Gifts, investments and misunderstandings – a 77 year old lady recovers “gifts” made to the family of her daughter in law

 

The High Court recently upheld the claims of 77-year-old Lorina Scott (the Claimant) for the return of various assets claimed as gifts by the family of her daughter in law, including: purchase monies invested in a property, a second property and the sum of £89,500.

This claim is best split into its three constituent parts:

1. Purchase monies in 1 Southgate;
2. Claimant’s property at 13 Lacy Street; and
3. Bank transfers made in the name of the Claimant.

Parties

The Claimant was a 77-year-old widow with one son, David Scott. David’s most recent partner with whom he had a child was Charlotte Bridge. Charlotte’s mother and father are the first and second defendants (“Charlotte’s Parents”).The Third Defendant was Melvin Jesus Casas-Bridge (“Mr Casas-Bridge”), the son of Charlotte Bridge from a previous relationship. Melvin had lived with Charlotte and David for a time and was considered part of the family.David and Charlotte separated in 2018 and were divorced in 2019, the split between the families resulting in this case.

1 Southgate

The Claimant had assisted Charlotte’s Parents with the purchase of their home in Barnsley, Yorkshire, under the right-to-buy scheme. The Claimant had contributed the sum of £34,302 to the purchase, which represented 50% of the purchase price with the other 50% being Charlotte’s Parents discount under the right to buy scheme.Charlotte’s Parents claimed this sum was a gift while the Claimant claimed the balance was an investment in the property, claiming a proprietary right. HHJ Matthews found that whilst the Claimant had a cordial relationship with Charlotte’s Parents, she would not make such a substantial gift to them, at the expense of her wider family. Charlotte, who arranged the purchase, believed that the Claimant was paying the balance for the benefit of her and David’s child and Melvin, who David treated as his child. Given this misunderstanding, HJJ Mathews was satisfied Charlotte’s Parents believed that the payment by the Claimant was a gift.Consequently, HJJ Matthews determined that the Claimant’s investment did not establish an interest in the property. He stated he was: “not satisfied that it would be fair or reasonable to give the Claimant any more potent remedy than the usual personal remedy of the payment of a sum of money, rather than a share in property.” Nonetheless, the Claimant recovered her investment.

13 Lacy Street

The Claimant was born and grew up at 13 Lacy Street and subsequently inherited this property from her father. However, nothing was done with the title of the property which remained in the Claimant’s deceased parents’ names. Charlotte arranged for this to be remedied. However, the property was subsequently transferred from the Claimant to Mr Casas-Bridge, Charlotte’s son, without reference to the Claimant.  The transfer deed was not properly executed but despite this the property was registered under the name of Mr Casas-Bridge.It was clear to HHJ Matthews that the Claimant never intended to part with the property at all. He was able to do justice to the claim on the basis of the mistake with the transfer deed, which was not properly witnessed. Consequently HHJ Matthews altered the register restoring the property to the Claimant.

Bank transfers

The Claimant had given Charlotte an electronic device allowing bank transfers from her accounts. Charlotte, without the Claimant’s permission, then transferred large sums to her father. HJJ Matthews found that the Claimant did not instruct these transfers to be made as they were such large sums that the Claimant would remember authorising them. Consequently, the Claimant was found to be entitled to judgment for the sum of £89,500 on unjust enrichment principles. However note HJJ Matthews concluded that the Claimant was not entitled to a proprietary claim against Charlotte’s father’s bank account or its traceable proceeds, seeing no argument his bank owed any account obligations to anyone other than their customer.

Conclusion

It is common for wealthy individuals to assist other family members. It is clear from the case of Scott v Bridge 2020 EWHC 3116 that as the recipients of such gifts you should be conscious that in a worst case scenario, a family fall out, there may be legitimate means for the donor to recover their “gift”, if they can prove it was not intended as one. The donors and the recipients should consider entering into a deed of gift in order to prevent legal proceedings we have seen in this case. This would provide both parties security and avoid costly legal battles. It would also clear up any misunderstandings, as in this case it was apparent there was both untoward behaviour on the part of Charlotte and a genuine misunderstanding as a result of Charlotte relaying information between the Claimant and her parents.The case of Scott v Bridge 2020 EWHC 3116 can be read in full here.Please get in touch with our Contentious Trusts & Probate team if you'd like to discuss anything covered in this article.