Collier v Collier [2002] EWCA Civ 1095
Respondent unable to rely on his illegality to recover property
Facts
Due to financial difficulties the respondent granted leases, with options to purchase, over two properties to the appellant (his daughter). Subsequently, the respondent raised mortgages over both properties without informing the lender of these options. The appellant exercised the options. The parties fell out and the appellant raised an action for possession of one of the properties. The respondent counterclaimed and argued that the properties were held on trust for him by the appellant.
Issues
At first instance, the court castigated the transfers to the appellant as carried out for illegal purposes including the defrauding of the lenders. However, the appellant’s claim that the transfer was a gift was rejected and the defendant was the beneficiary under an express trust between the parties. The appellant appealed on the basis that there was no express trust and, secondly, the respondent was precluding from relying on a trust due to its illegal purpose. The respondent argued that the illegality had not been carried into effect and so was irrelevant.
Decision/Outcome
The appeal was allowed. The purpose of the trust was to deceive and the respondent was prevented from relying on his own illegality. According to Mance L.J. the illegality had been carried into effect because the deceit of the mortgage lenders had been successful. Aldous L.J. added that the respondent had had the benefit of the illegality for a number of years, namely the defrauding of the Inland Revenue for inheritance tax purposes. He could therefore not dispute the effect of the transfers without relying on the illegality and the property must lie where it rested i.e. with the appellant.
Updated 19 March 2026
This case summary accurately reflects the decision in Collier v Collier [2002] EWCA Civ 1095. However, readers should be aware that the law on illegality in equity and trusts has developed significantly since 2002. The Supreme Court’s decision in Patel v Mirza [2016] UKSC 42 substantially reformed the approach to illegality in English law, replacing the earlier rigid rule-based approach (associated with Tinsley v Milligan [1994] 1 AC 340, which underpinned much of the reasoning in this era) with a broader range of factors-based analysis. Under Patel v Mirza, courts now consider the underlying purpose of the relevant legal rule, any other relevant public policy considerations, and whether it would be disproportionate to refuse relief. Collier v Collier remains a valid illustration of the facts and outcome on those particular facts, but it should not be read as a reliable statement of the current legal test for illegality in trust or property law. Students should study Patel v Mirza as the leading modern authority.
