Tinsley v Milligan [1994]

Tinsley v Milligan [1994] 1 AC 340

Resulting trusts and illegality; whether equitable interest may be claimed despite conduct.

Facts

Ms Tinsley and Ms Milligan purchased a property in which to cohabit as a couple. They used the house as a lodging house and this joint business provided the bulk of their income. The parties agreed they would be beneficial co-owners of the property but it was registered in Ms Tinsley’s sole name so as to allow Ms Milligan to make fraudulent claims for benefits with Ms Tinsley’s full knowledge and consent. The relationship broke down and Ms Tinsley sought to evict Ms Milligan. Ms Milligan counterclaimed for a half share in the property.

Issues

Ms Tinsley argued the legal title was in her sole name and the beneficial title should follow the legal title. She claimed Ms Milligan should not be able to rely on evidence of her unlawful conduct to establish a beneficial interest in the home, and equity should prevent her from benefitting from her unlawful act. Ms Milligan argued that the equitable interest stemmed not from her unlawful conduct but from her contribution to the purchase price of the property and, as such, she should be able to claim the interest, even though unlawful conduct became apparent through other evidence. She argued the resulting trust arose when she contributed to the purchase price, and that she did not have to rely on her dishonest conduct to establish her interest.

Decision/Outcome

Ms Milligan was successful in establishing a joint equitable interest in the house. She was able to prove the beneficial interest stemmed from her lawful contribution to the purchase price, and not from the unlawful, fraudulent social security claim. There was a clear, common understanding between the parties that they owned the property jointly, in equal shares.