Tribe v Tribe [1996] Ch 107
Presumption of advancement rebutted by father transferring shares to son
Facts
The plaintiff operated a company which sold clothing from a number of shops. The landlord served schedules of dilapidations in relation to two of the shops. To safeguard his interests, the plaintiff transferred his remaining shareholding in the company to the defendant, his son, for a consideration which was not, and was not intended to be paid. The defendant surrendered one lease to the landlord and purchased the reversion of the lease in relation to another shop. The plaintiff thereafter requested that the defendant retransfer the shareholding in the company to him.
Issue
The plaintiff sought an order that the defendant was required to transfer the shares back to him. At first instance, it was held that the transfer had been made for the illegal purpose of deceiving the plaintiff’s creditors. However, there had been an agreement that the defendant would hold the shares on trust for the plaintiff until such time as the dilapidation claims were settled and so the plaintiff was entitled to the relief sought. The defendant appealed.
Held
The appeal was dismissed. The presumption of advancement applied between the parties which would usually require the transfer to be treated as a gift. Although the plaintiff had transferred the shares for an illegal purpose, he was entitled to withdraw from the transaction before any part of the illegal purpose had been conducted. The plaintiff was entitled to give evidence of the illegality to rebut the presumption and recover the property. He was able to do so and was therefore entitled to recovery of the property. This case was an exception to the general rule that a court will not assist a plaintiff who has founded his action on an illegal act.
Updated 20 March 2026
This case summary remains accurate as a statement of the decision in Tribe v Tribe [1996] Ch 107. However, readers should be aware of two significant subsequent developments.
First, the presumption of advancement has been substantially reconsidered. Section 199 of the Equality Act 2010 was enacted to abolish the presumption of advancement in English law, but as of the date of this note that provision has never been brought into force and the presumption remains part of English law.
Second, and more importantly, the Supreme Court fundamentally restated the law on illegality in Patel v Mirza [2016] UKSC 84. The Court replaced the earlier rules-based approach (including the ‘reliance principle’ and the ‘withdrawal exception’ discussed in Tribe v Tribe) with a flexible, policy-based discretionary approach. Courts must now consider the underlying purpose of the prohibition that has been transgressed, any relevant public policy that might be harmed by denying the claim, and whether denial of the remedy would be proportionate. The withdrawal exception applied in Tribe v Tribe has not been expressly overruled, but its precise status within the Patel v Mirza framework is unsettled. Students should treat the reasoning in Tribe v Tribe with caution and consider the case alongside Patel v Mirza and subsequent cases applying that decision.
