The concept of providing a gift to another individual seems relatively simple. Parents may give their child a car as a birthday present, or more commonly, a sum of money to help them with their first house purchase. However, the implications of providing a gift regularly appear in disputes, particularly as to the division of properties on the dissolution of relationships; the most common question being whether the gift was ever really a gift in the first place.
When considering whether a gift s in fact a gift, there are three points to be considered:
- The intention of the party providing the gift (legally known as the Donor);
- The delivery of the gift to the receiving party (legally known as the Donee);
- And finally the acceptance of the gift.
One case in this areas is Scott v Bridges, a case which concerned three transactions.
- Scott had paid a some of money towards the purchase price of a property for Bridges’ parents. Scott argued that when she had paid the monies it was not intended to be a gift or a loan, and that she had acquired an interest in the property. Bridges’ argued that Scott had intended to gift the benefit of the deposit to her Son.
The Court found that Scott had intended to advance the funds with the intention of creating an interest which she could leave to her grandchildren collectively, as opposed to single grandchild, and therefore that Scott had intended to invest in the Property. The Court also found that Bridge’s parents, had not intended that Scott would have an interest in the Property, and believed the payment to be a gift to their grandson.
As the Court had found that Scott had intended to invest in the property, there could be no gift, even though the investment had not been for her.
- Scott had allegedly transferred the property in which she lived into the name of Bridges’ Son. Whilst Scott denied that she had signed any transfer of the Property, she equally stated that she did not intend to gift the property to the son. Bridges’ argued that the transaction was undertaken with the express authority of Scott.
During the course of the dispute, Scott had attempted to locate the purported witness to her signature on the transfer, without any success. On the other hand, Bridges had not made any attempts at all. The Court believed that the failure to take any step on their part was indicative as to the validity of Scott’s signature or indeed that of the witness, and found that Scott has not signed the transfer to Bridges’ Son. As a result Scott could not have gifted the property to Bridges’ Son.
- Bridges had been granted access to Scott’s account by Scott, but during that time had transferred some £94,000.00 from Scott’s account to her son’s account. Scott denied that the transfer of the monies to Bridges’ Son was a gift. Bridges argued that all payments was made with Scott’s express authority to gift the monies to her son.
The Court found that Scott had not instructed Bridges to make the transfer, nor did she have the intention of making the transfer to Bridges’ son. Equally, the Court found that Scott was entirely unaware of the transfers until long after the transfers had been undertaken. The Court awarded Scott damages equal to the sum of the transfers, finding that no gift had been made.
This case provides examples of the essential nature of the requirements imposed. Both the Donor and the Donee must have a common intention when both making and receiving and gift, and must have a common intention as to the nature of the gift. Without such common intention, there can be no gift.
Should you have any queries about gifts, future or past, and whether you need to take any steps to ensure the gift will be determined to be a gift, please contact this firms Dispute Resolution Department.
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