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Lloyd's Maritime and Commercial Law Quarterly

PROPERTY AND IMPROPRIETY—THE TINSLEY V. MILLIGAN PROBLEM AGAIN

Lowson v. Coombes
The Court of Appeal has once again been confronted with a dispute concerning beneficial title to property where the claimant’s activities are tainted by illegality. In Lowson v. Coombes,1 as in the much criticized case of Tinsley v. Milligan,2 property was purchased by two parties but, for dishonest purposes, title was conveyed into the name of one party alone.3
In Tinsley the House of Lords4 held that a claimant could establish title to property notwithstanding her involvement in a fraudulent transaction, provided that she did not need to rely on her illegality to make out her case—”the reliance principle”.5 This elevates the antiquated presumptions of advancement and resulting trust to potentially decisive status in cases of illegality. Where the presumption of resulting trust applies, a claimant can establish his equitable interest in the property without relying on the underlying illegal transaction. Where the presumption of advancement applies, a claimant is not permitted to rely on an underlying illegal purpose to rebut that presumption, making the presumption of advancement effectively irrebuttable in such cases.
Since Tinsley the English courts, while expressing concern over the arbitrary consequences of applying the reliance principle,6 have ostensibly followed the decision. However, the principle has been developed where necessary to avoid injustice, resulting in further complexity and confusion. For example in Tribe v. Tribe 7 the claimant was

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