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SHERIFFDOM OF GLASGOW AND STRATHKELVIN AT GLASGOW
[2025] SC GLA 19
GLW-A1279-23
JUDGMENT OF SHERIFF S REID
in the cause
JONATHAN RUSSELL (AS EXECUTOR OF THE LATE STUART RUSSELL) &
IRENE RUSSELL
Pursuers
against
REBECCA RUSSELL (AS EXECUTRIX OF THE LATE SIMON RUSSELL)
Defender
Act: Mr J. Reekie, Brodies LLP, Edinburgh
Alt: Mr M. Allport, Authorised Lay Representative
Glasgow 19 March 2025
The sheriff, having resumed consideration of the cause, makes the following
FINDINGS-IN-FACT:
1.
The late William Stuart Gibb Russell (known as "Stuart") and his wife, Irene Russell,
had two sons, Jonathan Russell and Simon Russell.
2.
The younger son, Simon, died on 21 April 2023.
3.
The father, Stuart, died on 1 March 2024.
4.
The elder son, Jonathan, is the executor of the late Stuart Russell.
5.
Rebecca Russell is the widow and executrix of the late Simon Russell.
2
6.
Prior to his retirement, Stuart practised as a chartered accountant; Jonathan is a
chartered accountant; Simon, a former salesmen, tried to set up various business ventures
over the years but with no material success.
7.
At various times, relations within the family have been strained.
8.
For 6 years or so prior to 2009, Jonathan was estranged from his parents; in contrast,
at that time, Simon's relationship with his parents was good.
9.
From 2020 until his death in 2023, Simon was estranged from his parents and sibling;
in contrast, at that time, Jonathan's relationship with his parents was good.
10.
The breakdown of Simon's marriage to his first wife, Fiona, was also a source of
tension between the siblings, in that Jonathan perceived the separation as an abandonment
by Simon of his former wife and children.
11.
In around 2009, Stuart and Irene Russell were relatively comfortable financially.
12.
In 2008, they owned a substantial home in Edinburgh; they had obtained capital
payments from Norwich Union under an equity release loan secured on that home; and, in
due course, in 2021, the home was sold for a sum in excess of £1.6 million, sufficient to clear
the security thereon and to fund the purchase for them of a retirement home in Glasgow.
13.
On 14 January 2009, Stuart received the sum of £430,000, being the initial payment of
Stuart's share of the proceeds of sale of family farm land in Bathgate; and on 9 February,
3 April, 6 May, 14 July, 4 August and 23 October, all in 2009, Stuart received further deferred
payments of £100,000, £40,000, £45,000, £25,000, £50,000 and £40,000, respectively, from that
sale.
14.
On 10, 13 & 26 February, 7 April, 7 May, 14 May, 23 June, 4 July, 6 August and
24 October, all in 2009, Stuart invested (through stockbrokers) the sums of £30,000, £25,000,
3
£25,000, £30,000, £25,000, £20,000, £10,000, £10,000, £50,000 and £25,000, respectively, in
various stock market investments.
15.
Between January and March 2009, by a series of cheque payments, Stuart paid £5,000
to each of his grandchildren (that is, to the children of Jonathan and Simon); and, in
addition, by three separate cheques of £5,000 each, Stuart paid a total of £15,000 to Simon's
former wife, Fiona, to assist her with raising her children to Simon.
16.
For many years, Simon lived beyond his means, he was unsuccessful in business, and
he often found himself in financial difficulty; but Stuart, who was generous and soft-hearted
in relation to his youngest son, often provided financial support to Simon and his
businesses.
17.
Between 2005 and 2009, Stuart paid the following sums to Simon: (i) on 7 December
2005, by cheque, he paid the sum of £25,000 to Simon ("the 2005 Payment"); (ii) on
30 November 2007, by bank transfer, he paid the sum of £30,000 to Simon ("the
2007 Payment"); (iii) on 15 August 2008, by cheque, he paid the sum of £30,000 to Simon
("the 2008 Payment"); and (iv) on 30 January 2009, by cheque, he paid the sum of £70,000 to
Simon ("the Disputed 2009 Payment").
18.
All of the foregoing payments to Simon were made by Stuart from a Bank of
Scotland account held jointly with Irene Russell.
19.
None of these payments to Simon is documented in a written deed or contract
between Simon and Stuart.
20.
None of these payments to Simon is referred to in, or evidenced by, any written
communication between Stuart and Simon, contemporaneous or otherwise, formal or
informal.
4
21.
From time to time, Stuart also paid sums to Simon to cover the private school fees of
Merridy, the daughter of Simon and the defender.
22.
At no time were any sums of equivalent magnitude or frequency paid by Stuart to
his eldest son, Jonathan.
23.
For a period of time, Stuart acted as chairman of one of Simon's businesses (called
"iAuctionshop"); and from time to time, from 2009 onwards, Stuart was in the habit of
buying artefacts in junk shops and sending them to Simon to generate and support on-line
sales by that business.
24.
In 2020, the health of Stuart and Irene Russell deteriorated: Stuart required to be
hospitalised for a hip operation and was subsequently diagnosed with symptoms of
cognitive impairment; Irene was diagnosed with cancer, and required to undergo surgery.
25.
At this time, Jonathan (who lived in Glasgow) intervened to provide essential day-to-
day practical care to his parents, specifically by relocating to Edinburgh for a period of five
months or so (until around May/June 2021) to live in his parents' home, where he looked
after his ailing father while his mother convalesced from surgery.
26.
Jonathan's actions at this time coincided with a renewal of harmonious relations
between Jonathan and his parents; in contrast, Simon (who lived in England) came to be
perceived by his parents (and Jonathan) as having failed to provide sufficient emotional and
practical assistance to his parents during this period of ill-health and need.
27.
Moreover, at this time, Stuart & Irene Russell perceived that Simon wanted his
parents to be admitted, against their wishes, to a care home due to their perceived infirmity.
28.
As a consequence of the perceptions referred to in findings-in-fact (26) & (27),
relations between Simon and his parents deteriorated dramatically, resulting in Simon's
complete estrangement from the family from this point onwards.
5
29.
Until around 2020, the siblings, Jonathan and Simon, had been nominated as joint
attorneys of Stuart and Irene Russell under the parents' Powers of Attorney, and as joint
executors under their Wills; but in December 2020 Stuart and Irene Russell terminated
Simon's nomination as their joint attorney; on 5 December 2020, they executed fresh Powers
of Attorney nominating Jonathan (and a third party) as their joint welfare and financial
guardians; and by letter dated 17 December 2020, Irene Russell wrote to Simon disclosing to
him that he was no longer nominated as joint attorney for his parents for the reasons
explained in findings-in-fact (26) & (27).
30.
On 18 December 2020, Stuart was examined by a consultant in old age psychiatry;
the examination was arranged due to concerns raised by Stuart's general practitioner as to
Stuart's cognition and capacity to make decisions; and, in the course of the examination,
Stuart admitted to the consultant that he was losing his memory, that he was having
difficulty keeping track of days and dates, and that his memory difficulties (which had
existed for 5 to 7 years prior to that date) had been progressing gradually.
31.
On 5 January 2021, the consultant diagnosed Stuart as presenting with very gradual
progressive cognitive impairment; the consultant opined that there had been a mild decline
in Stuart's functioning, especially in complex tasks, in keeping with a diagnosis of
Alzheimer-type dementia, but that his deficiencies were mild and early at that stage; the
consultant opined that Stuart was able to give a reasonable breakdown of his current
financial affairs, that he was able to understand information provided to him, and that he
was capable of making decisions in both financial and welfare matters, as well as expressing
his wishes.
32.
On 20 January 2021, Stuart executed a fresh Will inter alia revoking all prior
testamentary writings and appointing Jonathan and a third party as his executors.
6
33.
In early 2021, during his temporary relocation to Edinburgh to care for his parents,
Jonathan reviewed his father's financial records (including his father's bank statements) and
discovered, for the first time, that the Disputed 2009 Payment (and the other sums referred
to in finding-in-fact (17)) had been paid by Stuart to Simon.
34.
In June 2021, Stuart was assessed as no longer having capacity and was admitted to a
care home.
35.
Between January 2009 and 1 March 2024 (when he died), Stuart never personally
demanded repayment from Simon of the Disputed 2009 Payment.
36.
Between January 2009 and 1 March 2024 (when he died), Stuart never personally
demanded payment from Simon of any monthly interest on the Disputed 2009 Payment.
37.
Between January 2009 and 1 March 2024 (when he died), Stuart never personally
protested to Simon that any monthly interest on the Disputed 2009 Payment was overdue or
outstanding.
38.
Jonathan believes that his late brother Simon was manipulative and profligate; that
he uttered falsehoods to his parents about Jonathan's supposed wealth; that he
misrepresented to his parents the viability and prospects of his various business ventures
and the financial pressures affecting him from time to time; all with a view to extracting
money from his parents, including gifts and investment in his business ventures.
39.
By letter dated 21 July 2021 from Jonathan to Simon, Jonathan accused Simon of
having "hoodwinked" their parents into believing that Jonathan was "extremely wealthy" in
order for Simon and his family to benefit financially; Jonathan accused Simon of
"manipulative and Machiavellian tactics" to ensure that Jonathan and his family received
"virtually nothing over the years" whilst Simon and his family "regularly received large
amounts of money and other assets"; Jonathan alleged that Simon had "learned to prey
7
very effectively" on Stuart's "good nature" and "gullibility"; Jonathan stated that his
parents were "now both deeply remorseful for being so gullible and for showing [Simon]
and [his] family such favouritism over the years"; and in this letter Jonathan alleged, for the
first time, that the Disputed 2009 Payment was one of several "unpaid interest bearing
loans".
40.
By letter dated 20 September 2023 to the defender, Jonathan (then acting as attorney
for Stuart under Stuart's Power of Attorney) demanded repayment from the defender (in
her capacity as Simon's executrix) of various "interest bearing loans and investments",
including the Disputed 2009 Payment.
41.
Items 5/1/1-18 are true copies of extracts from the bank statements of Stuart and
Irene Russell issued by Bank of Scotland plc in relation to their joint account; these copy
bank statements bear certain handwritten annotations; some of these annotations were made
by Irene Russell upon receipt of the bank statements shortly after the dates that they bear;
other annotations (including handwritten references to "£70K loan to Simon" and "monthly
interest" thereon) were made by Jonathan many years later in 2021 or thereafter.
42.
Esto the Disputed 2009 Payment was agreed by Stuart and Simon to be a loan, it was
an express term of the agreement that the loan would be repayable only when Simon was
financially able to do so.
Makes the following FINDINGS-IN-FACT AND IN-LAW:
1.
The pursuers have failed to prove that the sum of £70,000 paid by Stuart to Simon on
30 January 2009 ("the Disputed 2009 Payment") was a loan.
2.
The pursuers have failed to prove that monthly interest was agreed to be payable on
the Disputed 2009 Payment.
8
3.
Absent proof to the contrary, the Disputed 2009 Payment is presumed to have been a
gift made ex pietate by Stuart to Simon, without mutual intention to constitute a contract of
loan between the parties or otherwise to impose any counterpart financial obligation upon
Simon to repay the sum.
4.
Esto the Disputed 2009 Payment was a loan, the pursuers have failed to prove that
the express precondition for repayment thereof has been purified namely, that Simon (or his
estate) is financially able to repay it.
Makes the following FINDINGS-IN-LAW:
1.
The pursuers having failed to prove that the sum first craved was loaned to Simon et
separatim that monthly interest was payable thereon as second craved, the defender is
entitled to be assoilzied;
ACCORDINGLY, Grants decree of absolvitor in favour of the defender, whereby, Assoilzies
the defender from the first and second craves of the initial writ; meantime, Reserves the
issue of expenses.
NOTE:
Summary
[1]
In 2009, a father paid £70,000 to his youngest son. More than 12 years passed, and
the father never demanded repayment of the money from his son. Both are now dead.
There is no documentary evidence at the hand of either the father or the son,
contemporaneous or otherwise, describing the payment as a loan, interest-bearing or
otherwise.
9
[2]
In 2021, in the throes of a bitter family rift, with the younger son now estranged from
his elder sibling and parents, the elder sibling discovered that the £70,000 sum had been
paid to his brother. He questioned his father about it. He claims that his father told him that
the payment was an interest-bearing loan and should be repaid. The elder son, then acting
under his father's power of attorney, demanded that his brother repay the £70,000 with
accrued interest.
[3]
In this ordinary action, the pursuers are the elder son (now acting in his capacity as
executor of his late father) and his mother. The defender is the widow and executrix of the
younger son.
[4]
The pursuers rely on the ordinary presumption against donation. In my judgment,
the ordinary presumption does not apply. Instead, where a person who makes a payment to
another is under a natural obligation to support and provide for the recipient (as in the case
of, say, a father and a son), there is no presumption against donation. On the contrary, in
that familial context, where a natural duty to support and provide exists, the presumption is
that the payment was a gift made ex pietate (that is, out of natural affection, compassion and
duty): Macalister's Trustees v Macalister (1827) 5S 219; Nisbet's Trustees v Nisbet (1868) 6M 567;
[2009] CSOH 142; Mailer v Mailer & Quinn 2009 WL 07285344). In such cases, the onus lies
not on the recipient but on the paying party to displace the rebuttable presumption that the
payment was a gift.
[5]
In this case, the pursuers have failed to discharge that onus. The evidence does not
support their contention that the payment was a loan, repayable on demand, with monthly
interest (at 6% per annum) from the date of first receipt.
10
[6]
Esto the disputed sum was agreed to be a loan (for which I find no reliable evidence),
it was an express term of the agreement that the loan would be repayable only when the
younger son was financially able to do so. The pursuers have failed to prove the
purification of that express pre-condition for demanding repayment. Accordingly, I
assoilzie the defender. I explain my reasoning below.
The evidence
[7]
I heard evidence from three witnesses: the two pursuers (Jonathan Russell and his
mother Mrs Irene Russell) and the defender (Rebecca Russell). The testimony of
Jonathan Russell was given orally in court. The testimony of the second pursuer and
defender was given, in part, in writing (by signed written witness statement) and, in part,
orally (by video conference call). Neither of the key protagonists (the late Simon Russell and
Stuart Russell) gave evidence. They died in April 2023 and March 2024, respectively.
Jonathan Russell
[8]
Jonathan Russell (63), is the eldest son of Irene Russell and the late Stuart Russell.
His younger brother is the late Simon Russell. In 2020, when his parents' health
deteriorated, Jonathan undertook an audit of his father's finances. He discovered that
several large payments had been made to his younger brother, including a payment
of £70,000 in January 2009 ("the Disputed 2009 Payment"). He questioned his father about
this payment. He said his father had replied: "I loaned that money to Simon and he should
repay it". By June 2021, his father had lost capacity, he was admitted to a home, and
Jonathan assumed control of his father's affairs under a power of attorney.
11
[9]
He spoke to his father's capacity. He insisted his father's memory was good.
Reference was made to a report dated 5 January 2021 from Dr Pervez Thekkumpurath and
to his father's power of attorney dated 5 December 2020 (items 5/2 & 5/4 of process).
[10]
He spoke to his interpretation of copy bank statements for his father's joint bank
account (item 5/1/1-18). He said that the 2005 Payment (of £25,000) was an investment in
iAuctionshop in exchange for a 25% shareholding. The 2007 Payment (of £30,000) was said
to comprise a further investment in that business, but this time by way of an interest-bearing
"reducing loan" of £24,000, with the balance of £6,000 being a gift to Simon and the
defender, split equally between them for inheritance tax allowance purposes (though
Jonathan conceded he had "made certain assumptions" as to the allocation of the component
elements as between investment and gift). The 2008 Payment (of £30,000) was said to
comprise an "investment" in "School Adviser", another of Simon's businesses which
subsequently failed. The Disputed 2009 Payment (of £70,000) was said to be an interest-
bearing loan to Simon to allow him to pay off his mortgage. He characterised certain regular
credit entries in the bank statements as interest payments on the Disputed 2009 Payment
and on the "reducing loan" element of the 2008 Payment.
[11]
In cross-examination, questioned on the circumstances of the Disputed
2009 Payment, Jonathan could not recall his father's specific words on the issue. Jonathan
understood the loan was intended to repay Simon's mortgage; it was to be repaid "when
[Simon's] business improved" and "when he could"; until then, Simon was to pay monthly
interest; regular monthly payments of £350 were then received into his father's joint account
from iAuctionshop for about 9 months after receipt of the Disputed 2009 Payment; these
monthly payments were said to correspond to interest on the alleged loan at 6% per annum;
but the monthly payments then stopped, and never recommenced. He conceded that his
12
father would not have chased Simon for the outstanding interest. He speculated that Simon,
who was "forever in difficulty with money", "would have come up with excuses", and his
father, being "soft" and "kind-hearted", would have "let him off". He spoke to the
deterioration in family relations by late 2020. In March 2021, Jonathan discovered that his
father's 25% shareholding in iAuctionshop had been "misappropriated" by Simon and the
defender; this news was said to have made his father "furious" and "ballistic"; and the
disclosure prompted Jonathan's demand letter to Simon in July 2021 seeking repayment of
the Disputed 2009 Payment. Such was the mutual animosity within the family that Jonathan
and his parents were not notified of Simon's subsequent terminal illness until just 2 days
prior to his death.
[12]
Jonathan clarified in cross-examination the source and timing of the handwritten
annotations on the copy bank statements. He identified those he believed were appended
by his mother (close to the date of the statements); he identified others appended by him
many years later. He insisted his parents could not have afforded to gift £70,000 to Simon in
January 2009.
[13]
In re-examination, Jonathan claimed to have a letter, found within his father's papers
though not lodged in this process, which recorded the terms of the £24,000 "reducing loan".
Irene Russell
[14]
Mrs Russell (87) adopted the terms of her affidavit dated 25 January 2024 and
supplementary statement 15 August 2024. In her affidavit, she stated that Stuart agreed to
loan £70,000 to Simon in January 2009. Though Stuart dealt with most of the couple's
financial matters in those days, she testified that she knew about the loan at the time; she
knew the money had been debited from their joint account; and she did not object, because
13
Stuart was not concerned. Simon needed the money for his mortgage and because
iAuctionshop was not performing well. She stated that Stuart had been "clear", when he
had capacity, that the money was a loan, and that he expected it to be paid back with
interest. He did not tell her "the details of what was agreed about interest". She understood
from the bank statements that interest "worked out" at 6%. She did not know if her
husband had ever chased up the unpaid interest. She conceded Stuart could be "a bit soft
with Simon" and would not have wanted to cause any upset "by bringing the issue up", but
she insisted that Stuart "always hoped and expected the money to be repaid when things got
better for Simon" (para 7). She said that a gift of £70,000 to Simon would have been
unaffordable for them. Some money was gifted to Simon and his family "from time to
time", but for special occasions like birthdays, Christmas, and to help with his adoptive
daughter's private school fees. Simon had previously asked his parents for money. As a
result, Stuart had invested in Simon's iAuctionshop business in exchange for a
25% shareholding; further business investments were then made later, by way of interest-
bearing loans; and a gift of £6,000 was also made to Simon, set up by Stuart "with
inheritance tax in mind". From time to time, Stuart would also go around "junk shops in
Stockbridge" and buy "bits and pieces" to gift to Simon, in order to generate business for
iAuctionshop.
[15]
In her supplementary statement, Mrs Russell spoke to the deterioration in Stuart's
mental capacity. It was "fair to say" that he could get confused at times. She narrated
incidents indicating a gradual decline in his mental abilities (including erroneously
reporting stolen items to the police). But Stuart's long-term memory was said to be very
good and she reiterated that, before he lost capacity, he had been "very clear" that he
wanted to pursue repayment of the alleged "loan" from Simon. She recalled sitting around
14
a kitchen table with Stuart and Jonathan in late 2020/early 2021 when Stuart confirmed to
her that the £70,000 payment was a loan. She stated this was "in line with" her
"understanding at the time" when the sum was paid to Simon. She spoke to the bank
statements. She identified her annotations on them. She stated that Stuart would deal with
most of the couple's finances at the time, but that she "liked to reconcile the cheques from
her account" by way of annotations on the statements. She sought to clarify the meaning of
her handwritten letter dated 6 February 2022 to the defender's former solicitors (which, in its
terms, appeared to record her lack of awareness of the loan). She explained that she was
aware of the existence of the loans to Simon (for £70,000 and £24,000, respectively) but was
"unaware" until 2021 that those loans were still outstanding.
[16]
In cross-examination, she acknowledged that Stuart and Simon often spoke together
privately; she was not involved in these conversations; and she was not involved in the
particular discussion between Stuart and Simon regarding the £70,000 loan. She said there
was "a lot going on unbeknown to me" in discussions between Stuart and Simon. She did
not know whether the loan agreement was made orally or recorded in writing; she did not
know whether the interest was to be simple or compound; she conceded that her husband
"dealt with all these things". She did not deal with the family finances apart from "ticking
things off" on the bank statements. She understood that the January 2009 loan was "to be
repaid when [Simon's] business was flourishing". When pressed as to how she knew that
the payment was a loan, she replied: "Because I know it was a loan". She said that she
knew that the monthly payments of £350 referred to in the bank statements were
attributable to interest on the loan because Stuart "probably" told her so, or that he "would
have" told her so, but that she could not specifically remember. She acknowledged that she
and her husband were "soft" with Simon, who was "always full of hard luck stories". She
15
said that Stuart would do "anything to help" Simon. They felt sorry for him. He was
removed as their attorney because Simon had wanted them to be admitted to a care home.
Rebecca Russell
[17]
In her witness statement dated 23 May 2024, Rebecca Russell spoke to the history of
her relationship with Simon and his parents; the deterioration in Simon's health; the
deterioration in Stuart's mental capacity; emerging strains in the family relationship during
the COVID lockdown; the death of her husband, her distress at the lack of compassion
allegedly shown by the family, and her shock at the demand and allegations now made
against her and Simon.
[18]
Rebecca's testimony on the supposed loan was limited. She said that Simon had told
her it was a gift from his father. It was one of several "generous financial gifts" received
from Stuart over the years. They assumed Jonathan had been similarly treated.
Closing submissions
[19]
Written submissions were lodged for both parties. The pursuers founded upon the
ordinary presumption against donation; the onus lay on the defender to rebut it; cases such
as Mailer were distinguishable; in any event, the pursuers' evidence, which was to be
preferred, was supportive of loan. For the defender, it was submitted that the payment was
a gift, made out of natural affection and duty; the pursuers' testimony was unreliable; and
the wider circumstances supported the inference of donation.
16
The legal principles
The ordinary presumption against donation
[20]
In Scots law, "there is a strong presumption against donation and it requires very
strong and unimpeachable evidence to overcome it" (Sharp v Paton (1883) 10R 1000, 1006;
Brownlee's Executrix v Brownlee 1908 SC 232). It is presumed that individuals do not render
services without payment, nor do they make payments without expecting anything in
return. When moveable property has passed from one person to another, the onus lies upon
the person alleging donation to prove it by evidence which is "reasonably convincing", and
which is so clear as to displace all other reasonable explanations put forward in evidence
(Grant's Trustees v McDonald 1939 SC 448, 471). If, on the evidence, the transfer can be
ascribed to a purpose other than donation, the onus has not been discharged. In the case of
doubt, the decision will fall against donation (Callendar v Callendar's Executor 1972 SC
(HL) 70).
The special presumption in favour of donation
[21]
However, less well-known perhaps is the special presumption which applies where a
payment or transfer is made by a person who is under a natural obligation to support or
provide for the recipient (as in the case of a parent and child). In that scenario, a different
rule applies. Contrary to the ordinary presumption, such a payment or transfer is presumed
to be a gift made ex pietate (that is, out of natural affection, compassion, or duty), and the
onus falls upon the person seeking repayment to rebut the special presumption in favour of
donation. In the particular situation of a payment by a parent to a child, the special
presumption can apply even where the child is "no longer in the first flush of youth"
17
(Mailer's Executrix v Mailer 2019 WL 07285344). A parent's devotion and sense of duty to a
child may be life-long.
[22]
The existence of this special presumption appears, at times, to be overlooked. Some
textbooks analyse the position as merely an illustration of the ordinary presumption (against
donation) being discharged more easily where the relationship between the parties is
familial in nature. But this seems to be erroneous. On a proper analysis, the "ordinary
presumptions" against donation simply do not apply where the payment or transfer is made
by a person who is under a natural obligation to support or provide for the recipient
(Malcolm v Campbell (1889) 17R 255, 258). Instead, the presumption is that the payment or
transfer is a gift made ex pietate. This is the rule stated in Macalister's Trustees v Macalister
(1827) 5S 219; Nisbet's Trustees v Nisbet (1868) 6M 567; Forbes v Forbes (1869) 8M 85; and
Malcolm v Campbell, supra. All are Inner House decisions. All are binding upon me. More
recently, the special presumption was applied by Lord Brodie in McGraddie v McGraddie
[23]
A brief review of the four leading decisions may be of assistance.
[24]
In Macalister's Trustees, a wealthy uncle advanced money to his nephew during his
minority, for the education and outfit of the child. He entered the advance in his books, but
died without requiring repayment or taking any document of debt. The deceased uncle's
trustees sued the nephew for repayment. The action failed. The Inner House agreed that it
was to be presumed that the advances were gifted. Merely keeping an accurate account of
the money expended in his books did not infer that the uncle intended to insist on
repayment.
[25]
In Nisbet's Trustees, a father advanced sums of money to a son for the purchase of a
commission in the army, without taking from the son any obligation to repay. The Inner
18
House held that there was a presumption against loan in such circumstances. Instead, the
advances were presumed to be collated, to be off-set against any claim for legitim in the
deceased father's estate. Following Macalister's Trustees, the Division stated (at 572):
"Every presumption is against the inference that advances thus made were
intended by the father and received by the son on the footing of debtor and
creditor. They are rather to be viewed as made by the father for advancement
of a son to whom at the time he no doubt looked forward as his heir and
successor... But the relative situation of the father and son at the time the
advances in question were made forbids the idea of the father's intention
having been to constitute himself his son's creditor for the amount".
[26]
In Forbes, a younger brother advanced sums of money to (and discharged debts of)
his elder brother. Many years later, the younger brother sued for repayment, alleging that
the payments were loans. Lord Cowan stated:
"[W]here there exists such relation between them as to infer a natural
obligation to make the advances as in the case of father and son, or uncle and
nephew, or even an elder brother and younger there is room for the
presumption that the advances have been made ex pietate, and the presumption
will be for donation rather than for debt...".
However, in Forbes, the parties did not stand in such a position towards each other as to
impose on the younger brother any natural obligation to make advances to the elder brother.
Accordingly, the special presumption did not apply in that case. Instead, the ordinary
presumption against donation applied.
[27]
In Malcolm, a payment was made by a father to a prospective son-in-law on the
occasion of his daughter's marriage. This sum amounted to about one-fifth of the father's
means. He had four other children. Four years later, the father sued the son-in-law for
repayment of the alleged loan. At first instance, the sheriff-substitute had simply applied
the ordinary presumption against donation and held that the onus rested on the recipient
(the son-in-law) to prove donation. (In the event, on the evidence, the sheriff-substitute
concluded that the son-in-law had discharged that onus and had proved that the payment
19
was a gift.) On appeal, the Inner House agreed that, on the evidence, the payment was a
gift, but it disagreed with the sheriff-substitute (and sheriff) on the issue of onus. The Inner
House held that, having regard to the relationship between the parties, the ordinary
presumption against donation did not apply, because the paying party was under a natural
obligation to provide for the recipient. Instead, the opposite presumption in favour of
donation applied. Therefore, the onus lay properly on the paying party (the father) to rebut
that special presumption. Lord Lee stated (at 257):
"If the balance of evidence be equal, much will depend on the question on
whom the onus lies. On the question of onus we have heard an argument, and
have had authority cited to us. Now I assent to the doctrine in the sheriff's note
that donation is not presumed, but where the person said to have made it is
under a natural obligation to provide for the person to whom it is said to be
made, there is no onus on the person receiving. The presumption rather is that
it may have been a gift ex pietate. That is the principle of the case of Nisbet's
Trustees v Nisbet".
Likewise, Lord Kyllachy stated (at 258):
"But the question is, what looking to the relations of the parties is the legal
presumption as to the footing on which this took place? In the general case it is
clear that the presumption would be for repayment... But the presumption is
the other way where, as here, the case is one between parent and child, and
especially where the occasion of the advance is the marriage of a daughter, and
the advance is made to her husband at the time of the marriage".
The Lord Justice-Clerk agreed (at 258). The onus was properly on the father to prove his
case "rather than on the defender to rebut a presumption against donation".
[28]
Against that formidable line of authority, the pursuers now advance their claim.
Can a loan be repayable only when the debtor is "able" to do so?
[29]
Before turning to my conclusions on the evidence, I pause to highlight a further
interesting aspect of the Forbes decision.
20
[30]
Forbes is an illustration of a case where the special presumption in favour of donation
did not apply (because the relationship between the parties did not import a natural
obligation on the paying party to support or provide for the recipient); the ordinary
presumption against donation did apply; but, on a proper construction of the agreement
between the siblings, the Inner House concluded that the money was only repayable when
the recipient (the elder brother) was financially "able to do so". Payments had been made
by the younger brother to relieve the elder brother from "pecuniary embarrassment". But
the Court held that they were not gifts. According to the Inner House, they were repayable
"should the tide of fortune turn" and the elder brother "became prosperous" (page 90).
[31]
In other words, such an arrangement is not necessarily too vague or uncertain to be
enforceable. Aside from Forbes, the enforceability of a loan repayable only when the
recipient is "able to do so" has been sustained in other cases (Shaw v Kay (1904) 12 SLT 6;
Reasons for decision
[32]
Applying these legal principles, I conclude that the pursuers have failed to discharge
the onus upon them of rebutting the presumption in favour of donation. I reach that
conclusion for the following reasons.
[33]
In the first place, there is no document of debt evidencing the alleged loan. Of
course, it is not essential for such a document to exist, but its absence is a relevant
circumstance to be taken into account (as it was by the Inner House in both Macalister's
Trustees and Forbes). The absence of a document of debt sits uneasily with the subsistence of
a binding legal obligation to repay the sum.
21
[34]
In the second place, there is no contemporaneous (or even non-contemporaneous)
written communication between the father and the son over a prolonged period in excess of
12 years (from January 2009 to July 2021), describing, characterising, or referring (even
obliquely) to the Disputed 2009 Payment as a supposed loan, interest-bearing or otherwise.
Again, the absence of any such written communication between creditor and debtor is not
fatal to a claim of this nature, but it is another relevant circumstance that is inconsistent with
the subsistence of a binding legal obligation to repay the sum (a fortiori where monthly
interest was allegedly payable on the sum from the date of its first receipt).
[35]
In the third place, the absence of any demand for repayment of the alleged loan over
a prolonged period in excess of 12 years (from January 2009 to July 2021) is inconsistent with
the notion of a legally-binding commitment to repay the sum. A similar incongruity was
observed by the Lord Ordinary in Macalister's Trustees where the absence, over a prolonged
period, of challenge or demand for repayment of the sum was itself supportive of the
inference that there never was a loan.
[36]
In the fourth place, the pursuers' belated characterisation of the Disputed
2009 Payment as an interest-bearing loan over 12 years after the sum was paid arises in the
context of a rancorous family quarrel. The relationship between Simon, on the one hand,
and his parents and elder sibling, on the other, had evidently broken down by the date of
the first demand in July 2021. In his oral testimony, Jonathan lost no opportunity to narrate
a litany of grievances with his profligate younger brother. In language often dripping with
judgement, Jonathan testified that: (i) Simon had "walked out" on his first wife, Fiona, and
his two "blood children", one of whom was just a "babe in arms"; (ii) Simon was
"manipulative and Machiavellian"; (iii) Simon was forever in financial difficulties;
(iv) Simon, a former Rank Xerox salesman, was trained in the art of persuasion and adept at
22
spinning a story to his father to extract money from him; (v) Simon had been treated more
favourably by his parents than Jonathan, in that Simon had received tens of thousands of
pounds from his father, whereas Jonathan had only ever received £250; (vi) Simon was a
waster, who never paid his debts, and had allegedly been bankrupted; (vii) Simon had
shown no interest in visiting or supporting his parents in the 18 months or so prior to his
mother's admission to hospital in 2020; (viii) Simon reneged on a promise to travel from
England to relieve Jonathan, for just one week, in caring for his ailing father when his
mother was in hospital for chemotherapy, merely because he was "too busy", it was "Black
Friday", and he had shopping to do; (ix) Simon placed pressure on Jonathan to admit both
parents to a care home when they fell ill in 2020, despite having benefitted from their
generosity over many years; (x) Simon then left Jonathan to care for his elderly parents on
his own for about 5 months in 2021; (xi) Simon misappropriated Stuart's 25% shareholding
in iAuctionshop Ltd; and (xii) over many years Simon propagated falsehoods about
Jonathan to his parents, falsely asserting that Jonathan was very wealthy, and therefore not
in need of any financial assistance from his father. Jonathan's bitterness towards Simon was
palpable.
[37]
One strand of this family quarrel is also very personal to Jonathan. A recurring
theme of Jonathan's testimony is his own grievance that Simon, whom he perceived as
undeserving, had received so much from his parents, while Jonathan, who latterly bore the
brunt of caring duties, had received so little. The whole issue of the alleged loan first
materialised after Jonathan had taken it upon himself to carry out an "audit" of his father's
affairs, discovered that money had been paid to Simon over the years, and questioned his
father about it. By that stage, relations with Simon were charged with rancour and personal
umbrage. In my judgment, that context of familial and personal animosity undermines the
23
reliability of Jonathan's testimony about the alleged "loan", absent evidence from some
other source (documentary or oral) that is not so tainted.
[38]
The same may be said of Mrs Irene Russell's testimony. Though her hostility
towards Simon was articulated in less trenchant terms, it was no less evident. She candidly
disclosed that she and Stuart had removed Simon as attorney under their powers of attorney
because Simon had expressed the wish that she and Stuart be admitted to a care home,
which had "upset" them both. She considered that Simon was "always full of hard luck
stories", he was unreliable in financial matters, and he should have sold some of his "stupid
cars" to fund "the good life" he so enjoyed, rather than asking his parents for money.
[39]
In the fifth place, more generally, the reliability of Jonathan's testimony on the nature
of the disputed payment (as a loan) was undermined by two issues: (i) its lack of detail and
(ii) his recurring tendency to speculate. Over and over, when asked to shed light on the
nature of the alleged loan, he failed to do so, merely repeating the mantra that his father was
adamant that the payment was a loan and should be repaid. He also tended to offer
speculation in place of actual knowledge. He speculated that his brother would have spun a
hard luck story to his father; he speculated that his father, being a kind-hearted person,
would have relented; he speculated that Simon would have used his charm and "other
techniques" to persuade his father to give him money; he speculated that he would have
done all number of things. His testimony sat on an inherently precarious foundation. This
undermined my confidence in its reliability. On certain issues, Jonathan's testimony had the
flavour of ex post facto rationalisation. He conceded that he had "made certain assumptions"
about the allocation of the 2007 Payment (of £30,000), with £24,000 ascribed to a "reducing
loan" and the balance of £6,000 being a gift split equally between Simon and the defender.
This aspect of his testimony appeared to be based on nothing more concrete than an
24
assumption by Jonathan, after the event, as to the most efficient way of using inheritance tax
allowances. Likewise, Jonathan's identification of credit entries in the bank statements as
"interest payments" (on the Disputed 2009 Payment and the 2007 Payment) seemed to
involve Jonathan working backwards from those credits to calculate an interest rate after the
event. (Nor was he always consistent in relation to interest. In his letter to Simon letter
dated 10 May 2023, Jonathan demanded payment of "accumulated compound interest",
only later changing the claim to one for simple interest.) Further, when pressed as to when
the Disputed 2009 Payment was supposedly repayable, Jonathan testified that it was to be
repaid when Simon's business improved and he was able to do so. This explanation, which
emerged only in cross-examination, had never been mentioned by him in evidence-in-chief.
It also contradicts the pursuers' pleadings, which state that the loan was repayable "on
demand", there being "no agreement" as to when it was to be repaid (Article 5). Overall, the
impression I gained was that Jonathan was inclined to make up the details as he went along.
[40]
In the sixth place, likewise more generally, the reliability of Irene's testimony
(specifically, of her supposed knowledge of the loan from the outset) was undermined by
four factors. First, in written and oral testimony she conceded that she had little
involvement in most of the couple's finances and left all such matters to Stuart. Second, in
cross-examination she conceded that she was not actually privy to the discussions between
Stuart and Simon regarding the Disputed 2009 Payment. Third, in her handwritten letter
dated 6 February 2022 to Simon's former solicitor, she stated that she had been "unaware" of
the loan until 2020. This conflicts with her written and oral testimony that she was aware
in 2009 that the payment was a loan. She sought to clarify the meaning of her letter. She
insisted that she meant merely that she was "unaware" that the loan was outstanding. I did
not accept this explanatory gloss. It seemed contrived and implausible. While she was
25
aware in 2009 that the payment had been made to Simon, the wording of her letter is clear
that she was "unaware" of the loan. That is also consistent with Irene's concession in
testimony that she actually had no substantive involvement in "the majority of the [couple's]
finances in those days" (affidavit, para 3), and was not privy to discussions between Stuart
and Simon on this payment. Consistent with that, none of her contemporaneous
annotations on the bank statements characterise the payment as a loan, or as any other kind
of investment. None of her contemporaneous annotations identify any of the subsequent
credit entries as "interest" on a supposed loan. Fourth, in any event, like Jonathan, Irene
could provide no substantive detail on the discussions in 2009 between Stuart and Simon
that allegedly constituted the loan. In summary, like Jonathan, her characterisation of the
Disputed 2009 Payment as a "loan" is a recent phenomenon. It emerged much later, in 2020,
only after Jonathan, on his own initiative, had undertaken an audit of his father's affairs;
after he had discovered multiple payments to his brother; after he had raised the issue with
his father, aggrieved at the inequitable treatment of the siblings; and after relations with
Simon had already descended into acrimony.
[41]
In the seventh place, even if I accepted Jonathan and Irene's hearsay testimony (that
Stuart had asserted in around 2020/2021 that the Disputed 2009 Payment was an interest-
bearing loan), the reliability of Stuart's assertion is itself undermined by evidence of Stuart's
deteriorating mental faculties at around this time. Jonathan and Irene were adamant that
Stuart's long-term memory was good. They also founded upon a consultant psychiatrist's
report dated January 2021 (following an examination in December 2020) that bears to record
that Stuart then suffered from only a mild cognitive impairment. But that is to be counter-
balanced against the fact that, just a few months later (by June 2021), Stuart had lost capacity
and had been admitted to a home (per Jonathan's handwritten letter to Simon dated
26
6 February 2022). Irene also conceded in her testimony that Stuart could become confused,
that he erroneously reported items as stolen to the police, that he could not recall what he
had done with family heirlooms (specifically, service medals) and speculated that he may
have given them to Simon. In my judgment, this wider context of deteriorating mental
capacity and failing memory undermines the reliability of Stuart's alleged assertion (to
Jonathan and Irene) as to the true nature of the Disputed 2009 Payment made over 12 years
earlier.
[42]
In the ninth place, there is no evidence of substance or quality shedding light upon
the detailed discussion(s) that allegedly took place between Simon and Stuart regarding the
Disputed 2009 Payment. The key protagonists, Stuart and Simon, are dead. Neither gave
parole or written testimony. All that Jonathan could offer (supported by Irene) was the
repeated assertion that, when he had questioned his father (at some unspecified time
in 2020/2021) about the payment, Stuart had insisted that the payment was an interest-
bearing loan and should be repaid. Even if Stuart were to have given that same evidence at
proof, his bald assertion, however insistent or sincerely held, that the payment was an
interest-bearing loan would not have advanced the claim greatly, because it amounts to little
more than an articulation of Stuart's subjective belief and lacks any substantive detail on the
constitution of a mutual agreement with Simon (such as whether, how, and when Stuart's
characterisation of the payment as an interest-bearing loan was ever communicated to
Simon; and whether, how, and when Simon ever indicated his agreement to that
characterisation of the payment).
[43]
Besides, the limited evidence that did emerge was more consistent with the inference
that Stuart would have gifted the money to Simon, rather than lent it on binding, onerous
terms. Both Jonathan and Irene described Stuart as being generous, kind-hearted, and "soft"
27
when it came to his younger son. Both lamented that Stuart was likely to have succumbed
to Simon's hard-luck stories. Irene testified that Stuart would have done "anything to help"
Simon. None of this squares with a father committing his son to repay a loan, and
meanwhile insisting upon monthly interest at 6% per annum. In my judgment, Jonathan's
letter to Simon dated 21 June 2021 comes closest to summing up the essential truth here: his
parents were "now both deeply remorseful for being so gullible and for showing [Simon]
and [his] family such favouritism over the years".
[44]
In the tenth place, much weight was placed by the pursuers upon the 9 or so monthly
credits (of £350 each) to Stuart's joint account, as disclosed on the bank statements. These
payments were said to evidence the payment of "interest" on the alleged loan. In my
judgment, that inference is not justified. Firstly, the credited payments do not bear to have
been made by Simon at all. Rather, they all emanate from iAuctionshop. True to form,
Jonathan sought to address the discrepancy with a speculation, namely, that Simon's
accountants would (presumably) have made a necessary adjustment to Simon's (presumed)
director's account within the financial records of iAuctionshop. But an equally plausible
explanation, on the evidence, is that the payments from iAuctionshop represented
remuneration for Stuart's chairmanship role, or reimbursement for the "bits and pieces"
purchased by Stuart in junk shops to generate on-line sales for the business. In truth, the
paucity of evidence leads to little more than a fog of speculation as to why these sums were
being credited to the account at all. Secondly, no adequate explanation was given as to why
Stuart did, and said, absolutely nothing when those monthly payments ceased just
10 months or so later. If a binding legal commitment to pay monthly interest on the loan
had indeed been agreed between Stuart and Simon, one would ordinarily have expected a
remonstration by Stuart, as creditor, in response to the cessation of the promised interest
28
payments. In the event, nothing happened. A prolonged period of silence and inaction in
the face of such a flagrant breach is inconsistent with the notion of a binding legal
commitment to pay monthly interest. That circumstance "strengthened and confirmed" the
presumption in favour of donation (Macalister's Trustees, 220, per the Lord Ordinary).
[45]
Lastly, in the eleventh place, a recurring theme of the pursuers' evidence was that
Stuart and Irene could not afford to gift £70,000 to Simon in January 2009. In law, it is
correct that the amount of the alleged gift, as a proportion of the alleged donor's assets, is a
relevant criterion in determining whether there was an animus donandi. A disposal
representing the whole or a substantial part of the value of the donor's estate is less likely to
be viewed as affordable, and therefore less likely to be sustained as a gift. In contrast, by
way of illustration, in Malcolm v Campbell, supra, a payment representing just one-fifth of the
alleged donor's estate was sustained as an affordable gift. In the present case, there is
simply no complete or reliable evidence to establish the full value of Stuart's assets and
liabilities, or of his actual or projected income and expenditure, as at January 2009. The
evidential position was opaque. Much was made of an equity release loan mortgaged over
Stuart and Irene's house in Edinburgh a year or so earlier, but there was no vouched
evidence from the pursuers of the value of the house, or the total secured debt on the house,
or of the instalment repayment liabilities, or of sources of income to fund the borrowing. In
contrast, there was undisputed evidence that Stuart had received substantial payments in
excess of £600,000 from the sale of family farmland in 2008/2009, much of which was
invested on the stock market, some of which was gifted to family members. On the patchy
evidence available, an alleged gift of £70,000 to Simon appeared to represent far less than
one-fifth of (at least some of) Stuart's available assets at that time. Therefore, drawing a
broad analogy with Malcolm, the disputed payment to Simon cannot be said to represent a
29
dissipation of the whole, or substantially the whole, of his father's estate at that date. The
pursuers thereby failed to establish the non-affordability of the presumed gift.
[46]
For all these reasons, I concluded that the pursuers have failed to discharge the onus
upon them of rebutting the presumption that the Disputed 2009 Payment was a gift to
Simon made ex pietate.
Two further difficulties
[47]
Unfortunately, the pursuers' difficulties do not end there. First, if I am wrong in
characterising this disputed payment as a gift, and if instead it were properly characterised
as a loan, I would have concluded on the evidence that the sum was repayable only when
Simon was financially able to do so. This was the testimony of both Irene and Jonathan. It is
also a conclusion that accords more closely perhaps with their description of Stuart's
character and relationship with Simon. But that raises a separate problem for the pursuers.
There was no evidence that Simon was ever financially able to repay the loan (or that his
executry estate can do so now). On that basis, esto the Disputed 2009 Payment was a loan,
the pursuers have failed to establish the purification of an essential pre-condition attached to
its repayment.
[48]
Second, two pursuers sue for repayment of this alleged loan. However, on the
evidence, the second pursuer (Simon's mother) had nothing to do with the transaction. In
her affidavit dated 25 January 2024 (para 3), she states that it was Stuart who agreed to loan
the sum to Simon. Irene subsequently conceded in cross-examination that she was not privy
to the discussions. There are no averments, and there was no evidence, to the effect that
Stuart acted as agent for his spouse. It is correct that the £70,000 derived from the parents'
joint bank account, but that is not sufficient to impute agency. And, of course, in her letter
30
dated 6 December 2022 to Simon's former solicitor, Irene stated that she had been
"unaware" of the alleged loan "until last year". The upshot is that, even if a loan were to be
constituted, Irene (the second pursuer) would not be a party to it. The action, so far as
directed against the defender at the instance of the second pursuer, would fall to be
disposed of by way of absolvitor.
[49]
To be clear, I have sympathy for Jonathan's position. Simon, with little apparent
effort or gratitude, has benefited handsomely from his father's kindness over many years,
while Jonathan, a dutiful and caring son, has received nothing of equivalent monetary value.
The story has echoes of the parable of the prodigal son in St. Luke's Gospel (15:11-32). In the
parable, a father allowed his youngest son to take and squander his inheritance but still
welcomed him back with open arms and a feast. The elder brother, who for years had
worked diligently in his father's fields, was aggrieved at the perceived inequity. However,
as in the parable, Stuart, the father, was entitled to do with his money whatever he wished.
It was up to him if he chose to gift it to a wastrel son. Like his biblical counterpart, Jonathan
must address his grievance, if he has one, to his father for the choices he made with his own
money. He has no legitimate complaint or remedy against his younger sibling, who merely
enjoyed the benefit of his father's boundless generosity and grace.
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