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Thomson v Mooney

Heather Viljoen reviews a case about gifting property

10 March 2014

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This case concerned the starting point of the five-year limitation period under s6 of the Prescription and Limitation (Scotland) Act 1973 in a claim based on unjust enrichment.

Brian Thomson and Elizabeth Mooney got engaged in 2005. They purchased a property together, in June of that year, to be held jointly with each party having a one-half pro indiviso share. Thomson provided £70,000 towards the purchase price, and the balance was provided by a mortgage that both parties were liable to repay.

In 2007, the relationship broke down and the contemplated marriage did not take place. The property was later sold and when the proceeds were to be divided, Thomson sought an additional payment of £35,000 (one half of the sum that he had provided towards the purchase). He argued that, following the breakdown of their relationship, Mooney had been unjustifiably enriched as a consequence of receiving a one-half share in the ownership following his £70,000 contribution.

However, proceedings were not started until April 2011. Counsel for both parties agreed that the starting point of the five-year limitation period was the date at which Mooney's obligation to repay part of Thomson's contribution became enforceable.

Mooney's case was that the obligation to repay became enforceable in June 2005 when the property was bought with Thomson's funds. If this interpretation was correct, the five-year limitation period would have expired in June 2010, and Thomson would be out of time.

Thomson argued that the obligation to repay only became enforceable when the parties separated in 2007: while the enrichment of Mooney occurred in 2005, it became unjust only at the point that the contemplated marriage would no longer go ahead.

At first instance, the Lord Ordinary held in favour of Mooney. It was held that her obligation to repay Thomson was based on the absence of any legal ground for her to retain the benefit she had received from him. As there had never been any legal ground for Mooney to retain the benefit of Thomson's gratuitous contribution, her obligation to repay existed from when the property was purchased in 2005 (and the limitation period started to run from that point also).

The Court of Session disagreed with the Lord Ordinary's analysis and set out that "a gift is not repayable at the whim of the donor simply because it is gratuitous" but "may exceptionally become repayable if it is made in the contemplation of a particular happening, for example in contemplation of marriage which does not take effect".

The court acknowledged "that an obligation to make good an unjustified enrichment may arise in a great variety of situations" and "in some the unjustified nature of the enrichment is present from the outset; but in others want of justification occurs only later in time when something happens to remove the initial justification for the enrichment".

In this case, for as long as the parties contemplated marriage, the justification for Mooney's enrichment persisted. At the point their relationship broke down, that justification ended and limitation ran from that point.

Accordingly, the court reversed the Lord Ordinary's decision and held the starting point for the limitation period was the date the couple separated in 2007.

See Thomson v Mooney (AP) [2013] ScotCS CSIH_115

Heather Viljoen is a solicitor at Michelmores

She writes regular case updates for Private Client Adviser