Glasgow sheriff rules £70,000 payment from father to son not a loan in dispute between their estates

About this case:

• Citation:
  [2025] SC GLA 19
• Judgment:
  External link
• Court:
  Sheriff Court
• Judge:
  Sheriff S Reid

Pursuers Jonathan Russell, the eldest son and executor of the late Stuart Russell, and his mother Irene Russell raised an action for payment against Rebecca Rusell, the widow and executrix of Simon Russell, who died just under a year before his father. The defender’s position was that the money was a gift made out of familial affection, or alternatively if it was a loan, it was an express condition that it only be repaid when Simon was financially able to do so.

The case was heard by Sheriff Stuart Reid, with Mr J Reekie, solicitor, appearing for the pursuers and Mr M Allport, authorised lay representative, for the defender.

Presumption against donation

In 2009, Stuart Russell paid £70,000 to Simon Russell. No documentary evidence existed describing the payment as a loan, interest-bearing or otherwise. In 2021, during a particularly bitter family dispute, the first pursuer discovered that the payment had been made and questioned his father about it. He averred that his father told him that the payment was an interest-bearing loan and should be repaid. Neither Stuart nor Simon Russell gave evidence, as they had died in March 2024 and April 2023 respectively.

The first pursuer, who assumed control of his father’s affairs under a power of attorney in June 2021, insisted that at the time his father’s memory was good. Referring to his father’s bank statements, he said that Stuart Russell had previously given money to Simon in 2005, 2007, and 2008 as investments in various failed business ventures, with the 2007 payment in particular being an interest-bearing reducing loan. The disputed 2009 payment was said to be a loan enabling Simon to pay off his mortgage.

By affidavit, the second pursuer stated that Stuart agreed to loan Simon the £70,000. She knew that the money had come from the joint bank account she held with Stuart and did not object because he was not concerned. She accepted in cross-examination that Stuart and Simon often spoke together privately, and she was not involved in discussions about the loan. In her testimony, the defender said that Simon had told her the money was a gift from his father, and she assumed the first pursuer had been similarly treated.

In their written submissions, the pursuers relied on the ordinary presumption against donation and argued that the defender had failed to rebut it. For the defender it was submitted that the payment was a gift made out of natural affection and duty, and the wider circumstances supported the inference of donation.

Parable of the prodigal son

Sheriff Reid, in his decision, said this was not a case where the ordinary presumption applied: “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).”

Describing this as a “less well-known” presumption in Scots law, he continued: “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.”

Explaining how the pursuers had failed to overcome this presumption, Sheriff Reid said: “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. The absence of a document of debt sits uneasily with the subsistence of a binding legal obligation to repay the sum.”

He added: “The absence of any demand for repayment of the alleged loan over a prolonged period in excess of 12 years 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 v Macalister (1827) 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.”

The sheriff concluded: “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). 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.”

Decree of absolvitor was accordingly granted in favour of the defender.