The ‘Unruly Horse’ has Bolted: Tinsley v Milligan

Published date01 May 1994
DOIhttp://doi.org/10.1111/j.1468-2230.1994.tb01951.x
Date01 May 1994
AuthorHugh Stove
May
19941
Tinsley
v
Milligan
in the reach of EC law, leaving the Member States a greater margin of discretion in
ordering the national processes for the enforcement of EC law. In the rather
daunting climate26 in which the Court must await its fate at the next
intergovernmental conference
(1996),
the acid test of its resolve may well
be
in the
post-Fruncovich cases before it. We must await the prospect that state liability
may, after all,
be
based not upon the strict liability of the Member States for their
failure to implement a Directive adequately, but rather upon standards of fault,
even wilfulness, on their part.
The
‘Unruly
Horse’ has
Bolted:
Tinsley
v
MiZZigun
Hugh
Stowe’
The
Decision
Tinsley
v Milligun’ presented the House of Lords with a chance to consider a
radical reformulation by the Court of Appeal of the illegality defence in civil law.
Traditionally, the courts have imposed a general prohibition on the enforcement of
actions tainted by illegality, subject to a limited number of discrete exceptions and
limitations.
In
a recent series of decisions,? certain members of the
Court
of
Appeal renounced the harsh and rigid framework of rules, and proposed that the
effect of illegality should depend upon a balance of ‘the adverse consequences of
granting relief against the adverse consequences of refusing relief. The ultimate
decision calls for a value judgment.’3 In
Tinsley,
the House of Lords unanimously
and emphatically rejected an approach based on a judicial discretionary balance.
However, the House split with respect to what inflexible rule should be applied to
the facts.
The case concerned the effect
of
illegality on the enforcement of equitable
property rights arising out of a resulting trust.
T
and
M
jointly contributed to the
purchase of a house. The house was registered in the sole name of T
to
enable
M
to
fraudulently claim welfare payments by misrepresenting that she did not own her
home. T knew of the fraud. The welfare fraudulently obtained was used to meet
T’s and
M’s
joint expenses. In
1988,
the defendant confessed her fraud to the
authorities. After a breakdown in their relationship, T commenced proceedings to
assert ownership
of
the house, and M counterclaimed seeking a declaration that T
held the property on resulting trust for them in equal shares.
In the absence of the fraudulent purpose, it was not doubted that the declaration
of a resulting trust would have been made. The issue for the House was whether
M’s
fraudulent purpose could be pleaded as a defence to her counterclaim. By a
26
See
Weiler, ‘Journey to an Unknown Destination:
A
Retrospective and Prospective
of
the European
Court
of
Justice
in
the
Arena
of
Political
Integration’
(1993) 3 1
Journal
of
Comn
Market Studies
417;
Mancini and Keeling, ‘Democracy and the European Court
of
Justice’
(1994) 56
MLR
175.
*Lecturer
in
Law, University
of
Durham.
1 [1993] 3
AU
ER
65.
2
Saunders
v
Edwardr
[1987] 1
WLR
1
1
16;
Euro-Dm
Ltd
v
Bathurst
[
19901
QB
1;
Howard
v
Shirlstar
Container
Transport
[1990] 3
All ER
366;
llnsley
v
Milligan
[
19921 2
AU
ER
391;
Pitts
v
Hunt
[
19911
1
QB
24.
3
Tinsley
v
Milligan
[19!Z]
2
AU
ER
391, 398.
0
The
Modern
Law Review Limited
I994
441

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