In this article we examine the recent Glasgow Sheriff Court judgment in Jonathan Russell (as Executor of the late Stuart Russell) & Irene Russell against Rebecca Russell (as Executrix of the late Simon Russell) [2025] SC GLA 19 which concerns a £70,000 payment from father to son and whether that should be treated as a gift, or a repayable loan.
We consider the conflicting rebuttable legal presumptions in Scotland, who has the burden of proof, the factors a court will likely take into account when deciding similar cases, and preventative measures you can take with a view to ensuring, insofar as possible, that you or your executors do not face similar claims in the future.
Case summary
A father (Stuart) made a payment of £70,000 to his youngest (adult) son (Simon) by cheque in 2009. They are both deceased, such that the case was brought by the elder son (Jonathan, now acting in his capacity as executor of Stuart) and his mother (the “Pursuers”) against Simon’s widow and executrix (the “Defender”).
The Pursuers argued that the payment was an interest bearing loan; whereas the Defender argued it was a gift. Concluding that the payment was a gift, the Sheriff made a dramatic biblical comparison:
“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.”
However, it is interesting to examine how the Sheriff reached this decision and this begins with an examination of the two applicable legal presumptions in these types of cases, including who shoulders the onus of proof in respect of each.
The competing presumptions
In Scots law, there is a long-standing general legal presumption against donation (or gift). Ordinarily, someone would expect repayment when giving someone money. The effect of this presumption is that the burden of proof falls on the payee to prove that the payment was a gift; rather than the onus being on the payer to prove that it was a loan.
However, the Sheriff in this case held that the normal presumption did not apply and instead the competing “special presumption” of gift ex pietate applied. This Latin term refers to gifts made in the familial context out of natural affection, compassion and duty.
The latter presumption is said to arise 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 parent and child) and whereby there would be no presumption against donation. This presumption can apply regardless of the age of the “child” and indeed in this particular case the son was an adult. The Sheriff noted that a parent’s devotion and sense of duty to a child may be life-long.
Where this special presumption applies, the burden of proof shifts and the onus lies not on the payee, but on the payer to prove that the payment was intended to be a loan by displacing the special presumption in favour of donation in the familial context.
The Sheriff found that in this case, the Pursuers had failed to discharge that onus and found that the payment made was indeed a gift made out of natural affection, compassion and duty by Stuart as a father to his youngest son, Simon. The Pursuers therefore lost their claim and although the Sheriff reserved the question of expenses meantime, the Pursuers will therefore likely be held liable to pay the Defender’s expenses.
The relevant factors
The judgment provides an analysis of the two presumptions and sets out the factors that a court is likely to consider when deciding similar cases, including, but not limited to:
Documentary evidence
Whether there is any documentary evidence which confirms or alludes to the nature of the payment and whether it was, for example, intended to be a loan or a gift will be important. This includes considering if there is any written agreement, deed, or contract, or if there is any written communication between the parties describing, characterising, or referring to the payment. Letters, emails, notes etc may all be relevant and in this case reference was made to communications between the parties and with their solicitors. Documentary evidence could be contemporaneous or after the fact; formal or informal.
Witness evidence
Whether or not there are any witnesses who can speak to what the payment was intended to be, especially from the payer and payee themselves, will likely be key. Importantly, in this case, Stuart and Simon were both deceased, so no direct evidence could be led from the payer and payee.
Even though both Pursuers claimed that they had been advised by Stuart that the payment was intended to be a loan, the Sheriff, for a variety of reasons, was not convinced by their evidence. The Sheriff also had cognisance of Stuart’s mental capacity when he had allegedly made statements to the Pursuers given that he had been declared incapax shortly after he had allegedly made the admissions.
The Defender gave evidence that she had been told by Simon that the payment was a gift.
Where witness evidence is led, then the level of detail the witnesses are able to provide; and the reliability and credibility of their evidence will be crucial factors. You can read our examination of these concepts in our previous article here.
Demands for repayment; or actual repayment
Whether there was any challenge or demand for repayment of any of the sum will also be a relevant factor, with the case law supporting the notion that where there is an absence of any such challenge or demand for repayment over a prolonged period of time it is likely to be supportive of the inference that the payment was not a loan, but rather a gift.
Whether there was, in fact, any repayment of any of the sum will also be relevant. Interestingly in the present case, there was evidence of payments of £350 per month for a period of nine months having been made to Stuart after the payment was made, but it was not clear from the evidence that these were repayments towards the £70,000. The Sheriff speculated that given that the payments actually came from Simon’s company, rather than from Simon directly, and given Stuart had a role in that company, the payments could potentially have been in connection with that. Furthermore, it was relevant that Stuart did not appear to raise any issue with Simon when those payments ceased before the £70,000 had been repaid.
In relation to the points above, whether or not there was any history of similar payments, and what the arrangements were in relation to those will also likely be relevant.
Linked to this, the length of time it has taken for a pursuer to bring a case seeking repayment; and the circumstances surrounding that; including any grievances there may be between the relevant parties, or ulterior motives, will also be relevant.
In the present case, Stuart did not personally demand repayment of the loan from Simon (or his executors, him having predeceased his father by a year) in the 15 years prior to his death, and it was commented on by the judge that the case was only brought a number of years down the line and after a family feud. The case was now effectively being brought by a disgruntled Jonathan against his deceased brother’s estate, with the Sheriff noting that his bitterness towards Simon was palpable.
The relation and nature of the relationship between the parties
The relationship between the parties, including whether there is a familial or similar relationship will be key. The presumption of gift out of natural affection, compassion, and duty may potentially apply not only in relation to payments from parent to child (or potentially vice versa although we note that this has not been tested), but between other family members such as siblings. One leading case concerned a payment from an uncle to a nephew that was held to be a gift.
The personalities of the parties involved and the nature of their relationship may also be relevant. For example, in this case, the Sheriff concluded from the evidence that Stuart “was generous and soft-hearted in relation to his youngest son” such that he often provided financial support to him and his businesses, despite apparent previous support being given and that Simon had nonetheless still continually found himself in financial difficulty.
The financial positions of the parties
The amount of the alleged gift, as a proportion of the alleged donor’s assets and the affordability or otherwise of that, may also be a relevant criterion in determining whether this was intended to be a gift, or not.
Comment
This case exemplifies that there is a high burden of proof to satisfy in these types of cases. Each individual case will always turn on its own particular facts and circumstances, with the outcome at court never guaranteed, so it is important for parties to take legal advice in relation to the potential risks, including in relation to costs consequences at an early stage.
Importantly however, this case highlights that when agreeing to provide or receive financial assistance, even when between family members, it is imperative that you take legal advice as to the potential consequences and put in place an appropriate agreement which clearly outlines the rights and obligations, if any, of the parties.
In some cases there may be tax or other consequences of payments which parties may not consider at the time and in other cases it might be prudent to obtain security for any loan provided. Taking advice should ensure that you are protected and insofar as possible, will reduce the risk of any potential difficulties for you, or indeed for your executors down the line.
Alternative recourse
As an aside, where executors wish to challenge payments that have been made from a deceased’s estate which have been characterised as gifts, there may be other potential remedies. For example, if there is evidence that the payer did not have the requisite capacity at the time, or that they may have been subjected to facility and circumvention, undue influence, or even fraud. Again however, each case will turn on its own individual circumstances in this connection, including the evidence that can be brought in support of any such claim.
Interestingly in the present case, Jonathan levelled various accusations at Simon, including how he had “hoodwinked” his father, used “manipulative tactics”, and preyed on his “good nature and gullibility”, but no separate or alternative claim along any of these alternative lines of challenge appears to have been made.
How can we help?
Our expert cross-departmental contentious executries, trusts and tax team draws on the expertise of contentious and non-contentious specialists from across our firm and has a wealth of experience in this field.
We regularly advise clients regarding alleged gifts or loans made (including by deceased persons) and the potential for recovery of the same, along with all manner of difficult private client questions and disputes. We advise clients on alternative remedies and resolutions which might assist in these situations, as well as alternative methods of dispute resolution such as mediation.
For enquiries relating to the validity of or challenging wills, or any other contentious executries, trusts, or tax issues, please contact Partner, Stephanie Hepburn or Senior Associate, Thomas McFarlane.
As noted at the outset, this case highlights that when agreeing to provide/receive financial assistance, even when between family members, it is imperative that you take legal advice as to the potential consequences and to put in place an appropriate agreement which clearly outlines the rights and obligations, if any, of the parties. As a full-service law firm, we can assist with all of the necessary advice and documentation. For non-contentious enquiries, please contact a member of our private wealth and tax team.