## Facts

- Ms. Tinsley and Ms. Milligan, in a cohabiting relationship, jointly purchased a property registered solely in Ms. Tinsley’s name.
- The arrangement was made to enable Ms. Milligan to fraudulently claim social security benefits, of which Ms. Tinsley was aware.
- Both contributed financially to the purchase and ran a lodging business from the property.
- The relationship deteriorated, leading Ms. Tinsley to seek to evict Ms. Milligan, who counterclaimed for a half share.
- The key factual dispute was whether Ms. Milligan could assert a beneficial interest under a resulting trust despite the association of the acquisition with an unlawful act.
- Ms. Tinsley argued that Ms. Milligan should not acquire a beneficial interest because doing so would require reliance on her illegal purpose.

## Issues

1. Whether a party to an illegal transaction can claim a beneficial interest in property under a resulting trust without relying on their own illegality.
2. Whether the reliance principle or a broader public policy approach should govern the application of the illegality defense in trust claims.

## Decision

- The House of Lords found that Ms. Milligan could claim a beneficial interest in the property without having to rely on the illegality, as her beneficial interest arose from her direct financial contribution.
- The court applied the reliance principle, holding that a claimant is barred only if their claim requires reliance on an illegal act.
- The strict reliance test was preferred over the discretionary public policy test proposed by the Court of Appeal.
- Ms. Milligan’s claim succeeded because the establishment of the resulting trust did not depend on her illegal conduct.

## Legal Principles

- A claimant will be barred from recovery only if their cause of action requires reliance on their unlawful act (reliance principle).
- A resulting trust can arise if a party proves financial contribution to the purchase price, regardless of an unlawful motive, provided the claim does not rest on the illegality.
- The House of Lords rejected a discretionary public policy test in favor of clear legal rules controlling the illegality defense.
- The reliance principle, as established in this case, contrasts with the later proportionality and public policy approach adopted in Patel v Mirza and subsequent cases.

## Conclusion

Tinsley v Milligan established that a beneficial interest under a resulting trust may be claimed if the claimant does not need to rely on their illegal conduct. The strict reliance principle adopted in this case became foundational for how courts addressed illegality in trusts, though this approach has since been reconsidered and replaced by a broader public policy test in later case law.

Tinsley v Milligan [1994] 1 AC 340