Kenneth Thomas v Deborah Porter
[2023] EWHC 983 (KB)
Vimalrai Patel v Mayur Patel
14 June 2024
[2024] EWHC 1412 (Comm)
High Court
A family argument over money ended up in court. One brother paid off his other brother's mortgage. The second brother said it was a gift, but the court disagreed. The case was put on hold until a related family trust case in Jersey finishes to prevent conflicting decisions.
Key Facts
- •Vimalrai Patel (Vimal), younger son of the deceased Prakashchandra Patel (Prakash), and Prakash's estate sued Mayur Patel (Mayur) for repayment of £816,120.04 used to discharge Mayur's mortgage.
- •Mayur's mortgage was guaranteed by Prakash and Vimal.
- •Mayur failed to repay the mortgage, leading Prakash and Vimal to pay it from their joint account.
- •Mayur argued the payment was a gift to Maya Patel (Maya), Mayur's wife and Prakash's sister.
- •Prakash and Vimal had previously given a Letter of Assurance to Maya, promising financial support, including £500,000 towards the mortgage.
- •Concurrent proceedings in Jersey involve disputes over trusts established by Prakash, and the validity of disclaimers signed by Maya and her family in consideration of the Letter of Assurance.
Legal Principles
Indemnity: A guarantor who discharges a debt is entitled to be indemnified by the principal debtor.
English Contract Law
Subrogation: A guarantor who pays a debt can step into the shoes of the creditor and enforce the creditor's rights against the debtor.
English Contract Law
Restitution: A party who has been unjustly enriched at another's expense is required to make restitution.
English Contract Law
The intention behind a payment is crucial in determining whether it constitutes a gift.
This case's interpretation of common law
Outcomes
The court rejected Mayur's defense that the mortgage payment was a gift.
The court found that Prakash and Vimal's intention was not to make a gratuitous gift but to treat the payment as partial fulfillment of the Letter of Assurance.
The case was adjourned pending the outcome of the Jersey proceedings.
The court considered it best to wait for the resolution of the related Jersey case before determining the final relief, to avoid conflicting judgments and to protect Mayur and Maya's position in the Jersey case.