Mark Shaw v The Estate of Martin Wood
[2023] EWHC 975 (KB)
Adam Jonathan Durrani & Anor v Charlotte Justine Coe & Anor
15 November 2024
[2024] EWHC 2912 (KB)
High Court
Friends and former partners fought over money. No clear paperwork existed to prove loans or gifts. A judge looked at emails, messages, and what people said to decide who owed what and how much. A bankrupt person remained involved in the case. The judge made detailed rulings on various transfers, some ruled loans, others gifts.
Key Facts
- •Dispute over money transferred to defendants, Ms Coe and Mr McCourt, from claimants, Mr Durrani and Sound & Vision Ltd.
- •Close relationships between parties; friendship and past relationship between Mr Durrani and Ms Coe, and cohabiting (but estranged) partnership between Ms Coe and Mr McCourt.
- •Lack of written documentation regarding the nature of the transfers (loans or gifts), repayment terms, and interest.
- •Mr McCourt's bankruptcy during proceedings.
- •Disputes regarding burden of proof and validity of loan contracts under the Law of Property (Miscellaneous Provisions) Act 1989.
Legal Principles
Shifting of burden of proof: In cases where money is transferred and the defendant claims it was a gift, the burden shifts to the defendant to prove it was a gift (unless there's a presumption of advancement).
Seldon v Davidson [1968] 1 WLR 1083; Chitty on Contracts, paragraph 42-277
Validity of loan contracts under s2 Law of Property (Miscellaneous Provisions) Act 1989: A loan agreement including a contractual agreement for a legal charge over property may be void if not properly documented.
Law of Property (Miscellaneous Provisions) Act 1989, s2
Insolvency Act 1986, s 285: Court's power (but not obligation) to stay proceedings against a bankrupt individual.
Insolvency Act 1986, s 285; Re Lynch [2020] EWHC 15 (Ch)
Outcomes
Ms Coe and Mr McCourt jointly liable to repay £150,000 transferred in December 2016.
Despite lack of documentation, evidence suggested this was a loan used for family finances and both parties were aware of the repayment obligation.
Ms Coe and Mr McCourt jointly liable to repay £135,245.03 (net) from transfers between March 2017 and August 2018.
Evidence suggested these transfers were additional loans under the same terms as the December 2016 transfer.
Mr McCourt liable to repay £50,000 to Sound & Vision; Ms Coe not liable.
Loan made solely to Mr McCourt; no evidence of Ms Coe's involvement or agreement to joint liability.
Ms Coe not liable to repay £11,449.21 transferred in 2020.
Court found these transfers were gifts, not loans, due to lack of documentation and the circumstances surrounding the payments.
Neither Ms Coe nor Mr McCourt liable to repay £6,000 (cash payment).
Court concluded this was a gift if the payment was made at all.
Proceedings against Mr McCourt continued despite his bankruptcy.
Court considered factors such as Mr McCourt's filed defence, lack of trustee intervention, minimal trial impact, and benefits of prompt resolution.