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Ben Jones
Ben Jones, UK Lawyer
Category: Law
Satisfied Customers: 48761
Experience:  Qualified Solicitor - Please start your question with 'For Ben Jones'
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A close friend gave me £250,000 three years ago at an

Customer Question

A close friend gave me £250,000 three years ago at an acutely vulnerable time to enable me pay off debts and my mortgage and to take early retirement. It paid off the bulk of my mortgage but I continued to pay the mortgage on the remainder. Unfortunately, we have recently fallen out and he is claiming that this in fact constituted a loan. There was never at any time any suggestion or implication that it was a loan, either orally or in writing. Still less was any repayment plan discussed. He is claiming that it was a loan on the basis of "payment on demand or as soon as possible thereafter". I have received a Letter before Claim advising me that he intends to force me to sell my house and repay him the money. In that case, I would have no equity left. Can he do this? His payment was always regarded as a gift. I have emails that strongly suggest that this was his intention, but not the specific word "gift". Equally, as pointed out, there is no evidence of a loan agreement or of any repayments to him. To reiterate, a loan was never mentioned or implied until after my friend broke off the friendship and began to pursue a Letter before Claim.
Submitted: 1 year ago.
Category: Law
Expert:  Ben Jones replied 1 year ago.

Hello, my name is***** am a qualified lawyer and I will be assisting you with your question today.

Customer: replied 1 year ago.
Thank you, ***** ***** meant to add, that in my initial response to his solicitor's Letter before Claim, I did not know that Trust and Confidence was a legal term and stated, thinking that trust and confidence are part of any close friendship, that I enjoyed such a relationship with my friend. I soon clarified this in a letter to his solicitor, but the solicitor said that he reserved the right to use this as an admission of a contract. However, throughout I have asserted strongly that these payments were never given to me in the form of a loan, that there can be no proof of such an arrangement, because no such conversation or understanding took place.
Expert:  Ben Jones replied 1 year ago.

How long after agreeing to give you the money did your friend request it back? Thank you

Ben Jones and other Law Specialists are ready to help you
Expert:  Ben Jones replied 1 year ago.

Hi there. Thank you for your request for a phone call. I am unable to talk at the moment as I am in court today but if you provide the information requested, I will review the relevant information and laws and get back to you as soon as I can. Please do not respond to this message after you have provided the information as it will just push your question to the back of the queue and you may experience unnecessary delays. Thank you

Expert:  Ben Jones replied 1 year ago.

Hi there, a court would very closely look at any claims that such an amount was given as a gift because of t being rather large. It is rare for people to just give gifts of that scale so a certain degree of scrutiny will be expected to determine whether this was indeed a gift or not. You do not need a formal loan agreement to have this treated as a loan – it could have been a loan simply based on what was agreed verbally between you and your intentions at the time. So it will come down to your personal witness evidence.

When it comes to assessing factual disputes, where it is essentially one person’s word against another’s, the courts have developed certain tests that would be applied that would help them decide how much weight to attach to each side's evidence. As a general rule, the following are some of the more widely used tests:

· Demeanour - includes matters such as a person’s conduct, manner, bearing, behaviour, delivery and inflexion. They are matters of impression, which are not necessarily revealed by reading a transcript of evidence. It is the more 'personal' side of the individual providing the evidence

· Inconsistency – mainly to do with any apparent inconsistencies in a person’s evidence

· Probability – this would ask of the evidence as a whole, or of a particular part of it: whose account is more probable in the circumstances?

So the courts will apply these or other similar tests in coming to a decision that they believe is fair in the circumstances. That does not mean it is factually the right one, but what has been judged to be the fairest outcome based on all available information.

As to forcing you to sell the house, that may not actually happen – this is not a secured loan which is charged against the property so he cannot automatically force you to do this and a court will very rarely force someone out of their house to repay a loan, so do not worry too much about this at this stage but you will have to potentially have to defend a claim if it proceeds.

Customer: replied 1 year ago.
Thanks, ***** ***** colleague, Alex, suggested on the phone that he has no grounds, given the passage of time 3+ years between his payments and his recent claim that these constituted loans, that there is no evidence of a loan agreement and no repayments have ever been demanded or made. There are no witnesses to such an agreement ever having been made. There never was the slightest implication oral or written of a loan being involved.In an email in response to my wife thanking for his assistance in January 2013, he responded in an email as follows: "It is a great pleasure to be able to help - there's no point in money if it's not used for good things - and what better cause than Daniel who has had such an absolutely rotten time. Thank God he met you. I wish I had known about his parlous situation before. I will pay off the whole outstanding debt by the end of March. What an inspiration that Cracow invitation of mine was - quite on the spur of the moment."My friend also stated recently in an email that he was "not sanguine" about ever seeing the money again. He encouraged me to take early retirement last year, which would have been odd if there had been a loan, as I was taking a major cut income.I might add that my friend is a wealthy clergyman and was a close friend and parish priest for over 21 years. He broke the friendship suddenly during Easter because I objected to being pressurized to attend confession, which he could not require me to do. He became obsessed with the issue and began to denigrate me in phone conversations with my wife.I think I told you that although he paid off the bulk of the mortgage directly to Northern Rock, I have continued to pay the remainder - £107,000 - which I switched lenders twice, in 2013 and 2015, to get a better rate. I did not declare my friend's purported "loan" because it was not understood to be such.
Customer: replied 1 year ago.
PS There were no personal witnesses to these payments, apart from my wife. Our relationship was amicable in the intervening years.
Customer: replied 1 year ago.
PPS Ben, I sorry I confused your names. Alex was the person who phoned me this morning.
Customer: replied 1 year ago.
Ben: His solicitor's Letter before Claim is threatened to place charge on the property.
Customer: replied 1 year ago.
I may be away from the phone until 2.30. Please leave a message here in that case.
Customer: replied 1 year ago.
I am back near the phone now.
Expert:  Ben Jones replied 1 year ago.

Hi there, sorry as I was not the advisor who picked up the call option I cannot call you but will reply here instead. All of the evidence you have mentioned will go towards your case to argue that this was a gift rather than a loan, but will not in itself guarantee that a court decides the same. Legally there is nothing stopping the person from challenging this and taking the matter further and letting a court decide who is right and who is wrong. So if he is going to do so then you will have no option but tod defend such a claim – however as he is the one claiming the burden of proving that this was a loan is on him and he needs to provide the evidence to convince the court of that.

Customer: replied 1 year ago.
Thank you for your feedback. Just one further detail. For all the reasons outlined, the payments provided by my friend was never presented in the form of a loan, either in writing or verbally. However, when he provided £200,000 for our mortgage in 2013, he paid it directly to the lender (without any formal application to register his interest), whereas other payments were directly to me. Does that make a difference to any potential claim for equity, even though he said in an email immediately afterwards, which we have, that "he was delighted to help" and "what was the use of money otherwise"?He is also claiming "undue influence", due to very sincere expressions of affection and loyalty by my wife and I, including our hope that he would come to live with us eventually. These were entirely sincere and never rescinded, although this offer became unlikely when he began the Letter before Claim to eject us out of the very home we would have had him live in. It was he who broke the friendship, which triggered this crisis. Before that, there was never the slightest suggestion that the payments he provided were anything other than a loan.
Customer: replied 1 year ago.
Sorry - I meant anything other than a gift!
Expert:  Ben Jones replied 1 year ago.

Whether he paid the money to you or the lender will not really make a difference as what matters is still what his intentions were at the time. I doubt that undue influence would come into it in these cirucmstances

Customer: replied 1 year ago.
Thanks for your prompt response - very helpful.
Expert:  Ben Jones replied 1 year ago.

No problem at all

Customer: replied 1 year ago.
Sorry to trouble you with one final (I think) question. When his solicitor contacted me in June and mentioned that my friend and I had a relationship of trust and confidence, I said, thinking that trust and confidence are everyday terms to describe a relationship, that we certainly did have such a relationship, although making clear that the payments were never made in terms of a loan, either verbally, in writing or by implication. I wrote to clarify what I meant by trust and confidence (the everyday rather than sense), but the solicitor said he would regard it as an admission of a contract, even though the context of the response as a whole had made clear that there never had been a loan. Can he really take my reference to trust and confidence wholly out of context of my response rejecting the Claim and use it to fabricate the existence of a loan?
Expert:  Ben Jones replied 1 year ago.

a relationship of trust and confidence is not just created by one of the parties admitting to such. This is a legal principle which would be created based on the overall relationship, the way you treated each other, basically looking at the overall situation...not just an allegation it was such a relationship and a subsequent acknowledgement. In other words only a court can decide whether such a relationship was formally in place

Customer: replied 1 year ago.
Thanks so much. This has been very helpful.
Expert:  Ben Jones replied 1 year ago.

Most welcome