David Brounger represented John Rankin Cornforth who was successful in his claim for money advanced under a series of oral loan agreements to a former friend. Mr Cornforth had lent the money on the understanding that his friend was going to receive an inheritance and repay him.
The case raised interesting questions about the:
- presumption of loan in Seldon v. Davidson [1968] 1 WLR 1083
- extent to which acceptance of and a failure to return sums advanced amounted to an acceptance of the terms of a draft written loan agreement
- extent that interest on a loan may be payable on the basis of previous dealings between the parties.
Background to the proceedings
Between 2012 and 2014 Mr Cornforth had lent approximately £200,000 to Simon Denyer to cover his divorce costs and settlement sums and to redeem his mortgage. Mr Denyer initially denied that the advances in respect of his divorce proceedings were gifts but later admitted that they were loans and repaid the money. However he maintained that the £125,000 paid to redeem his mortgage was a ‘gift’.
At trial, the judge ordered Mr Denyer to repay £125,000 plus interest