Legal advice please re loan/gift

[cornishblue7]

Hello

I’m seeking legal advice for a close friend, I’ll call her Sarah.

Sarah was in a long term relationship with a man she met online, I’ll call him Ben, who last October took out a loan for £25k and transferred it to her to help towards her starting a new business venture. It was verbally agreed that Sarah would pay this back in monthly instalments. Ben kept back £5k of this to cover the first 6 months of the loan, so £20k was transferred.
Sarah then fell pregnant, they were both (seemingly) very happy. Looking at buying a house together etc. Their families had met too. Ben said that Sarah didn’t need to worry now about paying back the loan.

Then a lady got in touch with my friend via email to say that Ben was also seeing her, and had been for their entire relationship. He had been living a double life, with no intentions of being honest with Sarah, even despite her falling pregnant. There are lots of extra details here I am omitting. My friend ended things immediately, and chose not to continue with the pregnancy. She is still devastated by the last year. Ben has recently got in touch demanding the money back and threatening court.
Does she legally need to pay this money back?
Thank you!

It depends on exactly what was said. If Ben said Sarah didn't need to worry at the moment, implying he still wanted it back eventually, it was still a loan and will need to be paid back. If he said she didn't need to worry about paying it back at all he was making the money a gift and she doesn't need to pay it back.

If it goes to court he will probably say either that he didn't say she didn't need to pay it back or that she didn't need to pay it back at the moment. If her version is that she didn't need to pay it back at all it will be up to the judge to decide on the balance of probabilities who is more likely to be telling the truth.

If there is any documentation saying that it was a loan from Ben to Sarah that will help him. Similarly if there is anything saying it was a gift that will help her. My guess is that there is no documentation either way so it is going to depend on which of them the judge finds most credible.

Thank you prh47bridge you’re right - there is no documentation either way. Just verbally.

. . . and it appears he lied as to his intentions and position so who do you think the judge might believe?

Jonbb - for sure he did, he was absolutely living a double life full of lies & deceit, I wasn’t sure if that would be acknowledged in court though, and just unsure about the legalities of it all.

He took a loan out to help her start her business. She should pay it back but make sure she is getting chIld maintenance from him.

Redhelen8 she didn’t keep the baby, when she found out about his secret life.

Probably sensible but I think it was given as a loan so should be paid back as originally agreed.

Thanks for your thoughts. There have been many opinions floating around recently, hence me being keen to ask from a legal point of view.

She should check the emails and texts from around the time he supposedly said he was changing the business loan into a gift because she was pregnant. If it supports a gift (not that likely in my view) then fine if not then she may need to pay it back may be less the costs of the abortion and any other losses his lies and deception have caused her perhaps.

Basically a court would be looking at what was agreed. You can certainly make a loan and later agree to change it into a gift. Ideally yuou document it at every stage. If no documents then you look at emails, texts letters and if none of that you speak to everyone who knew about what was said as their verbal evidence is good too. Eg if he said in front of 5 family members - that business loan is now a gift. I am givingyou the £20k and you never need to pay it back.

If instead he implied there was no rush to pay it back as she was bearing his child it probably remains a loan with unclear terms over repayment so a reasonable period of time to pay it back might be intended. It is possible she agreed to give him shares in his limited company in return for the loan too so going through all texts and emails right thorugh the time they were in touch could be very helpful as a starting point. Any lawyer would want to see all that.

Legally the loan is on his name so he is responsible for repaying it. Morally though, no matter how much of a shit he was, I don't think it's right to just keep £20k and not pay anything back.

Legally the loan is on his name so he is responsible for repaying it

The loan from the original lender is in his name so he is clearly responsible for paying that. However, he then loaned the money to "Sarah". It is clear that the terms of his loan to her involved her repaying him. She was therefore legally responsible for repaying him. The question is whether he subsequently turned the loan into a gift. If he did she does not have to repay him. If he did not she still owes him the money and is legally required to repay him.

Exactly. He owes a debt to a bank and originally at least she owed him the money he provided to her by way of loan. Two loans. Two contracts and possibly the second loan was converted into an absolute gift but may be not.

There are so many of these he said she said disputes out there with no written contract but sometimes there is a written one and a deed of variation - I fear not here or at least emails which help prove it all one way or the other.

If I was Sarah, I wouldn't be wanting a penny of his money, loaned or gifted. I hope her business is going well and she can scrape together every penny to be shut of him. Then have the satisfaction of knowing she did it despite everything he put her through. The best revenge is a life well lived and all that.