Coleman v Mundell

Coleman v Mundell

The court found that the parties had an oral collateral contract: the transfer of shares was intended as security for an interest-free loan, not an outright sale. Coleman is entitled to repay £250,000 and reclaim the shares.

Parties
Claimant: Philip Coleman; Defendant: Mark Mundell
Jurisdiction
England and Wales
Judgment Date
30 October 2020
Procedural Posture
Civil / Judgment
Outcome
Claim allowed
Legal Topics
Collateral Contract, Specific Performance, Loan Agreement, Share Transfer
Contract Law Collateral Contract Specific Performance Loan Agreement Share Transfer

Case Brief

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Parties

Philip Coleman

Claimant

Mark Mundell

Defendant

Procedural Posture

Civil / Judgment

Legal Issues

  1. 1 Whether the oral agreement between Coleman and Mundell constituted a loan secured by shares or an outright share sale
  2. 2 Whether a collateral contract existed alongside the share transfer deed
  3. 3 Whether Coleman is entitled to specific performance to reclaim shares upon repayment

Ratio Decidendi

The court found that the parties had an oral collateral contract: the transfer of shares was intended as security for an interest-free loan, not an outright sale. Coleman is entitled to repay £250,000 and reclaim the shares.

Court Disposition

Claim allowed

Orders

  • Coleman is entitled to repay £250,000 to Mundell and require the transfer of 50% of Ninurta S.L. shares back to him.
  • The implied term is that Mundell's appointment as administrator was solely for security and should end upon repayment.