Cohabitation: An alternative remedy
The myth of the "common law wife" remains a red herring for many of the six million cohabiting couples living in the United Kingdom today. It cannot be stated often enough that a cohabitant does not possess the same rights to a family home as a spouse upon relationship breakdown.
Where a property is registered in the sole name of a spouse, the starting point on divorce is an equal division of the net proceeds of sale. However, where a property is registered in the sole name of a cohabitant, it is necessary to consider the individual contributions to the purchase price.
If a cohabitant has contributed to a property by way of deposit or mortgage repayments, then they will usually be able to evidence a beneficial interest under a constructive trust, at which point the question of quantification arises. Over the years the courts have been very clear that financial contributions are the only method by which a beneficial interest can arise.
Legal practitioners are familiar with cases flowing from the decision in Burns v Burns, where a female cohabitant was held to have no beneficial interest in the family home, despite having cohabited with her partner for seventeen years, whilst raising two children and contributing to household expenses. This approach is well-entrenched.
The recent case of Southwell v Blackburn (2014) in the Court of Appeal reminds practitioners that the judiciary have discretion to order a remedy under the principle of proprietary estoppel. A remedy is available if the circumstances of the case make it 'unconscionable' that a party should receive no financial recompense if an assurance has been offered as to their future security and they have relied upon that assurance to their financial detriment.
Turning briefly to the facts in the present case, the parties met in early 2000. At the time, Ms Blackburn was living in a house rented from a housing association following the breakdown of her previous marriage. She spent around £20,000 fitting out and furnishing the property. She lived with her two daughters, at that time aged 11 and 12.
In 2002 the parties agreed to live together and were both involved in looking for suitable houses. They found a property which Mr Southwell purchased in his sole name, using equity from the sale of his previous property. A mortgage was secured on the property for which Mr Southwell was solely responsible. Mr Southwell promised Ms Blackburn a secure right of occupation, along with lump sum and pension nominations in the event of his death. He likened their relationship to a marriage to Ms Blackburn.
In reliance on these assurances, Mrs Blackburn gave up her tenancy and she and her daughters moved into the property with Mr Southwell. As time passed the relationship between the parties began to deteriorate and in 2009 Ms Blackburn returned to the property one day to find the locks had been changed without her knowledge.
Ms Blackburn consequentially made an application to the court. She claimed to be the beneficiary of a constructive trust and also that she had an enforceable claim in equity by operation of proprietary estoppel. At first instance, the judge dismissed the claim that a constructive trust had arisen, but upheld that a claim was established by virtue of proprietary estoppel. Mr Southwell was ordered to pay £28,500 to Ms Blackburn. This award restored Ms Blackburn to the same financial position as before she gave up her house, with the figure awarded updated to account for inflation.
On the evidence, the judge found that Mr Southwell had offered an assurance to Ms Blackburn that she would have a home for life. Mr Southwell was found to have offered the security that a wife would have in terms of accommodation and income provision. This assurance persuaded Ms Blackburn to give up her own independence and security. Mr Southwell made these promises intending that Ms Blackburn would rely on them. The judge felt it would be unconscionable for Mr Southwell to do anything other than to put Ms Blackburn back in much the same position as before she relied upon his assurance.
Mr Southwell appealed and the case was heard in the Court of Appeal on 16 October 2014. The appeal was dismissed. The judge at first instance had been right to find that an assurance had been made to Ms Blackburn, that she had relied on it to her detriment and therefore "repudiation of the assurance is unconscionable". The award of £28,500 was upheld.
As ever, each case will be dependent upon its own facts and merits. However, this ruling serves as a timely reminder that equitable remedies can be used to protect a cohabitant unable to establish a legal or beneficial interest in a joint property.