Mid Year Family Conference Cohabitation Speaker Graeme Fraser (Hunters)
Aug 17, 2015
What does cohabitation mean?
Living together as a couple without getting married or forming a civil partnership
What is living together? - Kimber checklist includes
• Living together in the same household
• Stability and permanence in the relationship
• Financial affairs indicative of the relationship
• An admitted and on-going sexual relationship
Recognition of pre-marriage cohabitation as a relevant factor on divorce
GW v RW [2003] 2 FCR 289; McCartney v Mills-McCartney [2008] 1 FCR 289 (Both High Court)
• Unreal and artificial to treat cohabitation and marriage differently where the relationship has moved seamlessly from cohabitation to marriage without any major alteration in the way the couple lived
• There is often a pooling of resources, both in money and property terms
But contrast with post separation/ divorce cohabitation…
Grey v Grey [2010] 1 FCR 394(Court of Appeal)
• There was no inevitable re-evaluation of a periodical payments claim for a wife where she had no legal entitlement to financial contribution or benefit from her cohabitant
Cohabitation as a modern family trendCohabitation is the fasting growing type of family in the UK • 3 million couples now cohabit • 30% of all births born to cohabiting couples • 25% of unmarried men and women between 15 and 59 cohabit • 78% of couples live together before marriage • Average age at which people marry has crept upwards to 31 (men)
and 29 (women)
• Perception: little difference between being married and living together
Why has cohabitation increased?Expansion of :
• Individualisation• Independence• Self-actualisation• Freedom
Rejection of :• Patriarchy• Authority• Marriage
Changing of attitudes
• 1960s/70s Social movements and feminism
• 1980s/90s Globalisation and new employment conditions
• Result : Uncertainty in relationships and more births within cohabitation
• Consistent pattern in UK and across Western Europe and Russia
Conflicting research
• Cohabiting relationships less stable…
• But marriage not always more advantageous for happiness and self-esteem
• Marriage leads to better outcomes…
• But new research needed to see whether there are differences between long term cohabiting relationships and long term marriages
Diversity of cohabitation patterns• Delayed entry into marriage
• Vast majority of marriages preceded by cohabitation
• Increased non marital childbearing
• Relatively short lived relationships, younger, poorer, liberal attitudes…
• But majority now see little difference in commitment of married and cohabiting couples which leads to the common law marriage myth
Why the breakdown of cohabitation often has unintended legal consequences
• Cohabitation is progression in a relationship so…
• Childbearing and property ownership can come before marriage
• Intervening life events and fear of commitment might result in a decision not to marry
• Patchy understanding of the difference in legal protection following dissolution of marriage and cohabitation
Relationship generated disadvantage• The division of labour between a modern family couple is not always
‘traditional’ in terms of who earns the money, or who runs the home and cares for the childrenBut:• does not automatically result in an equality of property ownership
• Childcare and homemaking can mean less income and no appreciable assets for performing those roles
• Those financial sacrifices can then enable the breadwinners to improve their income, and invest to accumulate capital
• The effect is aggravated the longer the relationship lasts
Burns v Burns: The decision
Lord Justice May :
"when the house is taken in the man's name alone, if the woman makes no "real" or "substantial" contribution towards either the purchase, deposit or mortgage instalments by the means of which the family home was acquired, then she is not entitled to any share in the beneficial interest in that home even though over a substantial number of years she may have worked just as hard as the man in maintaining the family in the sense of keeping the house, giving birth to and looking after and helping to bring up the children of the union"
Burns v Burns: The impact
Lord Justice Fox:
"she lived with him for eighteen years as man and wife, and, at the end of it, has no rights against him. But the unfairness of that is not a matter which the Courts can control. It is a matter for Parliament”
Contrast with the Family Court's approach to financial remedies on divorce…
White v White: 26 October 2000 House of Lords:
Lord Nicholls:
"In seeking to achieve a fair outcome, there is no place for discrimination between husband and wife... Typically, a husband and wife share the activities of earning money, running their home and caring for their children. Traditionally, the husband earned the money, and the wife looked after the home and the children… But whatever the division of labour chosen by the husband and wife, or forced upon them by circumstances, fairness requires that this should not prejudice or advantage either party"
Summary of basic principles
• The development of constructive trusts in domestic property disputes
Two Supreme Court decisions give guidance:
• Stack v Dowden [2007] UKHL 17;
• Jones v Kernott [2011] UKSC 53
A declaration of trust that expressly states how the property is held determines the respective beneficial interests between cohabitants
• If there is no express declaration of trust, a constructive trust is appropriate for determining beneficial interests in a jointly owned family home
• The starting point is an equal split of the beneficial interest
• But this is displaced if the couple had a different common intention when the property was acquired or subsequently
Summary of basic principles - Common Intentions – The law has “moved on”
• A couple’s common intention is to be deduced objectively from their conduct
• If the couple did not intend an equal division, then their property shares may be determined by what the court considers fair having regard to the whole course of dealing
• This is not limited to financial contributions to the purchase price
• Indirect contributions to the purchase price and improvements to the property after purchase may also be considered
Case law since Burns:
The rise of the common law constructive trust in a domestic property situation
• But there must be evidence of an express, inferred or imputed
common intention to share
• Where the property is held in one party's sole name, the party who makes non-financial contributions, such as raising the couple's children will continue to struggle to obtain any share in the family home on separation
• This can lead to hardship and vulnerability
Proprietary estoppel is not an appropriate vehicle to quantify cohabitation claims
Each case is fact specific
Southwell v Blackburn [2014] EWCA Civ 1347
• The appellant was aware that, as a wife, the claimant might have a substantial claim against him on divorce
• He therefore only provided a home to her and her daughters on his own terms
• Tomlinson LJ did not believe that "either of them were blind to the realities"
Graham-York v York [2015] EWCA Civ 72
• When considering fairness, having regard to the whole course of dealing, the confines of the enquiry as to fairness is in relation to the property
• The court's discretion is necessarily limited especially in sole ownership cases
• In spite of the length of cohabitation (33 years), natural love and affection did not come to the fore
• Non-owner's financial contributions did not amount to very much
• Her beneficial interest was limited to 25% of the property's value
Curran v Collins [2015] EWCA Civ 404
• Common intention and detrimental reliance are required in every common intention constructive trust case
• Very often, evidence of inference of common intention also demonstrates detrimental reliance
• But if detrimental reliance not demonstrated through evidence of common intention, separate evidence is needed
What is a cohabitation agreement?
A written, signed document that normally deals with:
• Who owns what, and in what proportions
• What financial arrangements have been made while living together
• How property, assets and income should be divided on splitting up
It is prudent to address potential future events such as the needs of any future children.
It should be upheld if property drawn up, with reasonable terms, and each party has separate, independent legal advice on its effect.
When should a cohabitation agreement be made? • It can be made at any time regardless of how long the couple have
cohabited
• They are often made at the time a couple purchase a property together
• Specialist family law advice will make the agreement more likely to be upheld
• The terms of a cohabitation agreement can be negotiated using the mediation or collaborative law processes
Why are cohabitation agreements useful? • There are no automatic cohabitation law rights on splitting up,
regardless of length of cohabitation
• They reduce or eliminate potential disputes on separation
• The negotiation of the agreement can focus the couple on the financial planning that will be needed during the relationship
What should be included in a cohabitation agreement? • Payment of the mortgage, and linked policies – how contributions will
be dealt with on splitting up
• Management of income through bank accounts, and how household bills, credit cards and debts will be paid
• Provision in pensions, including death in service nominations
• Listing personal possessions
• Expectations and wishes about care and finances for the children
Review the agreement if moving house, the couple have children, or there is a dramatic change in circumstances
Make a Will to cover position on death
Always consider a Declaration of Trust whenever a property is being purchased
Cohabitation legislation in other countries Germany• Laissez-faire approach• 26% are cohabiting, at similar levels to the UK• Almost no laws apply to cohabitation• Basic law requires state protection of marriage
Holland• Contractual approach• 30% are cohabiting• Registered partnerships available with same legal consequences as
marriage, except childbearing and childrearing• But only 8% are in registered partnerships
Cohabitation legislation in other countries Sweden
• Fixed rules
• 55% are cohabiting
• Neutral approach to marriage and cohabitation irrespective of whether the couple is opposite sex or same sex
• Division of labour occurs in all shared living relationships, regardless of whether you are married or cohabiting
Cohabitation legislation in other countries Sweden
• Objective is to provide minimum protection to the weaker partner when cohabitation ends
• Value of the family home and furniture divided equally at end of relationship, so long as items are acquired for joint use
• Departure possible if a cohabitant has invested gifts and/ or inheritance or when the relationship is shorter
• Reflects that family life means that both parties live in a single joint home not comparable with any other type of property
Cohabitation Reform
Lord Marks's Cohabitation Rights Bill (Second Reading : House of Lords 12 December 2014)
• Restitutionary approach
• To include couples who live together and have children, or who have lived together for at least 2 years
• Intended to address economic unfairness at end of a relationship that has enriched one party and impoverished the other
• Qualifying contributions to justify a redistribution of assets could be financial or could be in work or in kind
• Opting out available, provided that independent legal advice taken and other safeguards met
Arguments against reform
• Reduces willingness of partners to commit long term, increasing stress of breakdown to the significant detriment of children
• More beneficial for society to encourage marriage rather than cohabitation
• Coalition Government did not support legislation: "A proper consideration of cohabitants rights would be for the next Parliament"
Arguments in favour of reform
• There is a major detriment to children from the parting of any couple
• Women in their fifties or sixties, who have been left by their partner after 25 to 30 years, have been left homeless on their own with the children growing up
• The legislation would not discourage marriage but provide a safety net, transferring the financial burden of relationship breakdown from the state to irresponsible common-law husbands and fathers
• Difficult to prove and inordinate costs for cohabitants who argue that they have a share in the other's property
What next?
• Prevalence of cohabitation and of births to children to couples who live together suggests need for law reform will become more pressing over time
• Resolution's research shows strong public support for change
• Cohabitation reform successfully implemented in Scotland and Ireland
• What further work is necessary?
• Cross-party initiative for family law reform including cohabitation reform would be helpful
Final thoughts
Lord Marks :
“It is entirely wrong to perpetuate a system that has as its default position the notion that the partner unwilling to marry may take advantage of the other and, while doing so, take advantage of any children that they have together"
A good start:
Simple legislation providing long term cohabitants and those who have children with equality of division of any home acquired for joint use in a family relationship
Thank You
Graeme Fraser (Hunters)
Contact: [email protected]: @gsf1996
@HuntersFamLawwww.hunters-solicitors.co.ukwww.londondivorcelawyers.com