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Mid Year Family Conference Cohabitation Speaker Graeme Fraser (Hunters)
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Page 1: Cohabitation PowerPoint Presentation

Mid Year Family Conference

Cohabitation Speaker Graeme Fraser (Hunters)

Page 2: Cohabitation PowerPoint Presentation

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

Page 3: Cohabitation PowerPoint Presentation

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

Page 4: Cohabitation PowerPoint Presentation

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

Page 5: Cohabitation PowerPoint Presentation

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

Page 6: Cohabitation PowerPoint Presentation

Why has cohabitation increased?Expansion of :

• Individualisation• Independence• Self-actualisation• Freedom

 

Rejection of :• Patriarchy• Authority• Marriage

Page 7: Cohabitation PowerPoint Presentation

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

Page 8: Cohabitation PowerPoint Presentation

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

Page 9: Cohabitation PowerPoint Presentation

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

Page 10: Cohabitation PowerPoint Presentation

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

Page 11: Cohabitation PowerPoint Presentation

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

Page 12: Cohabitation PowerPoint Presentation

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"

Page 13: Cohabitation PowerPoint Presentation

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”

Page 14: Cohabitation PowerPoint Presentation

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"

Page 15: Cohabitation PowerPoint Presentation

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

Page 16: Cohabitation PowerPoint Presentation

• 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

Page 17: Cohabitation PowerPoint Presentation

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

Page 18: Cohabitation PowerPoint Presentation

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

Page 19: Cohabitation PowerPoint Presentation

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"

Page 20: Cohabitation PowerPoint Presentation

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

Page 21: Cohabitation PowerPoint Presentation

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

Page 22: Cohabitation PowerPoint Presentation

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.

Page 23: Cohabitation PowerPoint Presentation

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

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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

Page 25: Cohabitation PowerPoint Presentation

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

Page 26: Cohabitation PowerPoint Presentation

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

Page 27: Cohabitation PowerPoint Presentation

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

Page 28: Cohabitation PowerPoint Presentation

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

Page 29: Cohabitation PowerPoint Presentation

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

Page 30: Cohabitation PowerPoint Presentation

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"

Page 31: Cohabitation PowerPoint Presentation

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

Page 32: Cohabitation PowerPoint Presentation

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

Page 33: Cohabitation PowerPoint Presentation

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

Page 34: Cohabitation PowerPoint Presentation

Thank You

Graeme Fraser (Hunters)

Contact: [email protected]: @gsf1996

@HuntersFamLawwww.hunters-solicitors.co.ukwww.londondivorcelawyers.com