Court of Appeal decision in Southwell v Blackburn upholds payment to former partner in cohabitation dispute

On Thursday 16th October 2014 the Court of Appeal upheld an important order in relation to cohabitation disputes following relationship breakdown. This stresses the importance of putting in place proper cohabitation agreements.

The decision upheld the order of a lump sum payment from a businessman to his ex-partner. The female partner had brought a claim in respect of a property in the sole name of the man. She argued on the grounds of two claims, one of which was dismissed. As a result she received £28,500.

The background

Mr Southwell and Ms Blackburn lived together for ten years in a home chosen by them together, purchased in his name and funded by him with no financial assistance from her.

Ms Blackburn did not contribute towards the purchase of the property by way of capital or mortgage instalments.

The house was financed solely by Mr Southwell (£100,000 mortgage and £140,000 equity from his previous property).

He made promises to Ms Blackburn that she would be secure in the new home long term. Relying on the assurance, Ms Blackburn (who had two children by a previous relationship) left the secure rented property she had spent much of her money on and spent the rest of her savings to move in with Mr Southwell. Ms Blackburn was further reassured because Mr Southwell arranged for her to benefit from his pension if he died.

After ten years together the relationship ended. Mr Southwell gave Ms Blackburn notice to quit the property before changing the locks, making her homeless.

The court judgment

The judge found that it was a joint decision to live in this property, in Droitwich, and that she was involved in the process to select and view houses. The Judge was satisfied that the decision to purchase the house was made jointly with the intention that it would become their home, where they would live together effectively as man and wife.

The court found that he had broken his promise to her and that it would be unconscionable to permit him to do so.

Although Ms Blackburn invested no money in the property and did not own it, the court valued her claim as equivalent to the money she had invested in improving her previous home (£20,000), together with the cost of her move to live with him (£5,000). Inflation was applied taking the total to £28,500.

Key points to note:

• A cohabitation agreement can prevent such disputes. Provision can be made to determine what will happen to the non-owning party when the relationship ends. Everyone's situation is different and a cohabitation agreement can be drafted to fit individual circumstances.
• Unmarried partners who don't own the home in dispute and haven't contributed directly to buying or improving it may still have a claim if they can show that they were given assurances about their security or rights which persuaded them to act in a way which was against their own interests (e.g. by giving up a secure home to move in).
• It is rare for a cohabiting couple not to make such promises to one another. This situation will apply to many such relationships.
• The promise (and the reliance on it at personal cost) is made from the moment the couple move in together. The length of the relationship is therefore not critical.
• Property owners defending claims by non-owning former partners should take particular care. Giving notice to their former partner to quit and changing the locks can give rise to an actionable breach of any promise made, and reflects poorly on the owning party. Always take advice before excluding the non-owning party from the home.

For more information please contact Lucia Mills on 0117 9292811 or you can e-mail her directly at lucia.mills@wards.uk.com