Man loses house to co-habiting partner he refused to marry

The complexity of the law surrounding the rights - or lack of them - of cohabiting couples has again been highlighted in a court case which saw a mum of three awarded the profits from her ex-partner's £1million property.

Waiting for "someone better"

Property developer Stephen Farrer, 53, refused to marry Kirsty Cahill, 33, who he met while she was still at school "in case someone better came along".

A court heard how Miss Cahill was "besotted by, wholly dependent on and trusting of" her partner.

Mr Farrer put almost £140,000 into buying a house in Colliers Wood, London in 2007, which cost nearly £500,000, and the house was put in Miss Cahill's sole name. Judge Nigel Gerald said there was 'no doubt' it was an investment property.

Although Miss Cahill had three children with Mr Farrer, he 'publicly humiliated' her by going down on bended knee just two months after their youngest was born, in front of the whole family, before informing her later that he wouldn't marry her.

Price to pay

Judge Gerald ruled that giving Miss Cahill the four-bedroom house in Colliers Wood, South London, was the price Mr Farrer paid for denying her the financial security of a wife. The couple separated in 2012.

Although Mr Farrer insisted he had only put the house in her name to make it easier to get a mortgage, Judge Gerald ruled it was all hers. There is however, little doubt that if the house had been in Mr Farrer's sole name, the outcome might have been very different.

Judge Gerald said: "That sort of public humiliation - raising false expectations only to be diminished at a time not two months after the birth of their third child - gives an insight into the nature of the relationship between these two people, separated by 20 years.

"'In my judgment it is clear that the property is absolutely owned by Miss Cahill and Mr Farrer has no beneficial or other interest in that property".

The judge's ruling means Miss Cahill will receive the entire net proceeds from the sale, around £296,000 after he took the view that Mr Farrer's clear intent at the time of purchase was to give Miss Cahill the property, even though he later changed his mind.

The house was sold for £810,000 last year. Mr Farrer was also ordered to pay the legal costs of the case and will have to come up with £40,000 a month with more bills to follow.

Complicated legal area

The ruling came just days after the Office of National Statistics revealed that cohabitating couples are the fastest growing family type in the UK whilst marriage rates continue to decline.

At the moment, cohabiting couples are not afforded legal rights against each other and on the ending of a relationship, people are often surprised to find they have no claim on the other person's assets although in some circumstances a person can acquire rights by virtue of contribution or intention.

Cohabitation Bill - uncertain future

Even though the Cohabitation Bill - to clarify this area of the law - has got as far as a second reading in the House of Lords, it is looking unlikely it will progress further.

The Bill could establish "a framework of rights and responsibilities to provide basic protection for cohabitees" enabling "couples who have lived together for at least two years, or who have a child together, and who had become dependent on their partner financially to make legal claims against each other in a similar manner to divorcing couples".

Such a bill could have enabled both Mr Farrer and Miss Cahill to ensure that, on the demise of their relationship, both parties would receive an equitable share of assets, regardless of their marital status.

• In another case with cohabitation at its core, Gary Sterne, a TV cameraman, was ordered to pay £180,000 costs as well as 5.5 percent (£48, 675) of the value of the home he shared with his ex-girlfriend, Amanda Miller, after trying to reduce her payout at a court hearing. Judge Nigel Gerald branded him 'vindictive' and 'unpleasant'.

For help and advice on this area of the law, please contact Wards Solicitors' cohabitation specialist, Lucia Mills.