When do informal agreements between unmarried couples about property become binding?
Having a chat with your partner at the pub over a couple of pints, should, one would hope not result in legal rights and obligations being upheld by the High Court. However, in the case of Andrew Horn, the High Court of England and Wales have done just that.
An unmarried couple who split up after 15 years will have an equal share in their £1 million home after a judge accepted that they had agreed the arrangement at a pub 13 years ago.
Claire Chipperfield, 52, and Andrew Horn, 58, who have two children, moved to Lymington, Hampshire, in 2006. At the time of purchase of the property, Mr Horn paid most of the £280,000 deposit and the house was placed in their joint names. The pair now have two children of the relationship.
As the couple remained unmarried throughout the course of their relationship, the only remedy currently within English and Welsh law, to deal with financial matters for cohabitees, is under the Trusts of Land and Appointment of Trustees Act 1996 legislation.
It is often a common misconception that partners living together for a lengthy period of time enter into a ‘common-law marriage’. This is not the case and unfortunately parties separating will need to embark upon civil proceedings against the other to finalise any financial dispute.
See the blog written by our Senior Solicitor, Richard Buckley, blog to unearth the myths surrounding common-law partners https://bit.ly/2ShNOtI
Mr Horn, 58, pursued an application against Ms Chipperfield, 52, claiming that most of the house belonged to him even though it was in their joint names. Mr Horn argued that Ms Chipperfield had paid only £39,000 towards the deposit of £280,000 towards the property.
At the time of the final hearing, the property was valued at over £1 million when the argument reached the High Court. Mr Justice Freedman, making the ruling confirmed, that Ms Chipperfield held an equal share in the property as she had claimed.
It was noted by the Judge that the pair had had a verbal agreement, made some 13 years prior whilst in a pub. Mr Horn had said to Ms Chipperfield:
“Well, that’s it Chip, we are now 50/50 owners — but that means you owe half the debt as well.”
Mr Horn’s legal team, agreed that the pub conversation took place but insisted it did not mean an intention to share the property equally [and particularly post separation].
The Judge said that Mr Horn had:
“failed to acknowledge the sacrifices which Ms Chipperfield made to the family in terms of her career and the significant contributions which she made to the family finances”.
Mr Horn went on to claim that he had not meant for the words to be considered literally. Mr Horn said that he and Ms Chipperfield kept their finances separate throughout their relationship, albeit both contributing towards the family home.
Mr Justice Freedman, irrespective of Mr Horn’s claims, upheld a county court decision that the conversation occurred in the way described by Ms Chipperfield. The Judge said:
“Contrary to the submission made on behalf of Mr Horn, the words were to be given their literal meaning, which is also their natural and ordinary meaning. The reference to 50/50 meant both literally and in context that the ownership would be shared in those proportions.”
The decision came just a day before the Civil Partnerships Bill was to be finally considered in the Commons prior to receiving Royal assent; which seeks to provide rights to heterosexual couples entering into Civil Partnerships. Campaigners hope the Act will resolve the difficulties faced by those who cohabit and remain unmarried.
The starting point in most married couples divorce would be a financial settlement based upon an equal 50/50 division. The same rules cannot be applied to those in a long-term cohabitation. The Court has historically treated unmarried couples as separate entities and considered the pure mathematics of the relationship. As time moves on, so must the legal justice system. The law is slowly but surely catching up with the movement of the ‘normal’ family constitution, being a lifetime away from the previous ‘traditional nuclear’ family.
This case confirms the importance of parties’ discussions and general intentions within the relationship, to be considered as a key factor in decision making.
The moral of the story being that the Court will look to uphold the true intention of the parties during the relationship and not those sought thereafter.
If you have any questions and would like to speak with one of our experts then please contact, Sophie Arrowsmith from our Leeds team, Richard Buckley from our Sheffield team, or Chris Burns from our York family law team.
Please note this information is provided by way of example and may not be complete and is certainly not intended to constitute legal advice. You should take bespoke advice for your circumstances.