Published: 20 October 2014
This warning is currently ringing in the ears of one man who has been ordered to pay his ex girlfriend more than £78,000 following their relationship breaking down.
David Southwell, 55 met his ex partner, Catherine Blackburn in 2000 and set up home together in 2002. The house was purchased in Mr Southwell’s sole name using £140,000 equity from the sale of his previous property, together with £100,000 repayment mortgage in his sole name.
When they first met, Ms Blackburn was a divorcee with two daughters aged 11 and 12. She received very little by way of a financial settlement in her divorce, receiving a mere £25,000 which she used to fit out and furnish a rented property. She gave up her rented house in order to move in with Mr Southwell.
During the relationship, Mr Southwell paid all the outgoings on the property including the mortgage and day-to-day running costs. He paid for Ms Blackburn and one of her daughters to attend university and even paid for Ms Blackburn’s mobile phone and bought her a new car as well as giving her £500 a month spending money.
The parties separated acrimoniously in 2012 and Ms Blackburn claimed a 50% interest in the now £320,000 property owned solely by Mr Southwell.
Despite the relationship breaking down, Mr Southwell continued to financially support Ms Blackburn and her daughters. He paid £620 a month for 6 months for a rental apartment for Ms Blackburn which he also furnished and he bought her a new car.
Ms Blackburn tried to claim that she had a half share of the property by virtue of Mr Southwell holding the property for them both in equal shares. This claim for the establishment of a Constructive Trust failed. The judge did however uphold her claim of Proprietary Estoppel. This is a legal claim which may arise in relation to rights to use the property of the owner, and may even be effective in connection with disputed transfers of ownership.
Proprietary estoppel transfers rights if:
In December 2013 Mr Southwell was ordered to pay Ms Blackburn £28,500, the value the Judge put on her interest in the equity. Ms Blackburn appealed and was awarded a further £50,000 towards her legal costs.
Mr Southwell appealed.
Mr Southwell’s case on appeal was that Ms Blackburn’s case at first instance did not pass the test for proving Proprietary Estoppel and he argued that the trial judge erred in finding that Ms Blackburn had suffered detriment in relying on his alleged assurances.
Ms Blackburn claimed that they intended to buy the property together but did not because, at the time of purchase, she was living in Manchester which made signing papers inconvenient. She claimed they always intended to effect a transfer into joint names shortly thereafter. Mr Southwell denied this, practically claiming it was almost an accident that they ended up living there together.
The Court of Appeal Judge Lord Justice Tomlinson found that Ms Blackburn would not have given up her rented property, in which she had invested her previous divorce settlement, had it not been for reassurances given to her by her then partner. He found she should be put back in the position she would have been in, had the relationship not come into being.
He calculated that the £20,000 she had spent on the rental property she gave up would, in today’s money, be equivalent to £28,400. He concluded that benefits obtained by the parties during the relationship had flowed both ways and didn’t feel Ms Blackwell should give credit for those she received.
Ms Blackwell receiving rent free accommodation for herself and her two daughters and financial assistance to complete her university degree were held in the same regard as the assistance and support Mr Southwell received, which enabled him to achieve a promotion during the relationship.
Appeal dismissed. Mr Southwell must now pay his former partner £78,500.
It is entirely possible that this case may open the floodgates for similar claims over property when a cohabitation relationship turns bad. Perhaps the best way to avoid such claims is to enter into a Cohabitation Agreement setting out, from the very start of your relationship, how assets should be divided if the worst should happen and the relationship breaksdown.
K J Smith Solicitors have a team of dedicated family law experts with many years of experience in dealing with cohabitation agreements and issues related to separation. For more information or to arrange a free consultation, contact us today on 01491 630000 (Henley-on-Thames), 020 7070 0330 (Central London), 0118 418 1000 (Reading), 01753 325000 (Windsor) or 01256 584000 (Basingstoke).
This article was written by Suzanne Foster.