Family Law Reforms: Cohabiting Couples

The Law Commission’s Paper no 179 has showcased Parliament’s readiness to recognise and provide for ‘non-traditional’ families. Previous legislation had also attempted to cater for this, the Adoption and Children Act 2002 and the Gender Recognition Act 2004.

The proposed reforms are a reflection of social progression, where in England and Wales, there are over two million cohabiting couples. Britain seems to be moving towards a Scandinavian pattern, where cohabitation is quite normal and where marriage is more of a lifestyle choice rather than an expected part of life.^[1] Thiese develops dramatically being coined as being a “social revolution”.^[2]

The complexity of trusts law and procedure, and the problems of obtaining suitable evidence, made it difficult for lawyers to grapple with these cases making them hesitant and uncertain about advising their clients. Judges, also continue to struggle with the unwieldy machinery of trust law in their attempts to determine disputes between separating cohabitants: (Oxley v Hiscock^[3], and Stack v Dowden^[4], all demonstrating the difficulties of ‘TOLATA’ claims which might better be resolved by a statutory scheme tailored to the particular features of relationship breakdown.)

The Commission wishes to introduce a dual remedy when unmarried cohabitations breakdown based on restitution for economic benefits retained by the defendant and redress for economic disadvantages to the claimant caused by the relationship.^[5]

ï‚·Capital and income provisions upon relationship breakdown

Two schemes have been proposed for fanatical relief between cohabitating couples on separation; opt-in, (the couple opt-in to a new set of remedies) or the opt-out scheme (where the couples have made their own arrangements through prior agreement.)

In formulating its proposals, the Commission provisionally rejected the view that the redistributive jurisdiction of the Matrimonial Causes Act 1973 should be extended to cohabitants on separation. Respect for the parties’ autonomy would be accorded by allowing cohabitants to opt out of the scheme and to enter into enforceable cohabitation contracts of their own devising. Further, according to Baroness Hale of Richmond; the financial orders be carried out adequately in order to ‘…enable and encourage the parties to negotiate their own solutions as quickly and cheaply as possible’.

A declaration of trust may also be advisable; cohabitants should be encouraged to specify the shares in which the property will be held in the event of its sale on separation. But, if the house was solely in the name of one of the cohabitants then the contending party will have to show existence of an implied trust in order to successfully claim a share;(either a resulting trust; where the party contributed financially towards the purchase price, or a constructive trust, where the parties had a common intention that the property be shared).^[6]

The paper opens with a commentary on Burns v Burns^[7] to criticise current property and trusts law as giving rise to remedies which have been perceived as being illogical, uncertain and unfair.^[8]

Proposals have been made for a scheme based on contributions and sacrifices (similar to the principles of resulting trusts and contribution). Developed by claims only being made possible where applicants can establish the economic effects of the contributions to the relationship; including the sacrifices had not been fairly distributed between the parties upon separation. “Contributions” will be interpreted widely to include both financial and non-financial contributions made.^[9]

Further, in the absence of an expressed agreement to share property it should be made eligible that cohabitants make a claim based on the principle of economic advantage where it can be shown that; the respondent has gained an economic benefit caused, at least in part, by contributions made by the applicant.

This principle will also work in reverse, the proposed doctrine of economic disadvantage e.g. where one of the parties had acquired the role as primary child-carer and so lost the opportunity to accumulate capital.^[10]

ï‚·Economic advantage and disadvantage – A resolution from the North

Having recently implemented the Family Law (Scotland) Act 2006 introduced a remedial scheme for cohabiting couples in Scotland. The principles on which the new schemes are based are not dissimilar to those underlying the proposals of the Law Commission.

Introducing a scheme for separating cohabitants based on the principles of economic advantage and economic disadvantage, contains no minimum duration requirement precisely because the remedy is considered to be self-limiting in its nature. Many shorter relationships would be unlikely to engage the scheme at all as an applicant would be unable to prove the relevant advantage or disadvantage. It is not the relative shortness of the relationship, but the nature of the contributions made by the parties to it, which is significant in depriving the applicant of a claim.

ï‚·The surviving cohabitee – intestate succession and family provision on death

At present, surviving cohabitees only have the right to apply to court for the share of an estate via Provision for Family and Dependants Act, 1975 and have no automatic right to the intestacy of their partners. For the cohabitee to make a successful application they must satisfy the court that they fall into one of two categories; dependant or cohabitant of the deceased.

The objective is to grant the wishes of the deceased as had originally been intended regarding the distribution of their estate. But complications arise if the cohabitees were allowed to enter as part of the current law and intestacy rules. It would make the duties of the administrator or the executor more complex as they would have to investigate whether the decreased had been cohabiting prior to death, and if the cohabitee was eligible to part of the estate.

It is essential to maintain fairness between the disputing parties competing for the deceased’s estate. It is suggested that cohabitants should be automatically entitled to a share of the deceased’s estate on intestacy. This may also support the idea of the opt-out scheme (as per 5.21) and the arrangements made by the parties in case of separation a provision for the possible death of either party would be advisable and would resolve the need for future litigation.

ï‚·Alternative routes – the cohabitation contract or the opt-out agreement

Cohabitees may be eligible to opt-out of the new scheme of financial relief upon relationship breakdown but their claim in order to do this must be; sufficiently certain, sufficiently protective of weaker parties, accessible and not unnecessary burdensome. For the scheme to be binding the agreement must be written, and signed by both parties (having been witnessed). Ether party may be required to provide full disclosure of their assets prior to completion of the agreement and/or obtain independent legal advice. This poignantly acts as a form of unintentional arbitration as the parties will be encouraged to decide on resolutions in case of separation.

The opt-put scheme is ideal where each party intends to retain their financial independence.

Proposals have also been made in order to expand cohabitees options further intending that the cohabitation contract be made as clear as possible. The cohabitation contract is sufficient in so far as it deals with the financial and property aspects of the cohabitants’ relationship, it is essential to remove any remaining uncertainty of its validity meaning that any litigation instigated later would be avoided.

ï‚·Concluding

Many believe that there should be no remedies (beyond those currently available) for those who don’t marry (or register civil partnerships).^[11] Others believe that new remedies should be made available as it would be easiest, simply to extend the ancillary relief jurisdiction to certain cohabitants, allowing the court to give such weight as it thinks fit to factors such as the parties’ failure to formalise their relationship, the welfare of any children living with the couple and the duration of the relationship. The consultation paper takes a middle course, advocating the importance of reform but devising a self-standing scheme based on principles different from those underlying ancillary relief.

Case reports have also concerned the possible impact that the proposals will make upon support obligation arising automatically from cohabitation in accordance with ancillary relief, namely pensions. In the case of K v K (Periodic Payment: Cohabitation)^[12] conclusions made in commentary stated that the proposals fell well short of suggesting a support obligation arising automatically from cohabitation. Supporting this commentary with conclusions drawn by Coleridge J in the same case where his Lordship was pessimistic about the likelihood of legislative reform in respect of financial rights and obligations arising from cohabitation.^[13]

The Commission has acknowledged the uncertainty of the law, there were instances of injustice both where the ‘deserving’ non-owner failed to obtain a share and where the owner was wrongly required to pay off or concede a share to an ‘undeserving’ claimant.

There should also be greater focus on practice and procedures at the conveyancing stage to ensure that the parties truly understand the legal implications of their actions. The sensitivity of raising difficult questions at a time when the parties are apparently acting in harmony, and the professionally awkward issue of how to advise a non-client – if necessary — and ensure that, procedures are put in place to cover them from future negligence or other claims.^[14]

The paper is a resolution to a new social development. The proposals aim to reach a compromise between those who choose to cohabit and those who believe the integrity of marriage should be sustained. But with increasing numbers of people choosing to cohabit, and many choosing to raise families within these circumstances, the law will have to remain pragmatic.

Reference list

• • Hudson, A., Equity and Trusts. 3^rd ed. Cavendish Publishing, London.2004

• • Pearce, R & Stevens, J., Land Law, 3rd edition, Sweet and Maxwell, 2005
  • Smith, R., Property Law: Cases and Materials, 3rd ed., Longman, 2006.

• • Allison, D. All Change? 16 March 2007 New Law Journal 157 NLJ 386
  • Bailey – Harris, R., Case Reports: Ancillary Relief. 1 July 2006. Fam Law 36 (518)
  • Barlow, A and James, G. Regulating marriage and cohabitation in 21st century Britain [2004] MLR 143
  • Bridge, Stuart., Money, Marriage and Cohabitation. [2006] Fam Law 641
  • Douglas, G., Case Reports: Ancillary Relief. 1 February 2007. Fam Law 37 (104)
  • Douglas, G, Pearce, J and Woodward, H. Dealing with Property Issues on Cohabitation Breakdown. 1 January 2007. Fam Law 37 (36)
  • Duncan, S., Barlow, A., and James, G. Research: Why don’t they marry? Cohabitation, commitment and DIY marriage. 1 September 2005. Child and Family Law Quarterly CFam 17 3 (383)
  • Eekelaar, J., Property and Financial Settlement on Divorce — Sharing and Compensating. 1 September 2006. Family Law 36 (753)
  • Ellison, R & Masons, P., Broken Hearts break the bank. 1 July 2006. Pensions World, June 2006, 43
  • Gouriet, M. ‘Til court do us part (2) 10 February 2006 New Law Journal 156 NLJ 210
  • Humphries, M. The Law Commission consultation on cohabitation [2006] Fam Law 860
  • Probert, R. Trusts And The Modern Woman – Establishing An Interest In The Family Home. 1 September 2001; Child and Family Law Quarterly, CFam 13 3 (275)

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Footnotes

^[1] Duncan, S., Barlow, A., and James, G. Research: Why don’t they marry? Cohabitation, commitment and DIY marriage

^[2] Coleridge J as per K v K (Periodic payment: Cohabitation) (2005) EWHC 2886, quoted in Bailey – Harris, R., Case Reports: Ancillary Relief.

^[3] [2004] EWCA Civ 546, [2004] 2 FLR 669

^[4] [2005] EWCA Civ 857, [2005] 2 FCR 739

^[5] Eekelaar, J., Property and Financial Settlement on Divorce — Sharing and Compensating.

^[6] Hudson, A., Equity and Trusts. Chapter 14: Trusts of Homes. As per discussion of Ivin v Blake (1995) Fam. Law 72; subchapter “Resulting Trusts: Contributions to the Purchase Price”

^[7] [1964] 1 All ER

^[8] Bridge, Stuart., Money, Marriage and Cohabitation at subheading “What Principles?”

^[9] i bid 6; subchapter: “Resulting Trusts” as per discussion regarding Grant v Edwards (1986) 2 All E.R. 426

^[10] I bid 6 subchapter: “Commonwealth approaches – Trends in the academic discussions of the Trusts of Homes”

^[11] Allison, D. All Change? Subheading: “Undermining marriage”

^[12] ibid 2

^[13] op cit from Bailey – Harris, R., Case Reports: Ancillary Relief.

^[14] Douglas, G, Pearce, J and Woodward, H. Dealing with Property Issues on Cohabitation Breakdown.