Cohabitation, Breakdown and Trust

28th July 2016 Family Law

In any relationship, trust is an essential component. However, it is equally important when partnerships end, no matter whether the individuals involved were married or cohabiting. Being able to trust someone's account is an especially critical factor for courts trying to determine how to divide an unmarried couple's assets when there is an absence of documentary evidence to support one side or the other.

That issue has been at the heart of one case in the news this week, featuring a man and woman, a property and a marriage proposal which wasn't all that it seemed.

The hearing concluded that Kirsty Cahill was entitled to the proceeds from a sale of the London property bought as an investment by her former partner, Stephen Farrer, who was also the father of her three children.

Although he had contributed £140,000 towards the purchase price of the house, Mr Farrer had put it in her name, arguing that doing so would make it easier to get a mortgage.

Even so, despite being considered 'financially naive', Ms Cahill was awarded the entire £296,000 equity in the house following its sale last year three years after she had ended their relationship.

That was after the court heard about their life together. Mr Farrer was described as someone who had been 'stung' by a previous divorce and developed a tendency to 'dominate and humiliate' Ms Cahill.

The height of his treatment of her came when he proposed in front of family members, only to tell her that he wouldn't be marrying her after all.

Ms Cahill had argued that placing the property in her name was more than merely an administrative point but had been done to give her the sort of security which she would never have as a cohabitee alone.

In the end, the judge in the case decided that Ms Cahill's account was more reliable ('preferable') to that advanced by Mr Farrer and ruled that the property was 'absolutely owned' by her.

As well as having to pay her a substantial sum of money, Mr Farrer also has to come up legal fees estimated at £150,000.

Even though perhaps quite distinct in terms of the nature of the couple's relationship, there are certain elements of this case which are common to many others.

It highlights the disputes which can arise in the continuing absence of rights for cohabiting couples on separation. Pressure has been mounting for some years to give unmarried individuals at least a measure of the protection afforded their married counterparts but that effort has not succeeded yet.

That means, of course, that such break-ups can give rise to disagreement which is not resolved under Family law but property and trust law.

In the absence of documentary evidence to support a claim, the outcome can be determined by who is more believable. If one person is thought to be as 'shameless' as Mr Farrer was characterised, then it can add weight to their ex's account.

I can't close without making reference to what I regard as a fundamental piece of paperwork to try to prevent the kind of friction (and lengthy legal process) which Ms Cahill and Mr Farrer have experienced.

Moving in with someone and even thinking of having children together is a significant step. More couples realise that it therefore deserves regulating in the form of a cohabitation agreement.

Putting in place a document noting who brought what to the relationship and what should happen if - like so many other couples they ultimately break up is a relatively simple thing to do and it's proving increasingly popular too.

Almost like a prenuptial agreement for those intending to marry, it helps provide a means of defusing tensions if they part, allocating assets in a calmer and more regulated fashion.

To discuss divorce or a similar issue please do not hesitate our friendly expert team.

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Holly Tootill is a Partner located in Manchesterin our Family department

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