The recently reported case of John Hoggins’ failed claim against a £650,000 house he bought for his girlfriend, Greta Cerniauskaite, has generated some interesting headlines. Reports of “Plumbing tycoon's ex girlfriend wins share of fortune” and “British millionaire ordered to hand luxury £650,000 house to Lithuanian ex-girlfriend” add to the myth that cohabitants have legal rights.
A cohabitant does not, currently, have any freestanding legal rights and there is no such thing as a common law wife. Greta Cerniauskaite was awarded ownership of the house which was funded by John Hoggins because he registered that property in her sole name. Mr Hoggins funded the deposit for the house and paid the mortgage, without financial contribution from Greta. Judge Ann McAllister accepted the evidence that both parties had intended that the house would belong to Greta. This case is not surprising for lawyers in this field as the legal title was clear and there was no agreement behind that legal title that suggested anything other than Greta being the sole owner of the property.
The press has also reported on the claim of cohabitee Joy Williams, who lived with dentist Norman Martin for 18 years after he separated from his wife. Mr Martin didn’t divorce his wife or update his will. On his death, Ms Williams made a claim under the Inheritance Act in relation to the property which she owned jointly with and in which she had lived with Mr Martin. On Mr Martin’s death, his half share of the three bedroom bungalow in Dorchester was inherited by his wife Mrs Martin, despite leaving her in 1994 to start living with Ms Williams. Mrs Martin contested the case but the Judge Nigel Gerald (at Central London County Court) ruled in favour of Ms Williams, the cohabitee. To be successful, Ms Williams had to establish that for the two years prior to Mr Martin’s death, she had lived in the same household as him as his wife, or that immediately before his death she was being maintained either “wholly or partly” by him.
Cohabitation is the fastest growing family type in the UK. According to the Office for National Statistics, there were just under 3.2 million couples in the UK in 2015 and yet the legal protection for those couples is virtually non-existent. There is no alternative to marriage for cohabitants; civil partnership is still not available to heterosexual couples despite a recent attempted challenge to the law. The remedies for cohabitants are limited to:
- Property claims under section 14 of the Trusts of Land and Trustees Act 1996 for the court to determine an interest in property; and
- An application for financial provision for children under Schedule 1 to the Children Act 1989 (if the cohabiting couple have children); and
- On the death of a cohabitant, claims under the Inheritance (Provision for Family Dependents) Act
Of the three types above, it may be that a cohabitee (or co-owner) is left only with the first type of claim. Property claims can be complex. Claims for the Court to consider the beneficial ownership of a property, constructive trusts or to interpret proprietary estoppel are subject to intrinsic litigation risk and uncertainty. The legal recourse in these eventualities is backward facing and requires detailed analysis of who said what, when, if one party acted in reliance on another’s assurance, or implied a contract. The court will need to forensically examine the parties’ intentions, which by their nature can be unclear, or difficult to remember. The reliance on witness evidence also leads to the possibility of one party’s version of events being preferred to another. The Supreme Court has recently ruled that where terms are clear, they will be binding. The overall effect on property claims is relatively unknown, but it certainly indicates that parties may well be bound by historic correspondence.
What is the prospect of reform?
A Private Members Bill, the Cohabitation Rights Bill, was introduced in 2014 and reached the committee stage in the House of Lords but was abandoned in 2015. The Bill was reintroduced and had its first reading in the House of Lords on 4 June 2015. The second reading is yet to be scheduled. The Cohabitation Rights Bill provides basic protection for cohabitants who have cohabited for two years or more. Cohabitants can apply to the court for a financial settlement order, giving them some financial provision subject to meeting the qualifying criteria. This Bill goes some way to protecting vulnerable cohabitants but, as things stand, there is little political appetite for reform, despite pressure from lawyers, the press and the general public as they are becoming more aware of the inadequacies of the current law.
The Hoggins and Williams cases give a firm reminder to all cohabitees that they should take advice on their rights (or lack thereof) and draw up a cohabitation agreement and/or declaration of trust to record their agreement in relation to the purchase of property, and their intentions as regards the cohabitation. Cohabitants should also update their Wills if there is any change of circumstances in their relationships, to ensure legal costs are not spent later down the line.