Landmark ruling could have profound consequences for parting unmarried couples
The Supreme Court has ruled that a pensioner must pay his ex-partner almost £40,000 after the couple ended their cohabiting relationship.
Family lawyers believe the landmark decision in the case of Angus Grant and Jessamine Gow could lead to 'cohabitation agreements' and many more payouts to unmarried couples who split up after living together.
A London Supreme Court judge, Lord Hope, ordered Mr Grant to pay Ms Gow £39,500, reversing a decision in the Edinburgh Court of Session to overturn an earlier sheriff's court ruling.
A year after the couple's relationship began in 2001, Mr Grant, 58, asked Ms Gow, 64, to move into his house. Ms Gow agreed on the understanding they became engaged.
Encouraged by Mr Grant, Ms Gow sold her Edinburgh flat a year later, and the couple cohabited until their separation in 2008.
The award against Mr Grant mainly reflects how the value of Ms Gow's apartment might have increased if she had not sold it.
The court heard that the proceeds of the sale of Ms Gow's flat were used in part as the couple's living expenses and partly for Ms Gow's own purposes. In particular, they bought 2 timeshare agreements for £7,000, with Ms Gow paying the entire cost of 1 and contributing £1,500 to the other.
The court ruled that Mr Grant should repay the £1,500, together with the money Ms Gow lost on the flat.
Lord Hope insisted that the court's decision does not give cohabitees the same legal rights as married couples. However, a precedent has been set; cohabiting couples could be given leave similar to that of divorcees to seek financial compensation, without assuming an equal division of assets.
In a statement of reasons, the judges said equal rights would effectively impose a regime of property sharing, and in some cases continuing financial support, on couples who deliberately chose cohabitation to avoid such a position.
While the terms of the Family Law (Scotland) Act 2006 allow unmarried couples the right to compensation, the legislation had not been tested in the Supreme Court prior to the Grant-Gow case.
Experts in family law have warned that the ruling could have far-reaching consequences, with a potential for more 'cohabitation agreements' similar to regular 'pre-nuptials' for married couples.
"This could lead to further pressure for protection for unmarried couples in England and Wales," said Emma Pearmaine, Head of Family Law at Simpson Millar LLP.
"Cohabitation agreements already exist for cohabiting couples where 1 party wants to make sure the other has no claim on their property – something that could happen if it were proved there was intention for an interest to be derived and there has been direct contribution to things like mortgage repayments and home improvements."
The ruling could have particular impact on couples in Scotland, with some experts forecasting that some 1,000 a year will be affected.
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