Litigation of any kind is never a pleasant experience: parties will only have decided to come before the courts in order to settle a dispute if there is no likelihood of them resolving their situation by other means.
Litigation involving a warring couple is equally no less pleasant an experience, and it was in a dispute of this kind that the Court of Session was recently asked to rule. In the case of Alexander Melvin v Fiona Christie (see here) the Inner House of the Court of Session - Scotland's highest court – was asked to hear an appeal of the decision of the Sheriff Principal’ and the decision to award Mr Melvin a sum of money under the terms of the Family Law (Scotland) Act 2006 following the termination of the couples living together as a couple.
What is the background to this case?
The couple had been ‘cohabiting’ – the term for couples that live together as husband and wife, but are not actually married – since 1991/92 until 27 November 2007. They had two children together and had lived in a series of houses over the course of their relationship. The first house was bought under both names and each contributed £10,000 towards the purchase price. Houses that were later purchased were in Ms Christie’s name with help from mortgages that had also been taken in her name. The last house that was purchased was for use as a family home in November 2005 for the price of £192,951, which was funded by a loan from Northern Rock secured by a mortgage.
Mr Melvin had brought an action against Ms Christie under s.28(3)(a) of the 2006 Act. The 2006 Act provides that in the event hat a cohabiting couple cease to cohabit, the court may be asked to make an order for a financial sum to be paid in order to recognise the economic benefit that has been derived from their participation in the relationship. In the case of the parties in question, Mr Melvin was seeking payment to reflect his contribution to the various properties that the couple had enjoyed together, and that Ms Christie had benefited from.
What were the facts?
The majority of he ‘fact finding’ in this case was completed by the Sheriff Principal, whose decision was the subject of appeal.
Notwithstanding the fact that title and mortgages to the various properties were in Ms Christie’s name, there was evidence led that she could have not have afforded the mortgage payments without some assistance from Mr Melvin. This line of argument was deemed persuasive given that, at the time, Ms Christie was only earning between £16,000 and £17,000 per year. There was evidence that the only other source of income was from Mr Melvin who was working. The Sheriff was satisfied that both parties had made equal contributions to their general expenditure, and was persuaded that Mr Melvin “must have contributed in some way” in the purchase of the last house. The property increased in value over time, and following a remortgaging exercise, there was found to be equity in he property. Title remained with Ms Christie meaning that Mr Melvin had no proprietary interest.
What did the Sheriff decide?
The Sheriff was satisfied that Ms Christie had enjoyed an economic benefit from her relationship with Mr Melvin. However she took the view that it was not possible for her to make any award of capital expenditure under the 2006 Act: although Mr Melvin had suffered an economic disadvantage there was no evidence that he had intended, when making contributions for the purchase of the last property, to benefit Ms Christie. On that basis and on that of additional case,aw, the could not make an award under s.28.
This decision was later overturned by the Sheriff Principal, following a change in UK law. The Supreme Court overruled established case law that required for there to be evidence that economic disadvantage was suffered in a way so as to benefit another party, before a financial award under the 2006 Act could be granted. It clarified that for the purposes of s28, fair compensation for contributions made or economic disadvantage suffered in the interests of a relationship where the material issues. It also confirmed that this was to be determined on a broad assessment, given that most parties will not keep a record of their respective contributions.
The Sheriff Principal was persuaded that, at the end of the relationship between Ms Christie and Mr Melvin, Mr Melvin had suffered significant economic disadvantage given the equity held by Ms Christie. The Sheriff Principal also concluded that the economic advantage that Ms Christie enjoyed was a direct result of the contributions Mr Melvin had been making. On that basis, and in-keeping with the broad assessment as directed by the Supreme Court, the Sheriff Principal awarded Mr Melvin a sum amounting to one half of the value of he equity in the property.
How did the Court of Session treat this case?
The decision of the Sheriff Principal was appealed by Ms Christie on several grounds, most of which were dismissed with little difficulty. The focus will be on the ground that the judges of the Inner House spent the most time considering.
Ms Christie appealed on the basis that the Sheriff Principal had made a decisions which were ‘plainly wrong’ on three grounds:
- The Sheriff Principal did not evaluate the facts of the situation as relied upon by the Sheriff;
- The Sheriff Principal had made an error in terms of the “offsetting exercise” under s28 of the 2006 Act, by not making reference to various additional factors in making an award of capital sum; and
- Relying on earlier case law, the Sheriff Principal had not made a connection between the economic advantage she enjoyed and Mr Melvin’s contributions. Ms Christie also complained that the Sheriff Principal in earlier case law had indicated that there shouldn't be too much reliance on the broad concept of fairness, and that the decision in her case was an alteration of his thinking.
The Court found no basis to support any of the arguments made: it ruled that given that the material facts were not challenged there was no need to revisit them; absent any reliance on those additional factors for the purposes of offsetting the court was not obliged to state its consideration of them; and while the Sheriff was correct to require a connection, he was correct in highlighting that some links are closer than others. The Court also disagreed with the argument that there had been a change in the Sheriff Principals thinking.
This decision is an important one in highlighting how the law deals with a breakdown of a relationship, and the particular way that it deals with cohabiting couples. In any partnership there is likely to be some level of economic benefit given from one to the other, and this has consequences in the event that the relationship is unsustainable.
Speak to Our Specialist Cohabitation Lawyers
If you are concerned about how you may be affected in separating from your partner, contact the team at Miller Samuel Hill Brown today. Our specialist family law and litigation teams will be able to review your situation and provide you with effective, practical solutions to any legal issues that may arise. Contact us today and find out more about how our teams can help you.
