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Cohabiting Couples and Property Disputes: Where Are We Now, and Where Are We Going?

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Cohabiting Couples and Property Disputes: Where Are We Now, and Where Are We Going? COHABITING COUPLES AND PROPERTY DISPUTES: WHERE ARE WE NOW, AND WHERE ARE WE GOING? LECTURE TO THE PROPERTY BAR ASSOCIATION 13TH NOVEMBER 2007 MR JUSTICE MORGAN 1. The marriage rate has been declining. Marriage is being deferred until later in life. The number of cohabiting couples has increased dramatically since the 1970s and is expected to continue to rise. The 2001 census recorded some 2 million cohabiting couples in England and Wales. This figure was a 67% increase on the figure from 1991. 2. The number of children being born to cohabiting couples in England and Wales has also risen. In 2001, over 740,000 cohabiting couples had dependant children; they supported over 1.27 million children. The number of cohabiting couple households with dependant children more than doubled between 1991 and 2001. In 1970, fewer than 10% of births were to unmarried parents. By 2004, 42% of births fell into that category. In 2004, 76.4% of registrations of births where the parents were unmarried were to parents recorded as living at the same address, i.e., cohabitants. 3. Cohabitation is expected to become increasingly common and to spread across a wider range of the population in terms of age. The Government Actuary predicts that by 2031 the number of cohabiting couples in England and Wales will have increased to 3.8 million. By 2031, 16% of adults will be in cohabiting relationships and 41% of adults will be married. The elderly cohabiting population is expected to expand at a far greater rate than that of the cohabiting population as a whole. The number of children dependant upon a cohabiting couple will also increase as more couples have children outside marriage and fewer parents subsequently marry. 4. Cohabitation comes in many different shapes and sizes. People embarking on their first serious relationship more commonly cohabit than marry. Many of these relations may be quite short lived and childless. But these days most people cohabit before marriage. In 2003, 78% of spouses gave identical addresses before marriage. The figures are even higher for second marriages. Cohabitation is much more likely to end in separation than is marriage and cohabitations which end in separation tend to last for a shorter time than marriages which end in divorce. 5. Cohabitants and their children are not ignored by the law. There are specific statutory provisions which apply to the cases of cohabiting couples and their children. I will refer to these, in summary, later in this lecture. However, there 1 5. The title to this lecture asks two questions. The first is: Where are we now? The second is: Where are we going? The first question is obviously inspired by the decision (in April 2007) of the House of Lords in Stack v Dowden [2007] 2 WLR 831. The second question is obviously inspired by the publication (in July 2007) of the Law Commission Report (Law Com 307): “Cohabitation: the Financial Consequences of Relationship Breakdown”. 6. With these recent developments, the present is obviously a good time to take stock and to look ahead. 7. In relation to an area of law which depends upon the principles of the common law and of equity, it is not possible to answer the question: “Where are we now?” without knowing how we got where we are. I will therefore refer, briefly, to the history of the developments of the relevant principles and in the course of so doing will indicate the main milestones along the way. 8. I begin my collection of milestones by referring to the cases in the House of Lords which considered questions as to the ownership of the home in which a cohabitating couple resided. Although statute, today, makes an all important distinction between a married couple and an unmarried cohabiting couple, the non-statutory principles were first discussed and laid down in relation to husbands and wives. 9. The relevant decisions of the House of Lords are, as is very well known, Pettitt v Pettitt [1970] AC 777, Gissing v Gissing [1971] AC 886, Lloyds Bank Plc v Rosset [1991] 1 AC 107, and, now, Stack v Dowden [2007] 2 WLR 831. The latter case also drew upon two sentences in a decision of the Privy Council in Malayan Credit Limited v Jack Chia–MPH Limited [1986] AC 549 at 559. 10. Pettitt v Pettitt and Gissing v Gissing for many years have been treated as the source for the theoretical underpinning of this area of the law. However, whilst the speeches of their Lordships contain a great deal of relevant discussion, the cases decided comparatively little and left a great area undetermined. As was said in the Northern Ireland Court of Appeal in McFarlane v McFarlane [1972] NI 59, the facts in those cases “were not such as to facilitate or encourage a comprehensive statement of this vexed branch of the law” and that “much remain[ed] unsettled”. 11. Both Pettitt and Gissing concerned married couples. Pettitt finally killed off the idea that Section 17 of the Married Womens Property Act 1882 gave the court a power to vary the parties’ pre-existing beneficial interests to accord with the court’s view of what was fair. Section 17 of the 1882 Act was held 2 Pettitt and Gissing also rejected the idea of there being “family assets”, that is, assets which were used by the family and by reason of that fact were to be held to be owned in common by the family. Both Pettitt and Gissing discussed the law of resulting and constructive trusts. The discussion focused upon the existence of a common intention of the parties that the spouse who did not have legal title in his or her name would nonetheless have a beneficial interest in the property. In some cases the common intention might have been expressly agreed. In other cases the court would be able to infer the actual existence of such a common intention. More controversial was the idea that the court might “impute” such an intention to the parties when, on the facts, one could not make a finding that they ever had such an actual intention, whether expressly stated or found by inference. 12. In Stack v Dowden, Lord Walker of Gestingthorpe submitted Lord Diplock’s speech in Pettitt and Lord Diplock’s speech in Gissing to detailed analysis: see [18] to [20]. In Pettitt, Lord Diplock was in favour of the court taking on the role of imputing a common intention to the parties but his brethren did not support him. In Gissing, Lord Diplock accepted that it was not open to the court to impute an intention to the parties when all the express statements of the parties and all the inferences from their conduct did not support the existence of such an intention in fact. However, according to Lord Walker, Lord Diplock began to use the word “infer” so as to carry a meaning that was little different from the word “impute”. 13. Lloyds Bank Plc v Rosset was another husband and wife case. However, the dispute was not really between the spouses but between the spouses on the one hand and a bank on the other. This is a useful reminder that questions as to the property rights of spouses arise in cases that do not involve the ancillary relief principles which apply under the Matrimonial Causes Act 1973, on divorce. The property rights of individual spouses and other actual, or alleged, joint owners frequently arise in the Chancery Division when one is considering the position of third parties, such as a secured creditor or a trustee in bankruptcy. 14. In many respects, the decision in Lloyds Bank Plc v Rosset was a wasted opportunity. The case came some 20 years after Pettitt and Gissing . The case was argued over 4 days. The arguments of counsel take up more pages in the Law Reports than the single speech in the House of Lords given by Lord Bridge. He held that the wife’s case, on the facts, did not get off the ground. He contented himself with a short passage in which the relevant principles were heavily summarised. However, importantly, he distinguished between a party who was not the legal owner of the property making a direct contribution to the purchase price and such a party making contributions to family life in other ways. 15. In Stack v Dowden, Lord Walker suggested that the law had moved on from Lord Bridge’s comment in 1970 and that the House of Lords in Stack v Dowden “should move it a little more in the same direction”. 16. Although Pettitt, and Gissing and Rosset must be treated as milestones on the way, far more help was to be found in the myriad decisions of the Court of 3 Oxley v Hiscock [2005] Fam 211. The third comment is that the decisions of the Court of Appeal are not always easy to reconcile; they may be irreconcilable. But my fourth comment, with a view to being more positive, is to identify two cases which provide real help. They both involve cohabiting unmarried couples. The first is Grant v Edwards [1986] Ch 638 and the second is Oxley v Hiscock [2005] Fam 211. 17. The court in Grant v Edwards consisted of Sir Nicolas Browne-Wilkinson VC, and Mustill and Nourse LJJ. Each member of the court gave a judgment. The judgments are illuminating. 18. Oxley v Hiscock is useful because it is recent, it contains a detailed survey of many earlier cases and it was influential when Stack v Dowden was being considered and decided.
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