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LORNA DUNLOP HARLEY v MARK THOMPSON

SHERIFFDOM OF LOTHIAN AND BORDERS AT LIVINGSTON

2014SCLIVI58

A65/13

JUDGMENT

of  

SHERIFF PETER G. L. HAMMOND, Advocate

in the cause

LORNA DUNLOP HARLEY, residing at 120 Hawk Brae, Ladywell West, Livingston, EH54 6GF.

PURSUER

against

MARK THOMPSON, residing at c/o 22 Camps Rigg, Livingston, West Lothian, EH54 8PD.

DEFENDER

Act:   Monaghan, solicitor

Alt:    Miss Malcolm, counsel

 

LIVINGSTON,        September 2014.

The Sheriff, having resumed consideration of the cause:

 FINDS IN FACT:

  1. The parties are as designed in the instance.
  2. The parties were in a relationship which commenced in or around October 2010. They cohabited as if they were husband and wife from 1 April 2011 until 30 April 2012, when they separated.
  3. During the period of their cohabitation, the parties lived together at 22 Chuckethall Road, Livingston, which was the family home.
  4. There are no children of the relationship.
  5. The Pursuer has a child from a previous relationship, namely ……..born 1 December 1997 and the Defender has two children from a previous relationship, namely ………. born 20 January 1999 and ………. born 30 April 1996.
  6. The parties both owned heritable property in their own individual right at the commencement and also at the end of their relationship. The two properties owned by the pursuer were; 120 Hawk Brae and 57 Hawk Brae, in Ladywell, Livingston. The defender owned a house at 22 Camps Rigg, Carmondean.
  7. In or around January 2011, the parties decided to move in together into a new home to be acquired by them in joint names. At that time, the Pursuer was residing in her own home at 57 Hawk Brae, Ladywell, Livingston and the Defender was living in rented accommodation. The parties’ plan was for the Pursuer’s home at 57 Hawk Brae to be rented out and for the parties to move in together into this newly acquired home.
  8. In or around January 2011 the parties went “house hunting”. In about February 2011 they identified a home at 22 Chuckethall Road, Livingston. They purchased this house together in about April 2011. The parties then moved in and resided there as a family until the date of separation.
  9. In anticipation that the parties were imminently about to commence cohabiting with each other, the pursuer made available to the defender the sum of £3,100 to enable him to clear his pre-existing debts. There was no specific agreement between the parties as to the basis of this advance. The pursuer did not specify that it would have to be repaid by the defender.
  10. Title to the property acquired at 22 Chuckethall Road, Livingston, was taken in the joint names of the parties. The purchase price was £195,500.00. This was funded by (a) a mortgage taken out in the names of both parties with the Halifax totalling approximately £166,175.00, and (b) a purchase deposit totalling £29,325.00 plus legal expenses and outlays totalling £3,104.00. The total amount funded personally by the parties towards the purchase price deposit and associated expenses was accordingly £32,429.00.
  11. The £32,429.00 sum was funded entirely by resources owned by the Pursuer, or obtained by her on credit and which she was solely liable to repay. The pursuer accumulated these funds from (a) £5,200.00 borrowed as a cash advance from her Virgin Credit Card (b) £15,000.00 from her own savings and (c) £12,000.00 borrowed as a bank loan taken out in her sole name.
  12. At the time of the purchase of 22 Chuckethall Road, the parties did not reach any specific agreement about how the pursuer’s contribution to, or the defender’s inability to contribute to, the purchase deposit and costs, were to be treated. The pursuer did not take any precautionary steps to safeguard her financial interest in the house in the event of separation. The defender was unable to contribute to the deposit because he had no savings and was unable to re-mortgage his own home. There was little or no equity in that property.
  13. On the date of separation, 30 April 2012, the pursuer moved out of the family home. From that date until the sale of the home at 22 Chuckethall Road, Livingston on 22 February 2013, the Defender resided therein continuously.
  14. Following separation the parties divided the contents of the family home by agreement. The pursuer retained all the furniture and plenishings, except for a mattress and a painting which the pursuer did not want.
  15. The parties’ home at 22 Chuckethall Road, was placed on the open market for sale on 12 August 2012. It was sold on 22 February 2013 for the sum of £198,000.00. This represented an increase in value of £2,500.00 from date of purchase to date of sale. The entire net free proceeds of sale in the sum of £27,080.00, together with accrued interest was placed on deposit in an interest bearing account in the name both parties pending a judicial determination of these proceedings.
  16. The Pursuer had a credit card with Barclaycard Visa ending 1001 which was in her sole name. This had a balance at separation on 30 April 2012 of £6,646.49.
  17. The Defender was an additional card holder on the pursuer’s said Barclaycard Visa account. In about November or December 2011, with the permission of the pursuer, the Defender withdrew a total of £2,400.00 on this credit card. The defender used this money to repay a debt owed by him to his parents.
  18. There was no agreement between the parties that the defender would have to meet ½ of the debt on the pursuer’s credit cards from his own resources.
  19. In the period from the date of separation in April 2012, when the Pursuer removed herself from the home, until August 2012 inclusive, the parties contributed equally towards the utility bills for the home at 22 Chuckethall Road in which the Defender resided.
  20. In the period from September 2012 until the date of sale of the home on 22 February 2013, the Defender made payment of all of the utility bills for the home at 22 Chuckethall Road in which he resided.
  21. In the period from June 2012 until August 2012 inclusive the Pursuer requested, with the agreement of the Defender, and was granted a “payment holiday” temporarily suspending mortgage payments in relation to the mortgage over the home at 22 Chuckethall Road.In terms of the “payment holiday” the parties paid no mortgage for the months of June, July or August 2012.Payments to the mortgage were then due from 1st September 2012 until date of sale for the interest only part of the mortgage; being £634.02.
  22. In the 4 month period from October 2012 to January 2013, the Defender made payments to the parties joint account of £530 ( on 1 October 2012), £530 (on 2 November 2012), £650 (on 4 December 2012) and £680 (on 4 January 2013). These sums total £2,390.00. Said sums were applied to meet half the mortgage, joint life policy and buildings and contents insurance for 22 Chuckethall Road. A balance of £650 was paid towards the pursuer’s said Barclaycard Visa account.
  23. On 23 March 2011, a cheque for £7,000.00 was paid directly into the parties’ joint bank account with Nationwide ending …210.
  24. On separation, the Pursuer had a Goldfish Barclaycard Visa Card ending ….3009 in her sole name. The defender was not a named card holder. The debit balanceat the date of separation was £8,277.Part of the expenditure on this card comprised three holidays, namely (i) for the Pursuer and Defender only (£1,000.00); (ii) a deposit for a pre-booked family holiday in the name of the Pursuer (£1,600.00); and (iii) a holiday for the defender’s parents (£700.00). As a result of the parties’ separation, the Defender chose not to travel on the family holiday.
  25. At the time of the commencement of the parties’ cohabitation on or about 1st April 2011, the Defender was earning around £24,000.00 per annum and the Pursuer was earning around £70,000.00 per annum. From date of separation until September 2012 inclusive, the parties deposited their entire wages into the joint bank account.
  26. During the parties’ relationship, the pursuer controlled the parties’ bank accounts and finances, and made all the financial decisions.
  27. As at the date of proof, the defender’s employment had been terminated following a long term health absence. His prospects for future employment are uncertain.

FINDS IN FACT AND LAW

  1. For the purposes of this action, the parties were a cohabiting couple within the meaning of the Family Law (Scotland) Act 2006, section 25.
  2. To the extent specified in the interlocutor giving effect hereto, the defender has derived economic advantage from the contributions made by the pursuer and the pursuer has suffered economic disadvantage in the interests of the defender.

FINDS IN LAW

  1. The pursuer is entitled to an award of financial provision upon cessation of cohabitation, in terms of section 28 of the said Act of 2006.
  2. A fair and reasonable award in favour of the pursuer, taking into account the matters set out in section 28(3) to (6) of the Act, would be achieved by making an order under section 28(2)(a) requiring the defender to pay to the pursuer a capital sum of £19,868.

 

 

THEREFORE sustains (in part) the pursuer’s plea in law; repels the defender’s plea in law; FINDS the pursuer entitled to a capital sum on cessation of cohabitation in terms of section 28(2)(a) of the Family Law (Scotland) Act 2006; grants DECREE against the defender for payment to the pursuer of the sum of  NINETEEN THOUSAND EIGHT HUNDRED AND SIXTY EIGHT POUNDS (£19,868) STERLING; meantime reserves all questions of the timetable for payment of said sum, and all questions of interest thereon and expenses, and appoints the parties to be heard thereon within the Sheriff Courthouse at Livingston on                               at           a.m.

 

NOTE

Introduction

  • [1]In this action, the pursuer seeks an award of a capital sum under section 28(2)(a) of the Family Law (Scotland) Act 2006, by way of financial provision upon cessation of the parties’ cohabiting relationship. The sum sued for, as amended at the Bar of court in the course of the pursuer’s submissions is £53,428.54. This sum is said to represent losses and expenditure borne by the pursuer in the interests of the defender. The defender raises the question whether this short duration cohabitation qualifies for an award under section 28. In any event the defender avers that, on the facts, no award should be made beyond two particular elements of the pursuer’s claim which have already been conceded as being due. These relate to a deposit for the jointly purchased house, and a sum taken from a credit card belonging to the pursuer to repay a loan to the defender from his parents.
  • [2]This case went to proof before me over a number of days. Evidence was given for the pursuer by the pursuer herself, and her father Thomas Galbraith. The defender gave evidence on his own behalf, and also led evidence from his mother Mrs. Helen Thompson. Reference was made to a number of documentary productions. The parties produced an extensive joint minute of admissions, and also presented written submissions which it is unnecessary to repeat here.

    Background

  • [3]The pursuer and the defender began a relationship in October 2010. They had both been married before, and have children from their respective marriages. The pursuer has a son ….. from her previous relationship. The defender has two children from his previous relationship……and …….There are no children of the relationship between the parties.
  • [4]The parties both owned heritable property at the commencement of their relationship. The pursuer owned two properties; 120 Hawk Brae and 57 Hawk Brae, in Ladywell, Livingston. The defender owned a house at 22 Camps Rigg, Carmondean. They cohabited from 1 April 2011 until 30 April 2012, when the relationship came to an end and they separated. They purchased a family home at 22 Chuckethall Road, Livingston in their joint names, and lived there with the children during their period of cohabitation.
  • [5]Both parties were employed by Sky prior to and during their relationship. The pursuer is employed as a Programme Manager. The defender is a test analyst. There was a large disparity in the parties’ earnings, and the pursuer was the main earner and financial decision maker within the household. When they started cohabiting, the pursuer was earning approximately £70,000 per annum and the defender was earning approximately £24,000 per annum. Both parties knew this at the time they formed their relationship.
  • [6]In the course of the relationship, the parties pooled their joint incomes towards family expenditure. They kept their pre-existing assets and liabilities. However, the pursuer, as the main earner, bore a higher proportion of expenditure, and also allowed some of her resources to be used to pay off debts of the defender. Because the defender was unable to raise funds towards the purchase of the family home, the pursuer put together the deposit and legal expenses. She has been left with credit card debt incurred in the interests of both parties, and she claims the defender should bear a fair proportion of liability for this. At the date of separation, the pursuer moved out of the family home, leaving the defender as the sole occupant for a period until the house was eventually sold on 22 February 2013. During this time, certain liabilities in connection with the house were met by her, and which she argues should fairly be borne by the defender. The pursuer accordingly asks the court to award a capital sum to reflect the very detailed calculations she has carried out and which she avers represent the economic disadvantage she has suffered in the interests of the defender.
  • [7]The defender denies liability for the sums claimed by the pursuer, except in relation to two elements of her claim, which are not disputed. The defender concedes that a sum of £30,000 sought by the pursuer in relation to the house purchase arrangements is fairly due to the pursuer. This was conceded prior to the proof, and I understand that the parties are agreed that this part of the pursuer’s claim will be satisfied by signing over to the pursuer the whole net free proceeds of sale of 22 Chuckethall Road held on joint deposit receipt pending the outcome of the action. The defender also concedes that the sum of £2,400 taken from the pursuer’s Barclaycard Visa account …1001 was used to repay a loan to the defender from his parents, and accepts that this properly falls to be repaid to the pursuer.
  • [8]Beyond those matters, the defender questions whether the relationship is one of cohabitation qualifying for a financial award under the legislation. He argues that on the evidence, and having regard to the parties circumstances, no further financial award should be made. The pursuer entered the relationship knowing the position, and the defender has not taken advantage of the pursuer financially. He has nothing to show from the relationship. The pursuer has deeper pockets and she knowingly committed to a relationship where she would inevitably be the main breadwinner. Any negative impact on the pursuer’s financial position is part and parcel of family life and does not instruct an economic advantage to the defender or economic disadvantage to the pursuer which is referable to the cohabitation. Any loss should lie where it falls.

    Status of the relationship

  • [9]The defender argued that this cohabitation, of little more than a year, was not of sufficient duration to qualify as cohabitation for the purposes of bringing it within the scope of section 25 of the Act. The parties began a relationship in about October 2010. They cohabited for a period of 13 months from 1 April 2011 to 30 April 2012, when they separated. It was submitted that it would be inappropriate for a person in the position of the pursuer to seek to take advantage of the legislation to demand an accounting from the defender at the end of their relationship.The situation was far removed from a long-standing and enduring relationship of the kind the Scottish Government had in mind in promoting the legislation.I was referred to the policy memorandum attached to the Family Law (Scotland) Bill (which ultimately became the 2006 Act), which set out the policy objectives of the Government at pages 13 – 14. In particular, paragraph 67 on page 14 states that: “The intention is to create legal safeguards for the protection of cohabitants in long term and enduring relationships, not to cater for short-term cohabitation.”

    Credibility

  • [10]Each party criticised the credibility of the other. The pursuer reminded me that in the course of his evidence the defender denied telling his mother to tell Sheriff Officers that he did not live at her address. He was later forced to accept that this was a lie on oath. The defender drew my attention to a number of inconsistencies in the pursuer’s evidence. For example, she had asserted at the outset of her evidence that she had been left with no savings at the end of the relationship, but in fact it turned out that she had a “Sharesave” scheme, and had received a substantial bonus from her employer around the time the parties separated. According to the defender, this called the pursuer’s evidence into question. In my view there were inconsistencies in the evidence and the resulting positions of the parties. For that reason I have treated the evidence of both parties with some caution. Apart from the one instance where the defender accepted he was caught out telling a pointless lie, I formed the view that in relation to financial matters the defender was naive and passive rather than dishonest. His position tended to be supported by the surrounding circumstances, and the financial matters which were not in dispute. The major issue between the parties which turned on credibility was in relation to whether there had been any conditions laid down by the pursuer, or agreement reached, about paying her back for certain sums of money that she had provided or expended for his benefit. The pursuer struck me as intelligent and organised. She is money conscious and has an eye for detail. She had been through a divorce previously and was well aware that even the most promising relationships can end prematurely and unexpectedly. I was left with the clear impression that had she intended specifically that she was to be repaid by the defender, then she would have taken steps to protect her position by perhaps entering into a minute of agreement to regulate the position; or perhaps by arranging to take title to the family home in her sole name. On the contrary, she did neither of these things. She was vague and unconvincing on these matters. In my view this supports the defender’s stance that these things were not really discussed – at least not to the point of reaching any understanding that the defender was incurring liabilities that he would be called upon to account for to the pursuer at a later date. The pursuer made the decisions to proceed as she did largely on her own initiative. She was the dominant party, especially in relation tofinancial matters, and the defender’s role was a passive one.

    The Pursuer’s claim

  • [11]The pursuer’s claim on Record (Crave 1 as amended) is for a total of £53,428.54. The pursuer’s claim in broken down into a number of elements as follows:

     

    (a)

    Pursuer’s sole funding towards purchase of 22 Chuckethall Road (£29,325 deposit plus legal expenses  of £3,104; less £2,429 repaid by the defender)

    £30,000.00

    (b)

    ½ of £7,000 loan from pursuer’s parents to pursuer re initial house costs

    £3,500.00

    (c)

    Funds taken from pursuer’s Barclaycard Visa…1001 to repay loan from defender’s parents to defender

    £2,400.00

    (d)

    ½ of balance on Pursuer’s Barclaycard Visa …1001 at date of separation

    £2,123.35

    (e)

    ½ of balance of pursuer’s Goldfish  Barclaycard Visa ….3009 at date of separation

    £4,138.50

    (f)

    Costs associated with a cancelled holiday

    £1,166.00

    (g)

    Refund of payments made by pursuer towards family home in period between date of separation and sale (when defender in sole occupation)

    £2,453.52

    (h)

    ½  share of the interest on Visa accounts and Nationwide loan, adjusted to reflect the reduction in balances

    £4,547.31

    (i)

    Payment made by pursuer to defender to clear defender’s pre-cohabitation debts.

    £3,100.00

     

    Total  =    

    £53,428.68

     

     

    Pursuer’s sole funding towards purchase of 22 Chuckethall Place

  • [12]The pursuer submitted that she should be entitled to reimbursement of the funds which had come entirely from her own resources towards the purchase deposit and outlays of the house they purchased together as their family home at 22 Chuckethall Place. These were the deposit of £29,325 deposit, together with £3,104 of legal expenses; less £2,429 repaid by the defender towards that sum. This produces a total of £30,000.
  • [13]The defender conceded that he had been economically advantaged by the pursuer’s contribution to the house purchase deposit and expenses. However, he pointed out that his economic advantage did not extend to the whole sums expended by the pursuer, but only to the one half share thereof attributable to his interest in the property. In other words, the pursuer already had a right to her own one half share and did not require any order of court to award that to her.
  • [14]On that basis, the advantage to the defender under this head can be quantified in the sum of £16,214; less the £2,429 repaid by the defender. This brings out a net total of £13,785. I am satisfied that this element correctly reflects the advantage to the defender, and should be included in the capital sum awarded.

    Share of repayment of loan from pursuer’s parents to pursuer

  • [15]The pursuer also claims a sum of £3,500, representing ½ of a £7,000 loan made to the pursuer by her parents. It was to be repaid on demand without specification of any date for repayment. She avers that this loan was made for the benefit of both parties, and was expended on paying various ancillary costs involved in purchasing and initially occupying the house. The pursuer’s evidence was that she asked her parents for a £7,000 loan to cover expenses such as removal fees, new carpets and blinds.
  • [16]The defender submitted that I should accept the evidence that the pursuer removed the majority of contents from the property when she moved out. The loan was made to the pursuer alone, and whatever was bought with the loan was retained by the pursuer. It was submitted that no advantage had arisen to the defender as a result of the loan. The defender submitted I should make no award under this head.
  • [17]I am not satisfied on the evidence that it has been established that the loan was in fact used wholly or substantially in a way which could be described as conferring an economic advantage on the defender. I accept that, according to schedule contained in the pursuer’s productions, a number of items of expenditure were made around the time the parties moved into 22 Chuckethall Road, which are consistent with the purposes claimed by the pursuer. However, the pursuer was clearly also on a mission at that time to pay off credit card debt. It is not certain how much of the loan was applied towards that. I did however accept the defender’s evidence that little of that expenditure was of benefit to him or retained by him. The defender has nothing of real value to show from this loan. In any event, it was a loan to the pursuer from her parents and it appears that the defender was not the main driving force in deciding what expenditure to incur on the house. The pursuer’s father confirmed in his evidence that the defender was never involved in any discussions he had with the pursuer about this loan. It seems to me that the removal costs, and costs of decoration, lighting, carpeting, tiling etc. were natural incidents of moving house, incurred on the initiative of the pursuer, and I do not consider that it would be fair or reasonable to exercise my discretion in favour of making any award under this heading. Any “loss” incurred by the pursuer should lie where it has fallen.

    Repayment of loan from defender’s parents to defender

  • [18]The pursuer claims under this head the sum of £2,400. This was withdrawn by the defender, with the pursuer’s consent, from the pursuer’s Barclaycard Visa ending …1001. The money was used to repay a loan from the defender to the defender’s parents.
  • [19]It was agreed between the parties that the defender has been economically advantaged by receiving this sum. The defender accepts that he should repay this sum and concedes that an award in this amount ought properly to be made. That is clearly correct and just, and I will include this sum of £2,400 in my award.

    ½ debit balance of Pursuer’s Barclaycard Visa …1001 at date of separation

  • [20]Under this head, the pursuer asks the court to award a capital sum of £2,123.25, representing½ of the balance of the pursuer’s Barclaycard Visa ending …1001 at the date of separation. The balance was £6,646,49. Stripping out the £2,400 referred to above, the balance is £4,246.49; whereof ½ is £2,123.25. The defender was a named card holder on the account.The pursuer’s position was that this card had a zero balance at the start of the parties’ relationship, and the debit balance grew through the period of cohabitation to the final figure. On the pursuer’s own evidence this credit card was used to fund day to day living expenses such as petrol, shopping and expenditure on the parties 3 sons. Both parties used the card. The pursuer said that the defender was authorised by her to use that Barclaycard as required without her consent.
  • [21]The defender pointed out that an agreed payment of £650 towards the outstanding balance had been made by him post-separation. He submitted that, on the evidence, the pursuer had retained the majority of the household goods and the rest of the funds were used mainly on joint living expenses. There was no evidence that the defender had benefitted to that extent. In any event, even if the pursuer’s approach were correct, it was not possible for the court to distinguish what portion of the expenditure benefitted which party. There were no detailed statements showing what was purchased when. For example, the pursuer might have incurred more expenditure on her own behalf on this account, or she might have spent more on her own child. It was impossible to know. In the defender’s submission, no award should be made under this head.
  • [22]The evidence was that this credit card was used by both parties although it was in the pursuer’s name. There is no suggestion that the defender used it inappropriately or abused the pursuer’s trust. It is obvious that the parties used this card to fund general day to day household family expenses. For the reasons set out in the discussion below about the correct tests and their application, I am not satisfied that this can be said to have brought about an economic advantage to the defender which can sound in an award of a capital sum. I shall refuse to make an award under this head of claim.

    ½ debit balance of Pursuer’s Goldfish Barclaycard Visa …3009 at date of separation

  • [23]The pursuer also claims a capital sum representing½ of the balance of her Goldfish Barclaycard Visa ending ….3009, in the sum of £4,138.50. There was a zero balance on the credit card at the start of the relationship. It ended with a balance of £8,277 at the date of separation. The defender was not a card holder in relation to this account.
  • [24]The defender invited me not to make any award under this head. Part of the sum included appears to be double counted, as referring to cancellation costs of a holiday. In any event, the sums expended on that card were incurred for the benefit of the family generally.
  • [25]In my view, the same considerations apply to this credit card as to the card ending …1001. My observations apply with equal force. For these reasons, I am not satisfied that this can be said to have brought about an economic advantage to the defender. I shall refuse to make an award under this head of claim.

    Holiday cancellation costs

  • [26]Prior to the parties separation, a family holiday was booked. The intention was that the pursuer, the defender and their three sons would all participate in the holiday. When the parties separated, the defender withdrew from the arrangement. The removal of the defender and his two sons from the holiday incurred cancellation charges of £1,166. This was paid for by the pursuer on her Goldfish Barclaycard Visa …3009 after the date of separation. The pursuer argues that the defender should be liable to reimburse her for these costs as they were incurred due to his withdrawal from the holiday.
  • [27]The defender submitted that these costs occurred as a consequence of the relationship breaking down. Neither party benefitted in any way. The defender was not economically advantaged by the holiday being paid for. He and his children did not go on the holiday. The defender’s initial position was that he should not be found liable in an award under this head. However, the defender ultimately accepted that it would be open to the court to make an award under this head, but that any award should be restricted to ½ of the cancellation costs.
  • [28]In my opinion, once the relationship broke down it was inevitable that the parties could not go on holiday together. It was not unreasonable for the defender to withdraw from the plan along with his children. However, in considering whether and to what extent to exercise my discretion to order payment of a capital sum, standing the defender’s fair concession, I will include a sum of £583 under this head. This represents ½ of the total cancellation charge of £1,116.

    Costs of defender’s sole occupancy of house between date of separation and sale

  • [29]When the parties’ relationship came to an end on 30 April 2012, the pursuer moved out of the family home at 22 Chuckethall Road, and it was placed on the market. The defender and his two children remained in occupation of the house until it was eventually sold in February 2013. The pursuer continued to make payments towards the mortgage, joint life policy and the buildings and contents insurance between the date of separation and sale. She asks the court to award a capital sum of £2,453.52, representing reimbursement of the ½ share of these payments made by her.
  • [30]The pursuer made an issue about the defender’s new partner staying “regularly” at the jointly owned house without her approval, and was clearly annoyed by this. There was some evidence that this did happen occasionally. However, I do not consider that this is relevant to the issue to be determined by the court.
  • [31]The pursuer avers that she has been disadvantaged in that she had to pay outgoings for a house which she was unable to occupy but which the defender continued to enjoy as sole occupant. The defender gained a corresponding economic advantage in not having to pay half of his accommodation expenses. In addition, she had to meet her own living expenses, which included renting accommodation for part of this period until she could move into a house which she owned. The pursuer accepted that she had a contractual obligation to meet these payments, but in doing so she was placed at a financial disadvantage. She kept on paying the life policy premiums because she thought it would be in her interests to keep the policy in existence to make provision in the event of death.
  • [32]The defender argued that one half of the mortgage payments were due to be made by the pursuer, and that if she failed to do so there was a risk that the lender would re-possess the property. Accordingly the payments could properly be regarded as being made for her own benefit in preserving her interest in the property. The same applied to the buildings insurance. In relation to the life policy premiums paid after the house was sold, these result in no benefit to the defender. The pursuer did not need to continue making these payments and could have stopped doing so at any time by cancelling the policy. However, she chose not to do so. I was invited to make no award under this heading.
  • [33]On this matter, I prefer the defender’s submissions. I also take into account that, according to the joint minute of admissions (paragraph 3(i)), the house appreciated in value by £2,500 between the date of separation and the date of sale. The parties were in agreement that the pursuer should recover her initial outlay on the house by way of deposit and legal expenses. The practical effect is that the entire net free proceeds of sale will be released to the pursuer with interest thereon. On that view therefore, the pursuer has obtained the benefit of the increase in value.For these reasons, I do not consider that the contributions by the pursuer post-separation represent an economic disadvantage to the pursuer which results in an imbalance requiring to be addressed by an award under this head. I shall refuse to include this as an element of the award in favour of the pursuer.

    ½ of interest on Visa card balances and Nationwide loan paid by pursuer

  • [34]The pursuer submitted that she should also receive a capital sum of £4,547.31 in respect of interest she paid on the Visa cards and a Nationwide loan between the date of separation and earlier this year. The pursuer’s claim is for ½ of the total interest payments - £4,727.84 -less ½ of the reduction in credit card balances between the date of separation and the date of proof (£180.50).
  • [35]As the defender points out, there is some difficulty reconciling the sums set out on Record with the pursuer’s submissions. The defender reminded me that there was no evidence vouching the element of pure interest in these balances. The pursuer’s calculations are on the basis that the payments were to Virgin for interest on that debt, but that position is confused because there was a balance transfer from card ….3009 of £2,300. The defender pointed out the possibility that there was a substantial element of double counting in the pursuer’s treatment of debts or interest charges. The defender suggested that a cautious approach to the pursuer’s figures was appropriate.
  • [36]I consider there is weight in the defender’s observations. As noted above, the original expenditure which resulted in these debts appeared to be funding of various household expenditure for the benefit of the family while the parties were together. I am not satisfied that all the post-separation payments to these accounts by the pursuer have been clearly shown to be referable to interest only. This expenditure was financed at the time in the most expedient way for the parties. The decision to proceed in that way was that of the pursuer as the financial brains of the family. For all these reasons, and having regard to the relevant tests, I am not persuaded that there is an ascertainable economic advantage to the defender which requires to be addressed in the interests of fairness. I decline to exercise my discretion in favour of making an award under this head.

    Payment by pursuer to clear defender’s pre-existing debt

  • [37]The pursuer asks the court to award £3,100 under this head. This represents repayment of money she made available to the defender to help him clear various debts, including overdraft and credit card balances, incurred by him before the parties met. The pursuer paid over this sum in about March 2011, shortly before the parties began cohabitation. The pursuer’s position on Record was that this was not a gift, but stops short of averring that it was a loan.
  • [38]The defender avers that this was a gift, and that in any event it was made before the parties commenced cohabitation. The defender argued that a section 28 award is intended to reflect economic advantages and disadvantages accrued during a relationship, and that such a pre-cohabitation matter falls outwith the reach of the legislation. There was no cohabitation at that time and so section 28 has no application. The defender had made it clear that unless the defender’s debts were cleared there would be no cohabitation. She did not indicate to the defender that she expected this to be repaid. On the pursuer’s evidence, it was for the pursuer’s own benefit because she wanted a clean slate before they began living together.
  • [39]Having heard the evidence of the parties about the circumstances of this payment, I have come to the view that the divergence of views stems from the lack of any clear agreement between them at the time. I am of the opinion that the basis of the payment was not really discussed, and their attempts to characterise this payment as a gift, or otherwise, are simply a retrospective reflection of their optimistic expectations. There are no pleas in law inviting me to hold that there is contractual basis for repayment of this money. The parties rely only on section 28.
  • [40]Turning to section 28, I accept that the money was paid prior to the commencement of cohabitation. However, the money was paid to the defender a matter of a few weeks before they moved in together. According to the pursuer’s own averments, the payment was made in contemplation that the parties would cohabit. Indeed it appears to have been a condition precedent that the defender would use the money to “clean the slate” in relation to his previous debt. The debt was wholly that of the defender and it had been incurred entirely before the parties met.
  • [41]In my view, the legislation is widely enough drawn for me to take account of this payment in economically balancing how the parties came into the relationship against how they came out of it. Whether one treats the £3,100 as a “contribution” for the purposes of section 28(3), or simply has regard to it as part of the background bearing upon whether it would be just and reasonable to make an award, I am of the opinion that it would be unfair to leave this payment out of account. Although the pursuer perceived some advantage in the defender clearing his debts at the outset of their relationship, the true beneficiary was the defender. He had obligations enforceable by his creditors which have been extinguished through the generosity of the pursuer, and that falls to be recognised in applying the tests set out in the Act. I prefer the pursuer’s submissions, and will include this sum as an element in the capital sum to be awarded to the pursuer.

    Discussion

  • [42]On the question of whether the relationship qualifies, I notethat the legislation does not lay down any minimum qualifying period for cohabitation to be established. The Scottish Ministers considered this, but decided that there would be more to be lost than gained by setting an arbitrary qualifying time period. The question is therefore to be answered by looking at the circumstances of the relationship as a whole; the duration of the cohabitation being a factor to be considered.
  • [43]The parties both had children by previous relationships. They intended to live together, with the children, as a family from the outset. They bought a family house together. They both worked and pooled their individual earnings towards joint living expenditure. In large measure, their day to day financial affairs were merged and run together. Those arrangements worked well enough for over a year. For these reasons I am unable to dismiss their relationship as one of short-term cohabitation undeserving of protection under the legislation. This relationship was intended to be long-standing and in the nature of a cohabiting family one. The actual relatively short duration of the cohabitation is neither the only, nor decisive, factor to be considered. This relationship bears all the indications of a long standing and enduring relationship, and having regard to the tests in section 25(2), it qualifies to be regarded as a relationship of cohabitation for the purposes of section 25.
  • [44]Turning to the merits of the pursuer’s claim, her approach is essentially an accounting one. She has detailed the parties’ financial dealings, as she sees them, in great depth. She has produced an arithmetical assessment apportioning liability under various heads. With a few exceptions, she approaches this matter on the basis that she should not have to pay for anything which benefitted the defender alone, and the defender should pay his one half share of expenditure and liabilities incurred on a joint basis on behalf of the family as a whole. Her approach is based on what would be needed to restore her to the position she would have been in had she not brought her financial standing, resources, earnings and borrowing capacity to bear in a way which benefitted the defender. I agree with the defender that the legislation is not intended to facilitate a minute unpicking of the parties’ expenditure during the course of the relationship. In a relationship where cohabitants are pooling their resources, it not legitimate to use section 28 to have one party refund at the end of the relationship the living expenses he could not afford to contribute to during it.
  • [45]Much of the pursuer’s claim seeks repayment of what she sees as the defender’s half share of the liability for what she expended, or borrowed to expend, on what were expenses of running a family household. In my view, the undertaking of such expenditure is part and parcel of family life in consideration of keeping a roof over the family’s head and food on the table. Typically, such expenditure will be borne by the party most able to pay it, by the most convenient and expedient means. This might refer to the parties’ respective incomes, earning capacities, resources or borrowing capacities. It is undertaken out of a sense of affection, or perhaps assumed duty. However, it is beyond the contemplation of the legislation that what is freely given for affection is repayable by way of an accounting if the joint social enterprise which it is intended to sustain founders. As the defender put it, sums spent on day to day living expenditure are just a part of the sharing of finances which is considered relevant to establish a relationship as one of cohabitation for the purposes of section 25. The defender correctly submitted that this was not a business relationship, but a relationship of living together; which involved people sharing their resources without any expectation that the other party would one day compensate them for their larger contribution to the common good and costs of the family.
  • [46]Counsel pointed out that if the defender had known that he would be held accountable for every additional item of expenditure met by the pursuer, he may have hesitated about committing to the relationship at all. He would have realised that there were risks in doing so where he could be faced with substantial debts in the event of the relationship not lasting. The defender had no say or control over the way in which money was spent or used, and had he known this was the pursuer’s attitude, he may well have wanted more of a say in their joint financial affairs, especially after the relationship ended. Counsel submitted that the 2006 Act exists to address bigger issues and primarily to avoid the potential for one party to be left financially vulnerable at the end of a relationship.
  • [47]The pursuer’s approach resembles the kind of process involved in the dissolution of a business partnership, where capital accounts are settled; or in an action of count reckoning and payment, where an agent is called to account for his dealings with the financial affairs of a principal.
  • [48]The defender referred me to the case of Gow v Grant [2012]UKSC 1. It is clear from that decision that, although the words “fair and reasonable” do not appear in the legislation, it must be taken that that was the intention of the legislature. The purpose is to achieve fairness between the parties. Their Lordships observed (at paragraphs 31-33) that the relevant subsections of section 28 require to be read broadly, bearing in mind that they are designed to correct imbalances arising out of a non-commercial relationship where parties are quite likely to make contributions or sacrifices without counting the cost or bargaining for a return. Lady Hale observed in that case (at paragraph 54) that “.. It is in most cases quite impracticable to work out who has paid for what and who has enjoyed what benefits in kind during the cohabitation. People do not keep such running accounts….That is not what living together in an intimate relationship is all about..” Notwithstanding those observations in Gow v Grant, it seems to me that is the approach undertaken by the pursuer in this case.
  • [49]The pursuer was in a senior managerial position when the parties met. She was by far the higher earner. She received a salary of £70,000 per annum, in comparison to the defender’s salary of £24,000 – almost three times his earnings. The pursuer was fully aware of this disparity at the time they formed their relationship. She must have known that she was going to be expected to be the main financial contributor to the household. The evidence was that the parties pooled their income, which was paid into the same bank account.
  • [50]The defender referred me to the case of Pressley v Pressley 2002 SCLR 804. Although this was a claim in a divorce action under section 9 (1)(b) of the 1985 Act, the defender submitted that the approach in that case was instructive, and of application to this case. In the Pressley case, the pursuer (the wife) was the higher earner. She attempted to argue in support of a claim for financial provision that she had been economically disadvantaged by her greater contributions to the family upkeep. The Sheriff Principal took the view in that case that it was not appropriate to compensate a higher earner for such contributions to the family upkeep, because that was to be expected in the context of a husband and wife relationship. The same applies here because a fundamental part of establishing a couple as cohabitants is demonstrating shared finances or pooled resources. I agree with the defender that it would make no sense to require one party who had less money to make a compensatory payment to the other at the end of the relationship. I would go further, and suggest that to do so would be inconsistent with the purpose of section 28 and do an injustice in many cases.
  • [51]The pursuer referred to me to the case of Gray v Kerner 1996 SCLR 331. In that case, the Sheriff decided that it was unreasonable for the pursuer to be expected to fund the defender’s occupation of a house when she had her own accommodation expenses to pay. However, all of these individual cases turn on their particular facts and Gray v Kerner can in my view be distinguished. That case was a proprietory action for division and sale. In that case, the Sheriff appears to have placed weight on the fact that the defender was being unreasonable in expecting the pursuer to meet the liability for the mortgage and then expectinghimself to receive one half of the net free proceeds when the house was eventually sold. In the present case, it should be borne in mind that the defender offers to give the pursuer the whole net free proceeds of the sale.
  • [52]I did not find, on the evidence that there was any element of bad faith on the part of the defender. I did not consider it could be said that the defender set out to take cynical advantage of a short lived relationship with a financially secure woman in order to improve his financial prospects. The pursuer said that she had trusted the defender with a card on her credit card account, but there was no evidence that he had abused that trust in any way. He did use some of the pursuer’s resources for his own purposes, but always with the permission of the pursuer.
  • [53]In my view the parties contributed to the household expenditure according to their means. I accept that some of the expenditure was financed by borrowing, and that the pursuer has been left with the subsequent debt in the aftermath of the relationship, but the pursuer earned and continues to earn a substantial salary and owns two heritable properties. It is not clear why debts were run up or why they were not paid off subsequently.
  • [54]I was satisfied that the pursuer was the main financial decision maker of the family, and accept the defender’s evidence in that regard. It was not disputed that she managed all the family finances closely and controlled expenditure. The defender was passive in these matters and largely left all financial decisions to the pursuer. As the defender put it: “That was her thing”. He appears to have generally followed the pursuer’s wishes and instructions. I believed his evidence that he felt uncomfortable about earning less than her, but was reassured that this was not an issue. I formed the clear impression that the pursuer is a financially astute and assertive individual. She is intelligent and resourceful; rather than financially vulnerable. I accept that the she will have financial needs, including the education of her son. However, her ownership of property and earning capacity provide a degree of financial security. She will be able to get back on financial track again without undue hardship.
  • [55]By contrast, the defender has a lower earning capacity and less ability to save. He does own a house which his parents rent from him, but that is his only asset. He will also have to make provision to educate his children. It is true that he benefitted from the pursuer’s higher financial contributions while they were living together but not disproportionately so. Money came in from both parties according to their earnings and went out in the form of expenditure from day to day. The defender has not walked away with any windfall as a result of the relationship, and has had nothing to show for it beyond the specific verifiable elements which I have addressed in making this award. Following a period of long term sick absence, he has now lost his job and his future is uncertain.

    Decision

  • [56]For the foregoing reasons, I have decided that the pursuer has suffered economic disadvantage and the defender has received corresponding economic advantage, which are not offset, to the extent of the award set out herein. Much of the expenditure claimed by the pursuer is in my view irrecoverable as occurring in the course of a personal non-business relationship without any expectation that it would be repaid. I will make an award to reflect those elements of the pursuer’s claim which can be said to have resulted in clear and measurable economic advantage/disadvantage and which justify the court stepping in to correct an obvious imbalance in the interests of fairness.
  • [57]The elements of the pursuer’s claim which I accept are therefore : (a) the pursuer’s funding of the house purchase (£13,785), (c) Repayment of the loan to the defender’s parents (£2,400)(f) ½ of the holiday cancellation costs (£583), and (i) the payment to the defender to clear his pre-existing debts (£3,100) (total = £19,868). Subject to the following paragraph, my finding is that the economic imbalance would be redressed by ordering payment of a capital sum by the defender to the pursuer of £19,868.
  • [58]I turn next to the question of the amount of the operative decree to implement these findings. Somewhat unusually, it was narrated in the joint minute that the defender had made a settlement offer earlier in the proceedings. That offer was that the pursuer would be allowed to retain the whole net free proceeds of sale of 22 Chuckethall Road held on joint deposit, together with a further payment to the Pursuer of £2,400 by instalments in full and final settlement of the Pursuer’s claim, and no award of expenses would be made to or by either party. I was then informed in the course of submissions that, as a sign of good faith and in acknowledgement that it was proper to do so, the defender intended to sign over the net free proceeds to the pursuer without waiting for my decision in the action. For the purposes of the decree, it was anticipated that by the time of my decision these funds could be treated as paid. If they have not been paid, then the decree will be as set out herein (£19,868). On the other hand, for the avoidance of doubt, if the proceeds have been paid over as intended, then the decree will fall to be restricted by stripping out element (a) of the award in relation to the house acquisition costs (£13,785) and treating that head of claim as satisfied. I will invite the parties to address me on that matter at a further procedural Hearing.
  • [59]I was invited to reserve all questions of the timing of payment of the balance of the capital sum, and all questions of interest and expenses until giving my substantive decision. It may be that the defender will wish to address me in relation to payment of the balance by instalments in terms of section 28(7). I will accordingly put the case out for a Hearing on all of these matters.

 

 

Advocate

Sheriff of Lothian and Borders at Livingston