No romance without finance

The rather sad tale of equestrian lover Kristin Liden is a timely reminder of the precarious position of the so-called common law wife.

Ms Liden enjoyed an 18-year relationship with her now former partner, Michael Burton. During this time, the couple moved from Sweden to set up home in a property owned by Mr Burton in the UK. Over the period of the relationship, Ms Liden made payments of more than £70,000, to include contributions to allow Mr Burton to meet his mortgage commitments.

When the relationship came to an acrimonious end, Ms Liden staked a claim over the property, on the basis of the monies she had contributed. Mr Burton’s response was that he owed her nothing. Had they been married the position would have been very much clearer and straightforward. However, because they were not, Ms Liden could only pursue a claim under the Trusts of Land and Appointment of Trustees Act 1996, relying upon certain statements made to her by Mr Burton.

The argument eventually ended up before the Court of Appeal. It enforced a ruling of Mr Recorder Cameron. He had accepted Ms Liden’s submissions that she had only made the financial contribution demanded of her because Mr Burton had made clear that she could only live in his house if she did so. Also, because she was told on numerous occasions that they had a future together, that the property would be her home and that Mr Burton would “look after her forever”.

Ms Liden said that she was content to make the contributions because the assurances given to her by Mr Burton meant that she did not need to make provision elsewhere for her future. Mr Burton’s statements were found to give rise to a legal doctrine of proprietary estoppel, meaning that effectively Ms Liden was entitled to compensation for some (but not all) of the payments she had made. This is because Mr Burton’s promises to her meant that she had acted in a manner that prejudiced her financially, which she would not have done, save for his assurances.

Although Ms Liden had contributed some £70,000 towards the household expenses over the term of the relationship, the Court awarded her just £33,522. The sting in the tail for Mr Burton, who resisted Ms Liden’s claim, is that he now not only has to pay his own legal fees but also those of Ms Liden, which are likely to significantly exceed the lump sum awarded to Ms Liden.

Importantly, Ms Liden’s claim was not based on the parties’ relationship but rather upon the financial contribution she had made. This allowed Mr Burton to service the mortgage on the property. It was also based on the verbal assurances he was found to have given her, which influenced the decisions she made about how she used her financial resources.

Unfortunately, there are many, mainly women, who find themselves in an even less satisfactory position when they separate from partners to whom they are not married or in a civil partnership. Many believe that they have financial protection simply by reason of the (often lengthy) relationships into which they have entered but when the relationship breaks down can find themselves homeless, with little or no income and with no basis at all to claim against their partner’s assets.

It is essential that those who choose to cohabit, rather than to marry or to enter into a civil partnership, seek legal advice to ensure their financial position is secured, for example, by means of a cohabitation agreement or by becoming a joint owner of any property. If they choose not to take this important step they may well come to regret it.

If you would like to discuss this or your situation generally, please contact a member of our Family team.

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