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Cohabitee's Financial Claim Inaction Barred Unjust Enrichment Claim Against Executor

A Court of Session judge has ruled that by failing to bring a financial claim following the end of his relationship under the Family Law (Scotland) Act 2006, a former cohabitee barred his executors from seeking a remedy in unjust enrichment following his death.

The Case

The executors of Robert Courtney had their action against Yvonne Campbell, whom the deceased had been in a relationship with from 2009 to 2013, dismissed by Lord Beckett in the Outer House after applying the principle of subsidiarity, under which equitable remedies such as unjustified enrichment are only available where there is no other remedy provided by statute or common law, and holding that failure to act timeously does not open up the possibility of an equitable remedy.

The facts of the case are that Ms Campbell bought a property in 2010 with the intention of living there together with Mr Courtney. Mr Courtney put two £50,000 payments towards this purchase, but title was taken in Ms Campbell's name only. The executors sought repayment of both these payments, as well as for benefits the defender had gained as a result of Mr Courtney making payments towards the cost of labour and materials for renovations, as well as contributing his own joinery skills, which they valued at a further £50,000.

In their averments, the executors stated: “The deceased believed the property was, in effect, his and the defender’s property regardless of the title position. He expected to remain in the property and living with the defender there for the rest of his life. The expectation was that he would benefit equally from the contributions that he made.” The relationship broke down in 2013, and Mr Courtney moved out of the home.

S.28 of the Family Law (Scotland) Act 2006 provides that when a cohabiting relationship ends for a reason other than death, a court can order one cohabitant to pay a financial sum to the other if it considers one partner has gained an economic advantage to the detriment of or suffered an economic disadvantage in the interests of the other cohabitee. This provision has a strict time limit of one year from the date of separation, after which a claim against the former cohabitee will no longer be possible. After the breakdown of the relationship between Mr Courtney and Ms Campbell, Mr Courtney opted not to seek legal advice regarding the money he was due as Ms Campbell’s son had been very ill around this time, and later died. By the time he sought legal advice in August 2014, the statutory remedy under s.28 of the 2006 Act was unavailable to him as the time limit had expired.

The executors argued that due to these extenuating circumstances, excluding the claim would result in the kind of unfairness the 2006 Act was intended to remedy and that subsidiary was not an absolute rule, stating that as subsidiarity only applies when all other remedies have been exhausted, it could be argued that the remedy contained in s.28 had been ‘exhausted’ by the passage of time.

Lord Beckett was unmoved by these arguments, however, holding that Parliament had to have been aware of the common law when drafting s.28 of the 2006 Act, including the principle of subsidiarity. Where Parliament has imposed a time limit, he stated, there had to be some particularly special and strong circumstances existing before a claim could be brought for equitable remedy after that time has passed. Finding that Mr Courtney's altruistic motives did not prevent him from seeking legal advice if he felt he had a financial claim and finding in favour of the defendant.

The Pitfalls of Cohabitation

Recent government statistics show that cohabitation is on the rise in Scotland, and is the fastest growing type of family in the UK as a whole, and cases such as this highlight the many difficulties and pitfalls facing couples who choose not to have their relationship legally recognised. Cohabitation can be exciting and an important next step in life, but it is still key to have legal protections in place to ensure protection in the future. According to research by the Co-op, around one in four people living together believe they have the same legal rights as married couples, and this is sadly not the case. This mistaken belief can, and frequently does, result in cases that are, on the face of it, materially unfair. Mr Courtney (and his executors) have lost out to the tune of £150,000 in a situation that would have been entirely avoidable had he and Ms Campbell given their relationship some form of legal protection.

While an increasing number of couples are hesitant, unwilling or uninterested in committing to marriage, this does not mean that their relationship cannot have some legal protections. Cohabitation agreements are an extremely common way and simple way of ensuring some of these legal protections. They are essentially contracts and can contain agreements on anything you and your partner wish to agree on. They are especially useful in situations such as Mr Courtney and Ms Campbell’s – those involving property – and could have prevented the conflict from ever arising by making some provision for what was to happen to the property in the event of the relationship coming to an end.

We understand that talking about cohabitation agreements isn’t the most romantic thing in the world, but it’s in the best interests of both partners to have an agreement set down in writing. Cohabitation agreements have the added benefit of helping to avoid expensive court litigation where the outcome is often uncertain and ensure a resolution that works for both parties.

Contact Our Expert Cohabitation Agreement and Family Law Solicitors Today

If you require legal advice regarding the creation of a cohabitation agreement or if you require any legal advice regarding family law, our team of expert solicitors can help. Get in touch with our team using our online contact form.

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