The recent case of Liden v Burton highlights the willingness of the court to uphold the old principles of equity when it comes to disputes between cohabiting couples.
Mr Burton and Ms Liden began living together in Sweden in 1995. He was married but separated from his wife. The parties moved back to the UK in 2001 and took up occupation at Willow Beck. This property was owned by Mr Burton and his wife in their joint names, them having purchased it in the 1980s. As part of his divorce settlement in 2002, Mr Burton paid his wife a sum of £37,500 and Willow Beck was transferred into his sole name.
However, from 2001 until their acrimonious separation in 2013, Ms Liden provided Mr Burton with a sum of £500 per month towards the expenses of running and maintaining the property. Following their separation, Ms Liden claimed that she had an interest in the property because of her payments over a period of some 12 years. Specifically, her claim was that her interest arose under the principles of proprietary estoppel. Proprietary estoppel is an equitable concept that involves the following:
– The owner of a property encourages or allows the non-owner to believe that they have or will enjoy some right or benefit in respect of the property;
– In relying on their belief, the non-owner acts to their detriment with the knowledge of the owner; and
– The owner then seeks to take unfair advantage of the non-owner by denying them the right or benefit they had expected to receive.
The parties were very much at odds with one another in respect of their evidence regarding their relationship and what had been said and done by one another. However, the Judge dealing with the matter at trial preferred Ms Liden’s evidence. He found that Ms Liden’s payments of £500 per month represented half of her pension income. He also found that she would not have made such a contribution unless she had expected to receive something from the property in return. After all, she could have invested her money elsewhere. Perhaps the final nail in Mr Burton’s coffin was that the Judge found that he proposed marriage to Ms Liden in 2003.
He was satisfied that the features of proprietary estoppel were made out. He found that there was an understanding between the parties that of her £500 per month payments, £300 covered a contribution towards the outgoings of the property and the balance of £200 could be said to be ‘her investment.’ Over a 12 year period, this amounted to £28,800. He also found that if interest at 3% was added to this sum, her total interest in the property amounted to £33,522. Given that the property was on the market for £435,000 at the time of the trial, this was around 10% of the equity.
Whilst Mr Burton appealed against the decision of the Judge, the Court of Appeal dismissed his appeal in March 2016. Their view was that the Judge dealing with the matter had the crucial advantage of seeing the parties provide evidence in person. After making the findings he did, he had applied the law correctly to the facts and his decision could not be questioned.
If you are cohabiting and remain unsure over your financial position, there really is no substitute for obtaining clear and comprehensive legal advice.