Should common law marriage be entrenched in law as well as in the public consciousness? asks Clare Williams

Family solicitors love myth-busting. One of our favourite myths to bust is that of the popularly held misconception of common law marriage.

When we smugly say that there is no such thing as common law marriage, we are legally correct, but we do our listeners a disservice. The position is far from straightforward and the current law, unsatisfactory.

Complex tapestry

In August 2012, media outlets reported on a High Court case between celebrity lifestyle guru, Simon Brown, and his former partner, ‘macrobiotic chef’, Dragana Brown. The couple had never married, but Ms Brown stated through counsel that “Mr Brown said to her that she need not worry as she was protected as a common law wife”.

This comment will have been cited in order to give Ms Brown the best possible chance of establishing an equitable interest in the couple’s shared home.

The papers (wrongly in my view) seized upon this as a “unique bid to secure a ‘common law divorce’ payout” (Daily Mail, August 2012). Ms Brown may well establish an interest in the property and, even if she does not, will very likely be able to secure maintenance and potentially housing provision on behalf of the couple’s son.

However, this will have nothing to do with ‘common law marriage’ and everything to do with the complex tapestry of legislation and equitable principles that regulates the financial consequences of relationship breakdown where there is no marriage or civil partnership.

So, why does the myth persist? The reality is that, for a number of official purposes, those living together in a cohabiting relationship are treated differently from, say, friends in a house share. These include the acquisition of certain rights to inherit social housing tenancies and the definition of a household for the purpose of calculating benefit and tax credit entitlements.

The legislation that enables court orders to be made for protection from domestic abuse includes a statutory definition of cohabitants as “two persons who are neither married to each other, nor civil partners of each other, but are living together as husband and wife or as if they were civil partners”.

The ‘general public’ are not so daft after all: living together in a committed, loving relationship does make a difference to one’s rights and entitlements.

As if the situation were not confusing enough, the law in Scotland (the jurisdiction next door) does afford certain rights to cohabitants. Sections 25-29 of the Family Law Act (Scotland) 2006 put in place a scheme which allows cohabitants to make an application for maintenance and capital provision in the event their relationship ends otherwise than through death.

This legislation also creates certain presumptions in relation to the ownership of household effects.

The legislation does not create equivalence between separating cohabitants and divorcing spouses, but there is substantially more on offer than is available in England and Wales. In promoting the legislation, the Scottish government neatly encapsulated the central tension at the heart of this subject: the need to “balance the rights of adults to live unfettered by financial obligations towards partners against the need to protect the vulnerable” (Scottish Executive 2005a, para 65).

English experience

It would be misrepresentative to assert that there is no financial provision available for unmarried partners upon the breakdown of a cohabiting relationship.

Throughout the UK, the payment of child maintenance in disputed cases is dealt with by the Child Support Agency (CSA), using an arithmetic formula based on the non-resident parent’s income. The only criterion for establishing liability in principle is the fact of biological parentage or adoption or the existence of a parental order (which establishes a parent’s status following a surrogacy arrangement).

Whether or not the child’s parents are or have been married is irrelevant.

Where the non-resident parent has an annual net income in excess of £104,000, the court can order the payment of ‘top-up’ maintenance over and above what the CSA can award. Where resources allow, the court can also order the payment of school fees and a contribution towards expenses arising as a result of a child’s disability.

Such orders can either be made in the context of divorce/civil partnership dissolution proceedings or following a freestanding application by a parent under schedule 1 of the Children Act 1989. Again, where resources allow, the same legislation enables the parent of a child to be ordered to settle a property upon the child’s carer while the child is dependent, even though the parents were never married.

These provisions are only available to the parents of dependent children and, other than the payment of maintenance via the CSA, apply only where one or other of the parents is of substantial means. For example, there would be no financial provision for a cohabitant who has adopted the role of homemaker and become financially dependent upon their partner over 20 years or more, if there are no minor children.

Real problems arise where a cohabiting couple share a home and fail (as most do) to define their respective interests in that property. The vagaries of their financial and living arrangements and even private discussions dating back many years can assume a significance far beyond the parties’ wildest imaginings and impact upon how the equity in a shared property is divided upon separation.

In the absence of a statutory scheme for sharing homes, cohabitants in dispute have been forced to rely upon equitable principles and, as a result, a large body of case law has developed, mainly around the concept of the common intention constructive trust. The leading cases are Stack v Dowden [2007] 2 All ER 929 and Jones v Kernott [2011] All ER 64.

Broadly speaking, if a property is purchased in joint names without a declaration of trust specifying the extent of the parties’ respective beneficial interests, equity is presumed to follow the law. This presumption can be rebutted, but strong evidence is required.

Conveying a property into joint names, even where the contributions towards the purchase price and/or subsequent mortgage instalments are unequal will therefore result in a 50/50 division of the equity in most cases.

If a property is purchased in one party’s sole name, the history of contributions towards the purchase price, mortgage instalments and upkeep, taken together with any discussions the parties may have had can lead to an inference or imputation of an intention to share the beneficial interest.

Once such intention has been found by the court, it has a wide discretion to look at the whole course of dealings to decide how the beneficial interest in the property should be allocated (see Oxley v Hiscock [2004] All ER 48).

In cases where the cohabitant of a sole proprietor makes a contribution towards the equity in the property, or relies to their detriment on comments such as “don’t worry – this is your home too”, there is a high degree of uncertainty as to how the beneficial interests in the property will be shared and complex litigation can follow. The only sensible solution for those sharing homes is to enter into a cohabitation agreement and/or declaration of trust.

What of the cohabitant who arrives on the scene once a mortgage has been paid off and therefore has no opportunity to contribute towards the equity in the property, even indirectly? In the absence of a very specific and clear course of dealings to point towards shared beneficial interest, they will walk away with nothing.

Harsh outcome

If the Scottish legislation were enacted in England and Wales, the outlook for cohabitants would be less bleak, especially for those of modest means and/or those without children.

In particular, the opportunity to apply for a capital payment outright could work to alleviate hardship. Such legislation would not smooth out the uncertainty surrounding the co-ownership or sharing of homes where the beneficial interests have not been pre-defined. However, in the absence of a comprehensive redistributive jurisdiction such as exists for divorcing couples, would this ever be possible, or even desirable?

In December 2011, the Law Commission presented a draft Inheritance (Cohabitants) Bill and a draft Inheritance and Trustees’ Powers Bill. The Commission proposed (among other things) that unmarried partners who have lived together for five years will, in certain circumstances, be able to inherit under the intestacy rules.

The proposed qualifying time limit for couples with children would be two years, provided the children were living with them at the time of the partner’s death. If enacted, these provisions would combat the very harsh outcomes that can result when a cohabitant dies intestate.

The potential changes to the intestacy rules seem to strike a fair balance between impinging upon the freedom to enter into a relationship without legal baggage and protecting those who are left stranded simply because they never got round to formalising matters. Those who disagree with the scheme can opt out by making a will, subject to the right of a dependent survivor to apply under the Inheritance (Provision for Family and Dependants) Act 1975.

Resolution, the 6,500-strong organisation for family solicitors “committed to the constructive resolution of family disputes”, has repeatedly called for reform of the law of cohabitation, bolstered recently by the comments of Lady Hale in the Supreme Court case of Gow v Grant [2012] UKSC 29, at para 56, an appeal arising from the new Scottish legislation. “As the researchers comment: ‘The Act has undoubtedly achieved a lot for Scottish cohabitants and their children.’ English and Welsh cohabitants and their children deserve no less.”

Clare Williams is an associate at JMW Solicitors www.jmw.co.uk