Property and the Break-up of an Unmarried Couple

Property and the Break-up of an Unmarried Couple
Unmarried couples frequently buy property to be
assets on divorce. As the court said:
Regulations are such where only one of the couple is
“The difficulty with which the Court is having to
residentially qualified, only he or she can actually
grapple in this case is one which has exercised the
purchase the property if it is a freehold house or
courts of the United Kingdom increasingly over the
flying freehold apartment. The position is different if
last 20 years – how to reach a fair result in
the parties are married: in that case, the non-qualified
circumstances where a couple choose to live their
spouse can join in the purchase with the qualified
lives together outside the institution of marriage,
which the law recognises, and nonetheless seek the
resolution of the law in relation to their financial
This article will look at the case of Reid v. Flynn,
matters when they have separated.”
which recently came before the Royal Court,
After a consideration of various legal principles, the
relationship between unmarried partners and the
court settled on the principle of ‘unjust enrichment’
dispute between them as to the division of the net
as the basis for achieving a fair result between the
proceeds of sale of the property which had been
parties, and summarised the task for the court as
bought in the sole name of the qualified partner, Mr
Reid, and subsequently sold by him. The court’s
“The starting point is the legal interest. The Court
judgment in this case provides a clear indication of
then looks at whether there has been enrichment
the approach to be adopted in this kind of dispute,
which benefits the legal owner or owners or perhaps
where there the Court does not have the wide
some of them, at the expense of the claimant in a
statutory powers available under the Matrimonial
way that is unjustifiable.”
Causes Law in the case of the division of matrimonial
Applying this principle, the court considered the
The Reid v. Flynn judgment contains much for
parties’ original intentions, the parties’ respective
lawyers to pore over and ponder. For present
contributions, both monetary and in kind (bringing
purposes, though, there are two important lessons.
up the couple’s children), and the overall justice of
First, the court has made it clear that it has a wide
the case, and ordered that the net proceeds be
and flexible discretion in cases such as this to ensure
apportioned according to a particular formula.
that the sale proceeds of property are apportioned in
a fair way between previously co-habiting couples.
The case is also noteworthy for the court’s approach
The court made clear that the principle which it
to an agreement which had been entered into
applied in this case could apply to “heterosexual and
between the parties at the time of the purchase of the
homosexual partnerships in circumstances falling short of
property. This agreement covered matters such as the
those partnerships which the law formally recognises such as
servicing of the mortgage (taken out in the parties’
marriage or civil partnership; de facto business arrangements
joint names), the payment of outgoings relating to
not formally recorded in a partnership; and platonic co-
the property, the maintenance and upkeep of the
habitation arrangements which might be made, whether by
property and the division of the sale proceeds if the
members of the same gender or not, and whether as a result
property were to be sold.
of family ties or friendship”.
One might have thought that the court would simply
Secondly, it is clear that ‘off the shelf’ agreements
have enforced this agreement, which would have
entered into by co-habiting couples will be viewed
made it unnecessary to apply unjust enrichment
with extreme scepticism by the courts. That is not to
principles. However, the court took the view that
say that it is not right for co-habiting couples to
the agreement was meaningless in that it sought to
record their intentions in writing or that no
deal with the property in a vacuum, away from all
documents of this nature will be given effect to by
the other arrangements which the parties made with
the courts. But anything which smacks of artificiality
each other for the running of their home and for
will be given short shrift.
payment of their other outgoings. The evidence was
that the agreement was drafted by the lawyers acting
in the purchase of the property without any detailed
agreements of this nature would be well advised to
consideration by the parties of its content and that
review their agreement to make sure that they reflect
from the very beginning the parties paid no attention
their current circumstances and intentions. Please
to it. The court was particularly scathing of the way
contact Michelle Leverington on 818 163 or
the agreement referred to Miss Flynn as occupying
[email protected] for any advice
the property as Mr Reid’s “guest”.
which may be required in this area.
Partner – Property, Jersey
[email protected]
This publication is intended only to provide a summary of the subject mattered covered. It does not purport to be
comprehensive or to provide legal advice. No person should act in reliance on any statement contained in this publication
without first obtaining specific professional advice.
June 2012
© Appleby
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