A recent case of Chapman –v- Jaume has highlighted the need for cohabitants (unmarried parties) to enter into a Cohabitation Agreement.
Mr Chapman and Mrs Jaume met in 1997/1998. Mrs Jaume was married at the time but was going through divorce proceedings. Mrs Jaume received the former matrimonial home as part of the divorce settlement with her husband and by then Mr Chapman was already living with Mrs Jaume. Mr Chapman paid for substantial building works to be carried out at the former matrimonial home which he claimed to be £162,589.42. Mr Chapman and Mrs Jaume’s relationship ended in 2006.
Mr Chapman’s case was that he should be entitled to have the money back that he had spent on the property, such expenditure would be repaid upon the sale of the property or Mrs Jaume’s youngest child attaining the age of 18 years whichever was the earlier. This was not, the Court found, a case which needed to deal with Resulting or Constructive Trusts as Mr Chapman’s case was that the monies he had spent were a loan.
The Judge at first instance decided that as Mr Chapman had failed to prove the precise conditions about the time that the monies would be repaid meant that his case must fail entirely.
The Court of Appeal disagreed. The Court found that the Judge ought to have drawn the inference that the monies were repayable within a reasonable time after demand. The reasonable time would
have been at the very latest when the house was sold. It was decided therefore that the monies that Mr Chapman had spent on the property were repayable by Mrs Jaume.
The case was remitted back to the County Court to decide the issue of quantum which had not been decided in the initial judgment.
It is important therefore that if you are considering buying a house with somebody, moving in with them, or if your partner is moving in with you, that you enter into a Cohabitation Agreement. Recent cases regarding unmarried couples have resulted in some harsh decisions which could have been prevented if an agreement regarding their financial contributions to the relationship had been set out properly in a Cohabitation Agreement.
For advice on divorce please contact any of our offices.
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