Financial rights for cohabitants – an interesting case

Gow v Grant [2012] UKSC 29 is a recent decision of the Supreme Court dealing with the financial rights of cohabitants, the case is a Scottish case but it has relevance and interest for cohabitants and practitioners in England and Wales.

The decision reversed the judgment of the Inner House of the Court of Sessions, the Scottish Court of Appeal. The case deals with a couple, Mrs Gow and Mr Grant who lived together as husband and wife for just under 5 years. Mr Grant encouraged Mrs Gow to move in to his property and to sell her own property in order to facilitate this. She also spent the net proceeds of the sale of her property on various aspects of their life together including funding various holidays. Mrs Gow also ceased to work after they began cohabiting partly because her contract came to an end and partly because Mr Grant encouraged her not to pursue further employment opportunities.

The relationship then came to an end and Mrs Gow was left without a job or home. She therefore sought a capital payment from Mr Grant in accordance with section 28 of the Family Law (Scotland) Act 2006. This section provides that the courts are required to consider firstly, any economic advantage derived by the respondent (Mr Grant) from contributions made by the applicant (Mrs Gow) and whether the applicant has suffered an economic disadvantage in the interest of the respondent and secondly, the extent to which any such economic disadvantage is offset by any economic advantage gained by the applicant from contributions made by the respondent.

Mrs Gow’s application was first heard in the Sheriff Court in Edinburgh who found in her favour. Mr Grant successfully appealed this decision to the Inner House of the Court of Session. This court found in his favour and reversed the finding of the Sheriff’s court. Mrs Gow then appealed to the Supreme Court.

Lord Hope gave the leading judgment in which he considered relevant case law and comments made while the bill was being discussed in Parliament. He then took a pragmatic view of what was meant to be read by the section of the 2006 Act and found that the intent was not to replicate the arrangements available in the event of a breakdown of a marriage or civil partnership but to correct the economic imbalances and to consider not only these economic imbalances but any other relevant matters as well. Lord Hope ultimately upheld the Sherriff’s decision and the award of £39,500 to Mrs Gow.

Lady Hale, who concurred with Lord Hope, took the opportunity to make wider observations about the failure of English law to provide cohabitants with the right to make applications for financial orders. She went on to criticise the government for its lack of action since the Law Commission Report, Cohabitation: the Financial Consequences of Relationship Breakdown was published in 2007. Lady Hale suggested that any reform to English law would need to cater for the wide variety of cohabiting relationships and that it would need to consider whether to impose a minimum period of cohabitation in order for the right to make an application for a financial remedy to accrue.  Whether a minimum period of cohabitation should be 2 years or 5 years or alternatively whether the legislation should impose a requirement that the couple have children together has always been a contentious issue and a focus of any prospective English law.

Lady Hale states that ‘the main lesson from this case…is that a remedy such as this is both practicable and fair. It does not impose upon unmarried couples the responsibilities of marriage but redresses the gains and losses flowing from their relationship…the Act has undoubtedly achieved a lot for Scottish cohabitants and their children. English and Welsh cohabitants and their children deserve no less.’