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Growing Number of Cohabiting Couples Leaves More Families Open to Risk

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Cohabiting couples are the fastest-growing family type in the UK, according to newly released figures from the Office of National Statistics (ONS).

The ONS reports that the number of cohabiting couple families continues to grow faster than the number of married couple and lone parent families, with an increase of 25.8 per cent over the decade 2008-2018. It highlights the fact that more and more people are choosing to live together before, or without, getting married.

These changing demographics mean that an increasing number of people may be at financial risk in the instance of a cohabitation relationship break-up or the death of a partner. Currently, there is no such thing as a common law marriage in the UK and cohabiting couples are not afforded the same legal rights and protections as married couples.

The House of Lords is seeking to address this imbalance with the Cohabitation Rights Bill, which is currently passing through Parliament. The Bill proposes to establish a framework of rights for cohabiting couples following the end of the relationship or the death of one of the cohabitants.

The Bill’s provisions would only apply to cohabiting couples who had either been living together as a couple for a minimum period of three years or had a dependant child. It is intended to provide the right for either cohabitant, when a relationship breaks down, to apply to a court for a financial settlement order to redress a financial benefit or an economic disadvantage resulting from the period of cohabitation. It is also designed to make provision regarding the property of deceased persons who are survived by a cohabitant.

Where, If Anywhere, Do the Jet Set Call Home? High Court Gives Guidance

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Very rich people often live jet set lifestyles of ceaseless travel, so pinning down the country in which they are domiciled can be a serious challenge. The High Court faced exactly that difficulty in a case concerning the acrimonious breakdown of a relationship between a wealthy divorcee and her boyfriend.

The divorcee, who was a woman of immense means, for a number of years enjoyed a lavish and peripatetic lifestyle with her boyfriend, whom she had met at the gym where he worked. After they separated, she launched proceedings against him in London, seeking declarations that various assets acquired during the relationship – including a luxurious Italian property and a fleet of supercars – were owned by her alone, having been bought entirely with her money.

She also sought restitution of various business investments and over $9 million in cash. Her claims were based on an assertion that none of the assets and money concerned had been gifted to him and that they had been transferred to him by reason of the undue influence he had brought to bear on her.

He denied her claims and launched parallel proceedings in his native New Zealand, where the law enables division of relationship property on the permanent separation of unmarried couples. Neither of them was a British citizen and, following the end of the relationship, he had moved back to New Zealand to live with his parents. He argued that he had never been domiciled in England and that the English courts thus had no jurisdiction to entertain the divorcee’s claim.

In ruling on that issue, the Court found that he had made his home in England before the relationship ended. However, his residence and domicile in this country had ceased by the time the divorcee issued proceedings (the relevant date). His principal connection to England came to an end at the same time as his relationship and he had been excluded from his only residence in this country.

However, the Court also ruled on the evidence that he was not domiciled in New Zealand, or anywhere else, on the relevant date. On that basis, the divorcee was entitled to sue him in England in that this country was his last known place of domicile. She had also been entitled, with judicial permission, to serve him with the proceedings in New Zealand, by means of a WhatsApp message. England was in any event the appropriate forum for the trial of the divorcee’s claim in that the relationship had, for the most part, been carried on in this country.

Big Money Divorce Engages Family Judge in Company Valuation

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Companies are notoriously difficult to value, and particular problems can arise when they form the principal assets to be divided in divorce proceedings. In a big money case on point, the High Court bridged a huge gulf between the value placed by a wife and a husband on the latter’s business interests.

The couple, who had two children, were married for about seven years. The husband’s business interests, principally his 40 per cent shareholding in the company he worked for, represented by far their biggest asset. There was a gaping divide of about £9.5 million between the value put on those interests by the wife and that contended for by the husband.

On the basis of expert accountancy evidence, the Court valued the husband’s net business assets at a little under £17.9 million. Those assets were agreed to be matrimonial property and the husband was ordered to pay the wife half of their value, a lump sum of £8,948,930. The wife, who was anxious to achieve her financial independence as quickly as possible, argued that the husband should be ordered to sell his shares within 12 months and that, if he failed to do so, a receiver should be appointed to enforce their disposal.

The Court, however, noted that it was not a propitious time to sell the shares, in that the company had just experienced its two worst ever years of trading. The wife, who was from a wealthy background, was not in immediate need of funds and an early forced sale of the shares was likely to cause both her and the husband significant financial loss. The Court therefore set a date about four years in the future when the husband would be required to pay the lump sum in full.

The Court made further orders designed to equalise the couple’s other assets and to make provision for their accommodation and other needs. The husband was ordered to make annual maintenance payments to the wife pending remittance of the lump sum, when a clean break would be achieved. He was also required to pay maintenance for the children and to pay their school fees.

Divorced Overseas? English Family Judges Can Still Help You!

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If you have been divorced abroad but are habitually resident in this country, English family judges have the power to ensure that you receive a fair share of the marital assets. In a case on point, the High Court awarded a woman whose marriage was dissolved in Russia, but who had settled in London, a financial settlement of £5 million.

The middle-aged former couple, both Russian nationals, had three children during their 22-year marriage. From very modest beginnings, the husband had achieved great things in business and they had enjoyed a luxurious lifestyle. By the time of their divorce in Russia, the wife had already been living in London for some years and the Court noted that she was clearly habitually resident in England.

After the wife launched proceedings under the Matrimonial and Family Proceedings Act 1984, seeking financial relief following an overseas divorce, the husband failed to engage in the proceedings and repeatedly disobeyed court orders requiring him to disclose the extent of his wealth. The Court described his litigation conduct and his manipulation of the wife in relation to the Russian divorce as ‘appalling’.

The husband’s failure to cooperate meant that very little evidence was available, but the Court concluded that he was worth at least £22 million. The wife, who was a teenager when she married him, had made a full and equal contribution to the acquisition of the marital fortune and, had she been divorced in England, she would have been entitled to half that sum under the sharing principle. Having acquired British citizenship, her connection to this country was strong.

In the circumstances, the Court found that it would be wrong to confine the wife to a solely needs-based award. She had moderated her lifestyle since the divorce and her measured and well-judged claim was based on a very reasonable budget. £5 million, together with assets worth around £1.6 million that she already held, represented a little under 30 per cent of the total marital wealth. Given his poor behaviour, the husband was ordered to pay the wife’s £170,000 legal costs.

Court Returns Two-Year-Old to Land of Birth When Parents' Marriage Collapses

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For a UK court to have jurisdiction over a family law case, it is necessary to show that at least one party to it has habitual residence in the UK. In a recent case, an Israeli woman divorcing her Israeli husband sought a declaration that their two-year-old daughter was habitually resident in the UK so that the UK Family Court could deal with the hearings regarding the child’s welfare.

The Court refused the application and accepted that the child should be removed to Israel in accordance with the father’s wishes. He had previously consented to the child coming to the UK with her mother but then sought an order under the Hague Convention on the Civil Aspects of International Child Abduction 1980 to have her returned to Israel.

The couple had moved from Israel to the UK in an apparent attempt to salvage their marriage as part of a plan for a ‘fresh start’. The mother alleged that the marriage failed because of physical and emotional abuse by her husband, whom she characterised as ‘dangerous and violent’. However, evidence was produced that she had been advised to make false allegations about her husband to mislead the Rabbinical court, and there was a marked lack of evidence for the alleged behaviour or the mother having taken earlier action with regard to it. In addition, the rather short period between the couple’s arrival in the UK and the final breakdown of their marriage was not regarded as ‘a picture of stable integration into family and social life’.

In a long judgment (25 pages), the judge ruled that the child was habitually resident in Israel, not the UK, and should be returned there.

Time of the Essence in Overturning Agreements Made Under Duress

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We have often stressed the importance of obtaining high-quality legal advice in any dispute and starting any necessary legal action as soon as possible, and a recent divorce dispute illustrates why.

It involved a couple who were divorced in 2015. The financial settlement was made by way of a consent order and, as a result, the ex-wife received a cash settlement in excess of £1.7 million and financial support from her ex-husband for herself and their children.

In 2018 she went back to court, claiming that the original settlement had been obtained under duress and by ‘undue influence’, that her ex-husband had committed fraudulent non-disclosure of his true means and that she had not had legal advice on the terms of the agreement. Among specific allegations made were that he had transferred $5 million to his mother and had retained or ‘squirrelled away’ various assets without disclosing them.

She wished the original consent order to be set aside. Before it was made, she had instructed a firm of commercial solicitors that did not have a family law department to act for her. This was, she claimed, done at her ex-husband’s behest. That firm instructed another firm to provide her with family law advice. Her ex-husband had instructed the commercial firm on other matters and his ex-wife alleged that the arrangement had been made so that he could control the advice she was given, which she asserted was scant.

As happens in almost all such cases, there was voluminous and contradictory evidence. However, an important consideration was that the woman was aware of most of the matters about which she was complaining when the original consent order was made. Secondly, when she eventually went to a different firm of solicitors for advice, she failed to take action for nearly a year, a delay which undermined her claim as it lacked the necessary promptness. The judge commented that ‘on the hypothesis that she was constrained from bringing her application for a period because of the husband’s undue influence or duress, the onus was on her to make her application as soon as she could reasonably do so once she became free from that influence or duress. In practice, that means within weeks, not months.’

Her application was rejected.

Court Appearance May Not Mean Public Disclosure

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The principle of open courts is highly valued in the UK legal system. However, it is often a worry to people engaged in legal proceedings concerning family or marital issues that by going to court their family’s private affairs will become public knowledge.

In practice, with the assistance of expert legal guidance, many disputes can be efficiently negotiated without the need for a court battle. However, when the outcome of the dispute is court proceedings, the result may not be as bad as you expect.

Firstly, where children are involved, the courts will prohibit their identification, so that any reports are issued in anonymised fashion. Secondly, where it can be justified, it is possible to ask the court for an order which prohibits the reporting of the case.

Recently, for example, an order was granted to prohibit reporting on an appeal hearing in financial remedy proceedings in a divorce case, due to be heard later this year, in order to prevent the identification of the son of the parties involved. The Court of Appeal was of the opinion that the balance between the public interest and the right to anonymity on human rights grounds tipped heavily in favour of the latter.

Ignore Court Orders At Your Peril

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A wealthy Omani man who failed to pay to his ex-wife the financial settlement ordered by the court, or to cooperate with disclosure orders, faces arrest if he attempts to return to the UK.

When the couple’s marriage broke up, they were divorced under Omani law. However, the wife, a resident of the UK, sought and obtained orders in the UK court for financial relief (under Part III of the Matrimonial and Family Proceedings Act 1984) for herself and their children, who live with her.

The divorce took place in 2017 and the father remained in Oman, having not seen his children for many months at the time of the hearing. He did not comply with any of the court orders made and has not made the maintenance payments ordered.

In making a final financial order for maintenance and a lump sum, the judge also ruled that the husband should be committed to prison for three months for the failure to pay a matrimonial debt he clearly has the means to pay.

Absence of Evidence Dooms Unequal Shares Claim

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The legal ownership of property is not always the same as the beneficial ownership and disputes can arise when no documentation is executed to show the two are different. Such was the case in a recent dispute which occurred after a couple who had two children but never married broke up. The male partner worked in the IT industry and earned the greater part of their income. The female partner was a midwife, who switched to part-time working then gave up work to look after their young children.

The couple had moved to Hampshire from London, buying a property for £740,000 financed largely by the sale of the male partner’s property and a joint mortgage of just under £500,000. The female partner paid £39,000 to assist in the purchase, which was registered in joint names.

When the couple broke up, the ownership of the property was disputed. At the heart of the dispute was whether they intended to purchase it as joint tenants, as the female partner contended, or as tenants in common, as the male partner asserted. If they had purchased it as joint tenants, the value would be split between them equally. If they had purchased it as tenants in common, it would be owned in unequal shares corresponding to their respective contributions to its purchase.

Among the evidence given was that the male partner said in a conversation in a pub, "We are now 50:50 owners but that means you owe half the debt as well." The ownership of the property was recorded at the Land Registry as being a joint tenancy, this being consistent with the advice of the solicitor who acted on the purchase that in the event of either partner’s death, the title in the property would pass to the survivor.

At the original hearing, the judge ruled that the value of the property should be split equally. The male partner applied for permission to appeal, arguing that whilst he would have been content for title to pass if he died, while he was alive he would not have accepted a 50:50 split on a sale as he had provided more of the capital for the property’s purchase. He also contended that the evidence presented at the first hearing could not displace the assumption that the ownership would be in the ratio of the respective partners’ contributions.

In refusing the right to appeal, the High Court placed emphasis on the fact that the male partner did nothing to show that it was intended for the beneficial interest he had in the property to be different from the legal interest.

The moral of the story is that if you are buying a property with someone else and the legal title rests with all the buyers, you must ensure that if the beneficial interest is different, the appropriate documentation is put in place.

No Fault Divorce Legislation Promised in Next Parliamentary Session

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The process of divorce in the UK has for many years been seen as rather long-winded and tending to produce more conflict than need be. One of the reasons for this is that the grounds which demonstrate an ‘irretrievable breakdown’ of a marriage – the justification for a legal divorce – effectively apportion blame for the breakdown. This can cause the debate to become more argumentative than is necessary.

The Government launched a consultation last year and changes to the system were proposed to bring in ‘no fault’ divorce. These have met with overwhelming approval.

The Government has therefore promised to introduce legislation in the next Parliamentary session, which begins in May.

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