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"Somewhat arbitrary": case highlights need for certainty in cohabitation disputes

The case of Aspden v Elvy [2012] EWHC 1387 (Ch) is the first application of the landmark ruling by the Supreme Court in the England & Wales case of Jones v Kernott [2011] 3 WLR 1121.

In Jones v Kernott, the Supreme Court held that where a common intention as to how the interest in a property should be shared cannot be ascertained, the court should use its discretionary jurisdiction to impute an intention considered fair in light of the course of dealings between the parties.

Mr Aspden and Ms Elvy met in 1985. Shortly after, Mr Aspden purchased a property, Outlaithe Farm, in his sole name for £70,000. The parties started cohabiting, had two children, and separated in 1995/1996. Ms Elvy moved out with the children, but ran her kennel business from the outbuildings. Ten years later, Mr Aspden transferred Outlaithe Barn into Ms Elvy’s sole name. He remained living in Outlaithe Farmhouse until it was sold in 2008, following which he lived in a static caravan on the land belonging to Outlaithe Barn.

The dispute that arose surrounded the beneficial ownership of Outlaithe Barn. Mr Aspden said the transfer into Ms Elvy’s sole name was to put the property out of reach of creditors, and there was a common intention he should retain his interest in the property. He claimed he had contributed to the development works on the property, physically and financially.  Ms Elvy denied such an intention, and stated the payments were gifts in recognition of her contribution to the family and her interest in Outlaithe Farmhouse.

The decision for court therefore was whether Mr Aspden had an interest in the barn and, if so, what share of the interest he should have.

The judge found the original intention was for an outright transfer to Ms Elvy, and there was nothing to suggest Mr Aspden should have a beneficial interest. However, Mr Aspden later made a substantial contribution to the barn conversion, both financially and physically, increasing the value of the property. Given that he was living in a caravan “on-site”, the judge found Mr Aspden’s expectation was that he would also be moving into the barn on completion of the work.

Despite there being no express discussion, the court found there was an intention that Mr Aspden should have some interest in the barn as a result of his “very substantial” contributions. Mr Aspden’s interest in the property was found to be 25% of the equity. He admitted the figure was “somewhat arbitrary” but the best he could do in the circumstances.

Comments

The debate surrounding the need for cohabitation law reform looks set to continue. Until there is a change in legislation, it will be interesting to see whether case law develops to narrow the “somewhat arbitrary” nature of fairness in cases of this sort.
Cohabiting parties should consider avoiding a future dispute. Protection can be through a cohabitation agreement, recording how each shares in the property are held, or drawing up a will to protect an individual’s estate on death.

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at August 2012. Specific advice should be sought for specific cases; we cannot be held responsible for any action (or decision not to take action) made in reliance upon the content of this publication.

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