The article in The Times on 5th May 2016 confirming that Chloe Thomas (a 28 year old Advertising Executive) was ordered to pay her ex partner, Gareth Powell (a 31 year old builder), almost £50,000 as to his share in an apartment in Wandsworth in her sole name, by the Central London County Court yesterday is a cautionary tale.
The article does not set out in detail the reasons for this but the following points are relevant:
1. Normally a property in the sole name of one person is the only factor deciding how any net proceeds of sale are divided if the parties are not married or were not married when the property was sold.
2. There are a few exceptions and this case seemed to be one of them. It would appear that Mr Powell had spent more that £14,000 on building materials, installed a new kitchen and converted a dilapidated bathroom into a wet room. In legal terms this means that he would have been classed as having either a Resulting Trust, i.e. he put monies into the property, or a Constructive Trust, i.e. it was intended that if he did such works he would receive a share of the property on sale.
3. There was evidence that Chloe Thomas's mother (no doubt fearing the end of the relationship of her daughter to Mr Powell) drew up a contract giving Mr Powell one third of the profit on the property if they split. The couple agreed they would sign it but Chloe Thomas did not and her mother destroyed it. The judge said this was done in the "vain hope the contents would never surface if the relationship faltered". This was highly relevant.
4. Chloe Thomas was ordered to pay Gareth Powell's legal costs. The article states that this took her bill to about £200,000 i.e. the legal costs appear to have been three times as much as the £50,000 payment. The complexity of this area of the law does add to the costs and uncertainty. Had the couple entered into and signed a cohabitation agreement before the purchase of the property this may have been avoided. It also highlights the need for a reform of the law for heterosexual couples who cohabit to put them on the same legal footing as same sex couples who opt not to marry but to be in a civil partnership.