Family Law Update – The Importance of a Written Agreement
A recent case concerning a couple who live in Poole, Dorset, highlights the importance of making sure any agreement reached when a couple split up is properly recorded within a legally binding agreement.
The case concerning Mr Ely and Ms Robson was considered by the Court of Appeal on 26 July 2016 and the main points were:
In 1986, Mr Ely moved in with his girlfriend Ms Robson to live together in her home on Ashley Road in Poole.
In 1987, Mr Ely purchased a property on Torbay Road in Poole, which Mr Ely and Ms Robson moved into to continue living together. However, that new home was owned only in Mr Ely’s sole name with a mortgage in his sole name. Ms Robson made no financial contribution to the purchase of their Torbay Road home.
By 2005, Mr Ely and Ms Robson had 2 young children together, but their had relationship broken down. However, they remained living separate lives under the same roof at Torbay Road property.
In 2007, there were court proceedings to sort out who was entitled the equity in the Torbay Road property. Mr Ely claimed that he should have 100% of the equity, whereas Ms Robson claimed the right to 50% of the equity.
In August 2007, Mr Ely and Ms Robson met together in Poole Park in an attempt to try and resolve their differences before an expensive final court hearing was due to take place in September 2007. No one else was present at that meeting, but an unwritten (oral) agreement was reached (or was it?).
Shortly after the meeting in Poole Park, Mr Ely’s solicitor wrote to Ms Robson’s solicitor, setting out what Mr Ely thought had been agreed, which amongst other terms included that the equity in the Torbay Road property would be split 80% to Mr Ely and 20% to Ms Robson when the property was sold at a future date.
As a result of the agreement, the solicitors for both Mr Ely and Ms Robson wrote to the court asking for the hearing due to take place in September 2007 to be put back to later date, whilst the precise details of the agreement were recorded in a legally binding document.
However, by 2014, the agreement had still not been recorded within a legally binding document and there had been no further court hearing to finalise the case. It seems that neither Mr Ely nor Ms Robson thought recording their agreement in writing was important! (a decision they would soon come to regret)
During the seven years from 2007 to 2014, Mr Ely had continued to conduct himself as if there was a legally binding agreement in place; he allowed Ms Robson and other members of her family to live there.
In 2014, Mr Ely wanted the property to be sold so that he could recover his 80% of the equity and pay only 20% to Ms Robson. However, she refused to accept that there had been any agreement in August 2007 and insisted that she received 50% of the equity.
Ultimately, the Court of Appeal decided in July 2016 that Ms Robson was bound by the terms of the oral agreement reach at the meeting in Poole Park in August 2007. Therefore, Ms Robson was entitled to only 20% of the equity. (but had they got married, the outcome on divorce could have been very different)
The lessons to be learnt from this case are:
The laws which apply to married and unmarried couples concerning money and property when they split up are very different.
Whilst unromantic, a written financial agreement at the start of a relationship can save a lot of heartache and legal cost later, if things don’t work out as planned. (hope for best, but plan for the worst)
Dialogue between a couple who split up can be very useful to avoid the expensive legal bills and uncertainty of going to court. Whilst meeting in a public place is one option (so long as doing this is safe), other options for constructive and non-confrontational dialogue include support from specially trained family lawyers and mediators, who consider that going to court is very much a last resort for resolving a family dispute.
When an agreement is reached, it should be recorded in a legally binding document. Whilst an oral agreement might be upheld in a court, a lot of stress and legal cost can be avoided by having a legally binding document prepared by a family law solicitor. (you might not be as lucky as Mr Ely)
If you or someone you know wishes to discuss a family related problem, please make contact with a member of Kiteleys Family Team via any one of Kiteleys’ offices, for an initial free telephone assessment.