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24-10-2014

The decision in Southwell v Blackburn is another illustration of the precarious position of non-married co-habitees notwithstanding the non-professional media hype that arose from decisions such as Stack v Dowden.

It is an interesting case to draw the distinction between rights that can arise under proprietary estoppel as distinct from acquiring a right to a share in the beneficial interest in the property. It also shows that the outcome of many disputes can be very fact specific and dependent upon the trial judge on the day and his or her specific findings on conflicting evidence.

The Court of Appeal noted that both parties' evidence had been considered to be untruthful in parts and there were inconsistencies. The brief facts were that Mr Southwell and Miss Blackburn had started a relationship in 2000. She had previously been married and was living in a property provided by a Housing Association. She had spent a considerable amount of money on that property and had security.

In 2002 the parties moved into a property that was purchased at that time by Mr Southwell in his sole name. The trial judge had concluded that Mr Southwell had deliberately kept Miss Blackburn out of the purchase process but had said to her that “she would always have a home and be secure in this one”. Miss Blackburn had asserted that the intention had been for the property to be their joint property. The purchase price was funded solely by Mr Southwell.

For many of us dealing with this type of issue, the understandable process might be to apply Stack v Dowden and consider whether the evidence supported an express agreement, if not, an implied agreement and, if not, whether an agreement could be imputed on the parties to achieve fairness.

This was not the approach taken by the trial judge and the Court of Appeal agreed with this. There had been a finding that there was no constructive trust. Miss Blackburn had no share in the property on trust grounds although no mention is made of the law applied to reach this conclusion.

The trial judge focused on the issue of proprietary estoppel and considered that the detriment suffered by Miss Blackburn in reliance upon the representation by Mr Southwell that he would provide her with a home was that she had given up her previous property and hence the very real security that had given her.

The judge had rejected any suggestion that the assertion that she would be provided with a home was only for so long as their relationship lasted. She had relied upon a longer term assertion and suffered a real detriment.

The Court of Appeal pointed out that the detriment she had suffered was not that she had entered into a relationship with Mr Southwell in reliance upon the promise of a secure home but that she had given up her own home. That was a real detriment and it would be unconscionable not to allow her the relief of proprietary estoppel. Mr Southwell had been ordered to pay to her £28,000 for the equity she had obtained through the operation of the estoppel.

In the context of those of us who have to value an interest in property when there are competing claims, this case serves as a useful reminder that the acquisition of rights in property are, in modern times in the domestic context, available on a far wider basis than the old tests of the party having made direct or indirect contributions to the purchase price. Such contributions can be relevant but they are only part of the picture. 

If you wish to discuss this issue please contact Graham McPhie (gmcphie@moonbeever.com); or Frances Coulson (fcoulson@moonbeever.com).

This is intended for general information only and should not be considered as giving advice in relation to any individual case nor be taken as applying to any particular case. No liability is accepted for any such use of the information contained here.

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