Gow v Grant: Supreme Court awards cohabitee sum for financial loss

6 July 2012

The five justices of the Supreme Court – the highest court in The United Kingdom – have unanimously agreed to overturn a decision by the Inner House of the Court of Session and make an order awarding a cohabitant a financial sum for the losses she incurred as a result of the breakdown of her relationship.

Inksters reported last year on the case of Gow v Grant, where Mrs Gow had initially been awarded a sum by the Sheriff Court in Edinburgh. The award, based on the provisions of Section 28 of the Family Law (Scotland) Act 2006, was made on the basis of the disadvantage Mrs Gow has suffered as she had sold her own flat and moved in with Mr Grant. He had the benefit of some of the sale proceeds from that property, and also from Mrs Gow giving up work and taking on the running of the household. While there had been disadvantage to Mrs Gow, there had been none to Mr Grant. She had lost out on the rise in the value of the property since selling and would not be in position to purchase a property again. She was awarded a sum to reflect this, as well as the contributions she made to a timeshare property bought jointly with Mr Grant, totalling £39,500.
However, on appeal, the Court of Session rejected this and the appeal was allowed, meaning Mrs Gow’s award was refused. The Inner House looked at section 28, specifically, 28(3)(b), which looks at any economic advantage derived by the defender, and any disadvantage to the applicant. It was said there was not enough evidence to show that Mrs Gow’s actings had been directly in Mr Grant’s interest, and any disadvantage suffered by Mrs Gow was offset by the benefits of cohabiting with Mr Grant. They focussed on the requirement to look at the intention of the parties; whether one party intended to benefit another, economically.
The Supreme Court disagreed. They found that the Sheriff was entitled to use discretion in awarding a sum of £39,500, and it is not practical or necessary to base an award on a precise calculation of all contributions made during a relationship. The Court of Session should have taken into account the loss in value and economic disadvantage arising from the sale of Mrs Gow’s flat, which they had disregarded. The Supreme Court talked about the provisions of the Act aiming to achieve fairness rather than basing any award on narrow financial calculation. 
In the judgement, Lady Hale makes some interesting comments about Scottish cohabitation legislation and how England and Wales could learn lessons from it. She recognised that the ‘compensation principle’ was difficult to apply for the reasons mentioned; assessing and valuing each advantage and disadvantage to the parties was not practical. She also stated that the case illustrates that it may be ‘unwise’ to be too prescriptive about the order which the court should make to redress these advantages and disadvantages. Non-financial benefits and disadvantages, which can be taken into account, are hard to quantify in financial terms. She stated that the key lesson arising from the case is that this remedy was practical and fair, and redresses the gains and losses flowing from the relationship.

If you require further advice regarding cohabitation, separation, financial awards or any other family law matter, please do not hesitate to get in touch with our Gus Macaulay by sending Gus an e-mail or telephoning him on 0141 229 0880.


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