Bid for financial settlement following cohabitation fails

28 October 2011

Further clarification on the provision for separating cohabiting couples under section 28 of the Family Law (Scotland) Act 2006 has emerged in a recent case. In Selkirk v Chisholm, the pursuer, Ms Selkirk, sought payment of £30,000 from Mr Chisholm based on the equity of the home they had shared, and the value of Mr Chisholm’s car bodyshop business. The couple had been engaged and bought a house in 1999, which was solely in Mr Chisholm’s name and for which he paid the deposit and the whole mortgage payments. Equity had increased substantially between purchase and the date of the action, from £2,000 to over £25,000.

Ms Selkirk’s contribution appeared to be limited to groceries and household bills. They both kept separate bank accounts and did not open any joint accounts. Meanwhile, Mr Chisholm set up his business and this itself became moderately successful, with the value of the business increasing and higher profits being generated. The court were taken through his financial affairs and it appeared that his finances were largely the result of good fortune (he received an inheritance of some £20,000 that he put towards his new business), the rise of the property market, and sensible financial management.
The court looked at the increase to Mr Chisholm’s earning capacity, and whether the actions and contributions of Ms Selkirk had made this possible. A contribution by way of running the household was not thought to be relevant here. There was no evidence, as now appears to be required in section 28 cases, that he had derived an economic benefit from the actions of Ms Selkirk. Equally, she could show no disadvantage suffered due to his actions. Any expectation of marriage that she had did not affect the outcome. Of course, if the pursuer had taken joint title of the property, the outcome would have been different – but unfortunately for her, she didn’t. Mr Chisholm walked out of court without having to make any payment at all to his former fiancé.


If you need advice on cohabitation claims in Scotland, contact Inksters’ Gus Macaulay on 0141 229 0880 or send Gus an e-mail.


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