It is a truth universally acknowledged that we have several courts and tribunals, all with their own jurisdictions and that alone can be a bit tricksy.
An interesting decision recently came out of the Upper Tribunal (Lands Chamber) at the beginning of August 2019.
Tracy Harkins and Laurence Hallman were in a relationship for 13 years until 216 when they separated. They lived at a property in Bootle and the ownership was registered in the sole name of Mr Hallman. That is not at all unusual. Ms Harkins claimed a beneficial interest or share in the property. She wanted to protect her interest by registering a restriction on the title deeds at HM Land Registry. That is a sensible move because registering a restriction could stop Mr Hallman from selling the property and Ms Hallman potentially losing her share.
Mr Hallman objected to restriction being registered. He clearly thought was not entitled to anything from the property. The matter then came before the First Tier Tribunal. They decided that there was an intention to share the property but then they went on to try to work out the size of the share each of them had. Both Mr Hallman and Ms Harkins we unhappy with the decision and both appealed about different parts of the decision.
What the Upper Tribunal decided was that the First Tier Tribunal (FTT):
• Could say that Ms Harkins had a share in the property and that a restriction should be registered;
• The FTT had no power to work out the size of each party’s share; and
• In any event, the FTT had worked out the shares on an incomplete assessment of the evidence and it was wrong in principle.
The case report does give some background to the relationship of Mr Harkins and Mr Hallman. The description of the relationship is really not unusual.
From July 1999 until April 2015 Mr Hallman was a self-employed driving instructor. He and Ms Harkin met in October 2002, and began their relationship in January 2003. Mr Hallman is 12 years older than Ms Harkin and had three teenage daughters from an earlier marriage which had been dissolved. When the couple met, he was living in a small flat, making visits by his children difficult. In June 2003, with the assistance of a mortgage, he purchased 19 Durham Avenue, a three-bedroom family house. At that stage he and Ms Harkin had not begun to live together and the house was registered in his sole name. The FTT found that Mr Hallman had not promised Ms Harkin an interest in the house at that stage and that he had bought it so that his daughters could live there with him and as an investment for their future.
In October 2003 Ms Harkin became pregnant and in April 2004 she took maternity leave from her employment as a teaching assistant and moved in to live with Mr Hallman at 19 Durham Avenue. In due course she gave birth to twins. The FTT did not accept her evidence that Mr Hallman told her when she moved in that he would “add her name to the mortgage”. He re-mortgaged the property in 2005 for £54,000 and again in 2007 for £55,250, but the FTT found that it was not until January 2013 that the couple discussed obtaining a joint mortgage.
Following an argument, the couple separated in February 2009 and Ms Harkin moved out. They were reconciled in July the same year and resumed living together.
In December 2011 Mr Hallman obtained a personal loan of £7,500 from his bank, which he said was used to supplement the family income.
In January 2013 the couple became engaged to be married. In August the same year they obtained a joint loan of £12,000, part of which was used to repay the balance of the loan taken out by Mr Hallman in December 2011 with the remainder being spent on home improvements (replacement windows and a new door) at a cost of £4,400. It was paid into a bank account which had originally been in Mr Hallman’s sole name but which became the couple’s first and only joint bank account when Ms Harkin became a signatory in August 2013. The couple also insured the house in their joint names, paying premiums from the joint account, from at least 2015.
In March 2015 the couple obtained a second joint loan of £10,000, which was used to pay off the balance of the previous loan. At about this time Mr Hallman gave up his self employed status and took a job as a driving test examiner.
In December 2015 the couple’s relationship ended and in June 2016 Ms Harkin moved out permanently.
Ms Harkin had not returned to work immediately after the birth of the couple’s twins in May 2004. She began a college course in 2007, when the children went to school, and in March 2012 she resumed employment as a classroom assistant. During the period from 2004 until March 2012 Ms Harkin’s income consisted of Child Tax Credits of about £540 a month, which she received into her own bank account. When she returned to work her salary was also paid into her own account.
It was Mr Hallman’s case before the FTT that Ms Harkin had made no significant financial contribution to the family finances between May 2004 and March 2012. He was the sole breadwinner and the money she received in Tax Credits was treated by Ms Harkin as her own and used for her own expenses. Having resumed employment in March 2012, she began to contribute by making monthly payments into the joint account. These were taken in cash from her personal account and paid into the joint account in varying amounts, usually of £400, but from August 2012 of £800 and, on one occasion, £1000. No payments were made for a period of four or five months in the first half of 2015.
Ms Harkin’s evidence to the FTT concerning the couple’s joint expenses was very different. She maintained that she had made monthly contributions of £400 towards family expenditure from the Tax Credits she received from 2004 until March 2012. Initially she had paid for weekly shopping in cash taken from her own account, but in 2006 the couple had obtained a joint Asda store card. From then on, she used the store card for weekly shopping and gave Mr Hallman £400 a month in cash to go into his account to pay off the store card bill. There came a time when the Asda account was closed and she resumed paying cash for shopping. When she returned to work in March 2012, she paid £400 a month which she would withdraw in cash from her own account, £100 at a time until she had £400 which she would then hand over. From October 2012 she started contributing between £700 and £1000 a month, withdrawn in amounts of £250 at a time. For a few months at the start of 2015 she resumed paying in cash for the weekly shopping.
As you can see, the description of the relationship is really not unusual, but you can see how complex the situation can become and what the court has to untangle. The court will untangle it – but it will be done in the Chancery jurisdiction for unmarried couples. (Married couples use the divorce law to untangle their finances). The case will still have to be dealt with by the court to work out who has what shares. Neither Ms Harkins nor Mr Hallman had legal representation. The outcome was that the restriction would be registered. It was applied for on 24 June 2016. This decision was made on 2 August 2019. Over three years later, just to decide whether a restriction should be registered – and not even deciding who has what shares.
This area of law is complex. If you need help over shares or ownership of a property, contact me. Better still, get an agreement drawn up when you move in together or buy a property together…….