Financial settlements for co-habiting couples


Financial settlements for co-habiting couples

Couples who intend to separate must ensure they are fully informed of their rights prior to any discussions on financial settlement, as a recent court ruling found that even an informal arrangement made can be binding.

The case
Ely and Robson met in 1986 and shortly after entered into a cohabiting relationship when Ely moved into Robson’s home.   During their relationship, Ely and Robson each purchased properties held in their sole names - the contribution made by each party to the other’s property has always been in dispute.  The couple never married and their relationship came to an end in 2005.

In order to avoid the cost of litigation, the couple reached a financial agreement between themselves whilst talking on a park bench.  No solicitors or witnesses were present during this conversation and no formal agreement was signed. 

Robson subsequently made a claim for a beneficial half share of Ely’s property which Ely claimed was not part of their original agreement.  The judge found that the informal discussion was a binding agreement and ruled in Ely’s favour.  Robson went on to appeal but the appeal judge found that both Ely and Robson understood the objective of their discussion and Robson’s claim was dismissed.

What does this mean for you?
It is important to understand your rights on separation before any agreement is reached, as even an informal discussion about your finances may be considered binding.  More concerning is that it can still be binding despite receiving no legal advice on the reasonableness and consequences of the agreement.

If you are considering cohabiting with your partner it may be worth entering into a cohabitation agreement.  Alternatively, if you are in the process of separating from your partner and would like some legal advice on the financial consequences, please arrange an appointment with a member of the family team. 

Natalie Suret, Solicitor, Private Client, asb lawTo arrangement an appointment, or to speak to someone about your options, please contact Natalie Suret, Solicitor, Family.


View Natalie's profile

Meet the team

Published: 11 Aug 2016

Subscribe to all articles and news: