Scottish Sheriff Court Decisions

SHERIFFDOM OF LOTHIAN AND BORDERS AT EDINBURGH

 

 

 

Judgement

 

Of

 

Sheriff Kathrine EC Mackie

 

In causa

 

JESSAMINE WATSON GOW (Assisted Person) residing at 6/6 St Triduana's Rest Edinburgh

 

PURSUER

 

Against

 

ANGUS GRANT residing at 2 Waulkmill View, Penicuik Midlothian EH26 8LD (Assisted Person)

 

DEFENDER

 

 

 

Act: Gilmour, Hughes Walker, Edinburgh

Alt: Forster, Allan McDougall, Penicuik

A2710/08

 

Edinburgh December 2009

 

The Sheriff having resumed consideration of the cause Finds in Fact:-

[1].  The pursuer is Jessamine Watson Gow. She is aged 72 years. She resides in rented property at 6/6 Triduana's Rest Edinburgh. She is unemployed.

[2].  The defender is Angus Grant. He is aged 65 years. He resides in property owned by him at 2 Waulkmill View Penicuik. He is retired but works part-time as a courier.

[3].  The parties met in about July 2001 through a Singles Club. The pursuer is divorced with two children. She had been caring for her father until his death. The defender is a widower with two children. Their relationship developed. In about December 2002 the defender asked the pursuer to live with him in his house in Penicuik. The pursuer agreed to do so if they became engaged to be married. They became engaged to be married. In about June 2003 the parties began to live together as husband and wife in the defender's property at 2 Waulkmill View Penicuik. Their relationship terminated in about January 2008.

[4].  Between June 2003 and January 2008 the parties were cohabitants.

[5].  When the parties met the pursuer owned and occupied a studio flat at 176/5 Fauldburn East Craigs Edinburgh. The property was subject to an interest only mortgage of which, as at December 2002, £11,876.27 was outstanding. The pursuer held an endowment policy with Scottish Widows which was due to mature in the sum of about £10,000.

[6].  The defender owned a three bed roomed house at 2 Waulkmill View Penicuik. As at June 2003 the property was worth about £200,000. The property was free of any mortgage. He was employed as a lecturer at Jewel & Esk Valley College. He was also in receipt of a widower's pension from the Bank of Scotland in excess of £600 per month. He held a portfolio of shares worth about £16,000.

[7]. After the parties agreed to live together the defender encouraged the pursuer to sell her property. The property was sold for the sum of £50,000. After payment of the expenses of sale and repayment of an outstanding mortgage the pursuer received the sum of £36,559.02. From those proceeds the pursuer repaid credit card debts of £8,089.61 and the balance of the cost of a new kitchen amounting to £6,043.78. She made loans to her son totalling £4,000. She invested £5,000 in each of a Zurich Guaranteed Investment Account and a Sterling Investment Bond.

[8]. Until the parties commenced cohabitation the pursuer was employed as an audio typist. In about May 2003 her contract came to an end. At the defender's request she did not seek further work. She had savings from the balance of the proceeds of sale, investments and was in receipt of an occupational and a state pension amounting to about £640 per month.

[9]. During the period of cohabitation the pursuer contributed to the maintenance of the defender's property. She paid for repairs to the heating system amounting to not less than £343.08. She paid for soft furnishings and redecoration amounting to not less than £2735.43. She contributed to the running costs of the property. Cold Weather Payments received by her were paid into the defender's bank account. She paid for a TV licence. She paid for contents insurance cover. She contributed to the running cost of the defender's motor vehicle. She paid for road tax and petrol. She bought food for the parties. She purchased various household items amounting to not less than £1527.65.

[10].  The defender operated a budget account from which utilities and regular bills for the property were paid. The defender paid about £2000 per annum for Council Tax, £655 per annum for contents and buildings insurance, £400 per annum for telephone including broadband, £1200 per annum for electricity and £1200 per annum for petrol. The pursuer did not drive. The defender also purchased food for the parties and prepared the majority of parties' meals.

[11].  In about July 2005 the pursuer's Sterling Investment Bond was surrendered. The proceeds of £5,609.30 were used together with other funds of the pursuer's to purchase a week at a timeshare property in Madeira in the joint names of the parties. The pursuer had previously contributed the sum of £1,500 towards the purchase by the parties of a week at said property. The parties continue to own jointly said weeks.

[12].  In about 2006 the pursuer's Zurich Guaranteed Investment Account matured in the sum of about £6,000. The pursuer spent £2,000 on paintings, two of which were gifted to the defender, and £1,000 on a holiday. The balance of the proceeds was used by the pursuer towards the day to day expenses of the parties.

[13].  In about September 2003, without discussion with the pursuer, the defender accepted voluntary severance from his position as lecturer at Jewel & Esk Valley College. The defender received a redundancy payment of £16,528.26. He received a lump sum from his pension of £30,110.14. The defender was in receipt of part time earnings and pensions totalling about £1300 per month.

[14].  The parties enjoyed an active social life.

[15].              In about January 2005 the pursuer resumed employment as a Data Input Operator with The Scotsman earning about £170 per month. The defender continued to work part time with Jewel & Esk Valley College until about 2006. Between February and August 2007 the pursuer transferred to the defender £500, £300, £80, £150 and £80. The defender transferred to the pursuer £900. The defender also paid to the pursuer the sum of £2,920. The pursuer gave to the defender occasional payments if he needed money. In February 2008 the pursuer borrowed from the Clydesdale Bank the sum of £16,200 because of the amount of debt she had accrued on credit cards.

[16].              In about late 2003, following the failure of their funding arrangement the pursuer's son Trevor Gow and his partner Wendy Mitchell required financial assistance to complete the transaction for the purchase by them of the Haven Restaurant, Anstruther. The defender offered to assist.

[17].  On 23^rd February 2004 the pursuer and the defender entered into an agreement with the pursuer's son Trevor Gow and his partner Wendy Mitchell whereby the defender invested the sum of £23,000 and a repayable loan of £55,000 in return for a 9% holding in the restaurant known as the Haven. The pursuer invested the sum of £10,000 for a 4% stake in the restaurant. The pursuer's son and his partner agreed to repay the sum of £55,000 over 10 years at an interest rate as determined by the Halifax Building Society.

[18].  In connection with his investment the defender initially he used funds received from his redundancy, lump sum and other savings while he awaited receipt of the sum of £55,000 borrowed by him from the Halifax Building Society. He granted a security for said sum over his property at Waulkmill View which was otherwise mortgage free. The mortgage was repayable on an interest only basis. The pursuer's son through the business of the Haven Restaurant made payment of the sums due by the defender to the Halifax Building Society. In January 2005 the defender paid a further £5,000 into the business.

[19].  The pursuer's son paid to the defender the sum of £86,020 in May 2007 and the sum of £9,502.70 in November 2008. The defender no longer has any interest in the Haven Restaurant. In May 2007 the sum due to the Halifax Building Society was about £52,000. The defender chose not to repay said sum with the monies received from the pursuer's son. He repaid debts accrued on his credit card, an Egg loan and invested about £46,000 in shares. In about October 2007 the defender borrowed a further sum of £14,000 from the Halifax Building Society. As at 31^st January 2008 the amount due by the defender to the Halifax Building Society was £64,421.49.

[20].  The pursuer accumulated debt on her credit cards. The defender paid her the sum of £2,920 towards the debt. In about February 2008 in order to clear the debt on her credit cards she borrowed £16,200 from the Clydesdale Bank to be repaid over 7 years.

[21].  After the parties ceased to cohabit in January 2008 the pursuer continued to reside in the defender's property until about 19^th June 2009. In June 2009 she obtained alternative accommodation from Castle Rock Edinvar Housing Association. After receipt of benefits the pursuer's rent amounts to £33.70 per month. She has removed from the defender's property a bed, a settee, two light fittings, two blinds and one set of curtains.

[22].  In about July 2009 the value of the property at 176/5 Fauldburn East Craigs Edinburgh was £88,000.

[23].  The current value of the defender's property is in excess of £200,000. During the period of cohabitation the defender spent £27,000 on the construction of a new roof on his property. The defender also added a conservatory to the property at a cost of £15,000.

Finds in fact and in law that the pursuer has suffered economic disadvantage in the interests of the defender to the extent of £39,500; Appoints parties to be heard on the terms of section 28(7) of the Family Law (Scotland) Act 2006 and on the question of expenses within the Sheriff Court House 27 Chambers Street Edinburgh on Thursday 17^th December 2009 at 9.30am.

 

 

 

NOTE

 

[1].  The pursuer seeks payment of a capital sum in terms of section 28 of the Family Law (Scotland) Act 2006. It was not disputed that the parties were cohabitants in terms of section 25 of the 2006 Act.

Pursuer's Evidence

[2].  The parties met in 2001 at a social event organised by a Singles Club which they had both joined. Their relationship developed to the extent that in about December 2002 the defender asked the pursuer to live with him as husband and wife in his house at 2 Waulkmill View Penicuik. The parties became engaged to be married. They cohabited from June 2003 until January 2008 when their relationship terminated.

[3].  When the parties met they each owned their own home and were each in employment. The pursuer owned a studio flat at 176/5 Fauldburn East Craigs Edinburgh. The property was subject to an interest only mortgage of which as at December 2002 £11,876.27 was outstanding. The pursuer had an endowment policy with Scottish Widows which was due to mature in the sum of about £10,000. She was employed as an audio typist through an agency. She was also in receipt of a pension from previous employment and a state pension amounting to about £640 per month. The defender owned a three bed roomed house at 2 Waulkmill View Penicuik. No valuation of the property was produced. The pursuer did not challenge the defender's value of £200,000 as at June 2003 and I have accepted that figure. The property was free of any mortgage. He was employed as a lecturer at Jewel & Esk Valley College. He was also in receipt of a widower's pension from the Bank of Scotland in excess of £600 per month. He held a portfolio of shares worth about £16,000.

[4].  When the defender asked the pursuer to live with him the pursuer required to consider what to do with her property. Her evidence, which I accepted, was that the defender was adamant that she should sell the property. She was reluctant to let the property because of the damage which tenants might cause. She was in love with the defender, was engaged to be married to him and felt that they were moving forward together. Although the pursuer, as owner of the property, dealt with the legal and practicalities of sale the parties discussed the issue and the defender gave the pursuer advice, particularly with regard to the price at which the property should be offered. There was no evidence that the pursuer was in such financial difficulty that she was forced to sell the property. I accepted that the pursuer sold the property in the interests of furthering her relationship with the defender.

[5].  The pursuer sold her property in about June 2003 for £50,000. After repayment of mortgage and expenses of sale the pursuer received the sum of £36,559.02. From that sum the pursuer paid the outstanding balance in respect of the installation of a kitchen and credit card debts. She invested about £10,000. She loaned her son about £4,000. She was left with a balance of £8,425.63. Although the amount at credit of her bank account appeared to be less I accepted the pursuer's evidence that she contributed that balance to the parties' relationship and used it towards their general living expenses. In addition her endowment policy with Scottish Widows matured and the funds were paid into an account with Scottish Widows Bank.

[6].  The pursuer's unchallenged evidence was that at the defender's request she did not seek further employment when her contract as an audio typist came to an end in about May 2003. The pursuer was then aged 66 years. The pursuer envisaged keeping home for the defender while he continued to work as a lecturer. Unknown to the pursuer the defender had accepted voluntary severance from his employment in about September 2003. He received a redundancy payment of about £16,000 and a lump sum from his pension of £30,000. He continued to work part time at Jewel & Esk Valley College. The pursuer was in receipt of pensions totalling about £640 per month. The defender was in receipt of part time earnings and pensions totalling about £1300 per month.

[7].  It was not disputed that the defender operated a bank budget account out of which the usual utility bills for the parties were paid. Neither the account nor the bills were produced. Figures of between £1500 and £2000 per annum for Council Tax, £655 per annum for contents and buildings insurance, £400 per annum for telephone including broadband, £100 per month for electricity, £100 per month for petrol and £400 per month food were not disputed. Apart from suggesting that he would have been entitled to a single person's discount of 25% in relation to Council Tax there was no attempt on the part of the defender to quantify the amount of said bills which might be attributable to the pursuer and thus the amount of any loss of income suffered by the defender.

[8].  The pursuer's evidence that she paid to the defender her statutory Cold Weather Payments, and paid for TV licence, Road Tax, and Contents insurance was not challenged. She also maintained without challenge that she contributed to petrol costs. None of these payments was quantified. Invoices were produced in support of her evidence that she paid heating repair costs totalling £343.08, the making and fitting of soft furnishings totalling £2,735.43 and various household items from Jenners totalling £1,527.65.

[9].  In August 2005 the pursuer surrendered the Sterling Investment Bond receiving the sum of £5,609.30. The pursuer's unchallenged evidence was that that sum was put towards the purchase at a price of £7,000 of a second timeshare week. The balance was funded by her cashing in other investments. The parties had purchased at an earlier unspecified date a week at the timeshare also at a price of £7,000 to which the pursuer had contributed £1,500. The parties remain joint owners of these two weeks. There was no evidence about the current value of these weeks.

[10].              The pursuer accepted that the defender did most of the cooking and food shopping for the parties explaining that he did so because he liked to be in control. She also purchased food for the parties and occasionally was allowed to cook.

[11].              In about January 2005 the pursuer returned to employment as a Data Input Operator with The Scotsman earning about £170 per month. The parties enjoyed an active social life going out to the theatre and for meals. Their finances were stretched. Between February and August 2007 the pursuer transferred to the defender £500, £300, £80, £150 and £80. The defender transferred to the pursuer £900. It was agreed that the defender also paid to the pursuer the sum of £2,920. In February 2008 the pursuer borrowed from the Clydesdale Bank the sum of £16,200 because of the amount of debt she had accrued on credit cards.

[12].              Following the termination of the parties' relationship the pursuer continued to live at Waulkmill View. She had no alternative accommodation. In June 2009 she obtained rented accommodation from Castle Rock Edinvar Housing Association at a cost of £33.70 per month after receipt of Housing Benefit.

[13].              In about late 2003 the pursuer was advised by her daughter that her son was experiencing difficulty with his proposed business venture. The parties went to Fife to see her son to find out what the difficulty was. Her son and his partner had agreed to acquire the Haven Restaurant, Anstruther, but the person who was to provide funding had withdrawn from the arrangement. The pursuer's evidence, which I accepted, was that the defender offered to assist. An agreement was entered into in February 2004 whereby the defender invested a total of £78,000, £55,000 of which was said to be a repayable loan, in exchange for a 9% interest in the business. The pursuer invested £10,000 in exchange for a 4% interest.

[14].              The pursuer's son's evidence, which was not challenged, was that all sums had been repaid to the defender. £86,020 had been repaid to him in May 2007 and £9,502.70 had been repaid in November 2008. He was aware that the defender had borrowed funds in connection with his investment. It had been an interest only mortgage and the business of the Haven Restaurant had made the repayments. The total sum paid to the defender had been calculated by their respective lawyers. It was accepted that a further sum of £5,000 had been paid by the defender to the business in January 2005 in respect of bills and VAT. Following payment to the defender he no longer had any interest in the business. The pursuer retained her interest.

Defender's Evidence

[15].              Although the defender agreed the background to the parties' relationship and that he had asked the pursuer to come to live with him he maintained that the reason for selling the pursuer's flat was her dire financial position. After the decision to sell had been made the pursuer had taken over the process and he had had no involvement with the lawyer. He accepted that he had advised the pursuer to offer the property for sale at an upset price.

[16].              Prior to cohabitation he had owned his property without mortgage, held about £16,000 worth of shares and owned a car. In September 2003 he had accepted voluntary redundancy.

[17].              He accepted that on finding out that the pursuer's son was in difficulty the parties had gone to see him. In his evidence in chief he accepted that he had offered to put money into the business although in cross-examination he said that he had been asked to help. He had invested a total of £78,000, £55,000 of which was by means of a mortgage secured over his property. Initially he had used his redundancy payment, drawn £30,000 from his pension, had sold £9,000 worth of shares and had borrowed £10,000 from his bank. When the mortgage had been received he had paid a further £15,000 to the business. The balance of the mortgage had been paid into his bank.

[18].              The defender said he had borrowed £17,000 from Egg because his credit cards had reached their limit. He had used them for household expenses including the cost of a new conservatory in the sum of £15,000. He had paid for the cost of a timeshare week on his credit card. He had received £1,500 from the pursuer towards the cost although he said that they were supposed to pay for it in equal shares. He also accepted that he had received other payments from the pursuer, that if he needed money she would give him a payment and that she had paid for the boiler repairs. However, he maintained he paid all bills including gas electricity Council Tax and telephone with virtually zero contribution from the pursuer. He also maintained that he usually did about all the food shopping and the majority of the cooking. Council Tax amounted to about £1,960 per annum. He would have been entitled to a discount of 25% as a single person. Heating and lighting amounted to about £1200 to £1500 per annum. Telephone including broadband, which the defender maintained was an essential item, amounted to about £400 per annum. Buildings and contents insurance amounted to about £655 per annum. Food cost a minimum of £400 per month. Petrol costs amounted to about £1200 per annum. He accepted that the pursuer paid the contents insurance premium for a couple of years.

[19].              It was agreed that the defender had borrowed £19,435 from Egg in November 2005 and that the loan had been repaid in December 2008.

[20].              In May 2007 and November 2008 the defender received repayment of his investment in the pursuer's son's business. He received a total sum of £96,522.70. He said he spent between £30,000 and £40,000 clearing credit card debts and invested about £46,000 in shares. He did not repay the mortgage of which in May 2007 £52,000 was outstanding.

[21].              In October 2007 the defender increased the mortgage by £14,000. He had spent £27,000 on replacing the roof over his property. The defender said he paid for the works to his property by credit card which was cleared from the funds received from the pursuer's son.

[22].  The defender produced two spreadsheets prepared by him which he said detailed his annual income and capital received between 5^th April 2002 and 2009 and Loans and debt for selected months. He said he had bank statements going back 40 years. Few, if any, vouchers supporting the figures in the schedules were produced. He accepted that the value of his property had increased from the figure of £200,000 which he had attributed to it in July 2003.

Pursuer's Submissions

[23].  The pursuer's agent submitted that there was as yet little guidance available in relation to the application of section 28 of the 2006 Act. I was referred to CM-v-STS [2008] CSOH 125 (Lord Mathews) and Jamieson-v-Rodhouse Unreported Kirkcaldy Sheriff Court 1^st August 2008 (Sheriff KRW Hogg) being the only decisions as yet in applications under section 28.

[24].  It was submitted that because of a number of differences between section 9(1)(b) of the Family Law (Scotland) Act 1985 and section 28 of the 2006 Act no assistance could be derived from a consideration of the former provision. In particular the first word in section 9(1)(b) of the 1985 Act namely "fair" did not appear in section 28 of the 2006 Act. I was referred to Dougan-v-Dougan 1998 SLT (Sh Ct) 2 at page 30 where Sheriff Morrison considered that "fair account" in terms of section 9(1)(b) of the 1985 Act was not compensation. I was also referred to the Report dated 15^th December 2005 of Stage 3 of the Family Law (Scotland) Bill where the then Justice Minister explained it was intended that one partner would compensate the other for any net economic disadvantage resulting from the relationship and that that offered fairness to both parties.

[25].  It was submitted that it was not necessary to show both economic advantage by the defender and economic disadvantage by the pursuer. Either would be sufficient. There was no reference to concurrent economic advantage and disadvantage.

[26].  It was also submitted that since there was no reference in section 28 to the resources of parties any award did not require to be reasonable having regard to a party's resources. It would have been open to Parliament to include such a reference if they had wished so to do.

[27].  For these reasons the pursuer's agent submitted that an award in terms of section 28 was more in the nature of compensation than a fair accounting.

[28].  The pursuer's agent submitted that section 28 required to be considered on its own merits. He submitted that there were two separate two stage tests to be carried out. Firstly section 28(3)(a) required to be considered and then the offsetting provision in section 28(5), and secondly section 28(3)(b) required to be considered and then the offsetting provision in section 28(6). He invited me not to adopt the approach of Sheriff Hogg in Jamieson at page 11 where he considered that the provisions of section 28(3)(a), (3)(b), (5) and (6) required to be considered at the same time.

[29].  So far as section 28(3)(a) was concerned it was submitted that the evidence would entitle the court to consider that the defender had derived an economic advantage but that would be offset in terms of section 28(5) by economic disadvantage suffered by him. Accordingly the position was neutral. In this case the pursuer's agent relied upon section 28(3)(b). The pursuer had sold her house to further the relationship with the defender. It was agreed that it had been sold for £50,000 and that if it had not been it would have a value of £88,000. The pursuer now had no capital and that loss had been incurred in the interests of the defender. I was invited to reject the argument that the pursuer had sold her house for other reasons. The pursuer now had nothing to fall back on and nothing to leave to her children.

[30].  In relation to section 28(6) each party had contributed what they could to the relationship. It was submitted that there were problems in quantification, that a broad brush approach should be adopted and there should be no offset. It was accepted that the defender had used monies to fund the parties' joint lifestyle. This was offset by the pursuer's contribution albeit of a smaller amount.

[31].  It was submitted that the defender's investment in the pursuer's son's business was of no relevance. It had not been done in the interests of the pursuer. Even if it were relevant there was no relevant economic disadvantage because the defender had been fully repaid.

[32].  It was accepted that it would be going too far to award the pursuer a sum which would allow her to purchase her flat back.

Defender's Submissions

[33].  As a preliminary point the defender's agent did not accept that there had been any evidence of indirect and non-financial contribution.

[34].  The defender's agent did not disagree with the "broad brush" approach suggested by the pursuer's agent. However he submitted that the pursuer had failed to prove by adequate vouching how the capital introduced into the relationship had been spent. The onus was on the pursuer to show what contribution she had made to the benefit of the defender.

[35].  It was not accepted that the pursuer had no capital. She retained an interest in the timeshare property and her son's business. The 2006 Act did not provide for potential future windfalls.

[36].  The defender's agent relied upon the decision in Jamieson and submitted that section 28(3)(a) and (3)(b) required to be considered simultaneously. The court could not look at the economic disadvantage of the pursuer in isolation but had to consider whether any advantage had been gained by the defender. The parties' relationship had been a joint decision and it was questionable whether the defender should bear the brunt of the loss. The pursuer should bear some responsibility. The defender was not underwriting the pursuer's decision to sell. The burden of cohabitation should be borne fairly.

[37].  The pursuer had been relieved of the responsibility of paying Council Tax and other bills for running a property. The defender was the main contributor to the relationship. If one deducted from his redundancy and pension draw down the cost of the new roof the defender contributed £20,000. At the end of the relationship the defender was left with a property burdened with a loan of £63,000. Before cohabitation the defender owned his house free of loan, held shares and had a lump sum coming to him. The defender was severely disadvantaged. If the pursuer was disadvantaged to the tune of £38,000 she was advantaged by contributions from the defender in terms of capital and the running of the house.

[38].  The pursuer continued to benefit from contributions by the defender when she remained in the property rent free after the end of the relationship.

Discussion

[39].  The Family Law (Scotland) Act 2006 introduced a myriad of changes to family law in Scotland including, for the first time, a cohabitant's right to obtain financial provision on the termination of a relationship and from a deceased cohabitant's intestate estate. The language of the Family Law (Scotland) Act 1985 in dealing with financial provision on divorce or breakdown of a civil partnership is not mirrored in the provisions relating to cohabitation. There are no references to "fair" or "reasonable" division or support nor indeed is there any reference to the resources of parties. During Stage 3 of the Bill the then Minister for Justice stated that the provisions were "not about seeking to replicate the financial arrangements that apply to spouses or civil partners". It is reasonable to suppose that in creating a right for a cohabitant to make certain claims Parliament intended a different approach to be adopted. It is regrettable that no clear statement of the approach which Parliament intended is immediately discernible from the wording of the provisions. In contrast to the 1985 Act there is no statement of the principles to be applied in deciding what order, if any, to make. In my opinion, given the differences in language between the two statutes, the absence of references to fair and reasonable, and the apparent intention that the financial arrangements applying to spouses or civil partners were not to be replicated there is force in the argument of the pursuer's agent that in considering applications in terms of section 28 of the 2006 Act one cannot adopt the same approach as that taken to claims in terms of section 9(1)(b) of the 1985 Act.

[40].  In Dougan Sheriff Morrison considered Parliament's intention with regard to section 9(1)(b) of the 1985 Act. In using the phrase "fair account" at the beginning of the section he said that "Parliament clearly intended something more than acknowledgement, but a fair consideration or reckoning of the disadvantage is not compensation. Even if it were, whatever is regarded as fair under s9(1)(b) is subject to the factors in s11(2) and the reasonableness provision in s8(2)(b)." He did not consider that in applying s9(1)(b) one began with an exact calculation of the financial loss and then considered any reduction in terms of s11(2) and s8(2)(b).

[41].  In a cohabitation there is no matrimonial property to be divided fairly between the parties. The court may make an order in terms of section 28(2) after having regard to the matters mention in section 28(3)(a) and (b). The court accordingly has a discretion to make an order. "Having regard to" economic advantage and disadvantage does not mean that a precise calculation of loss requires to be made. These are factors which the court is required to take account of in considering what if any order should be made. The court is also required to have regard to the factors mentioned in subsections (5) and (6). Significantly in my opinion the terms of section 28 do not direct the court to achieve a fair division of property acquired during or for the purpose of cohabitation. The purpose of an order in terms of section 28(2)(b) is more readily understood, being a payment in respect of any economic burden of caring for a child of the parties, although how the factors in subsections (3), (5) and (6) are relevant is not immediately apparent. There will also be an obligation upon the parties to aliment any such child. No such obligation to aliment exists between the parties. It may be assumed that parties having decided to enter upon cohabitation rather than marriage have considered the more limited rights and obligations in that arrangement.

[42].  I did not find the approach adopted by Lord Matthews in CM-v-STS of assistance for the reasons set out above. I do not believe that in making an order in terms of section 28 the court is attempting to balance the financial positions of parties. As I have already pointed out there is no direction to achieve a fair division of parties' assets. It appears to me that what Parliament intended the court to do was to consider whether, having regard to what each party contributed to the relationship either financially or otherwise, there was any net economic disadvantage or loss arising as a result of the relationship which might be redressed by an order for payment of a capital sum. Such a payment appears to be more in the nature of compensation. I am reinforced in that view by the comment of the then Minister for Justice at Stage 3 of the Bill when she said that the "provisions will ensure that one partner compensates (my emphasis) the other for any net economic disadvantage that has resulted from the relationship that they formed together".

[43].  In considering any application under section 28(2) the court is to have regard to the matters set out in subsection 3(a) and (b). When considering an application under section 28(2)(a) the court also has to have regard to the matters set out in subsections (5) and (6). It appears to me that the court has to consider, firstly, whether the defender has derived economic advantage from contributions by the applicant (subsection 3(a)) and then the extent to which any such advantage is offset by any economic disadvantage suffered by the defender "in the interests of the applicant" (subsection 5). Secondly, the court has to consider whether the applicant has suffered any economic disadvantage "in the interests" of the defender (subsection 3(b)) and then the extent to which any such disadvantage is offset by any advantage the applicant has derived from the defender's contributions (subsection 6). I note that the contributions by the applicant are not offset by contributions by the defender nor is economic disadvantage suffered by the pursuer offset by economic disadvantage suffered by the defender. Subject to those observations, in carrying out this exercise it appears to me that the pursuer's agent's approach is correct. There are two parts to each of the two matters to be considered. If at the end of this exercise the applicant appears to be left with some economic disadvantage then an award may be made in terms of section 28(2)(a). In these circumstances I did not find the decision in Jamieson-v-Rodhouse to be of assistance.

[44].  Contributions includes indirect and non-financial contributions, and "in particular any such contributions made by looking after.....any house in which they cohabited". Economic advantage includes gains in capital, income and earning capacity and "economic disadvantage shall be construed accordingly".

[45].  It would be an unusual relationship if parties, from the commencement, proceeded to keep full and detailed accounts of their respective finances so that, upon its termination, a mathematical calculation might be made of any contributions made, economic advantage derived or disadvantage suffered. In these circumstances I agree with agents that a "broad brush" approach will be required in respect of many aspects of the parties' finances.

[46].  In this case neither party was in the first flush of youth. Each had been married before and had grown up children. Their respective circumstances were well established. The defender, as a lecturer at the Jewel & Esk Valley College was in receipt of a greater income than the pursuer. The value of his capital assets including his property was greater than the pursuer's. However the pursuer owned the property in which she lived and was in receipt of an income from employment and pensions which allowed her to maintain her lifestyle.

[47].  Much of the evidence about the parties' relationship was not in dispute. Where there were any differences between them I preferred the evidence of the pursuer. I found the pursuer credible and reliable and entirely open about her relationship with the defender. By contrast I found the defender less so. He seemed anxious to portray the pursuer in a poor light particularly so far as her financial position was concerned and also reluctant to accept that she had made any contribution financial or otherwise to their relationship.

Section 28(3)(a)

[48].              Allowing for the absence of detailed accounting I was satisfied on the evidence before me that the pursuer had contributed financially to the parties' expenditure during the period of cohabitation. Some items of expenditure were vouched. The transfers to the defender's bank of £500, £300, £80, £150 and £80, the payment by the pursuer of heating repair costs totalling £343.08, the making and fitting of soft furnishings totalling £2,735.43 and various household items from Jenners totalling £1,527.65 exceed the payment by the defender to the pursuer of the sums of £900 and £2,920 by £1,896.16. It was not disputed that the pursuer had paid TV licence, Road Tax, and Contents Insurance. The amount and frequency of payment was not vouched. It was not disputed that she gave the defender the Cold Weather Payments received by her. It was also not disputed that the pursuer contributed to petrol costs although again the amount was not vouched nor quantified. I consider it a reasonable inference from the evidence of the parties' relationship that there were other financial contributions made by the pursuer which cannot now be vouched. That the pursuer contributed to the parties' day to day expenses the balance of the proceeds of sale of her property and the proceeds of her Zurich Guaranteed Investment Fund was not challenged. The defender also acknowledged that occasionally if he needed money the pursuer would give him some.

[49].  The defender, as a result of a gain in his income either from receipt of a payment from the pursuer or as a result of the pursuer making a payment on his behalf, has derived economic advantage from the pursuer's financial contributions to the relationship.

[50].  I was also satisfied that a reasonable inference from the evidence was that the pursuer had also made a non-financial contribution in looking after the house in which the parties cohabited. It is clear from the vouchers produced that the pursuer spent time and energy, particularly, in the decoration and maintenance of the house. She also contributed in the provision of meals for the parties.

[51].  The defender derived an economic advantage from the pursuer's non-financial contributions.

Section 28(5)

[52].  As I have already observed, economic advantage derived by the defender from contributions by the pursuer is not offset by economic advantage derived by the pursuer from contributions by the defender. That might have been thought to be the logical consideration. However Parliament has decided that the court has to consider the extent to which any such economic advantage is offset by economic disadvantage suffered by the defender in the interests of the pursuer. Economic disadvantage is defined as including losses in capital, income and earning capacity.

[53].  A major plank of the defence in this case was that the defender had suffered economic disadvantage by reason of his property being subject to a mortgage whereas prior to cohabitation the property was free of mortgage. In my opinion the defender's argument is misconceived. As noted above economic disadvantage suffered by the pursuer is not offset by economic disadvantage suffered by the defender but by contributions made by him in the interests of the pursuer. In any event the purpose of the loan eventually secured over his property was to invest in the business of the pursuer's son. I do not accept that the payments made to her son were made by the defender "in the interests" of the pursuer. I note that in the schedules produced by the defender that he refers to these payments as "investments". Further the defender has had full repayment of the sums paid to the pursuer's son together with interest. To that extent he has received a return on his investment. The defender chose not to repay the mortgage secured over his property when he received funds from the pursuer's son although he received a sum in excess of the amount then outstanding on the mortgage. Instead he chose to invest a substantial amount in bank shares, which has proved now to be a poor investment, and to repay other debts. He has since borrowed further funds to increase the amount of the mortgage. I would observe that no vouching was produced by the defender in respect of the use to which the funds received from the pursuer's son was put nor the purpose for which the debts paid had been incurred or the further borrowings secured. The defender said that he had paid for the works to his property by credit card. Accordingly such debts would appear to have been incurred for his benefit. That the defender is left with an outstanding mortgage is due to his choice, which in hindsight may have been a poor one, and not to any loss incurred by him in the interests of the pursuer.

[54].  The defender did not produce a current value of his property but accepted that it would have increased in value since June 2003. He has invested in the property by the renewal of the roof and the addition of a conservatory.

[55].  It appears to me that, there was no evidence that the economic advantage derived by the defender from the pursuer's contributions both financial and non-financial is offset by economic disadvantage suffered by the defender in the interests of the pursuer.

Section 28(3)(b)

[56].  I am satisfied on the evidence that the pursuer has suffered economic disadvantage in the interests of the defender. I accepted the pursuer's evidence that the only reason that she sold her house was as a result of the encouragement by the defender to do so after he had suggested that they commence cohabitation and in the interests of furthering their relationship. There was no evidence that the pursuer was contemplating a sale of her house before then or that she was being pressed to do so for financial reasons. I accepted her evidence that had she not embarked upon a new life with the defender she would have continued to maintain her own property and would have continued to work to enable her to do so. As a result of the sale the pursuer has lost her principal capital asset which, it is agreed, would be worth £88,000 now. She now requires to live in rented accommodation and is unlikely to be able to afford to purchase another property.

[57].  The pursuer, however, has enjoyed the benefit of a substantial amount of the sale proceeds. She was able to repay the mortgage outstanding on her property. She repaid other debts. She was able to lend money to her son and invested sums. She enjoyed the sole benefit of about £42,000 of the sale proceeds.

[58].  The balance of the sale proceeds, about £8,000, was contributed to the parties' relationship.

[59].  The value of her property would have been £88,000 now. Accordingly the pursuer has suffered economic disadvantage in the interests of the defender to the extent of £38,000.

[60].  The pursuer paid £1,500 towards the purchase by the parties of a week's timeshare. From inter alia the proceeds of her investment in the Sterling Investment Bond the pursuer paid £7,000 for the purchase of a second week's timeshare. Although the parties own the two weeks jointly the pursuer has paid more than 50% of the price. She has suffered economic disadvantage in the interests of the defender to the extent of £1,500 in the acquisition of these assets which remain in parties' joint names.

Section 28(6)

[61].  The court now requires to consider the extent to which any economic disadvantage suffered by the pursuer in the interests of the defender is offset by any economic advantage derived by her from contributions made by the defender.

[62].  It was not disputed that the defender operated a bank account from which the regular outgoings for the house in which the parties cohabited such as Council Tax and utility bills were paid. It was also not disputed that the defender paid for the majority of the parties' food. No vouching was produced. Such figures as were given in evidence were not disputed. Adopting a "broad brush" approach, to the extent that the pursuer was not making payment herself of the type of bills paid by the defender, and in similar fashion to the contributions made by the pursuer, it may be inferred that the pursuer has derived economic advantage from the contributions made by the defender.

[63].              It is a reasonable inference from the evidence that the defender also made non-financial contributions, particularly in the preparation of meals as was emphasised on a number of occasions.

[64].              It was also argued that the pursuer derived economic advantage from contributions by the defender by remaining in the defender's property after termination of the relationship. I consider that the defender's argument is misconceived. In my opinion any economic advantage must be derived from contributions made during the period of cohabitation. Whether the defender permitted the pursuer to remain in his property after the parties ceased to cohabit is, in my opinion, irrelevant.

[65].              In my opinion such relevant contributions as were made by the defender would not be sufficient to offset the economic disadvantage suffered by the pursuer in the interests of the defender.

Decision

[66].              In my opinion the purpose of section 28(2)(a) is to provide a means whereby a cohabitant may be compensated financially when cohabitation ends. In this case the pursuer gave up her principal capital asset, her home, in the interests of the defender believing that she and he were embarking on a new life together. The financial circumstances of both parties were not complex. They each appear to have accrued debts and to that extent appear to have lived beyond their means. They each contributed to the relationship financially and non-financially according to their respective means. When cohabitation ended the pursuer did not have any home. The defender still had his home which has increased in value.

[67].              Quantification of economic advantage and disadvantage and contributions by parties is unlikely to be precise having regard to the nature of relationships and the tendency to "pool" resources both financial and non-financial. It is also likely to be hampered, as in this case, by the absence of detailed vouching which parties, not anticipating the cessation of cohabitation, are unlikely to have retained. Inevitably a "broad brush" approach is likely to be adopted.

[68].              It was argued on behalf of the defender that the legislation does not provide for "windfall" benefits. In my opinion the legislation requires that any sum which may be ordered in terms of section 28(2)(a) is considered having regard to the matters set out in section 28(3)(a) and (b) and the matters set out in section 28(5) and section 28(6). The value of any economic disadvantage or advantage requires to be assessed as at the date on which parties ceased to cohabit.

[69].              Having had regard to the matters set out in section 28(3)(a) and (b) and the matters in section 28(5) and section 28(6) I am satisfied that there is a net economic disadvantage in favour of the pursuer and that she should be compensated in the sum of £39,500.

[70].              I was not addressed on whether payment should be ordered on a specified date or by instalments in terms of section 28(7). Accordingly I will arrange a hearing in order to be addressed on that issue. I was invited to reserve the question of expenses and that issue may be addressed at the same hearing.