Scottish Sheriff Court Decisions

SHERIFFDOM OF NORTH STRATHCLYDE AT PAISLEY

 

[2015] SCPAI 72

A279/12

JUDGMENT OF SHERIFF PRINCIPAL D L MURRAY

 

In the cause

 

W

 

Pursuer and Respondent;

 

Against

 

M

 

Defender and Appellant:

 

Act: Fletcher

Alt: Finlayson

 

 

Paisley, 7 October  2015.

The Sheriff Principal, having resumed consideration of the cause, Refuses the appeal, Adheres to the sheriff’s interlocutor of 23 April 2014,  except in relation to finding in fact and law  4 where the words “has lost capital of £35,000 and income of £11,214 in the interests of the defender” shall be deleted and  “paid over £46,214 to the benefit of the defender.” Inserted in substitution;  Finds the defender liable to the pursuer in the expenses of appeal, except in relation to hearing on 13 February 2015 and preparation therefor, where the expenses shall be paid to the pursuer by the defender’s agent W. A Finlayson personally, Allows accounts to be given in and remits the same when lodged to the auditor of court to tax and report. 

 

DL Murray

 

Background

[1]        The appeal arises from the sheriff’s decision of 23 April that the appellant (the defender) should pay to the pursuer, the sum of £46,214.  The sheriff found the defender to have benefited from payments made by the pursuer.  The sheriff found that prior to commencing cohabitation the parties had a relationship since mid-2009 and would reside together one or two night per week.  She found the defender had been working in London in temporary employment and returned to Scotland in May 2011 and cohabited with the pursuer between then and February 2012.  The sheriff found the parties to be cohabitants in terms of section 25 of the Act for this period.    

[2]        This appeal first called before me on 13 February 2015 however the shorthand notes had not been extended and the hearing had to be adjourned for these to be obtained.  The case called again on 23 June when I heard submissions and as a result of submissions I reverted to the sheriff seeking clarification of four matters.  She produced a supplementary note dated 1 July and the case called again on 3 September for parties to address me in the light of the sheriff’s response. 

[3]        Having sought the supplementary note from the sheriff eight grounds of appeal fell to be considered.

1. The sheriff erred in law in finding that the defender had derived an economic advantage standing the financial position of the defender at the start of the period of cohabitation compared with that at the end of the said period.

2. The sheriff erred in law in finding that the pursuer suffered an economic disadvantage having regard to the fact there was no crave to this effect and having upheld the defender’s agent’s objection to such evidence being led.

3.  The sheriff erred in law in making finding of fact and law number 4, in respect that there was no record for, nor any evidence of, the pursuer having suffered a loss of income of any sum, particularly £11,214. 

4.  The sheriff erred in law in holding as admissible and in allowing reference to the report prepared by Mark Rutherford of DM Hall lodged by the pursuer in respect that there was no record for it and the defender’s agent made objection.  

5. The sheriff erred in law in holding that the payments made by the pursuer to the defender totalling £1500 in March and April 2011, outwith the period of co-habitation are recoverable in terms of section 28 of the Family Law (Scotland) Act 2006 ”the 2006 Act.” 

6.  The sheriff erred in law in taking into account the potential value of the defender’s property once completed rather than at the time cohabitation ended.

7.  The sheriff erred in law by not taking account of the cost of completion of the works at the defender’s property in calculating in the economic advantage or disadvantage to the defender.  And

8.  The sheriff erred in law by not holding that the defender had suffered an economic disadvantage standing the terms of findings in fact 6, 10 and 14.

 

Submissions for the defender 

[4]        The defender’s submissions were focused on two aspects of the judgment. That the sheriff had erred in law in  holding that the defender had no economic disadvantage and secondly that the sheriff had erred in finding the pursuer suffered an economic disadvantage as a consequence  of the £54,000 paid by her to the defender and that the defender had accrued economic advantage.   In addition to these aspects the defender developed submissions on the evidence and report of Mark Rutherford and on the £1500 paid over to the defender, before cohabitation was found to have commenced.

[5]        The defender submitted, in respect of the first two grounds of appeal, that this was properly viewed as an economic advantage case based on the increase in value alleged by the pursuer to the property.  It was submitted that the sheriff had fallen into error in approaching the matter on basis of the contribution made by the pursuer. The sheriff it was said had failed to have proper regard to any advantage accruing to the defender by the contributions made by the pursuer.  Matters expanded upon in relation to the sixth and seventh grounds of appeal and the value of the property.

[6]        The defender had objected to the lack of specification of economic loss and it was submitted that that objection had been upheld by the sheriff.   This submission resulted in a requirement to seek further information from the sheriff, which was duly provided.

[7]        At the continued hearing notwithstanding the terms of the sheriff’s supplementary note the defender maintained his position that the objection had not been upheld that there was no record for the pursuer having suffered economic disadvantage.  It was submitted for the defender that the mere fact of the pursuer paying money over to the defender did not, of itself, result in economic disadvantage.  It was said that suffering loss was not the same thing as suffering economic disadvantage.

[8]        In relation to the third ground of appeal it was said there was no basis for a finding that the pursuer had lost income.  The pursuer’s pleadings and evidence was only to the effect that monies were paid over to the defender.

[9]        In relation to the fourth ground of appeal this was focused on the need for the defender to have fair notice of the pursuer’s case. In particular under reference to Eadie Cairns v Programmed Maintenance Painting Ltd 1987 SLT 777 it was submitted that the DM Hall report which was produced required to be incorporated into the pleadings before it could be relied upon by the pursuer, or for Mr Rutherford to speak to it.  The pursuer’s case it was submitted was deficient in the absence of reliance on the report to support the valuation of the property.  Further Mr Rutherford professed having no expertise in valuing unfinished properties.  This meant even if his evidence was allowed it should not have been relied upon by the sheriff.

[10]      In relation to the £1,500 paid prior to cohabitation, it was submitted that section 28 of the 2006 Act anticipated that account should be taken of payments resulting in economic advantage or disadvantage made during the period of cohabitation.  Given her there was no dispute that the £1500 was paid over before cohabitation commenced it should not have featured in the sheriff’s assessment.  It was submitted that the position in relation to cohabitation differed from the position where parties were married.  Section 9(2) of the Family Law (Scotland) Act 1985 provided that “economic advantage” occurring prior to or during the marriage or civil partnership can be taken into account and “economic disadvantage” construed accordingly.  No like provision was provided for in the 2006 Act in relation to cohabitation.    In Douglas v Bell 2014 Fam. LR 2 there had been breaks in the period of cohabitation and that allowed matters prior to the resumption of cohabitation to be taken into account.  A different position from that as applied in the instant case.  It was further submitted that Gow v Grant 2013 SC (UKSC) 1 was focused on the period of cohabitation and the ratio restricted consideration to the period of cohabitation.  One example of this was what Baroness Hale said at [54]:

“It is in most cases impracticable to work out who has paid for what and who has enjoyed what benefits in kind during the cohabitation……It is much more practicable to  consider where they were at the beginning of their cohabitation and where they are at the end,”

[11]      That approach, it was submitted was reinforced by the definition of cohabitant in terms of section 25 of the 2006 Act.   It was therefore said to be an error of law for the sheriff to have made an award to the pursuer taking account of this £1,500 paid over before cohabitation commenced.

[12]      The defender submitted even if it was accepted that the pursuer had put money towards the cost of the renovations to the property, she was not entitled to be compensated for this unless it could be proved this resulted in a corresponding benefit – economic advantage to the defender.  It was submitted that there might be an alternative case, based on promise, open to the pursuer in such circumstances, but that was not pled in the instant case.  Here it was said that there was no value given to the property at the relevant date when cohabitation ceased.   The renovations were incomplete and Mr Rutherford had conceded that he was not experienced in valuing unfinished property or in assessing the cost of works to complete the property.  There was an absence of evidence as to the value of the property at the relevant date.  It was not open to the sheriff to find that the sums expended on the property automatically increased its value by those sums.   Accordingly it was submitted that there was a lack of evidence to entitle the sheriff to make the findings which she did in relation to the £35,000 contributed by the pursuer to the renovations.

 

[13]      The final ground of appeal of the defender was that the sheriff should have found that he had suffered economic disadvantage in coming back up to Scotland to cohabit with he pursuer given the sheriff’s findings, because the defender had given up well paid work in London to do so. 

 

 

 

Submissions for the pursuer

[14]      Mrs Fletcher for the pursuer invited me to uphold sheriff’s judgment and refuse the appeal.  Subject to a concession that the sheriff in finding in fact and law 4   had mis- expressed the position when she found that the £11,214 came from income.   It was submitted that apart from this the sheriff did not err in law in the making of any other findings of fact or findings of fact and law and the appeal should be dismissed.

[15]      Referring to section 28 of the 2006 Act she drew my attention to the fact that it imposed discretion on the sheriff.  Referring to Britton v Central Regional Council 1986 SLT 207 and to McPhail Sheriff Court Practice 3^rd edition 18.111

“The appellate court may intervene if it is satisfied that the judge did not exercise his discretion at all; or that in exercising it he misdirected himself in law; or misunderstood or misused the evidence or the material facts before him; or took into account an irrelevant consideration or failed to take into account some relevant consideration; or if his conclusion is such that, though no erroneous assumption of fact or law can be identified, he must have exercised his discretion wrongly.”

[16]      She submitted the appeal is to be approached on the basis that the interlocutor must be regarded as a valid and correct judgement unless and until the appellant shows cause why it should be altered.  It was submitted that there is no proper basis to alter the sheriff’s interlocutor in the instant case. In Finding-in-Fact 22 the sheriff had found “the renovations to the property were funded by the defender carrying out much of the work himself.  The sum of £35,000 was forwarded by the pursuer and the defender utilised the sum of £50,000 which he had accumulated in cash from cash work”.

[17]      In Finding-in-Fact 19: prior to renovation the defender’s home was valued at £220,000.  Following completion of the renovations the value of the property would be £325,000.  In Finding-in-Fact 18 the sheriff found “the sum of £35,000 was used for the renovation of the pursuer’s home” although clearly that should refer to the defender’s home.  It was however accepted that there was no precise finding by the sheriff as to the value of the defender’s home as at the date on which cohabitation ceased and the pursuer’s agent accepted that it might be helpful to revert to the sheriff to clarify this matter and clarify her view of the cost of works to complete the property.

[18]      Referring to paragraph 55 of Lady Hale’s judgement in Gow v Grant where she states:

“In principle, if one party has derived a clear and quantifiable economic benefit from the economic contributions of the other, it may be fair to order, what is, in effect, restitution of the value of that benefit.”

[19]      It was submitted that was exactly what occurred in relation to the property renovations, £35,000 had been contributed by the pursuer to the cost of renovations, and the defender had received the benefit in using such funds towards the renovation and thereby increasing the value of the property.  In the Minute of Admissions the defender concedes that the pursuer has made contributions of £54,214.  In the pursuer’s submissions that gave rise to economic advantage to the defender.

[20]      As far as ground 2 is concerned, it was submitted to have no substance if one looked at the pleadings and crave 2, which replicated the statutory formulation.  There should be no doubt in the defender’s mind as to the case which the pursuer sought to make.  Having regard to Macphail 9.17 the consequence of which is by exception to emphasise the normal rule that legal duties should be averred in pleas-in-law and not in the pleadings themselves.

[21]      Reference was made to Lord Guthrie’s opinion in the House of Lords case McGlone v British Railways Board 1966 SLT 7 where he sets out the fundamentals of Scottish pleadings at page 7:

 “Now it is fundamental to the Scottish system of pleading that a defender is entitled to fair notice on record of the case made against him at the proof by the pursuer, so that he can prepare evidence to meet and rebut that case.  Therefore the pursuer is not entitled to attempt to prove a different case of which the defender has not received fair notice, and which he has not been given an opportunity to prepare to meet.”

[22]      It was submitted that the terms of the closed record clearly put the defender on notice of the basis of the pursuer’s claim.  It was clear from the pleadings that the pursuer claimed the value of the property had increased.  Article 3 of condescendence sets out in terms that the property had increased in value by approximately £150,000 as a result of the renovations. 

[23]      The pursuer submitted that from Gow v Grant it should be taken that the underlying principle is one of fairness designed to correct imbalance between the parties. 

[24]      In respect of the third ground of appeal the pursuer conceded that the sheriff mis-expressed the position when she found that the £11,214 came from income.  It was however submitted that the reference to income was of no moment.  It was accepted by the defender that this sum had been paid by the pursuer to him.  In these circumstances it was irrelevant to the consideration of the sheriff whether it derived from income or capital.

[25]      In relation to the fourth ground of appeal, I was invited to have regard to the decision of Sheriff Bell in John Halliday v Roland Decorators 1964 SCLR 365 where Sheriff Bell distinguished the Eadie Cairns case. Following a detailed analysis of Eadie Cairns and consideration of Grampian Hydraulics Buckie Ltd v Dauntless Marine Engineering & Supply Co Ltd (Sh.Ct.) 1992 SCLR 301 Sheriff Bell was satisfied that sufficient notice had been given.   The pursuer submitted I should adopt a similar approach here and could be satisfied sufficient notice was given to the defender.  Particularly since Mr Rutherford’s report was available to the defender, from when it was lodged as a production in November 2013.   It was reasonable that Mr Rutherford should use it as an aide memoir in giving his evidence.   His evidence entitled the sheriff to make the findings on the value of the property which she had.

[26]      With regard to the sheriff’s note at the foot of page 26 there was no doubt that the sheriff had found that the pursuer had suffered an economic disadvantage in the interests of the defender.  A total disadvantage which she found to be some £54,000. At page 27 of the note the sheriff cogently explained her reasons for making an award of £46,214 in favour of the pursuer:

 “In my opinion she is entitled to the return of the £35,000 which she paid towards the cost of renovating the property, the £714 which she paid for the costs of the course which he undertook, the sum of £1,500 she paid prior to the parties taking up cohabitation.  Of the £2000 a month paid during the course of parties’ cohabitation of nine months I have determined she is entitled to a return of one-half of this sum being £9000, given that some of the expenditure had been to her benefit in that she was not paying rent and that she would have required to pay for food, heating, council tax and rent or mortgage in any event.  These sums total £46,214.”

It was submitted the sheriff had thus exercised her discretion in a manner which gave me no reason to interfere with her decision.

[27]      In relation to the argument proposed by the defender on the objection which he took, Mrs Fletcher submitted that this was misconceived.  Particularly so given her position that the objection was not upheld but rather the question withdrawn.  As confirmed by the sheriff in he supplementary note.

[28]      It was submitted that the sheriff was entitled for the reasons she set out to find the defender had not suffered any economic disadvantage.  He was principally carrying out work renovating his property and also separately secured some temporary employment.

[29]      It was submitted that the pursuer’s plea in law reflects the terms of the statute.  Fair notice had been given to the defender of the case sought to be made by the pursuer and answered by the defender. 

[30]      On the £1,500 paid over to the defender before cohabitation commenced Mrs Fletcher indicated she had found this referred to in a case decided by Sheriff A D Miller in Jedburgh Sheriff Court. Lindsay v Murphy 2010 FamLR 156 There the sheriff said

“I agree with counsel for the defender that there is nothing in the terms of s 28 that requires the court to consider “contributions”, as defined in subs (9) , only in so far as made during the period of cohabitation.  

[31]      The pursuer submitted this was a correct approach.   In the instant case in seeking to achieve a fair result taking account of economic advantage and economic disadvantage the sheriff was entitled to have regard to the £1,500.

 

Discussion and decision

[32]      The statutory basis on which this case proceeds is Section 28 of the 2006 Act which provides:

“Financial provision where cohabitation ends otherwise than by death

(1) Subsection (2) applies where cohabitants cease to cohabit otherwise than by reason of the death of one (or both) of them.

(2) On the application of a cohabitant (the “applicant”), the appropriate court may, after having regard to the matters mentioned in subsection (3)—

(a) make an order requiring the other cohabitant (the “defender”) to pay a capital sum of an amount specified in the order to the applicant;

(b) make an order requiring the defender to pay such amount as may be specified in the order in respect of any economic burden of caring, after the end of the cohabitation, for a child of whom the cohabitants are the parents;

I make such interim order as it thinks fit.

(3) Those matters are—

(a) whether (and, if so, to what extent) the defender has derived economic advantage from contributions made by the applicant; and

(b) whether (and, if so, to what extent) the applicant has suffered economic disadvantage in the interests of—

(i) the defender; or

(ii) any relevant child.

(4) In considering whether to make an order under subsection (2)(a), the appropriate court shall have regard to the matters mentioned in subsections (5) and (6).

(5) The first matter is the extent to which any economic advantage derived by the defender from contributions made by the applicant is offset by any economic disadvantage suffered by the defender in the interests of—

(a) the applicant; or

(b) any relevant child.

(6) The second matter is the extent to which any economic disadvantage suffered by the applicant in the interests of—

(a) the defender; or

(b) any relevant child,

is offset by any economic advantage the applicant has derived from contributions made by the defender.

(7) In making an order under paragraph (a) or (b) of subsection (2), the appropriate court may specify that the amount shall be payable—

(a) on such date as may be specified;

(b) in instalments.

(8) Subject to section 29A, any application under this section shall be made not later than one year after the day on which the cohabitants cease to cohabit.

(9) In this section—

“appropriate court” means—

(a) where the cohabitants are a man and a woman, the court which would have jurisdiction to hear an action of divorce in relation to them if they were married to each other;

(b) where the cohabitants are of the same sex, the court which would have jurisdiction to hear an action for the dissolution of the civil partnership if they were civil partners of each other;

“child” means a person under 16 years of age;

“contributions”includes indirect and non-financial contributions (and, in particular, any such contribution made by looking after any relevant child or any house in which they cohabited); and

“economic advantage”includes gains in—

(a) capital;

(b) income; and

I earning capacity;

and “economic disadvantage”shall be construed accordingly.

(10) For the purposes of this section, a child is “relevant” if the child is—

(a) a child of whom the cohabitants are the parents;

(b) a child who is or was accepted by the cohabitants as a child of the family.”

 

[33]      Looking at the appeal in relation to the identification of economic advantage for the defender and economic disadvantage to the pursuer, standing these provisions the sheriff was entitled to make an award in favour of the pursuer.   I consider the sheriff here has correctly applied a holistic approach and sought to achieve fairness between the parties and reached the conclusion that there is a loss (disadvantage) to the pursuer which is reflected in some benefit (advantage) to the defender.

[36]      The pursuer made payment to the defender and the sheriff sets out how these payments were used by the defender. I set out below why I accept there was economic advantage to the defender.

[37]      The second ground of appeal on the absence of a crave specifying economic disadvantage to the pursuer has no merit and falls to be dismissed.  I find this argument was correctly and addressed by the sheriff in her judgement.  As the sheriff put it:

 

 “The pursuer’s case is pled on the basis that the defender gained an economic advantage from the financial payments made to him by the pursuer.  The pursuer’s plea-in-law reflects the whole terms of the statute.  The defender can have no doubt that the pursuer offered to prove that he gained from her financial payments to her detriment.  There was no dispute about the funds transferred between the parties.  None passed from the defender to the pursuer.  The defender did not offer to prove any benefit to the pursuer from the payments made to her.” 

 

[38]      The defender also argued there was a lack of basis for various findings by the sheriff in relation to the value of the property and the economic advantage or disadvantage to the parties from financial contributions made in particular around the value of the property.  Contrary to that suggestion I consider where monies are paid over by one party and utilised for the benefit of another party that the donating party will generally be found to have  sustained an economic disadvantage and that the receiving party to have  benefited.  In the instance case in relation to the monies contributed by the pursuer and utilised towards the renovation works I am satisfied on the sheriff’s findings that the use of these monies has contributed to an increase in the value of the property.  This results in economic advantage to the defender in the increase in value of his property.   I therefore adhere to the sheriff’s findings and dismiss the first two grounds of appeal.

[39]      With reference to the sheriff’s supplementary note, it would have been preferable had the sheriff been able to make a finding in fact of the value of the property at the date when cohabitation ceased.  I am however satisfied that this is not fatal to her reasoning given that she finds the value to be in excess of the pre renovation valuation and the cost paid towards the renovations.  These she found to be £50,000 by the defender and £35,000 by the pursuer. I also conclude these were finding she was entitled to make on the evidence particularly given the paucity of evidence from the defender on the value of the property. I therefore find no substance to the sixth and seventh grounds of appeal. 

[40]      The defender’s agent indicated in submission that it was a conscious decision not to provide evidence of the defender’s view of the value of the property.   That was in my view mistaken.   The passage quoted above from Lord Guthrie in McGlone v British Railways Board makes clear that a defender is expected to prepare for and meet the case brought against them.  In many family cases the value of the assets will be of critical importance and the defender who takes such an approach perils their position.  It results in the sheriff only having the evidence provided by the pursuer.   Thus if the evidence is allowed and found to be credible and reliable then absent any contrary evidence the sheriff will accept it. 

[41]      In relation to ground 3, as was made clear in the course of submissions the defender’s focus in this ground was in relation to the reference to income.  It was conceded by the pursuer the sheriff was not entitled to find the £11,214 was paid from income.  It is clear however from the terms of the joint minute that sums were paid by the pursuer and in the sheriff’s note she accepts the sum of £46,214 was paid over by the pursuer to the benefit of the defender. The sheriff found that the pursuer had suffered economic disadvantage in the sum of £46,214 by which sum the appellant had benefited.   To accurately reflect the position I shall adjust finding in fact and law 4 to delete the words “has lost capital of £35,000 and income of £11,214 in the interests of the defender” and substitute “paid over £46,214 to the benefit of the defender. That said I find no basis to interfere with her discretion in assessing this disadvantage and consequent advantage at sum at £46,214. £35,000 was contributed by the pursuer to the property renovations.  The balance of £11,214 derives from £714 paid for the course the defender attended, the £1,500 which is the subject of a distinct challenge in ground of appeal 5, as being prior to the cohabitation and that part of the £2,000 per month for 9 months which the pursuer paid to the defender during their cohabitation which the sheriff has concluded resulted in economic advantage to the defender.    The pursuer avers on record sums as having been paid over to the defender.  There is therefore nothing in the allegation that the pursuer has no record for this finding and I reject this as a ground of appeal, subject to what I say separately in respect of the fifth ground of appeal. 

[42]      Standing the terms of the pursuer’s averments on record and the parties’ joint minute which agreed that the sum of £54,214 was paid by the pursuer to the defender, I find no substance in the argument of the defender that the pursuer has not shown there to be economic advantage to the defender.   It is also of note that the clarification given by the sheriff in her supplementary note as regards her not making any ruling on the objection further negates the defender’s argument.   As I indicated in the course of submissions an obvious reading of the objection recorded at page 46 of day 2 of the notes of evidence was that the evidence was exploring a Gow v Grant type claim, that in selling her house the pursuer no longer had a foot on the property ladder.  A basis of claim not foreshadowed in the pursuer’s pleading and which may have resulted in the objection being sustained. But there is no proper basis to suggest that the sheriff saw merit in the defender’s suggestion of a lack of pleading for economic disadvantage to the pursuer in the sums she had contributed to the defender.  I therefore reject this ground of appeal.

[43]      I consider the case of Eadie Cairns v Programmed Planned Maintenance Painting Ltd, may be distinguished.   The Eadie Cairns case related to a lack of specification in pleadings where the pursuers sought to make reference to an expert report to provide more detailed specification of the failings on which they founded their case. The extra division found there was a failure to give proper specification of the case within the pleadings.  That is a quite different position from that facing the defender in this case.  The pursuer has record averring the renovation works have increased the value of the property by approximately £150,000 and calls upon the defender to lodge in process a valuation.  That was information which should have been within his knowledge or about which he could have obtained the information by obtaining his own valuation report.   Pleadings are about providing fair notice and the defender had perfectly adequate notice of the pursuer’s position that there was an increase in the value of the property.  I agree with the sheriff’s decision to allow the evidence of the chartered surveyor Mr Rutherford in relation to the value of the property, and dismiss this ground of appeal.   I also find no reason to not accept her view that she found Mr Rutherford to be both credible and reliable.  As is well recognised the first instance judge is best placed to make such a finding. 

 

[44]      The fifth ground of appeal has been the most difficult to answer.  I have not been cited or found any authority which puts the matter beyond doubt.  The legislation does not specifically prescribe whether payments made and received prior to cohabitation resulting in economic disadvantage and advantage should be taken into account.  Although the defender’s evidence was that he had asked for the £1,500 and that he was comfortable in asking for it given the parties were in a relationship, the parties were not cohabitants in terms of section 25 of the 2006 Act.

““Meaning of “cohabitant” in sections 26 to 29

(1) In sections 26 to 29, “cohabitant” means either member of a couple consisting of—

(a) a man and a woman who are (or were) living together as if they were husband and wife; or

(b) two persons of the same sex who are (or were) living together as if they were civil partners.

(2) In determining for the purposes of any of sections 26 to 29 whether a person (“A”) is a cohabitant of another person (“B”), the court shall have regard to—

(a) the length of the period during which A and B have been living together (or lived together);

(b) the nature of their relationship during that period; and

I the nature and extent of any financial arrangements subsisting, or which subsisted, during that period.”

 

[45]      There are therefore two competing approaches which may be applied. Namely, looking at the matter of economic advantage and disadvantage in relation to the cohabitation, payments made immediately prior to the cohabitation may be taken into account as part of the overarching discretion available to the sheriff to achieve fairness between the parties.   Or alternatively that a bright line should be applied from the commencement of cohabitation so that only advantage and disadvantage deriving during the period of cohabitation should be taken into account. 

[46]      Having regard to the Scottish Law Commission’s thorough review, consultation and report there is perhaps a flavour that they did not anticipate pre cohabitation contributions would be taken into account.  Likewise in the speeches of Lord Hope and Lady Hale in Gow v Grant there are clear references to cohabitation which might suggest account should not be taken of financial matters prior to cohabitation. Adding more to the discretion of the sheriff may serve to reduce the certainty of outcome and give rise to more litigation.  As Lady Justice Hale records at [53]:

 “the compensation principle, although attractive in theory, can be difficult to apply in practice because of difficulties in identifying and valuing those advantages and disadvantages.”

[47]      Against that, as noted in Gow v Grant the Deputy Minister for Justice commenting on the provisions of the Bill to the Scottish Parliament indicated:

“Our sense of a fair and just outcome when committed relationships come to an end involves setting a framework for compensation where one partner can show they have suffered net economic disadvantage in the interests of the relationship.”

[48]      It must also be noted as the defender submits that the provisions of section 9(2) of the Family Law (Scotland) Act 1985, in relation to marriage and civil partnership, do specifically provide for the court to take account of economic advantage or economic disadvantage prior to the marriage or civil partnership.  The provisions relating to cohabitation in the Act are silent on this point.  That provides an interpretive challenge, it might be felt that the specific reference in relation to contributions prior to marriage or civil partnership in the Family Law (Scotland) Act 1985 and the absence of any reference to pre cohabitation in the 2006 Act may be said to suggest that the Scottish Parliament did not intend for pre cohabitation contributions to be taken into account.   As Elaine Samuel sets out in Child and Family law 2^nd edition at par 16.204:

“While contributions, advantages and disadvantages both prior to the marriage or civil partnership are relevant, there is no express statement to this effect in respect of cohabitants.   Whether that means that pre cohabitation losses or gains are irrelevant is not clear.”

 

[49]      I note however Lord Hope states in Gow v Grant at par 35:

“section 28 does not seek to replicate the arrangements that are available for financial provision on divorce or the termination of a civil partnership.   For this reason it would not be right to adopt the same approach to the application of that section as would be appropriate if the exercise was being conducted under section 9 of the 1985 Act.” 

I have reached the view that no interpretive assistance may be drawn from the specific reference to contributions prior to marriage or civil partnership in the 1985 Act, and the absence of any equivalent provision in the 2006 Act.   I have also reached the conclusion that the question of taking account of sums contributed immediately prior to cohabitation was a matter not formally considered by the Supreme Court in Gow v Grant. 

[50]      Having regard to the ratio of the Supreme Court in Gow v Grant where a fair outcome was seen as been a key policy aim of the 2006 Act I conclude that the terms of the 2006 Act do not exclude payments made prior to cohabitation commencing being taken into account.  With the overall policy aim of the 2006 Act and the ratio of Gow v Grant being to achieve fairness it is appropriate that discretion should rest with the court in determining economic advantage and disadvantage and the relevance of payments or transactions towards that economic advantage and disadvantage.  Accordingly I am satisfied as a matter of law in terms of the 2006 Act the sheriff was entitled to have regard to the £1,500 paid over before cohabitation commenced.   That accords with the view expressed by Sheriff Miller in Lindsay v Murphy.   I also find the sheriff was entitled in the exercise of her discretion and in seeking to achieve fairness between the parties to take account of the £1500 paid prior to the cohabitation commencing in making her award to the pursuer.  The sheriff has made an assessment in the round and reached a conclusion aimed at achieving a just outcome.  I do not consider she is so plainly wrong that I should interfere with the exercise of her discretion on the matter, particularly where it is looked upon as part of her overall assessment of economic advantage and disadvantage in terms of section 28 of the 2006 Act.   There may be other cases where in weighing the matter up the sheriff will reach a conclusion that actions prior to commencement of cohabitation should not be taken into account.  It will be a matter to be determined on the facts of a particular case.   In the context of the 2006 Act as a whole such a decision is appropriately best left to the discretion of the sheriff.

[51]      I find the eighth ground of appeal that the defender sustained economic disadvantage in the interests of the pursuer to be without foundation.  The findings in fact are clearly findings which the sheriff was entitled to make.  The sheriff’s analysis of the evidence explains that while she accepts that the defender was earning £1,020 gross per week while working in London, she did not accept that this was a permanent job.  She was satisfied that the defender took the job in London to earn high wages, and had every intention of returning to Scotland once he had sufficient funds.  The sheriff also states that she was not satisfied that the defender was unable to find work or that he could not find work if he put his mind to it.  She further states that she was not satisfied that the defender had suffered any loss of wages attributable to the interest of the parties.  Her clarification puts the matter beyond any doubt.  It confirms what she concluded and demonstrates a cogent basis for so finding.  These were conclusions which she was entitled to reach.

[52]      Accordingly I shall adhere to the sheriff’s interlocutor in relation to the sums awarded to the pursuer and the appeal falls to be dismissed.

 

 

Expenses

[53]      The appeal having been unsuccessful the normal rule shall apply and the expenses of the appeal will be awarded to the respondent.  I reserved the question of expenses for the adjourned appeal hearing on 13 February 2014.  That adjournment was required because the notes of evidence were required for the appeal.   As is made clear in MacPhail 3^rd edition 16.63, the appellant requires, where he intends to found on evidence, to timeously lodge the notes of evidence.  During the appeal reference was made to the notes of evidence.  No good reason has been advanced to me why the notes were not available for that hearing.  I am of the view that the failure to have the notes of evidence extended to allow the appeal to proceed rested solely with the appellant’s agent.  Mr Finlayson invited me to leave this as a matter between him and his client.  It would not be right that the appellant should bear that cost.  Accordingly and for completeness I find that in relation to the expenses for the adjourned hearing on 13 February 2014 those shall be the personal responsibility of the appellant’s agent. 

                                                                                                            DL Murray