Jacqueline Whigham V. Steven Owen
| Jurisdiction | Scotland |
| Judge | Lord Drummond Young |
| Neutral Citation | [2013] CSOH 29 |
| Date | 20 February 2013 |
| Court | Court of Session |
| Published date | 20 February 2013 |
| OUTER HOUSE, COURT OF SESSION [2013] CSOH 29 | |
| OPINION OF LORD DRUMMOND YOUNG in the cause JACQUELINE WHIGHAM Pursuer; against STEVEN OWEN Defender: ________________ |
Pursuer: Hayhow; Morisons
Defender: Speir; Turcan Connell
20 February 2013
[1] The pursuer seeks an order in terms of section 28(2)(a) of the Family Law (Scotland) Act 2006 for payment of a capital sum from the defender following the cessation of cohabitation between the parties. This area of the law has been the subject of recent guidance from the United Kingdom Supreme Court in Gow v Grant, 2012 SLT 829; [2012] UKSC 29. Following that guidance, the pursuer now seeks payment of capital a sum that will give her the equivalent of half of the parties' net assets at the date of the cessation of cohabitation, or £397,279; the defender submits that she is entitled to nothing.
Background
[2] The parties began to live together in about July 1984 and continued to do so until the beginning of January 2011. They lived at a number of addresses. For some months in 1984 and 1985 they lived together at Market Street in Musselburgh, and thereafter they lived for some months in a house at 215 Ferry Road, Edinburgh. In October 1985 they moved to Habbie's Howe Hotel, Ninemileburn, where they lived until 1990. From that time until the cessation of their cohabitation they lived together at Spittal House, Ninemileburn. There are three children of their relationship, Danielle Aitken Owen, born on 14 June 1985, Lauren Mary Owen, born on 16 September 1986, and Kieran Daniel Owen, born on 17 November 1992.
[3] At a time when the parties' relationship began, the pursuer was employed as a commis chef at the Lady Nairne Hotel in Duddingston, Edinburgh; she lived with her mother nearby. She gave up that employment when she became pregnant with the parties' elder daughter, towards the end of 1984. The defender was working as a plumber, having finished his apprenticeship two or three years previously. He had worked for East Lothian District Council for a short time, but at the time when the parties' relationship began he was in business on his own account. Many of his activities were in partnership with his brother, William Owen, who was employed at a managerial level in the plant hire business and who was able to secure some degree of financing for their ventures. Initially the defender carried out contract plumbing work under the names Stevie Pipes and then Aitken Sinclair, which was a partnership with his brother. The defender and his brother carried out a number of property developments. They renovated two flats in Musselburgh, and then built two houses in Cockburnspath. The Musselburgh project, which was the first, apparently began very shortly before the beginning of the parties' relationship. In these projects the defender carried out the plumbing and some other parts of the work; his brother's role, by contrast, was in the field of administration and arranging finance. The ventures were generally profitable. It is not necessary to go into details of the profits on the individual projects, because these were used in part to pay for the living expenses of the pursuer, the defender and their family and were otherwise rolled over into the next project. Thus they are ultimately reflected in the parties' capital assets at the date of the cessation of cohabitation.
[4] When the parties moved into 215 Ferry Road, Edinburgh, the property had recently been purchased by the defender and his brother, and rooms in the property were let during the period when the parties lived there. At the same time the defender carried out substantial renovation work on the property. The property was sold at a profit, which was rolled over into the purchase of Habbie's Howe Hotel, Ninemileburn. The hotel was run as a business by the partnership of the defender and his brother, although most of the practical work was done by the pursuer; this comprised most of the cooking and cleaning work. The building was considerably renovated, in the same manner as the earlier developments. By about 1990, however, it became apparent that the hotel was not very profitable; the pursuer blamed this on stricter enforcement of the drink‑driving legislation. The defender and his brother then decided to develop the hotel into three houses, and at the same time to build a house for the parties on an area of ground attached to the hotel. That is the house known as Spittal House, which because the parties' family home and is still owned by the defender. It is a fairly substantial building. The hotel business ceased and the building was split into three houses; each was sold in due course. The defender and his brother carried out a number of other developments in Edinburgh, Roslin, West Linton and Lasswade. In about 1999 or 2000 the business relationship between the defender and his brother came to an end in somewhat acrimonious circumstances. Each of the two went his own way, William Owen emigrating to Australia, and the developments carried out by the defender thereafter were on his own account. These were at Habbie's Howe Hotel.
[5] At the same time the defender continued to carry on his plumbing business. In 1990 the partnership of Aitken Sinclair had come to an end, and the pursuer carried on business on his own account under the name Town & Country Plumbing. In about 1991 or 1992 that business developed into a drain‑clearing business known as "Dial‑a‑Rod". The defender still carries on that business. For most of the time he employed another plumber in the business, and the pursuer was responsible for taking telephone bookings and other administrative tasks. The defender became interested in other business projects. In about 2005 he set up a business called Gadget Wizard, a mail order business for the purchase of certain types of electronic device. The pursuer played a part in that business by taking and sending out orders. The defender also planned a business to organize horror tours in the Old Town of Edinburgh. When the parties separated, his main activity was the Dial‑a‑Rod business.
[6] I will begin by setting out the legal basis for the pursuer's claim, and discussing the implications of the recent decision in Gow v Grant, supra. This area of law has caused enormous difficulty in practice, and the approach to the evidence must be informed by a proper construction of the statutory provisions. Thereafter I will discuss the witnesses and the evidence that they gave; the relevance of the evidence is inevitably conditioned by the analysis of the legislation. Finally I will attempt to determine whether any award should be made in favour of the pursuer and, if so, what the amount of that award should be.
Legal basis for pursuer's claim
[7] The pursuer's claim is based on section 28 of the Family Law (Scotland) Act 2006. The right is entirely statutory; there is no corresponding right at common law. Section 28 is in the following terms:
"Financial provision where habitation 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;
...
(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 interest 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 interest 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.
... ."
"Child" is defined in subsection (9) as meaning a person under 16 years of age. In the same subsection, "contributions" are defined as including indirect and non‑financial contributions, and in particular any such contribution made by looking after a relevant child or any house in which the parties cohabited. "Economic advantage" is defined as including gains in capital, income and earning capacity, and "economic disadvantage" is to be construed accordingly.
[8] The application of this section has proved to be extremely difficult in practice. The Scottish Law Commission considered the other principal section of the 2006 Act dealing with the consequences of cohabitation, section 29, in the course of a project dealing with the law of succession (the report is the report of Succession: Scot Law Com No 215; the consequences of cohabitation are considered in Part X), and it became clear in the course of the project that sheriffs, who deal with the great majority of cohabitation claims, were extremely dissatisfied with the existing legislation. The main complaint was that it gave them no guidance as to how to approach the quantification of a claim. The solution suggested by the Law Commission was that the judge or sheriff should initially consider the nature of the cohabitation and relate proportionately to a marriage; thus a cohabitation that has lasted many years, with many of the features of marriage, might be rated at 80 or 90% of a marriage, and one that has not lasted long, or has...
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