Giambrone's Family Law Team have successfully obtained a Substantial Settlement through Mediation

Nearly everyone understands the importance of taking legal advice and enshrining the terms of a commercial transaction in a comprehensive legal agreement.  Unfortunately, when it comes to personal relationships often a verbal promise is often taken at face value.  Daniel Theron, a partner, commented “it seems that when a relationship is in the early stages and going well the parties trust one another and the party of lesser financial standing may feel awkward about asking for a degree of financial security to be incorporated in a legal document, believing that such a request may seem cynical and mercenary,” Daniel further comments “many people have regretted not taking legal advice and protecting their position when a relationship eventually does not work out. Regrettably, there can be devastating consequences.”

The position of being the less financially secure partner may make it feel uncomfortable to pursue legal advice and a robust legal agreement when an unmarried couple start out together.  However, the alternative possibility for the less secure partner of finding yourself obliged to leave a home of several years without receiving any financial benefit is far more distressing and obtaining proportionate redress for shared costs can be problematic.

Giambrone was instructed by a client, Mr A, who had been in a long term relationship, but not married, spanning approximately 35 years with Mr B.  Mr A and Mr B had known each other for approximately 50 years. Mr B had acquired his property shortly before he and Mr A entered into a relationship and Mr A moved into his home.  Mr B had purchased his property in the early 80s and there was a £20,000 difference between the purchase price and the amount borrowed by way of a mortgage.  Mr A and Mr B shared the costs equally, each paying half of the mortgage payments and half of the day-to-day expenses.

The parties entered a Deed of Trust shortly after they had entered into a relationship that set out what would happen should Mr A vacate the property and/or should the property be sold clarifying how the proceeds of sale should be divided.  The Deed of Trust stated that in the event of Mr B’s property being sold the proceeds would be divided on a 50/50 basis between Mr A and Mr B less £20,000 deposit that Mr B had initially paid on the purchase of the property.  The couple made mirror wills leaving their entire estates to each other.  Mr A was not named on the Title Deed of the property as Mr B was advised against this.  Mr A believed that he was protected by the Deed of Trust and that his relationship and his interest in the property was sound.

The couple continued in their relationship with some ups and downs and sometime in late 2018 Mr B informed Mr A that he was considering selling the property with a view to relocating; Mr B confirmed in early 2019 that he would be moving and estate agents were instructed.

It was always understood by Mr A that should the property be sold the couple would buy a property together and the agreed amount of £20,000 would be returned to Mr B, with the remainder of the proceeds to be placed in a joint bank account.

The Deed of Trust made provision for alternative methods of distribution, depending on the factual scenario which would apply. Mr A believed that he could rely on the many discussions that had taken place between him and Mr B as to how the proceeds of sale would be distributed. The Deed of Trust was silent on what should happen should the parties wish to amend the Deed of Trust. A number of the discussions were witnessed by third parties but no written amendments were made. Mr A believed that he and Mr B had entered into a binding agreement that the proceeds of a sale would be distributed 50/50 (less £20,000).

The relationship broke down acrimoniously and Mr B gave Mr A notice to leave the property. Mr A left the property less than a month after receiving notice.  It subsequently became apparent that Mr A had been mistaken to rely upon Mr B’s assurances as Mr B was not prepared to honour the verbal agreement they had reached and instead insisted that the wording of the Deed of Trust should apply. Frustratingly, Mr B suggested that Mr A had not paid one penny towards the mortgage repayments and that he had not contributed equally to the day-to-day expenses. As a result of this about-face Mr A found himself in a difficult financial position as he would not have bought another property on his own account when the couple separated nor would he have applied for a costly bridging loan had he been aware that the agreed method of interpretation of the Deed of Trust would no longer be adhered to. 

The Deed of Trust made provision for two methods of calculation for the division of the proceeds of the sale of the property. The first provided for a 50/50 distribution of the proceeds of sale less £20,000, whilst the second provided for a 50/50 distribution less half of the difference of the value at date of the Deed (£50,000) and the value at date of Mr A leaving the property. The first option did not require Mr A to contribute equally towards the mortgage payments and day-to-day expenses, whilst the second option did require equal contributions by Mr A.  The Deed also provided for two methods of payment of the proceeds of sale, the first being an immediate lump sum payment and the second being payments by instalments spread over an eight-year period.

Daniel Theron, who led the case, highlighted two potential legal arguments to counter Mr B’s contention. One being that the Mr A relied on the assurances provided by Mr B as to how the Deed would be interpreted and  Mr B cannot now retract his statements and the other being that both parties had agreed that the Deed defined any dispute over interpretation and Mr B was bound by that agreement.  A further area of contention was how the proceeds would be paid to Mr A and whether Mr B should be able to retain the proceeds of the sale and the benefit of any interest accrued whilst he made payments in instalments over a period of eight years, which was Mr B’s preferred option.

The other huge issue of contention was that Mr B refused to acknowledge Mr A’s financial contributions to the point of denying that there had been any such contributions.  Daniel Theron set about building a schedule of evidence and a strong legal argument to support our client’s contentions whereupon he faced a painstaking task of trying to procure thirty years of bank statements.  Daniel was able to access and piece together the evidence little by little and demonstrate that Mr B’s contentions were either misinterpreted or not founded. Our client was able to receive his just entitlement.

Daniel remarked “our client almost certainly felt that having a Deed of Trust and the periodic discussions with Mr B regarding the division of the proceeds of a sale of the property, coupled with the lengthy relationship with Mr B was sufficient to ensure that his position was sound.  Unfortunately, it proved to be less secure than he believed. It cannot be emphasized strongly enough that in such circumstances independent legal advice should be sought.  Trusting a person’s spoken words, however much you believe they are sincere, may result in disaster without top-level legal backup. A legal agreement between two parties should be a bespoke document drafted for the unique circumstances of each relationship and have sufficient foresight to off-set changes in the relationship.”

Giambrone’s family team has enjoyed considerable success when assisting our clients in similar contentious situations.

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