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Commencing cohabitation proceedings: which procedure, which court?

John Wilson provides clear guidance for the family lawyer on the unfamiliar procedures and rules surrounding cohabitation claims.

John Wilson, 1 Hare Court

In ancillary relief matters, if it proves impossible to achieve an amicable settlement, or even if one simply wants to put in place a timetable for the resolution of matters, the starting point is straightforward. The family law practitioner will issue an application in Form A for some or all forms of ancillary relief. The court will provide the timetable from there on and we all know what we must do. What should one do, however, when the client has not been married to his/her former partner and the claim relates to an alleged beneficial interest in property ("a cohabitation claim")?

As a responsible and experienced practitioner, you have complied with paragraph 4.1 to 4.10 of the Practice Directions – Protocols (see pages C1-001 onwards in Volume 1 of the White Book) and written the requisite Pre-Action Protocol letter. The proposed defendant has responded, through his/her solicitors and mediation has either been attempted and failed, or has been rejected as an option by the proposed defendant [1]. The next step must be the issue of proceedings. Should proceedings be issued in the County Court or the High Court? If issued in the High Court should they be issued in the Family Division or the Chancery Division? Wherever proceedings are issued, should one use Part 7 or Part 8 of the Civil Procedure Rules ("CPR")? This article addresses these questions.

County court or High Court?
A County Court has jurisdiction under sections 13 and 14 of the Trusts of Land and Appointment of Trustees Act 1996 ("TOLATA") whatever the amount involved in the proceedings and whatever the value of any fund or asset connected with the proceedings [2].

The practitioner must therefore decide whether to issue in the High Court or the county court [3]. If the application is made in the county court it must be issued in the court for the district in which the defendant resides or carries on business or in the district in which the property is situated. If the application is made in the High Court it may be made to the Central Office in London or in any District Registry.

The procedure is the same in the county court as it is in the High Court (see below) as the CPR introduced a unified procedure for claims.

If proceedings are taken in the county court it is likely that the distinction between Family and Chancery Divisions will be less pronounced – if it is there at all – as the same panel of judges will be available.

The practitioner will find that the majority of cases can be properly accommodated in the county court, or the Principal Registry of the Family Division ("PRFD"). If the issues are relatively straightforward and the amounts involved are not great (e.g. where only one house is being argued about and there are no "high net asset" Children Act points), then the county court is probably the appropriate forum. Another factor to bear in mind is that county court proceedings tend to be somewhat cheaper and the judge is more likely to have a broad experience of family matters than, for example, in the Chancery Division of the High Court. In London, consideration should be given to agreeing with the defendant's advisers that the matter be issued in the Central London County Court ("CLCC") – see below – so as to take advantage of the running list and of specialist Chancery judges that are supposed to be available in that court.

It should be noted that, in the PRFD, the district judges have significantly more exposure to ancillary relief claims, where the principles that are engaged are very different from those under TOLATA. Further that the Court Office staff, for similar reasons, have less experience of, or familiarity with, claims issued under Part 7 or Part 8 of the Civil Procedure Rules ("CPR").

Central London County Court
If proceedings are to be issued in a London county court, practitioners should be aware of the fact that the CLCC has a dedicated Chancery List where cases are heard by specialist Chancery Circuit judges or recorders and a continuous Chancery List is maintained. It is not uncommon for the parties to agree that proceedings should be issued in the CLCC. Similarly, some London county courts will transfer cases to the CLCC so that the parties can take advantage of the pool of specialist experience there [4]. It is therefore sensible to check whether the Court you are issuing in has a local practice in relation to the listing and trying of TOLATA claims (and as to whether it has a scheme for mediation – see below).

A Pilot Scheme for Mediation
A Pilot Scheme for Mediation was introduced at CLCC which was to operate initially from April 2004 to March 2005 pursuant to the terms of a Practice Direction supplemental to CPR Part 26. Under the terms of this Practice Direction, the court can:

The court may also, when it serves the Allocation Questionnaire, serve a notice of referral to mediation on each party:

(a) state whether they agree or object to mediation

(b) specify any dates within 2/3 months of the date of filing the response on which they would not be able to attend a mediation appointment and

(c) if they object to mediation, set out their reasons for doing so.

A mediation will be arranged and the parties will be equally responsible, in the first instance, for the mediator's fees.

The practitioner should also be aware of the fact that, in October 2005, there was an amendment to the Practice Direction PD29 for Multi-Track cases (which, almost without exception, cohabitation claims are). A new sub-paragraph 9 has been added to para. 4.10 to this effect:

"(9) in such cases as the court thinks appropriate, the court may give directions requiring the parties to consider ADR. Such directions may be, for example, in the following terms:

`The parties shall by [date] consider whether the case is capable of resolution by ADR. If any party considers that the case is unsuitable for resolution by ADR, that party shall be prepared to justify that decision at the conclusion of the trial, should the trial judge consider that such means of resolution were appropriate, when he is considering the appropriate costs order to make.
The party considering the case unsuitable for ADR shall, not less than 28 days before the commencement of the trial, file with the court a witness statement without prejudice save as to costs, giving reasons upon which they rely for saying the case was unsuitable."

Bear in mind, therefore, the availability of mediation (and the dangers of unreasonable refusal to mediate) and check on a particular court's facilities before issuing. TOLATA claims can be notoriously unpredictable. There is therefore a clear role for mediation in such cases.

Issuing in the High Court?
It is likely to be more appropriate to issue in the High Court if:

Schmidt v Wong
In that case the Claimant in county court personal injury proceedings sought to freeze the defendant's assets, a remedy only available in the High Court. The claimant's solicitors should have made the application for a freezing order in the High Court under paragraph 3 of the Jurisdiction Order [6]. There was no need to initiate originating proceedings in the High Court for that purpose: see CPR Part 23. If therefore, you are considering bringing proceedings in the county court where a "High Court only remedy" is sought (usually as a matter of urgency) it is probably sensible to be aware of Schmidt v Wong. I have heard again, from practitioners, of cases where district judges at the PRFD have made freezing injunctions without jurisdiction, as a result of which the ability to recover costs expended, once the jurisdiction issue is taken, is compromised.

Family Division or Chancery Division?
Practitioners need to be aware of Part 64 of the CPR which deals with cases involving estates, trusts and charities. CPR r.64(1)(3) (which came into force in December 2002) states that "all proceedings in the High Court to which this Part applies must be brought in the Chancery Division". CPR r.64(2) sets out details of the cases covered by Part 64. The Practice Direction at 64PD.1 states:

"The following are examples of the types of claims which may be made under rule 64.2(a):

(1) A claim for the determination of any of the following questions:

(b) any question as to who is included in the class of persons having:

(iii) a beneficial interest in any property subject to a trust

(2) A claim for the following remedies:

(a) an order requiring a trustee:

(i) to provide and, if necessary, verify accounts
(ii) to pay into court money which he holds in that capacity; or
(iii) to do or not to do any particular act
(b) an order approving a sale, purchase, compromise or other transaction by a trustee; or
(c) an order directing any act to be done which the Court could order to be done if the estate or trust in question were being administered or executed under the direction of the Court

With that caveat in mind is it is now appropriate to turn to a consideration of the appropriate forum in High Court TOLATA disputes.

High Court – Family Division or Chancery Division?
Matrimonial practitioners will probably feel more at home in the Family Division and so it is probably fair to assume that the presumption would be for that division to be chosen over the Chancery Division (Chancery practitioners often feel as daunted by the Family Division as family practitioners feel by the Chancery Division).

The following factors would suggest that the Family Division is more appropriate:

"given the mounting pressure on the courts, brought about by the marked increase in cases relating to couples living together outside marriage, where financial rights have to be worked out according to the parties' strict entitlements in equity with none of the flexibility available in matrimonial law, it is important to adopt the following procedures:

a. Whatever the court in which the proceedings are initiated, it must be of prime concern that all possible issues are raised at the earliest stage, so that an informed judgment can be made as to forum and procedure providing the quickest and most effective outcome.

b. If it is necessary to bring cases of disputed ownership of household chattels to adjudication, the proper course is to claim for a declaration or inquiry as to the beneficial interest, supported by appropriate affidavit evidence on lines similar to the procedure for resolving disputes under S.17 of the Married Women's Property Act 1882.

c. Discovery orders should be made early and enforced strictly.

d. With regard to the formulation of a claim to beneficial interests in substantial assets, the emphasis accorded by the law to express discussions between the parties requires that those discussions should be pleaded in the greatest detail, and in the Family Division, where there is no procedure for pleading and particulars, the degree of particularity with which the relevant discussions are asserted in the claimant's affidavit will be of prime importance for both sides."

Proceedings may be better commenced in the Chancery Division when:

What if there are Children Involved?
The involvement of children may be:

In all such cases the strong probability is that the proceedings should be issued in the Family Division if the case warrants commencing in the High Court. However, given the wording of CPR 64 it may be sensible to seek concurrence from the other side (bearing in mind the wise words of Waite J, referred to above, about the need for all live disputes to be heard together in the same forum).

It is a trite point but, when considering a potential Schedule 1 Children Act application, one cannot begin to consider the settlement of property so as to provide accommodation for a minor child until one has determined who owns what [7].

If there are disputes between a man and woman (or indeed a same-sex couple) with children as to the beneficial interests in property and connected issues as to what is needed by the person with residence of the children to house the children, one must establish the beneficial interests of each in the disputed property before one can then decide how much should be settled for the benefit of the minor during the minor's minority (see generally Chamberlain v Chamberlain; Lilford v Lord Glynn; Re P (Child: Financial Provision) [2003] 2 FLR 865). In particular, see W v W (Joinder of Trusts of Land Act and Children Act Applications) [2004] 2 FLR 321.

Similarly, it is clear from a consideration of S.15(3) of TOLATA that the welfare of the child requires consideration. Clearly this is something that the judges of the Chancery Division are more than capable of dealing with but it is probable that judges of the Family Division have more familiarity with issues as to welfare and as to the jurisprudence that has built up around Schedule 1.

Transfer down to the County Court from the High Court
If a case has been issued in the High Court and the Court feels that the case should more properly have been commenced and/or should be continued in the county court, it has power to order transfer. Practitioners are referred to Chapter 13 of the Chancery Guide in Volume 2 of the White Book at paragraph 13.2 which states that any case which does not require to be heard by a High Court judge, and falls within the jurisdiction of the county courts, may be transferred down to a county court and:

"Where a case which has been so transferred, the papers must be marked "Chancery Business" so as to ensure, so far as possible, suitable listing."

Whether to transfer down will depend upon the complexity of the facts, legal remedies or procedures involved. It should be noted that, in London, cases of a specifically "Chancery" nature which are transferred down to the county court will ordinarily be sent to the CLCC (Chancery List). If the parties would prefer the case to be transferred to a local county court for convenience by agreement then that is also possible.

Part 7 or Part 8?
Prior to the introduction of the CPR proceedings would either be commenced by writ (more normal in the Queen's Bench Division) or by originating summons (a Chancery stalwart). In addition, there were differences between the institution of proceedings in the county court and in the High Court. The Woolf reforms introduced a uniform system and, in addition, strove to simplify the language of the courts and lawyers. All actions are now started with a claim form. However, claims can be started under the Part 7 procedure or the Part 8 procedure. The Part 7 procedure is akin to the old writ action whereas the Part 8 resembles the originating summons procedure.

Traditionally, the writ option would be backed with a detailed statement of claim in which the case was carefully pleaded. The originating summons procedure would be, usually, supported by an affidavit. Equally, with the writ procedure it was likely, if not probable, that there would be disputes of fact. Pleading the case carefully was therefore paramount. One would use the originating summons procedure where, for example, there was a dispute as to the proper interpretation of a deed or other legal document. In other words the issues were not primarily of fact but of the legal interpretation of agreed facts.

It will be readily apparent that, in the nature of cohabitation disputes, which tend to be riddled with factual dispute, the more appropriate instrument would be the Part 7/writ action rather than the Part 8/originating summons action.

However, it would seem that the proper way of commencing proceedings in TOLATA claims is under the Part 8 procedure (see De Costa and Garrood "Procedural Aspects of Cohabitation Claims" [2003] Fam Law 270). The argument runs as follows:

The practitioner is also referred, again, to CPR Part 64.3 which states that: "A claim to which this section applies must be made by issuing a Part 8 Claim Form". I understand that this part of the CPR has been used in argument for the proposition that a Part 8 Claim Form is mandatory in cohabitation/TOLATA disputes.

Whilst this gives comfort to family practitioners as it means that one can avoid the need to plead the case in the civil procedure way and can simply use the Part 8 procedure and support this with a statement, signed with a statement of truth, setting out the facts, this is potentially a dangerous option to follow [8].

The reality is that in cohabitation claims:

The better course, it is submitted, (unless there are no significant disputes of fact) is that either:

Even if the claim is commenced under Part 8, there should be, within the affidavit, something akin to a pleading, so that the client and his lawyers know precisely how they are intending to put the case [9]. A useful compromise may be to exhibit to the statement of fact a proposed draft particulars of claim with the invitation to the court to treat the matter as issued under Part 7. The advantage of drafting the statement and the "pleading" at the same time is the chance of inconsistencies between the two documents emerging is diminished.

If proceedings are commenced under Part 8 it is probably sensible for matters to be continued under Part 7 with proper pleading. Practitioners should be aware of r.8.8 of the CPR (Procedure where defendant objects to use of the Part 8 procedure) which states that:

"(1) where the defendant contends that the Part 8 procedure should not be used because:

(a) there is a substantial dispute of fact; and

(b) the use of the Part 8 procedure is not required or permitted by a rule or practice direction,

he must state his reasons when he files his acknowledgement of service."

(Rule 8.1(3) allows the court to make an order that the claim continues as if the claimant had not used the Part 8 procedure.) The court, too, can act to have the matter transferred to the Part 7 procedure. It is submitted that if there are significant issues of fact (as will almost always be the case) the Part 7 procedure is more appropriate. Note that the court has the power to order that the Part 8 claim should stand as particulars of claim and to direct the filing of a defence.

As there are always likely to be significant issues of fact in contested cohabitation claims it is submitted that it is appropriate and sensible either to agree that Part 7 be used from the outset or to agree to the matter proceeding under Part 7.

Similarly, it is sensible for the claim to be formulated, as between solicitor and client, under the stricter Part 7 analysis, before questions of issue arise as, in this way, weak claims can be filtered out and significant savings in costs can be achieved.

When drafting the proceedings, whether it be by way of a witness statement or particulars of claim it is imperative that the constituent elements of constructive trust and/or proprietary estoppel are fully and properly pleaded.

Procedure on Issue of Proceedings
The procedure is the same in the High Court and county court and the CPR apply. The application should be made by claim form in Form N208 under Part 8 in the first instance. The claim form must state:

The claim form must also contain a statement of truth (see CPR Part 22). A claimant is required to file evidence in support of the claim at the time of issue.

Although the evidence relied upon can be included on the face of the claim form, save in the most straightforward of cases, it will generally be better to include this in a separate witness statement.

The defendant is also required to file any evidence in response at the same time as returning the acknowledgement of service form. The claim form and evidence in support, together with as many copies as there are defendants, should be filed at court with the fee payable.

On receipt the court will issue the claim and return copies for service together with a Response Pack in Form N208C.

Each defendant is required within 14 days of service of the claim form to return the acknowledgement form from the response pack indicating whether the claim is contested together with any written evidence relied upon. (NB it will not be uncommon for the defendant to want to make a counterclaim setting out his/her case as to beneficial entitlement etc – this is known as a Part 20 claim (see Part 20 of the CPR for details) and, in Part 8 claims, permission to issue a Part 20 claim is required from the Court – see CPR r.8.7.)

After the court has received the acknowledgment form (or after 16 days whichever is the earlier) the court will put the papers before a district judge (or master in the High Court) and, in the case of defended actions, allocation questionnaires will be sent out to the parties.

The district judge/master will then give directions which will usually include listing a hearing date for a Case Management Conference ("CMC") – which is in essence a directions hearing – see CPR Part 26 generally.

Part of Judicial Case Management is the allocation of a case to a particular track. This is usually done after the parties have completed and filed allocation questionnaires. There are three tracks:

(1) the small claims track
(2) the fast track and
(3) the multi track.

Part 8 claims are initially allocated to the multi-track (CPR r.8.9(c)) – in reality most Part 7 cohabitation claims would also warrant the multi-track.

Questions of Allocation Questionnaires, Case Management Conferences and Pre-action checklists go beyond the scope of this article and will be dealt with in a further article.

Notes

[1] A potentially dangerous course: see Halsey v The Milton Keynes General NHS Trust [2004] EWCA Civ 576 and Burchell v Bullard [2005] EWCA Civ 358
[2] See the High Court and County Court Jurisdiction Order 1991 (S I 1991 No. 724) at paragraph 2(1)(p)
[3] When the Allocation Questionnaire is filed you will have to give reasons for your choice of court
[4] From personal experience I know that, as of April 2005 at least, the Wandsworth County Court transferred any case with a time estimate of 3 days or more to the CLCC
[5] See Schmidt v Wong [2005] EWCA Civ 1506; the Times, December 13th 2005 for an example of a case where the Claimant issued in the County Court but required "High Court only" remedies – i.e. a freezing injunction. The error in issuing in the wrong court proved costly for the Claimant. Apparently this is the first case that has considered this issue of jurisdiction
[6] I.e. the High Court and County Courts Jurisdiction Order 1991 (SI 1991/724) as subsequently amended
[7] See generally TL v ML (2005) EWHC 2860 on the appropriate procedure where third party interests require resolution
[8] In passing, a potential tactical advantage of the Part 8 procedure is that it requires the Defendant to put in a witness statement in response. An ill-thought out witness statement in this area of the law can be a hostage to fortune. There may be some merit in seeking to extract from the other side, perhaps before a full legal analysis has been carried out, a summary of the facts relied upon by the Defendant
[9] See TL v ML referred to above