Irish courts have, to date, tiptoed around piercing the corporate veil in separation and divorce…
New rights and obligations relating to couples that cohabit have been introduced pursuant to the Civil Partnership and Certain Rights and Obligations of Cohabitants Act 2010 (“the Act”) which came into law in January 2011. The rights and obligations for cohabitants in the Act are a radical departure from the pre-existing position whereby cohabiting couples had little or no rights or obligations as against each other. It is important for couples living together to understand their possible new rights and obligations but it is also important for such couples to be aware that it is possible to contract out of the Act as it relates to cohabiting couples.
In order to qualify as a cohabitant a couple, whether same sex or opposite sex, must be living together in a committed relationship for five years, or two years if they have children together. It is important to note that the Act does not confer any automatic rights on such a couple but rather provides a redress scheme, allowing a financially dependant party to the relationship to apply to Court for relief in the event that the relationship breaks down or the other party dies. Previously such a party had no recourse if not married and could therefore be left in a very vulnerable position financially even if the couple had been in a committed relationship for many years.
The Act provides a welcome safety net for cohabitants left in a financially vulnerable position following the end of the relationship. However, on the other hand for a non dependent cohabitant the Act can mean that such a partner (or former partner) in the relationship may, unknown to him or her, have significant obligations to his or her financially dependant cohabitant if the relationship were to break down or if he or she (the non dependant cohabitant) were to die. It is important therefore that couples living together are aware of the new provisions and of their ability to contract out of the Act by means of a Cohabitation Agreement.
The Act makes provision for the recognition of Cohabitation Agreements. Such agreements can deal with issues such as what happens in relation to property, maintenance and other financial aspects of a relationship in the event the relationship breaks down or one party dies. Previously parties could only enter into an agreement in relation to property – now the agreement can deal with all of their financial affairs. Such agreement are only enforceable if they are in writing and if both parties have received independent legal advice and the terms must be negotiated on the basis of full financial disclosure by both parties. The Act does allow a Court the power to undo such an agreement if it is in the interests of justice to do so, although it is arguable that it is possible to contract out of this provision also!
Awareness of the new provisions contained in the Act for cohabiting couples is therefore vital. However, it is equally important that couples are aware of their right to contract out of the Act and to agree between them how to regulate their obligations and rights to one another by means of a Cohabitation Agreement in the event that the relationship ends or one party dies. For many couples it would be far more preferable to be in control of their legal obligations and rights to one another in such circumstances rather than leaving such rights and obligations to be imposed at the discretion of a Judge.
Justin SpainThis article appeared in – The Law Society Gazette | December 2015