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Mock Shock: The long-term girlfriend of a millionaire is allowed to keep the property she was gifted during their relationship!

By Kathryn Mason -

The press have been very quick to cover the case of John Hoggins and Greta Cerniauskaite. The headlines have included:

 

Millionaire plumbing boss must give £650,000 home to Lithuanian housekeeper who became lover Millionaire plumber is ordered to pay his Lithuanian former cleaner girlfriend huge slice of his fortune – even though they were NEVER married Businessman forced to give £650k house to Lithuanian girlfriend he met while she was working as cleaner

Needless to say, the public’s comments have been highly critical of both Greta and the legal system. Yet again, the legal system favours women and men are shaking with fear that judges may start making decisions that would see them less well off if and when they split with their girlfriend.

This blog sets out to correct this misunderstanding of the case and explain exactly why it was ordered that Greta should keep her property.

The actual legal issue

This was an ‘all or nothing’ case: the property either belonged to Greta or it did not. The judge did not look to family law principles. Instead, the case was heard in ‘The Property Chamber, First Tier Tribunal, Land Registration Division’. The legal issue related only to the beneficial ownership of a property and the court had to ascertain the intention of the parties at the time the agreement was reached.

Relationship between the parties

The nature of the relationship is important background information as it goes to intent.

John and Greta met in 2004. John’s first marriage was drawing to a close and he shared two children with his first wife. At the time of meeting, John was the sole shareowner in a number of successful plumbing and heating businesses. Greta was working as a part time cleaner at the National Portrait Gallery. She has since become a business woman and model.

The relationship between John and Greta was long term, with the couple separating in February 2013. Throughout their relationship, the couple enjoyed a high standard of living. On one occasion, John gifted Greta a limited edition Bentley worth £160,000.

Between 2005 and 2013, Greta spent over £100,000 on clothing and jewellery, all paid for by John. They travelled to exclusive holiday destinations, both together and apart. Although John claimed that the relationship had started to fall apart as early as 2007, there was evidence that the couple were trying for a child together until around 2011.

Upon the breakdown of their relationship, on 19 November 2014 John applied to the Land Registry to put a ‘restriction’ against the property at the heart of this dispute.

The property in dispute

In 2009, the property was purchased for £450,000. The deposit of £100,000 was paid by John. A mortgage was secured on the property for the remainder of the balance. The property was registered in Greta’s name and only Greta’s name.

The stamp duty and repayments of the mortgage until August 2013 were repaid by Greta from her ‘salary’ of £93,000 received from John’s company. Greta had been added to the payroll of John’s company in 2008 but it is accepted that in reality she did not have a substantive position within the company. From August 2013, Greta continued to pay the outgoings and mortgage for the property from her own funds.

The evidence

  • The property was registered, and remained registered, in Greta’s sole name. Supportive of Greta’s case.
  • A letter from Mr Browne, a partner at Gibsy Harrison, who were instructed to act in the purchase of the property. On 10 December 2008, Mr Browne wrote to Alliance and Leicester stating that: “The money paid by Mr Hoggins as detailed in this letter is effectively a gift from him to the borrower. There is to be no arrangement between the borrower and Mr Hoggins for any part of this money to be repaid to him and furthermore Mr Hoggins will have no legal or beneficial interest in the property. As advised, it is considered an outright gift from Mr Hoggins to the borrower.” Supportive of Greta’s case.
  • The couple did not live in the property together during the relationship. The judge felt that this strengthened Greta’s case because it shows that the property was intended for Greta as a form of security.

John’s position and evidence as a witness:

  • The property had been put into Greta’s name as he was not able to take on a third mortgage.
  • In his written evidence, he stated that ‘it was understood and agreed’ that the property would be purchased in Greta’s name but paid for by him and held on trust for him.
  • In evidence, he said that Mr Browne’s letter should be discounted because at the time of writing, Mr Browne held a grudge against him from some years before 2008 when John refused to sell some land for Mr Browne. Mr Browne described this claim as ‘bizarre’.
  • Greta had been constantly nagging him to buy a property for her and ‘the contents of most of the shops in Bond Street’. He gave the impression she had only been with him for his money.

Greta’s position and evidence as a witness:

  • The intention had always been that the property was a gift hence it had been registered in her name.
  • In evidence, Greta explained that she had suffered at the hands of two abusive husbands and had always been concerned about her long term security. John reassured said that he wanted her to have a property in her own name, so that she would feel secure.
  • John had always been incredibly generous throughout their relationship. The £100,000 deposit paid for the property, this was not a great deal of money to John at the time as the business was doing incredibly well.

The judgment

In light of the evidence set out, it is unsurprising that the judge held that Greta should retain her property. The judge found the evidence to be so convincing that she had no hesitation in finding that the monies paid by John towards the purchase of the Property were a gift by him to Greta.

Commentary

The frank reality of this case is that the law did not ‘force’ John to hand over to Greta a property because she had been his girlfriend and the relationship failed. The law acknowledged the fact that the property had been Greta’s all along and dismissed John’s case that the property had been held on trust for him. The family court was not at all involved in the decision. The break down of the relationship is merely an interesting fact in the case and led to one ex trying to get a gift back from his former partner.

If you would like to know more about the issues covered in this article, Vardags offers a free consultation to qualifying individuals.

For high net worth and ultra high net worth individuals or their companies, our confidential enquiry line is staffed 24 hours. Call 020 7404 9390 today.

Kathryn Mason

Kathryn read History at the University of Cambridge before converting to law through the senior status law degree at Queen Mary, University of London. She wo...