The financial claim for a cohabiting couple whose relationship has broken down can be very difficult to determine. If the parties jointly own a property but cannot agree on fair division of the beneficial ownership then a court will have to decide by what proportion the asset should be divided.
In November 2011 the case of Jones v Kernott UKSC 53 was decided in the Supreme Court. In this article Healys Brighton family law solicitors examine the case and its repercussions for cohabitees.
Kernott v Jones – financial claim for an unmarried couple
Ms Jones, a hairdresser, and Mr Kernott, an ice cream salesman, met in 1981. They had two children together and, in 1985, bought a house in their joint names. Ms Jones had previously owned a home and proceeds from the sale of this were used as a deposit payment on the new home.
During their time in the family home, the couple shared mortgage and upkeep costs. When a loan was required to complete building work on the property, the couple took it out in their joint names.
In 1993, Mr Kernott moved out of the family home as a result of relationship breakdown. Ms Jones remained in the property with the couple’s children. Evidence presented at court showed that the couple had put the home up for sale, but it was taken off the market in 1995 when an insurance policy was cashed in so that Mr Kernott could purchase a home for himself.
By 2006, the value of the former family home had greatly increased and Mr Kernott decided he should receive a beneficial share of its worth. However, Ms Jones applied to the county court, under section 14 of the Trusts of Land and Appointment of Trustees Act 1996, for a declaration of her sole ownership of the beneficial interest.
In court, in 2008, the judge held that despite the house having been bought in joint names with the presumption that the property would be shared, the common intention had changed subsequently. Mr Kernott was awarded an entitlement of 10 percent of the house which was valued at £240,000 at the time.
Following an unsuccessful appeal in the High Court, Mr Kernott took his claim to the Court of Appeal. In November 2011, the Supreme Court upheld the original ruling.
Guidance for cohabiting couples following Supreme Court judgment
In bringing his appeal, Mr Kernott argued that the Court had been wrong to infer or impute the couple’s change of common intention for the property. He also maintained that it was wrong that the judge was able to decide the so-called “fair” division.
In upholding the original order, the Supreme Justices noted that the principal for unmarried, cohabiting couples, as recognised in Stack v Dowden, is that an automatic presumption of shared ownership and equity will prevail when the property is bought in joint names.
Importantly, the principal behind this presumption arises because (i) the joint purchase of a property indicates an “emotional and economic commitment to joint enterprise” and (ii) the analysis of each cohabitee’s practical contribution to the upkeep of the property over a long period of time is complex and obscure.
However, if this presumption is rebutted by evidence that the common intention of the parties had ceased to be joint holding of the property, then the court must attempt to discern what the parties had intended, whether expressly or by inference. In certain cases the court will be required to impute an intention which may possibly be an anathema to one or both of the parties.
In the case of Jones v Kernott, the following principles were applied:
(i) when a family home is bought in joint names the starting point will be that the couple owns the property as joint tenants in law and equity;
(ii) presumption can be displaced by evidence that the couple’s common intention was different, either at the time the property was purchased or later;
(iii) common intention will be objectively deduced (inferred) from the conduct and dealings between the parties;
(iv) where it is clear that the couple had a different intention at the outset or had changed their original intention, but it is not possible to infer an actual intention as to their respective shares, then the court is entitled to impute an intention that each party is entitled to the share which the court considers fair having regard to the whole course of dealing between them in relation to the property; and
(v) each case will turn on its own facts; financial contributions are relevant but there are many other factors which may enable the court to decide what shares were either intended or fair.
Healys Brighton family law solicitors for cohabitee legal advice
If you need the help of a family lawyer in Brighton to advise you after relationship breakdown, Healys has years of experience in this field.
We believe in listening sensitively to your explanation of your circumstances, so that we can completely understand the issues and offer you advice based on protecting your best interests.
To speak to one of Healys Brighton family law solicitors today please call 01273 685 888 or email an enquiry to email@example.com