The Supreme Court has at last handed down its Judgment on Jones v Kernott and the law on Cohabitation rights has gained a whole new perspective!
By way of background, Mr Kernott and Ms Jones bought a property in 1985 which was registered in their joint names. During their relationship, Mr Kernott paid £100 per week towards the household expenses and Ms Jones paid the mortgage and other household bills out of their joint resources. The couple separated in October 1993 and Mr Kernott moved out. Ms Jones remained in the property with the children and assumed sole responsibility for all household expenses and outgoings. Mr Kernott made no further financial contribution towards to maintenance of the property and this arrangement continued for 14 1/2 years until the matter was brought before the County Court.
The triggering factor in these proceedings was when the parties agreed to cash in a joint life insurance policy and divide the proceeds between them, enabling Mr Kernott to put down a deposit on a home of his own in May 1996.
At the County Court, it was held that the only reason that Mr. Kernott could afford his own property was because he was not making any financial contribution towards the former family home or towards supporting his children. It was noted that whilst at the outset of their relationship, their intentions had been to provide themselves and their children with a home, over time Mr. Kernott had demonstrated through a lack of contribution towards the upkeep and outgoings of the property, that he had no intention of preserving his beneficial interest in the property and indeed had acquired an alternative property for himself! This rationale provided the basis for their 10%:90% equity award in favour of Ms Jones.
Mr Kernott appealed to the High Court, arguing that the judge was wrong to infer or impute an intention that the parties' beneficial interests should change after their separation. The Court of Appeal, by a majority, allowed Mr Kernott's appeal and declared that the parties owned the property as tenants in common in equal shares.
The Supreme Court upheld the original ruling of the County Court. They held that the starting presumption in such circumstances should be that a property held on a joint tenancy would be treated the same in equity as in law i.e. held on equal shares. Such a presumption can only be rebutted if it is proven that the parties had a common intention at the date that they acquired the property or if they later formed the common intention that their respective shares should change. This later common intention formed during the relationship is to be imputed objectively from the parties' conduct. As to the size of the parties' new respective shares, the Court has the discretion to award shares which it considers fair in light of the whole course of dealing between them relating to the property. Greater financial contributions made by one party only will be one factor taken into account by the Court when assessing share sizes.
Knowing now that the Court has the discretion to impute that the common intention between the parties has changed makes it all the more important to consider preparing a Declaration of Trust at the time of acquiring the property. This will enable each party's share, taking into account any additional financial contributions i.e. by way of deposit, to be properly quantified. A Declaration of Trust can also be drawn up over the course of a relationship to take into account one party's greater contribution after separation.
If you are a joint owner of a property which was acquired whilst you were in a relationship, but which has since broken down, your beneficial interest in the property may now be higher than 50%. If like Ms Jones, you have become largely responsible for the expenses and outgoings of the property since your separation, your higher financial contribution may entitle you to a greater share of the property.
Here at stevensdrake, we can provide you with the right legal advice to help you understand what you may be entitled to should you wish to secure your interest in the property. To arrange a first meeting please contact Hana Khodabocus, Assistant Solicitor, Family Department on 01293 596900.
Published - December 2011
This article is provided for general information only. Please do not make any decision on the basis of this article alone without taking specific advice from us. stevensdrake will only be responsible for the advice we give which is specific to you.
