Kernott v Jones: Cohabitation

The Office of National Statistics has reported this week that the number of cohabiting couple families has risen from 2.1 million in 2001 to 2.9 million. This means that last year the same percentage of married couple families have children as cohabiting couple families.

It is more important than ever for cohabiting couples to consider the implications of living together and owning property together. All cohabiting couples who either own property together or plan to do so in the future should be aware of the recent Supreme Court judgment in the case of Kernott v Jones.

Mr Kernott and Ms Jones met in 1981 and had two children together. They purchased a property in joint names in 1985. The deposit on the property was funded from the proceeds of sale from Ms Jones’ previous home. The mortgage and upkeep of the house was shared equally between the parties. In 1986 they took out a loan of £2,000 to build an extension and Mr Kernott did some of the work himself.

The relationship broke down and in 1993 Mr Kernott moved out of the property. Ms Jones continued to reside in the property with the children. Mr Kernott purchased a new property for himself in 1996.

In 2006 Mr Kernott claimed a beneficial share in the property they owned together. Ms Jones submitted that she in fact owned the entire beneficial interest in the property. The county court judge noted that the property had been bought in joint names and there was therefore a presumption that they intended to jointly share the beneficial ownership. However, Ms Jones said that for over ten years there was no evidence to suggest a common interest to share the property as Mr Kernott had ceased to contribute towards the mortgage. The judge held that their common intention had changed and that once the initial presumption of joint beneficial ownership is displaced and there is no clear evidence as to the division of shares in the property, the court can infer or impute an intention to the parties as to the division of property that they would have intended. He awarded Mr Kernott 10% of the property.

Mr Kernott appealed to the High Court, however his appeal was dismissed. Mr Kernott continued to pursue matters in the Court of Appeal and his appeal was allowed.

The matter was finally heard in the Supreme Court which restored the order of the county court. The key points to note from this landmark judgment are:

• Where people purchase a family home in their joint names the presumption is that they intend to own the property jointly in equity. 
  
  This is because purchasing a property jointly indicates an “emotional and economic commitment to a joint enterprise” and there is a practical difficulty in analysing parties’ respective contributions over long periods of cohabitation.
  
• The presumption of joint ownership may be displaced by evidence that it was not, or ceased to be, the common intention of the parties to hold the property jointly.
  
• Common intention can be objectively deduced (inferred) from the conduct and dealings between the parties.
  
• Where it is clear that the parties 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 is entitled to the share which the court considers fair having regard to the whole course of dealings between the parties regarding the property.
  

It is important to note that each case will be fact specific.

If you either own property with a partner (or ex-partner) or are considering buying a property with your partner it is important that you have clearly defined your interest in the property. Mr Jones considered he owned 50% of the property whereas the court only awarded him 10% of the beneficial interest in the property. It is therefore important to seek advice from a family law solicitor.