Courting blues

Not getting married to your Significant Other has become commonplace in today’s world – and as a result, so has buying a house with that person.

But what happens when things go wrong and one person moves out of that shared property? A cautionary lesson can be learned from today’s eagerly awaited Supreme Court judgment in the case of Jones v Kernott
(see story).

Patricia Jones and Leonard Kernott bought a house together in 1985 and had two children but never married. When they split up in 1993 Kernott moved out and a year or so later used the equity from cashing in a joint life insurance policy to buy his own place.

The value of the original property rose over the years, and in 2006 Kernott began the process of trying to claim his interest in the house. Jones responded by bringing county court proceedings in an attempt to have herself registered as the sole owner.

In the county court Jones argued that although at the time of the split she and Kernott were indeed joint tenants of the house, his subsequent purchase of his own place “along with other events” was evidence that their intentions had changed. In the absence of any concrete proof of what the couple’s original intentions had been, the county court judge said it was up to him to consider what was “fair and just”. He said the property’s value should be divided with 90 per cent for Jones and 10 per cent for Kernott.

Kernott appealed, losing in the High Court but winning in the Court of Appeal, where Lord Justices Wall and Rimer said there was nothing to indicate a change in intention. The Supreme Court heard the case in May this year.

In their unanimous decision Lords Walker, Collins, Kerr and Wilson and Lady Hale said the county court decision had been right. In typical Supreme Court fashion they all found slightly differing reasons for coming to this conclusion, but the key point is that the court is able to impute an intention where that is unclear.

The decision extends the principles set down in the 2007 House of Lords decision in a similar case, Stack v Dowden, on which Lord Walker and Lady Hale also ruled. Before that case most cohabitation disputes had been decided on the title documents. However, as Stewarts Law senior associate Matthew Humphries says, practitioners have had difficulty implementing Stack v Dowden– not helped by the lack of progress made by Parliament in this area.

Indeed Lord Wilson specifically refers to this in his judgment, saying: “In the light of the continued failure of Parliament to confer upon the courts limited redistributive powers in relation to the property of each party upon the breakdown of a non-marital relationship, I warmly applaud the development of the law of equity […] that the common intention which impresses a constructive trust upon the legal ownership of the family home can be imputed to the parties to the relationship.”

Mills & Reeve family barrister Joanna Grandfield suggests that legislation needs to be introduced quickly to address the “yawning gap in protection and provision” for cohabitees.

Meanwhile, family and property lawyers are likely to be advising unmarried couples to make it clear, when buying a house, what will happen in the event of a split. Although Jones v Kernott provides some legal certainty, entering into a proper contract with your partner could prevent having to pursue a lengthy dispute through the courts.