Kernot v Jones - What are the parties intentions?PrintPdfClose »

16/11/2011

This is a case which has implications for all couples who live together but are unmarried. Patricia Jones and Leonard Kernot were such a couple, they lived together, had children together and bought a house together. When they separated Mr Kernot left and bought his own property cashing in a jointly owned policy. Miss Jones remained in the house paying the mortgage and taking care of the children.

Some 14 years later Mr Kernot wished to realise his share of the property. The former couple could not agree what his share should be and an application was made to the Court by Miss Jones under the Trusts of Land and Appointment of Trustees Act 1996.

At the first hearing in a County Court, the Judge noted that the property was a family home which they intended to share jointly up and did so until 1993. After 1993, the parties lived in separate houses and Miss Jones claimed that this meant that Mr Kernot should not receive an equal share of the property. The District Judge agreed and awarded Mr Kernot a 10% interest in the property.

Mr Kernot appealed to the High Court stating that as the property was held in joint names he should receive his fair share and the District Judge had been wrong to infer an intention between the parties after 1993 which it would have been reasonable in the new circumstances. The High Court dismissed his appeal, and Mr Kernot therefore appealed to the Court of Appeal which allowed his appeal.

The case finally went before the Supreme Court in 2011 some four years after the first application was made to the Court.

The Court decided that the presumption of joint ownership arises when a property is purchased in joint names as it indicates a joint enterprise. However in this case the Court then said that that presumption can be varied/changed if there is evidence that the common intention of the parties, to hold the property in equal shares, changed over the years. In this particular case this was shown by the fact that Mr Kernot had moved out in 1993, cashing in a joint policy to purchase a new property; and for some 14 years not making any financial contribution towards the house. The Court stated that the parties common intention could be inferred from this conduct and the dealings between the parties and that their intention had changed following their original intention to own the property jointly.

In reality what does this mean, it means for many couples who own the property jointly, the presumption remains that they own it in equal shares unless there is anything set out in writing to confirm that they hold unequal shares in the property. This is usually done by entering into a Deed of Trust or living together agreement at the time of purchase.

What it may mean is that for couples who separate and remain apart for a long period of time, who have jointly owned property that they have not dealt with is that one party may well now be entitled to less than an equal share of the property.

This case however does not affect many couples who live together but only one of the parties owns the property. In that situation the position is still that one person would have to prove that they had an interest in the property not owned by them under property law.

How can you avoid this? The simplest way is to take advice before you buy a property with someone else, or before you move somebody else into your property, and if at all possible enter into a Deed of Trust or living together agreement setting out what your intentions are in relation to the property that you are living together in.

If you have any queries about this issue then please do not hesitate to contact a member of the Family Team.

Fiona Yellowlees

Partner
T: 01626 202415
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Catherine Strigner

Partner
T: 01392 666548
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Emma Benyon-Tinker

Solicitor
T: 01803 407660
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