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09 NOV 2011

PROPERTY: Jones v Kernott [2011] UKSC 53

[The judicially approved judgment and accompanying headnote for Jones v Kernott [2011] UKSC 53, [2012] 1 FLR 45 has now published in Family Law Reports]

(Supreme Court; Lord Walker, Lady Hale, Lord Collins, Lord Kerr, Lord Wilson; 9 November 2011)

This case concerns the correct approach to calculating beneficial interests in property where the legal title to the property is held in joint names by an unmarried couple but there is no express statement of how it is to be shared.

The unmarried couple purchased a property in joint names. The woman supplied a deposit; the balance was funded by an interest only mortgage. The couple had two children together. An extension to the property was paid for largely by the man. During the relationship the household bills, including the mortgage payments, were shared. After almost 10 years in the property the relationship broke down. The man moved out, after which all payments were met by the woman, who maintained the property and supported the children with very little contribution from the man. The parties did cash in a life insurance policy, dividing the proceeds, in part to enable the man to buy a property in his sole name. Subsequently, when both properties had increased in value, the man served a notice of severance in respect of the property in joint names. The woman responded by bringing a claim under the Trusts of Land and Appointment of Trustees Act 1996 in respect of both properties. At first instance the court held that the woman was entitled to 90% of the value of the first property, on the basis that this was fair and just. The Court of Appeal allowed the man's appeal.

The Supreme Court unanimously allowed the woman's appeal and restored  the order of the county court. The principle recognised in Stack v Dowden is that where people purchase a family home in their joint names the presumption is that they intend to own the property jointly in equity also. The starting point is different in cases where the property is bought in the name of one party only. The presumption of joint beneficial ownership arises because (i) purchasing property in joint names indicates an "emotional and economic commitment to a joint enterprise" and (ii) the practical difficulty of analysing respective contributions to the property over long periods of cohabitation.

The Court held that the presumption may be rebutted by evidence that it was not, or ceased to be, the common intention of the parties to hold the property jointly.  The court should try to ascertain the parties' actual intentions, expressed or inferred but if it is clear that the beneficial interests are shared but impossible to infer a common intention as to the proportions in which they are shared, the court will have to impute an intention to them which they may never have had .

The judgement applied the following principles: (i) the starting point where a family home is bought in joint names is that they own the property as joint tenants in law and equity; (ii) that presumption can be displaced by evidence that their common intention was, in fact, different, either when the property was purchased or later; (iii) common intention is to be objectively deduced (inferred) from the conduct and dealings between the parties; (iv) where it is clear that they 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 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.

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