Jones v Kernott [2011] UKSC 53

An unmarried couple jointly purchased a family home. After separation, Mr Kernott left and stopped contributing to the property while Ms Jones remained with the children and paid all expenses. The Supreme Court held that the parties' beneficial interests had changed over time, awarding Ms Jones 90% and Mr Kernott 10%.

Facts

Ms Jones and Mr Kernott began cohabiting in 1983 and purchased 39 Badger Hall Avenue in joint names in 1985 for £30,000. The deposit came from the sale of Ms Jones’s mobile home, and they jointly took out a mortgage and later a loan to build an extension. They had two children together. In 1993, Mr Kernott moved out. Ms Jones remained in the property with the children, paying all household expenses herself. Mr Kernott made no further contributions to the property or significant contributions to child maintenance. In 1996, Mr Kernott used proceeds from a cashed joint life insurance policy to purchase his own property. By 2008, the family home was valued at £245,000.

Issues

Primary Legal Issue

Whether the beneficial interests in a jointly owned family home could change over time through a common intention constructive trust, and if so, how such interests should be quantified when express agreement is absent.

Secondary Issues

Whether the court could impute an intention to the parties where inference was not possible, and the distinction between inferring and imputing intention in determining beneficial shares.

Judgment

The Supreme Court unanimously allowed the appeal and restored the trial judge’s order dividing the property 90% to Ms Jones and 10% to Mr Kernott.

Lord Walker and Lady Hale, delivering the leading joint judgment, clarified the principles from Stack v Dowden:

“The starting point is that equity follows the law and they are joint tenants both in law and in equity. That presumption can be displaced by showing (a) that the parties had a different common intention at the time when they acquired the home, or (b) that they later formed the common intention that their respective shares would change.”

On the question of inferring versus imputing intention, the Court stated:

“In deference to the comments of Lord Neuberger and Rimer LJ, we accept that the search is primarily to ascertain the parties’ actual shared intentions, whether expressed or to be inferred from their conduct. However… where it is clear that the beneficial interests are to be shared, but it is impossible to divine a common intention as to the proportions in which they are to be shared… the court is driven to impute an intention to the parties which they may never have had.”

The Court found that the parties’ intentions had changed when the life insurance policy was cashed in 1996, enabling Mr Kernott to buy his own home. The logical inference was that his interest in the family home should crystallise at that point.

Implications

This case significantly clarified the law on beneficial interests in jointly owned family homes. It confirmed that:

• In joint names cases, there is a presumption of beneficial joint tenancy which can be rebutted.
• The parties’ common intentions may change over time, creating an ‘ambulatory’ constructive trust.
• Where actual intention cannot be inferred, the court may impute an intention based on what is fair having regard to the whole course of dealing between the parties.
• The presumption of resulting trust based on financial contributions does not apply in the domestic consumer context.

The decision provided welcome clarification following difficulties experienced by lower courts in applying Stack v Dowden, establishing a clearer framework for determining beneficial interests in cohabitation property disputes in the absence of legislative intervention.

Verdict: Appeal allowed. The order of the trial judge was restored, declaring that the beneficial interests in the property were held 90% by Ms Jones and 10% by Mr Kernott.

Source: Jones v Kernott [2011] UKSC 53