Jones v Kernott in the Supreme Court

In England (where co-ownership of land gives rise to a statutory trust), when a co-habiting couple buy a family home in joint names but do not declare the nature of the co-ownership there is a presumption of a beneficial joint tenancy (thus, equal shares following severance (Stack v Dowden)). The presumption can be departed from if there is evidence to show either that they had a different common intention at the time of acquisition or that they subsequently reached a different common intention. The common intention is to be deduced objectively from the parties’ conduct (‘the whole course of dealing’). If (a) it is clear that the parties formed a different common intention either at the time of acquisition or subsequently, and (b) it is not possible to find an express or inferred agreeement (common intention) then the parties are entitled to the ‘share which the court considers just having regard to the whole course of dealing between them in relation to the property.’

In Jones v Kernott ([2011] UKSC 53, SC)  K and J cohabited and had two children together. K abandoned J in 1993. J then met all mortgage and other payments concerning the family home and got very little financial help from K. In 2007 J sought a declaration that she was the sole beneficial owner of the family home. She accepted that in 1993 at the time of the separation, K was entitled to a one half beneficial interest in the property. She contended that the events of the next 14 years (the fact that she made all payments) showed that in the light of the whole course of conduct, the parties’ intentions had changed so that J’s share had increased at the expense of K. K succeeded at first instance and the court found that she had a 90% beneficial interest. This was reversed in the English Court of Appeal (see Kernott v Jones). J’s appeal to the Supreme Court was successful and the first instance decision was restored.

While all of their Lordships concurred in the result, there are differences between them (for example as to whether or not the distinction between inferred and imputed intentions has practical significance). It seems clear that the imputed intention has been given a place in this area of the law.

Lord Walker and Lady Hale gave a joint judgment. They relied on the finding at first instance that there was evidence of an actual change in the parties’ intentions. They summarised the law thus: when a co-habiting couple buy a family home in joint names but do not declare the nature of the co-ownership there is a presumption of a beneficial joint tenancy (thus, equal shares following severance (Stack v Dowden)). The presumption can be departed from if there is evidence to show either that they had a different common intention at the time of acquisition or that they subsequently reached a different common intention. The common intention is to be deduced objectively from the parties’ conduct (‘the whole course of dealing’). If (a) it is clear that the parties formed a different common intention either at the time of acquisition or subsequently, and (b) it is not possible to find an express or inferred agreeement (common intention) then the parties are entitled to the ‘share which the court considers just having regard to the whole course of dealing between them in relation to the property.’ (para. 51)

The court engaged in quantifying the beneficial interests is primarily seeking the parties’ actual shared intentions:

‘However, there are at least two exceptions. The first, which is not this case, is where the classic resulting trust presumption applies. Indeed, this would be rare in a domestic context, but might perhaps arise where domestic partners were also business partners: see Stack v Dowden, para 32. The second, which for reasons which will appear later is in our view also not this case but will arise much more frequently, is 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. In those two situations, the court is driven to impute an intention to the parties which they may never have had.’ ([31])

Michael Lower

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Tags: common intention constructive trust, imputed intention, Michael Lower, ownership of the family home, Whole course of dealing