This week has seen another important ruling in the world of family law. The Supreme Court has allowed the appeal in Jones v Kernott, which will have a significant impact upon those couples who live together and own a property together.
The case concerned a house which was jointly owned by the parties, Ms Jones and Mr Kernott. They bought the house jointly in 1985 and never expressly stated how they would own their shares. While living together, the parties jointly paid the mortgage and bills until Mr Kernott left in 1993. After this time Ms Jones took up paying the mortgage herself and Mr Kernott bought another property.
In 2006, 13 years after leaving, Mr Kernott approached Ms Jones and said that he wanted to have his interest in the house. Understandably, Ms Jones was extremely distressed by this, in light of all the payments she had made herself and the fact the home had significantly increased in value in the 13-year period, so she applied to the Court to resolve the issue. At the first hearing, the Judge stated that, even though, in law, they owned the home jointly, their original intention had changed since they bought the home in 1985 and, as Mr Kernott had not paid towards the property for a significant period of time, their initial presumption of joint equal ownership was displaced. The Court, therefore, awarded Mr Kernott only 10% of the equity.
Mr Kernott appealed against the decision and the Court of Appeal allowed it. Ms Jones was not happy to accept this and made an application to the Supreme Court, who upheld the original decision of the first Judge, resulting in Mr Kernott having a 10% interest in the property.
This case is important for cohabiting couples because they can no longer presume that, if a home is owned by them without expressly stating how they own it, there is an immediate entitlement to an equal interest in the property. If it can be proved that the original purpose of owning the home jointly has been displaced, then the parties have an opportunity to argue that they should have a different interest in the home. This will be welcomed by many family practitioners, on the basis that it can result in a much fairer and more equitable outcome when a couple separates than the law has allowed to date.
Cases such as the above occur all too frequently, and cohabiting couples would do well to remember there are no immediate laws to protect them on separation, unlike the protection they would receive if they had been married. Therefore, despite this ruling, to avoid all the legal cost and distress that such cases can cause, parties that live together and own property should record exactly how they wish to own their assets, who should pay for these, and how they want them to be dealt with on their separation. This can be easily done in a Cohabitation Deed.
For advice or more information, contact Anna Patterson.