A Cautionary Tale for Cohabitants - Jones v Kernott

16-Jan-2012 In 1985, Leonard Kernott and Patricia Jones purchased a property together in joint names with a joint mortgage. They lived at the property together for 8 years until 1993 when Mr Kernott moved out. Ms Jones remained living in the property with their two children and was solely responsible for paying the mortgage and expense without any contribution from Mr Kernott.

In 2006 Mr Kernott issued proceedings to realise his share of the property. Ms Jones argued that her interest, irrespective of the fact that the property was jointly owned, had increased since separation in 1993. She argued this on the basis that she had been solely responsible for payment of the mortgage and expenses etc.

In 2008 a County Court Judge agreed with her and awarded her a 90% interest in the property. The matter was heard again in the High Court following an appeal by Mr Kernott in which in July 2009 the court upheld the earlier decision. Mr Kernott further appealed to the Court of Appeal.

In May 2010 the Court of Appeal overturned the decisions of the lower courts and held that Mr Kernott had a 50% interest in the property, notwithstanding the time that had elapsed since the parties separated in 1993. Ms Jones thereafter referred the case to the Supreme Court which was heard in May 2011.

After being separated for 18 years and after months of deliberation, the Supreme Court ruled that 10% is a fair share for Mr Kernott.

The reasons adopted by the court for reaching its decision outlined the complexity of the law in this difficult area.

The bottom line for those considering cohabitation is not to assume that the legal paperwork that shows co-ownership of the property is the end of the story. Careful analysis needs to be given to the relationship between the parties which means that the court has taken the view that it is fair to adjust the 50/50 shares from when the property was first bought many years ago. The man has only 10% because of what has happened in the years since the couple separated.

The clear message for any cohabiting couple contemplating purchasing a property is to obtain legal advice. The issues that arose in this case can be easily overcome by a simple Declaration of Trust explaining how you want to own the property and a Living Together Agreement that shows what your intentions are. If you separate or there is a significant change in circumstances i.e. redundancy, then certainty can be achieved by a review of the Declaration of Trust and Living Together Agreement to ensure that it accurately reflects those changes – in the same way as making a Will. The cost of taking these simple precautions is only a fraction of the cost of embarking upon contested litigation.

For more information about cohabitation rights contact family lawyer Lisa Kemp.

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