The case of Kernott v Jones whose judgement was given in the Supreme Court today will have a huge impact for cohabiting couples.
For many years practitioners like myself have been campaigning for the rights of cohabiting parties and in particular women with children to be improved. The public perception is that there is still an entity as a common law husband and wife. Such an entity does not exist and those who cohabit and are not married have very few rights indeed.
Over a year ago, the Royal Commission gave a report recommending that cohabitees should have some limited rights and should be compensated for example if they give up their job for a relationship and to have children. At no time did they suggest there should be parity of rights with those who were married but indicated that something clearly needed to be done to protect vulnerable people in cohabitations. The Royal Commission’s recommendations were totally ignored by this Government. The reasons for this are as follows:-
(a) There is a fundamental ground swell of opinion that if cohabitees require the same rights, then they ought to simply get married and that will give them the whole raft of rights relating to property, entitlement to maintenance, lump sum and rights on inheritance.
(b) The religious body in Parliament are extremely strong and raised very strong objections on moral grounds to more rights being introduced.
(c) There is an overwhelming political reason why rights for cohabitees will never be enshrined in statute and this is because there are simply not enough courts, judges, judicial time or funding to be able to deal with what would be the enormity of cases brought to court if the law changed as suggested by the Law Commission.? Put simply, the money is not there to allow the change in the law.
A huge dilemma therefore face the Supreme Court this week in reaching a decision in the case of Kernott v Jones. This involved a cohabiting couple who purchased a house together in joint names. The deposit being paid by Ms Jones from her previous home. There was no declaration as to how the beneficial interests in the property were to be held and to begin with the mortgage and upkeep were shared. Later they took out a loan to build an extension and Mr Kernott did a lot of the work himself.
The parties had had two children together but the relationship died and Mr Kernott moved out. From that point onwards Ms Jones did not receive any child support nor too any payments towards the mortgage. Thirteen years later after moving out Mr Kernott applied to the Court under what is known as a Trusts of Land and Appointment of Trustees Act application (TLATA) stating that he wanted his full half share because the property had been bought in joint names.
The County Court and High Court found that Ms Jones should be entitled to 90% and Mr Kernott 10% because of the contributions that had been made. The Court of Appeal disagreed and stated that if you buy the property in joint names then the legal and beneficial interests are the same. They stated that the property would forever stays in joint names notwithstanding the contributions made and awarded Mr Kernott 50%. Ms Jones appealed to the Supreme Court saying there had to be a balance of fairness and in her view the Court could infer or presume by looking at their dealings with the property that their joint shares had changed over time.
It was her case that the Court could and should bring in fairness and determine that time had changed the initial agreement. Mr Kernott argued it is fundamentally wrong for the Court to interfere by inferring or imputing any change in their intention by substituting the Court’s opinion. He said joint names, means joint names.
I am happy to say that the Supreme Court have now decided to go boldly where no one has gone before in relation to these matters (the star trek approach). They agreed with Ms Jones that whilst a purchase in joint names is a starting point, they ought to look at the whole of the dealings between the parties. This means that the original common intention to hold the property jointly can change and that this can be rebutted in the Court by producing evidence to show this.
This can be shown particularly where the parties don’t share finances. The Court went on to say that where the evidence isn’t clear about what the common intention of the parties is, the Court can now have the power to infer or impute what the intention was of the parties. Firstly, they will look at what did the parties intended (they call this expressly or inferred) and if it is possible the Court will look to see what that common intention was to impute.
The Court will look at what the intention was of the parties when the property was purchased or at a later date from looking at their conduct and the whole of the course of their dealing ie who paid what and when and each case will turn on its own individual facts. Financial contributions are relevant but they will also look to promises that were made and relied upon.
However, whilst some might find this case ground breaking, the fact is that the Court’s impute parties’ intention when dealing with divorce cases every day of the week. They try and unravel what was intended by the parties, who has done what and the principle of fairness and I am very happy as a practitioner to say that this case has now introduced a concept of fairness through the back door into these cohabitation cases.
There should be no confusion as to what this case means, it does not confer any rights on a cohabiting woman to receive maintenance as she has no entitlement to this, she has no entitlement to a lump sum or inheritance rights, none of that will be provided by this case. What it does, is to provide a sensible method of unravelling the interests that a cohabiting couple have in their main asset, namely the home particularly where children are involved.
However, in order for parties not to find themselves having to unravel the minutia of their life before the Court, I, as a practitioner together with others, would recommend that at the time of purchasing a property a Cohabitation Agreement is drawn up or a Deed of Trust indicating on the title of the property how the shares are to be held.
If they are unequal they should be held as tenants in common rather than joint tenants to avoid any difficulties. Similarly as the parties? relationship progresses and more contributions are made by one than the other, then a Deed can be drawn up at a later date and reflected on the title of the property. Another very important aspect is however difficult it might be always keep receipts for any expenditure which you make in these cohabitations.
Society has now moved on and many more people are cohabitating with marriage rates falling dramatically and in these circumstances this issue comes up time and time again. Parties must understand that if they are in cohabiting relationships where the law does not confer them the same rights as marriage, that they should take every possible step to secure their position in both at the time of purchase and later if they are to make large contributions to a home.
This case however does afford some remedy to cohabitating couples but litigation is never certain and it is up the parties to make sure that their intentions are clear and unequivocal and easy for everyone to determine in the event that the relationship does comes to an end.