Jones v Kernott

Where cohabitants hold a home jointly, equality is the starting presumption, but their beneficial interests may change as circumstances change. The court must examine the parties’ whole course of conduct and determine what they must be taken to have intended. It must respect any intention shown by their words or conduct and must not simply impose its own view of fairness. Where a change in intention is established but the parties gave no indication of its extent, the court may impute an intention that the interests should be adjusted fairly and reasonably. Beneficial interests may therefore be ambulatory. The court should consider the parties’ initial position and then whether, and to what extent, their intentions altered.

The claimant and defendant had bought a house in joint names and initially held it in equal beneficial shares. Their relationship ended, the defendant left, ceased contributing to the mortgage and outgoings, and later bought another property in his sole name. The claimant continued to maintain the jointly owned house and support the children. The County Court held that the parties’ beneficial interests had changed and awarded the claimant 90 per cent of the equity. The defendant appealed, raising the questions whether the interests could change after acquisition and whether the court could use fairness in quantifying the alteration.

1. Appeal dismissed. The County Court’s allocation of 90 per cent of the equity to the claimant was within the permissible range. The appellant was ordered to pay the appeal costs on the standard basis.
2. In a joint-names case, joint beneficial ownership in equal shares is the starting point. That presumption may be displaced in an unusual case by evidence from the parties’ whole course of conduct, including their financial arrangements and whether they maintained separate finances.
3. The court must determine what the parties actually intended, or must be taken to have intended, from their words and conduct. It must not override an intention manifested by the parties merely because another result appears fair. However, where the parties’ intention cannot be inferred, the court may impute a common intention.
4. Beneficial interests may be ambulatory. The court should consider the initial common intention and then whether subsequent events show, or justify imputing, a change. Here, the parties’ separation, division of the life-insurance proceeds to assist the appellant’s purchase of another home, and his complete cessation of contributions showed that equal ownership was no longer intended.
5. The appellant had not abandoned his existing interest. His initial financial contribution and substantial improvements to the house required recognition. But the claimant’s subsequent payments and the appellant’s use of his resources to acquire a second property justified a substantial reduction in his share. Since the parties gave no indication of the extent of the alteration, a fair and reasonable adjustment was the only practical criterion available.
6. The court did not need finally to decide whether non-payment of child maintenance was independently relevant. It could legitimately be considered as part of the parties’ financial separation, although it was not central to the result. The appellate court would interfere only if the first-instance decision exceeded the generous ambit within which reasonable disagreement was possible.

1. High Court (Chancery Division): On appeal from the Southend County Court, the appeal was dismissed and the 90:10 beneficial allocation was upheld.
2. Southend County Court: H.H. Judge Dedman held that the parties’ beneficial interests had changed and awarded the claimant 90 per cent of the property’s value.