Kernott v Jones

In a joint-names purchase of a home by cohabitants, joint legal ownership starts with a presumption of joint beneficial ownership in equal shares. The person asserting different shares bears a heavy burden and must establish the parties’ shared intention as to both the departure and its extent. The court must examine the whole course of conduct, but cannot substitute its own view of fairness or invent a bargain the parties did not express or imply. Post-separation payment of outgoings, non-contribution, delay, or acquisition of another home did not, without more, prove an intention to vary equal shares. The appeal was allowed and equal shares declared.

Leonard Kernott and Patricia Jones bought their home in joint names while cohabiting and had two children. They separated in 1993. Jones remained in the home and thereafter paid the mortgage, insurance premiums, repairs and other outgoings. Kernott acquired another home and, after a lengthy delay, sought his share.

The Southend County Court awarded Jones 90% and Kernott 10%. Deputy Judge Nicholas Strauss QC dismissed Kernott’s appeal in [2008] EWHC 1714 (Ch), reported at [2009] 1 All ER 947. The issue on this second appeal was whether the parties’ beneficial interests had changed from equal shares after separation.

Majority: Wall and Rimer LJJ. The appeal was allowed. The parties held the severed joint tenancy as tenants in common in equal shares.

1. Following Stack v Dowden [2007] UKHL 17, a conveyance of a domestic home into joint names starts with joint legal and beneficial ownership in equal shares. The person asserting different beneficial interests bears a heavy burden.
2. The court must search for the parties’ shared intentions, express or inferred, by examining the whole course of conduct. Beneficial interests may change over time, but the court cannot replace that inquiry with its own assessment of fairness or supply a division which the parties neither expressed nor implied.
3. Oxley v Hiscock [2004] EWCA Civ 546 remained relevant to sole-name cases where an intention to share existed but the proportions were undefined. Its fair-share approach did not displace the joint-names presumption governed by Stack.
4. The parties had agreed that their interests were equal when they separated. There was no evidence of any subsequent discussion or agreement altering those interests. Jones’s sole payment of outgoings, Kernott’s non-contribution, his acquisition of another home and the passage of time were insufficient to establish a joint intention to vary the shares.
5. The court decided only the beneficial shares. It did not determine sale, realisation or equitable-accounting questions.

Dissent: Jacob LJ. He considered that the trial judge had applied the correct Stack test and that the inference of changing intentions was not perverse. He would have deferred to the trial judge’s multifactorial assessment and dismissed the appeal.

• Court of Appeal (Civil Division): [2010] EWCA Civ 578. Wall and Rimer LJJ allowed the appeal; Jacob LJ dissented.
• High Court: Deputy Judge Nicholas Strauss QC, [2008] EWHC 1714 (Ch), dismissed Kernott’s appeal from the county court.
• Southend County Court: Judge Dedman awarded Jones 90% and Kernott 10% of the beneficial interest in the home.