Jones v Kernott

Where a family home is acquired in joint names by a couple who are both responsible for the mortgage, beneficial ownership is presumed to follow the legal title. Unequal financial contributions do not create a resulting-trust presumption.

Equality may be displaced by a different common intention at acquisition or by a later common intention to change the shares. The court must ascertain that intention objectively from the parties’ words and conduct. If unequal ownership is clear but the intended proportions cannot be ascertained, the court may impute fair shares after considering the whole course of dealing concerning the property. Financial contributions are relevant, but they are not conclusive.

Jones v Kernott concerned a family home bought in the joint names of an unmarried couple. Ms Jones provided the deposit, but both parties contributed while they lived together. After their separation, Ms Jones remained with their children, met the property expenses for more than 14 years and maintained the home. Mr Kernott made little further contribution and acquired a separate property.

Ms Jones sought declarations under section 14 of the Trusts of Land and Appointment of Trustees Act 1996. The County Court awarded her 90% of the beneficial interest. The High Court upheld that result: [2009] EWHC 1713 (Ch). The Court of Appeal, by a majority, restored equal ownership: [2010] EWCA Civ 578. The central issue was whether the parties’ common intention had changed and, if so, how their altered shares could be quantified.

1. Disposition. The Supreme Court unanimously allowed the appeal and restored the County Court order dividing the beneficial interest 90% to Ms Jones and 10% to Mr Kernott.

2. Starting point. Lord Walker and Lady Hale, with whose reasons Lord Collins agreed, held that a family home acquired in joint names by a couple jointly responsible for the mortgage is presumed to be held jointly in equity. Unequal contributions to the deposit or purchase price do not produce a competing resulting-trust presumption. This reaffirmed and clarified Stack v Dowden [2007] UKHL 17.

3. Displacing equality. The presumption may be displaced by proof that the parties had a different common intention when acquiring the property or later formed a common intention that their shares should change. The primary inquiry concerns their actual shared intention, objectively deduced from their words and conduct. A court cannot substitute its own view of fairness for an intention which the evidence establishes.

4. Quantification. Where it is clear that the parties intended unequal ownership, or a later alteration of their shares, but the intended proportions cannot be ascertained by expression or inference, the court must impute fair shares. Following the approach in Oxley v Hiscock [2005] Fam 211, fairness is assessed from the whole course of dealing concerning the property. That expression bears a broad meaning. Financial contributions are relevant, but the court may consider the full range of conduct bearing upon the parties’ relationship with the property.

5. Application. The majority on the application of the principles—Lord Walker, Lady Hale and Lord Collins—inferred that the parties’ intentions changed after separation. Mr Kernott ceased contributing, acquired his own home and retained its capital gain, while Ms Jones alone maintained the former family home. Their conduct supported the inference that his interest had crystallised and that subsequent gains on the former home should belong to Ms Jones. A rough calculation produced a result sufficiently close to 90:10 that appellate interference was inappropriate. No further accounting was required.

6. Concurring approaches. Lord Kerr and Lord Wilson agreed in the outcome but would have imputed, rather than inferred, the 90:10 allocation. They stressed that inference concerns actual intention, while imputation supplies a fair result when actual intention cannot be found. This difference did not affect the unanimous disposition.

• United Kingdom Supreme Court: In Jones v Kernott [2011] UKSC 53, the court unanimously allowed Ms Jones’s appeal and restored the County Court’s 90:10 division.
• Court of Appeal: By a majority, the court allowed Mr Kernott’s appeal and declared that the parties held equal beneficial shares: [2010] EWCA Civ 578.
• High Court: The deputy judge upheld the County Court’s conclusion that the parties’ intentions had changed and that the 90:10 division was justified: [2009] EWHC 1713 (Ch).
• Southend County Court: Judge Dedman declared that Ms Jones held 90% and Mr Kernott 10% of the beneficial interest.