Moral maze for courts in dividing up couples’ properties
The result of a Supreme Court case this week looks set to change and define property law for co-habiting couples who split up. Sharon Dale reports.
ONE in six couples live outside marriage but when they split up and attempt to divide their property assets, the lack of a marriage certificate can complicate matters.
A Supreme Court ruling this week has agreed that a postrelationship property should be divided taking into account the individual moral circumstances rather than purely following strict property laws.
The case concerns the correct approach to calculating beneficial interests in property where the legal title to the property is held in joint names by an unmarried couple but where there is no preagreed contract on how it is to be shared.
Ms Jones and Mr Kernott met in 1981 and had two children together. In 1985 they bought a house in their joint names for £30,000 with a £6,000 deposit paid by Ms Jones. The mortgage and upkeep on the house was shared between them.
In 1993 Mr Kernott moved out, leaving Ms Jones at the property with both children and three years later he bought his own house. In 2006 Mr Kernott wanted his share of the property, while Ms Jones applied to the county court for a declaration under section 14 of the Trusts of Land and Appointment of Trustees Act 1996 that she owned the entire beneficial interest in the £245,000 property.
The county court judge noted that the house was first purchased to set up a family home, was bought in joint names and a presumption arose that they intended to jointly share the beneficial ownership of it as well.
Up until 1993 there was no evidence to rebut that presumption. Ms Jones claimed that in the 14 and a half years following there was evidence that their common intention had changed. Mr Kernott had ceased to make contributions towards the running of the house and had made only very limited contributions towards the support of their children. The judge decided that Mr Kernott was entitled to only a 10 per cent share. Mr Kernott appealed to the High Court and then to the Court of Appeal, which reversed the intital decision giving him a 50 per cent of the property.
However, Ms Jones challenged this at the Supreme Court on Wednesday and it resulted in a reversal for fortune for her expartner. The judge agreed that he should only get 10 per cent of the value.
Joanna Grandfield, associate barrister at Mills & Reeve Leeds office, says that the ruling should act as a spur for co-habitees to protect their assets.
“While good news for many, the decision is unwelcome for those who have taken a deliberate decision not to marry specifically because they do not wish to place themselves in a situation whereby their assets could come under attack on relationship breakdown. The decision of the Supreme Court means that these individuals would be well advised to enter into a cohabitation contract sooner rather than later or else risk a protracted dispute within which a court would determine what it considers to have been the intention, irrespective of whether or not it was.”
Ms Grandfield is also calling for new legislation to protect unmarried couples from lengthy and expensive civil court cases when their relationship breaks down.
She says: “The laws governing the rights of unmarried cohabitants are a complex mishmash unsuited to the needs of the people relying on them, with the myth of the common law spouse persisting in the eyes of the general public despite the fact it has not existed in English law for over 250 years.
“With one in six of all couples living together outside of marriage, an estimated 2.2 million cohabiting couples, this is a very dangerous and costly state of affairs, both financially and emotionally for an awful lot of people. The law relating to the property interests of couples who live together is unfit for the modern day purpose to which it is being put. There is support from the legal profession and Resolution for more protection for unmarried couples in order to reflect social reality. As yet, Government has failed to address this wholly unsatisfactory situation through implementing legislation to protect co-habitants by offering them similar, but not the same, rights as married couples.
“Reform of the law is long overdue and has left judges having to infer the intentions of the parties in order to arrive at morally fair but, some would say, legally spurious, results. Until much-needed changes happen, an awful lot of people will be left to wade through an unholy mix of express and implied trusts, necessitating a trawl through the history of a relationship in order to ascertain who meant what when and what that means now, often many years later. The Supreme Court’s decision amounts to an approval of the increasing tendency of the courts to avoid the harsh results of a strict interpretation of property law through the use of inferred intentions.”
ON TRACK: Barnet House has unrivalled views of the North Yorkshire Moors Railway and is tucked away in the
Heartbeat village of Goathland.
HOUSE SPLIT CASE: Patricia Jones leaves the Supreme Court in London with her daughter Lauren after the hearing into property ownership.