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.

Yorkshire Post - Property - - PROPERTY -

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.

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