Legal Principles and Key Points
- In the case of Jones v Kernott 2012 1 AC 776, it was held that Courts will look at parties’ actual intention deduced objectively from words and actions over the presumption that beneficial interests coincide with the legal estate.
- Where evidence does not show what shares were intended, it is for the Court to decide what shares were either intended or fair.
Facts of the Case
- The appellant (J) appealed against a decision which declared that the property co-owned by her and the respondent (K) was held as tenants in common in equal shares.
- The couple lived together, sharing expenses such as bills and food shops for over eight years when K moved out of the property in 1993.
- J remained in the property with their two children and then paid all household expenses herself with K making no further financial contributions.
- This situation continued for 14 years and when the house was up for sale, K commenced proceedings in the county court claiming a declaration under TOLATA 1996.
- The declaration was made that 90% of the sale proceeds are to go to J and 10% to K.
- K appealed for a higher share which was allowed under the Court of Appeal.
Issues in Jones v Kernott 2012 1 AC 776
- Could the presumption of equal beneficial shares in joint name cases be rebutted with sufficient evidence of a change of intention?
Held by Supreme Court
- Appeal allowed, held in favour of J to keep the 90% share.
Lord Walker, Lord Kerr
- The supreme Court upheld the decision that if property is purchased in joint names, the presumption is that the beneficial interests in the property are to reflect their legal estate.
- There is a high threshold to rebut the presumption required objective evidence to a change of intention over the course of dealings.
- “In joint names’ cases, the starting point is that equity follows the law. One begins the search for the proper allocation of shares in the property with the presumption that the parties are joint tenants and are thus entitled to equal shares; (ii) That presumption can be displaced by showing (a) that the parties had a different common intention at the time when they acquired the home or (b) that they later formed the common intention that their respective shares would change; (iii) The common intention, if it can be inferred, is to be deduced objectively from the parties’ conduct; (iv) Where the intention as to the division of the property cannot be inferred, each is entitled to that share which the court considers fair. In considering the question of what is fair the court should have regard to the whole course of dealing between the parties.”