The case of Kernott v Jones is being hailed by some family lawyers as, potentially, the “new White”: a reference to the ground breaking case of White v White, heard by the House of Lords in 2000, which radically altered the landscape for divorce settlements.
Kernott v Jones is a cohabitants’ property dispute. In 1985 the parties purchased a property in joint names. The deposit was paid by Ms Jones, and a property extension was paid for by Mr Kernott. The couple separated in 1993. Ms Jones and the couple’s two children remained in the property, and Ms Jones assumed sole responsibility for the mortgage and household expenses. In 2006, Mr Kernott claimed his 50 per cent share in the property. The High Court awarded Ms Jones a 90 per cent share, but this decision was overturned by the Court of Appeal.
Eleven years after White v White, the appeal in Kernott v Jones was heard today by the Supreme Court. It was heard by five heavyweight judges including Baroness Hale and Sir Nicholas Wilson, in his first case as a new appointee to the Court.
The question at hand is this: to what extent (if at all) will the Supreme Court push the boundaries of joint property law ownership, where one party has contributed far more than the other?
In the earlier House of Lords case of Stack v Dowden, some boundaries were pushed, albeit intended for a limited number of cases. It is speculated that the renamed Supreme Court in Kernott v Jones could go further. The court may hold that a common intention to depart from equality could be expressed or inferred in the conduct of the parties, or even “imputed” to the parties. This approach, of “imputing” a common intention, was trenchantly rejected by the Court of Appeal in Kernott v Jones.
So it falls to the Supreme Court to decide if the High Court is correct, the Court of Appeal is correct or if they will come up with a different approach. They will consider to what extent the concept of “fairness” counts, if at all, in redistributing the parties’ equitable interests in their property.
An interesting article in Family Law Week, by Dr Robert H. George of the University of Oxford concludes:
If the evidence shows that these cohabitants’ actual intentions (whether express or, more likely, inferred) were that the property should be held in fair shares, those intentions should be given effect by the court. There is no reason in principle not to allow this approach (though it might not sit comfortably with the general aim of avoiding litigation in these cases, which may become increasingly significant as legal aid becomes scarcer). Nothing is imputed under this approach. The court’s evident desire to reach a fair outcome in disputes about former cohabitants’ property rights can be met by recognising that many cohabitants actually intended that the outcome be fair.
That is only the first part of the job, however. Assuming the Supreme Court does decide it will adjust the parties’ shares, what test does it then apply to calculate each party’s precise share?
As with Radmacher v Granatino in 2010, the long and winding judgements expected in Kernott v Jones may well occupy their Lordships and Ladyship for the next six months. Until then, family lawyers up and down the country are adopting a pragmatic approach, advising clients who are caught up in cohabitation disputes to “wait and see”.
The Supreme Court appears to be faced with a truly mind-bending job. Should property law be the subject of such microscopic analysis, essentially because no proper law exists to regulate cohabitation?
At present, unmarried couples are unable to apply to the court for regulation of their financial affairs, in stark contrast to married couples and couples who have entered into civil partnerships. However when Lord Justice Wall, the President of the Family Division, stated recently that urgent legislation is required for cohabiting couples, more than 60 per cent of The Times readers surveyed disagreed. Clearly there are deeply held objections: social, religious and moral.
Why? Overall the most powerful objection appears to be that married couples have chosen to enter into a legally binding relationship and, if such a relationship ends, legal regulation must apply too. Cohabiting couples have deliberately chosen not to follow suit. Cohabitation is on the increase while marriage is on the wane, in part because couples are considering and rejecting this formal, legal regulation of their relationships. They are fearful of the legal consequences if the relationship falters. The argument goes that if a legally binding agreement has been rejected, why provide the protection of tailor-made cohabitation law?
I disagree with this argument because a cohabitation manifestly does produce a relationship in need of regulation. All we have at present is a hotchpotch of rigid, outmoded and outdated property law to regulate the end of a relationship that may have been every bit as financially complex as a marriage. As Kernott v Jones goes to show, this clearly doesn’t fit the bill.
Its inadequacy is further highlighted by the fact that in the 16-44 age group in this country, cohabiting couples now account for more relationships than any other. As such children of cohabiting relationships, unlike those of divorcing couples, pass under the court radar too. Do their needs not count in the same way as for children of married couples?
What we need, irrespective of whether or not we personally approve, is comprehensive law that does fit the bill. They already have this law in Scotland.
We are playing catch-up. We clearly need new law that does not equate cohabitation with marriage, and does not reward parties with marriage settlements. Law that would compensate those such as Ms Jones, who has sustained economic imbalance as a result of cohabitation. Law as intended by the Law Commission, whose report to the Government continues to gather dust.
In the meantime, with no such end in sight, Kernott v Jones will see the most agile and brilliant legal brains in the country occupied for months, considering firstly whether a peg is round or square – and secondly deciding in which round or square hole the round or square peg should somehow be fitted.