Ben McFarlane, Nicholas Hopkins, Sarah Nield: Land Law, Text, Cases and Materials

Chapter 18: Interests in the Home

These updates are consecutive to the previous updates and cover the period from the posting of the previous updates to 31 August 2010.

The Cohabitation Bill 2008 referred to in the previous update of this chapter stalled at the Committee Stage of the House of Lords, with no date set for further sittings after the first sitting on 30 April 2009.

The implications of Stack v Dowden [2007] 2 AC 432 continue to be considered by the courts. The recent Court of Appeal decision in Kernott v Jones [2010] EWCA Civ 578 tackles central questions arising from the case including the basis upon which the parties common intention is to be ascertained and the relevance of financial contributions to the quantification of shares in domestic property. Readers are recommended to see the

annotation of the decision provided by Stuart Bridge Jones v Kernott: Fairness in the Shared Home The Forbidden Territory or the Promised Land? [2010] Conv 324. The case concerned a dispute as to ownership of a home that had been bought in the joint names of Mr Kernott and Ms Jones, a cohabiting couple. The couple had separated in 1993 and by common agreement they were at that time jointly and equally entitled to the beneficial interest. Mr Kernott had left the property at the time of their separation, while Ms Jones had remained in occupation with their children and had, since then, discharged all financial obligations relating to the home. The question for the court was whether, by so doing, Ms Jones was now entitled to a greater beneficial share. By a 2-1 majority (Jacob LJ dissenting), the Court of Appeal held that the beneficial entitlement to the property had not changed. In doing so, the majority reversed the decision of the judge at first instance who had considered Ms Jones to be entitled to 90% of the beneficial interest and Mr Kernott the remaining 10%. As we note in part 2.2 the starting presumption in a case of joint legal ownership is joint and equal beneficial ownership. The presumption can be rebutted, but only where the circumstances are very unusual. Where it is, the parties shares are quantified according to their common intention (on which see part 2.3). The majority in Kernott v Jones considered there was nothing to demonstrate that the parties common intention as regards ownership of the property had changed since the time of

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Ben McFarlane, Nicholas Hopkins, Sarah Nield: Land Law, Text, Cases and Materials their separation. Ms Jones financial contributions were not sufficient themselves in this regard. Rimer LJ acknowledged that it was the parties unequal contributions in Stack that was considered by the majority of the House of Lords to justify departing from the initial presumption of joint and equal beneficial ownership and that the parties shares in that case did in fact approximate with their financial contributions. He noted that the case appears to present the trial judge with something of a challenge (para 75). In this

respect, Kernott v Jones highlights the importance of looking beyond the parties financial contributions in the context of the home: it is the parties common intention that rules. On the facts, the marginalisation of financial contributions was detrimental to the claimants claim.

Of particular importance is the discussion in the case of the meaning of a common intention. As we note in part 2.1.2, in Stack v Dowden Lord Neuberger distinguished between inferred and imputed intentions. He considered that it would be wrong in

principle and contrary to previous authorities to impute an intention even though no such actual intention can be deduced from [the parties] actions and statements, and even though they had no such intention (Stack v Dowden [2007] 2 AC 432, paras [125]-[127]). The majority of the House of Lords, however, did not endorse this distinction with Baroness Hale referring generally to the parties intention actual, inferred or imputed (para 60). In Kernott v Jones, Rimer LJ doubts that Baroness Hale was suggesting that the court can invent an intention that the parties neither expressed nor inferentially had (para 77). Wall LJ notes the total lack of evidence about the parties intentions (para 52) and concludes that he cannot infer any intention on their part to alter their respective shares over time (para 58). As Bridge observes, in effect the majority endorses and adopts the view of Lord Neuberger in Stack v Dowden, in the sense that imputation of intentions, and fairness as a self-standing criterion for quantification of beneficial entitlement, are both within the forbidden territories, and therefore outside the purview of the court ([2010] Conv 324, p. 328). Leave to appeal to the Supreme Court has been granted.

The role of intention in the common intention constructive trust is examined by Nick Piska Constructive Trusts and Constructing Intention in Martin Dixon (ed), Modern Studies in Property Law Volume 5 (Oxford: Hart, 2009). Piskas analysis sets out to consider the influence of liberal ideology in the role and construction of intention.

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Ben McFarlane, Nicholas Hopkins, Sarah Nield: Land Law, Text, Cases and Materials Matthew Harding Defending Stack v Dowden [2009] Conv 309 offers a different perspective on the decision. He suggests that from a liberal perspective, which focuses on personal and moral autonomy, any defence of Stack can only be partial (p.324). He does not address liberal views on intention (the topic of Piskas chapter) but considers instead an objection based on unjust enrichment: that the presumption of joint and equal beneficial ownership irrespective of contributions unjustly enriches one party at the expense of the other. Harding suggests that the case may however be fully defended from a communitarian perspective, in which the relationship of two individuals might alter the normative background against which those individuals may make claims against each other, removing them from the field of liberal justice and placing them in another field populated by communitarian norms (p.311).

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