Jones v Kernott [2011] UKSC 53 [2012] 1 AC 776

Facts

• Jones v Kernott concerned the allocation of beneficial interests in property jointly owned by an unmarried couple.
• The parties purchased the property in joint names and later separated, with one party continuing to live in and maintain the home.
• After the separation, one party bore the entirety of the upkeep and financial contributions related to the property.
• Legal title to the property remained in joint names, while the beneficial ownership was disputed as circumstances changed over time.
• The dispute centered on whether the beneficial interests should mirror the legal title, or reflect the parties’ evolving intentions and respective contributions after separation.

Issues

1. Whether beneficial ownership in co-owned property held in joint names must, as a presumption, match legal title, or whether this can be rebutted by evidence of differing intentions.
2. Whether courts can infer or impute a change in the parties’ common intention regarding beneficial ownership over time based on conduct and contributions.
3. How beneficial shares in jointly owned property should be quantified when there is evidence of changed intentions or contributions after acquisition.
4. Whether the established approach in Lloyds Bank v Rosset, focusing on direct financial contributions, remains authoritative in light of Stack v Dowden and Jones v Kernott.
5. To what extent courts may impute intention regarding beneficial interests in the absence of clear evidence.

Decision

• The Supreme Court confirmed that the presumption of joint beneficial ownership arising from joint legal title can be rebutted by evidence of differing common intention.
• It held that common intention may be inferred from the parties’ words and conduct, including both financial and non-financial contributions.
• The court decided that common intention could change over time, and that beneficial interests may be redistributed if subsequent conduct demonstrates this shift.
• Where the actual intention cannot be identified, the court has the authority to impute an intention deemed fair, after evaluating the whole course of dealings between the parties.
• The decision marked a move away from the rigid requirement for express agreements or direct financial contributions, adopting a more flexible and equitable approach.

Legal Principles

• The starting point for beneficial interest in joint names cases is a presumption of equal ownership, subject to rebuttal by evidence of contrary intention.
• Common intention constructive trusts remain guided by the parties' intention, which may be inferred or, where necessary, imputed by the court.
• Courts may consider a broad range of factors—financial and non-financial, express and implied—in determining common intention and quantifying shares.
• There is a recognized departure from the strict approach of Lloyds Bank v Rosset, with courts now placing emphasis on fairness and the realities of domestic relationships.
• Imputation of intention is permissible where the actual intention is indiscernible, allowing courts to reach an equitable outcome.

Conclusion

Jones v Kernott is a significant Supreme Court decision that broadened the approach to determining beneficial interests in co-owned property, emphasizing the importance of the parties’ intentions and conduct rather than legal title alone, and permitting courts to impute intention where necessary to achieve fairness.