BackLatest News and Articles - November 2012
Cohabitation – the water muddies still further
It is, perhaps, the worst kept secret in the legal profession that the law relating to cohabitation requires some clarification at legislative level. This is especially the case in relation to issues concerning the distribution of cohabitational property. This simply does not exist in circumstances involving married couples.
Indeed, the obvious area where there is a level of vulnerability is when cohabitees reside together for a lengthy period of time and either the property is owned in one party’s name, or it is owned in parties’ joint names in circumstances where at least one of the parties believes that the standard 50/50 arrangement is not applicable in their particular circumstances due to either an increased contribution on purchase of the property, or an inequality of contributions in the improvement of the property over time.
The obvious question asked of clients on first attending an appointment, if there is a wish for them to establish whether their entitlement to the property is not reflective of the legal ownership with the Land Registry, is whether there was a Trust Deed entered into at the time of the purchase to reflect the actual ownership with the Land Registry over and above what is shown in the Land Registry Title.
Conveyancing solicitors are becoming wise to the necessity of advising cohabiting couples of the merits of the different kinds of ownership, and the merits of a Trust Deed on purchase of property. That said, it is fair to say that even when such advice is given, it is still rarely the case that cohabiting couples seek to take up the offer of such advice. We are, therefore, left with the addressing of matters through the relevant Case Law.
Enter the case of Jones and Kernott (2011) when, on appeal, it was held that Mrs Jones should receive 90% of the share of the property and Mr Kernott 10% interest in the property. At the Lower Court, the Judge quite understandably followed the interpretation of the law based on the concept of property-related considerations stating that, as the property was in joint names and appeared to be equally and jointly owned, this was the appropriate distribution of property ownership.
The Supreme Court overturned this decision and commented that a cohabitee to date had always had an uphill struggle to prove that they should have either an interest in the property where their name is not on the deeds, or the greater share of the property where the deeds would appear to reflect joint and equal ownership and, inevitably, their case would be based on a complicated Trust Law style argument.
It is right to say that the wrong answer to a question in cross-examination addressing such matters could easily lead to a cohabitee receiving nothing in respect of property that they had financially contributed to over a significant period of time. The fact that skilful cross-examination by Counsel could lead to the giving of an answer which was not naturally reflective of what the overall intention was, would not appear to be fair. Indeed, the concept of fairness was a specific feature of the Jones and Kernott judgment which has not previously reflected other cases up to and including Stack and Dowden.
There are two ways to look at the decision in Jones and Kernott. The first is to applaud the concept of fairness being introduced to the distribution of cohabitational property, which is a long overdue and welcome consideration and there are less incidents of parties becoming victims of unfair decisions based on a letter-of-the law approach being adopted by a Judge. The view that I take is that if this landmark judgment of the Supreme Court is not followed up by clear legislative reform outlining these issues, along the same lines as the Matrimonial Causes Act of 1973 in respect of divorce-related legislation, then it will simply lead to a ‘muddying of the waters’ in relation to where parties stand on the breakdown of a cohabitational arrangement, with no obvious clarity achieved.
Indeed, this further emphasises the necessity for Trust Deeds on the purchase of cohabitational property.
I await, as do many other lawyers, with interest to see the overall impact of this case in general terms.