Lady Hale lays down new rules for cohabitation disputes

The Supreme Court has allowed the appeal by a former cohabitee that she should get 90 per cent of the former couple's home, restoring the trial judge's decision to depart from the traditional assumption that interest in the property should be split 50-50.

Giving the lead judgment in Jones v Kernott [2011] UKSC 53, Lady Hale said the trial judge had correctly found that the couple's intention after they separated 'did change significantly' from their initial plans when they moved in together to 'provide a home for themselves and their progeny'.

When they separated, the couple sought to sell the property, which was held in joint names, but eventually took it off the market, preferring to cash in a life insurance policy, the proceeds of which allowed Mr Kernott to buy his own property.

'The logical inference is that they intended that his interest in [the property] should crystallise then,' Lady Hale said. 'Just as he would have the sole benefit of any capital gain in his own home, Ms Jones would have the sole benefit of any capital gain in [the property].

'Insofar as the judge did not in so many words infer that this was their intention, it is clearly the intention which reasonable people would have had had they thought about it at the time. But in our view it is an intention which he both could and should have inferred from their conduct,' she said.

'A rough calculation on this basis produces a result so close to that which the judge produced that it would be wrong for an appellate court to interfere,' she added, before setting out a five-point test for judges.

Lady Hale said that in the absence of express declaration, the presumption should remain that the cohabitants are joint tenants in law and equity, but that this presumption could be displaced if there was evidence in the parties' conduct of a different intention. Only where there was no direct evidence should the court look at what would be a 'fair' share in the circumstances (see box below).

Tom Farley-Hills, a partner with West End firm Harbottle and Lewis, said the ruling confirmed that intention can change over time and as such did not create more uncertainty. However, he said, by opening up a number of scenarios the ruling could lead to a rise in disputes over the existence or otherwise of evidence of common intention.

The ruling overturns the Court of Appeal decision last year by Sir Nicholas Wall, now president of the Family Division, who reduced Ms Jones' claim to 50-50.

Lord Justice Wall explained that there was 'a total lack of evidence about the parties' intentions' in this case to reverse the 50-50 presumption.