“THE RIPPLE EFFECT: CO-HABITEES AND FAIRNESS”

On 9 November 2011 the Supreme Court – the Highest Court in England and Wales – gave its decision in the case of “Jones v Kernott.”   In doing so it dropped a new pebble from its hand into the lake below. 

Mr Kernott and Ms Jones were a separated, unmarried, couple who had previously lived together in a property jointly owned by them. 

The Court was asked to decide in what percentage the monies, from any sale of the property, should be divided between Mr Kernott and Ms Jones – the Court stated that if it could be shown that an unmarried couple of jointly owned property did not intend to equally share the property and the owners could not show or agree how they wanted the monies to be divided, the Court would impose on each person a share that it believed fair. 

The pebble was ‘fairness.’   The initial ripple caused may appear small, but is likely to swell and may have a dramatic effect on the surrounding landscape of unmarried couples.

Of course, the idea of fairness is, in principle, a sound one.  However, in deciding what is fair it is likely that one, or both people, will be left unhappy at the result: Mr Kernott received only 10% of the proceeds of sale - he had argued he was entitled to 50%. 

Ms Jones and Mr Kernott had not recorded in writing how they wished for the monies to be divided when the house was sold – had they done so the matter first may not have ended at Court and, secondly, if it had done, a Court may simply have honoured the agreement.  

Whether you are about to purchase a home with your partner or are currently living with your partner, you should give serious consideration to recording in writing what you wish to happen to any monies in the event the relationship breaks down. 

This can be in the form of either a Trust Deed or a Co-habitation Agreement.

Liam O’Shea of our Litigation and Family Departments can provide you with a fixed fee quote for advising you on these.