Jones v Kernott
| Jurisdiction | England & Wales |
| Judgment Date | 10 July 2009 |
| Neutral Citation | [2009] EWHC 1713 (Ch) |
| Docket Number | Claim no. 7SS02399 |
| Court | Chancery Division |
| Date | 10 July 2009 |
[2009] EWHC 1713 (Ch)
In the High Court of Justice
Chancery Division
On appeal from the Southend County Court
Before Mr. Nicholas Strauss Q.C. (sitting as a Deputy Judge)
Claim no. 7SS02399
Appeal Court reference: CC/2008/PTA/0637
Mr. Andrew Bailey, instructed by Francis Thatcher & Co appeared for the appellant.
Mr. Richard Power, instructed by A.I. Sampson & Co appeared for the respondent.
Hearing date: 12 th May 2009
This is an appeal from the decision of H.H. Judge Dedman in the Southend on Sea County Court on 21 st April 2008 concerning a claim made by the respondent (“Ms. Jones”) under the Trusts of Land and Appointment of Trustees Act 1996 in respect of two properties, 39 Badger Hall Avenue, Thundersley, Essex and 114 Stanley Road, Benfleet, Essex. The first of these properties was a house bought by Ms. Jones and the appellant (“Mr. Kernott”) in joint names. It was occupied by them from about May 1984 until October 1993, when their relationship ended. The second is a property bought by Mr. Kernott in his sole name in May 1996, some 2 years and 8 months after he had moved out of the Badger Hall Avenue house.
It was common ground between the parties before H.H. Judge Dedman that the parties held the beneficial interest in the Badger Hall Avenue house in equal shares until October 1993, and it is now common ground that Ms. Jones did not acquire a beneficial interest in the Stanley Road house later bought by Mr. Kernott. The issues are whether, and if so to what extent, their respective beneficial interests in Badger Hall Avenue were changed when Mr. Kernott left, ceased to contribute to the mortgage and other outgoings and bought his own separate property at Stanley Road. H.H. Judge Dedman held that they did change, and that Ms. Jones was entitled to 90% of the value of the property on the basis that this was “fair and just”.
Quite surprisingly, since the factual situation in the present case must be a common one, there is little authority on whether in such a case the court should infer that the parties' intentions as regards their respective beneficial interests have changed, or impute such a change to them, or if so, how the amount of such a change should be ascertained.
In cases of this kind, as was said by Baroness Hale in the Privy Council case of Abbott v. Abbott [2007] UKPC 53:
“The search is to ascertain the parties' shared intentions, actual, inferred or imputed, with respect to the property in the light of their whole course of conduct in relation to it.”
Or, as she had put it in Stack v. Dowden [2007] 2 A.C. 432 at para. 61:—
“…the search is still for the result which the parties must, in the light of their conduct, be taken to have intended”
However, there is a doubt which arises from her speech in that case as to whether, and if so how far, it is open to the court to consider what is “fair”, and therefore as to whether H.H. Judge Dedman's approach in this case was correct. The principal issue in this appeal is whether for the courts to consider what is fair, in assessing the amount of a party's interest in this kind of case, is to venture on to “forbidden territory”
Before dealing with the facts of the present case more fully, it is convenient to refer in some detail to the leading authorities, namely the decisions of the Court of Appeal in Oxley v. Hiscock [2005] Fam. 211 and of the House of Lords in Stack v. Dowden, to which I have already referred.
In Oxley, an unmarried couple bought a house in the name of the defendant, the male partner. Both made substantial contributions to the purchase price, the defendant's contribution being the greater, and both contributed to the maintenance and improvement of the property and to the repayment of the mortgage from their pooled resources. The defendant's appeal against the judge's decision that the property was beneficially held in equal shares was allowed. The Court of Appeal decided that it was to be inferred from the fact that both parties had made financial contributions that there was a common intention that each should have a beneficial share and that (in the absence of any discussion as to the amount of their respective shares) each was entitled to the share which the court considered fair having regard to the whole course of dealing between them including arrangements made to meet the outgoings on the property.
Chadwick L.J. (with whom Mance and Scott Baker L.JJ. agreed) reviewed the previous authorities at considerable length. He held (para. 52) that two issues arose in cases of this kind. First, was there a common intention that each should have a beneficial interest in the property and if so, secondly, what was the common intention of the parties as to the extent of their respective beneficial interests? He rejected the submission that the court was bound, by Springette v. Defoe [1992] 2 F.L.R. 388, in a case in which the first question was answered affirmatively, to answer the second by reference to the financial contributions made by the parties i.e. in accordance with a resulting trust approach. He held that, on the contrary, the effect of the decision of the Court of Appeal in Midland Bank plc v. Cooke [1995] 4 All E.R. 562 was that, once the court had concluded that the parties intended the beneficial interest in the property to be shared, as would readily be inferred where both had made some contribution to the purchase price, the amount of their respective shares would be what the court considered to be fair on the basis of all the relevant conduct, not limited to the amount of their respective contributions: see paras. 53–60.
At para. 59 Chadwick L.J. cited the dictum of Waite L.J. in Midland Bank at 575:—
“… For a couple embarking on a serious relationship, discussion of the terms to apply at parting is almost a contradiction of the shared hopes that have brought them together. There will inevitably be numerous couples, married or unmarried, who have no discussion about ownership and who, perhaps advisedly, make no agreement about it. It would be anomalous, against that background, to create a range of home-buyers who were beyond the pale of equity's assistance in formulating a fair presumed basis for the sharing of beneficial title, simply because they had been honest enough to admit they never gave ownership a thought or reached any agreement about it.”
It is also clear from this part of Chadwick L.J.'s judgment that he regarded the analysis of Lord Diplock in Gissing v. Gissing [1971] A.C. 886 at 908–9, which he had set out at para. 34, as retaining considerable importance:—
“There is nothing inherently improbable in their (i.e. the husband and wife) acting on the understanding that the wife should be entitled to a share which was not to be quantified immediately upon the acquisition of the home but should be left to be determined when the mortgage was repaid or the property disposed of, on the basis of what would be fair having regard to the total contributions, direct or indirect, which each spouse had made by that date. Where this was the most likely inference from their conduct, it would be for the court to give effect to that common intention of the parties by determining what in all the circumstances was a fair share.”
Chadwick L.J. said at para. 60 that the law had moved on since Midland Bank v. Cooke, and he then analysed the decision of the Court of Appeal in Drake v. Whipp [1996] 1 F.L.R. 826, another case in which both partners had contributed to the purchase price and to subsequent expenditure, the property having been conveyed in the sole name of the male partner. Commenting on the decision of the Court of Appeal that in all the circumstances Mrs. Drake's “fair share” should be one-third, Chadwick L.J. said at para. 65:—
“It is very difficult, if not impossible, to find anything in the facts in Drake v. Shipp [1996] I FLR 826 to suggest that either of the parties ever gave thought to an arrangement under which the property should be shared in the proportions two-thirds and one-third; let alone that that was ever their common intention. Nor do I think that Peter Gibson LJ approached the matter on that basis. As he said, at p.830, “in constructive trust cases, the court can adopt a broad brush approach to determining the parties' respective shares”. And that is what he did, as he acknowledged in the passage, at p.831, which I have just set out: “I would approach the matter more broadly, looking at the parties' entire course of conduct together.” That approach, as it seems to me, had received the approval of the House of Lords some 35 years earlier, in Gissing v. Gissing [1971] AC 886, 909E, per Lord Diplock; had been endorsed, at least by Sir Nicholas Browne-Wilkinson V-C, in Grant v. Edwards [1986] CH. 638, 657H; and had been acknowledged and accepted by Bourse LJ in Stokes v. Anderson [1991] I FLR 391, 399F. If these problems are to be solved by an analysis based on constructive trust, which requires the imputation of some common intention at the time of acquisition, then, as Nourse LJ observed Stokes v. Anderson, at p.400C, “the court must supply the common intention by reference to that which all the material circumstances have shown to be fair”. That is, I think, what Waite LJ had in mind when he referred, in Midland Bank plc v. Cooke [1995] 4 All ER 562, 575, to “equity's assistance in formulating a fair presumed basis for the sharing of the beneficial title” in a case where the parties “had been honest enough to admit they never gave ownership a thought….”
He then went on at para. 66 to say that what the court was doing in cases of this nature was to supply or impute a common intention, when there was in fact none. On the second question, the extent of the parties' respective interests, he said at para. 69:—
...
To continue reading
Request your trial
-
Jones v Kernott
...duty to reach a decision on even the most difficult case. As the deputy judge (Mr Nicholas Strauss QC) said in his admirable judgment [2009] EWHC 1713 (Ch), [2010] 1 WLR 2401, para 33 (in the context of a discussion of fairness) "that is what courts are for." That was an echo (conscious o......
-
Virendra Kumar v. Sumintra Arjun
...trust (Lloyds Bank plc v. Rosset [1991] 1 AC 107). Stack v. Dowden [2007] 2 AC 432; [2007] 2 WLR 831 and Jones v. Kernott [2009] EWHC 1713 (Ch); [2010] 1 All ER 947 have enlarged the circumstances in which a common intention may be [69] In Gissing's case (supra) the House of Lords held that......
-
Nassibou Butler Henry Browne (Administrators of the Estate of Hubert Phipps Deceased) Claimants v St. Kitts-Nevis-Anguilla National Bank Ltd 1st Defendant Clive Browne 2nd Defendant Michelle Rochester-Woodley 3rd Defendant [ECSC]
...duty to reach a decision on even the most difficult case. As the deputy judge (Mr Nicholas Strauss QC) said in the admirable judgment (2009) EWHC 1713 (Ch), (2010) 1 WIR 2401, para 33 (in the context of a discussion of fairness), 'that is what courts are for.' … The trial judge has the oner......
-
Table of Cases
...Table of Cases Kernott v Jones [2010] EWCA Civ 578, [2010] 3 All ER 432, [2010] 2 FCR 372; sub nom Jones v Kernott [2010] 1 WLR 2401, [2009] EWHC 1713 (Ch), [2010] 1 All ER 947 215, 221, 224, 228, 232–234 Khatun v United Kingdom (1998) 26 EHRR CD 212 13, 15, 16 Khorasandjian v Bush [1993] Q......
-
Taking a Witch's Brew and Making a Consommé Lord Neuberger's Dissent in Stack v Dowden [2007] UKHL 17, [2007] 2 AC 432
...intention” is decided by inference or imputation from primary facts? I think not to any great degree ’ 98 (emphasis added). 91 [2009] EWHC 1713 (Ch), at [31]. 92 [2010] EWCA Civ 578. 93 Ibid, at [76]. 94 Above, n 92, at [77]. 95 Above, n 8, at [60], per Baroness Hale. 96 Above, n 94. 97 Abo......