Supreme Court Cuts Unmarried Father's Share in £250K House from 50% to 10%

The Supreme Court has overturned the controversial ruling handed down last year by the Court of Appeal that a man was entitled to a 50% share in the family home he left eighteen years ago. The Court reinstated the county court's decision that he was only entitled to a 10% share.

Leonard Kernott and Patricia Jones began a relationship in 1980. They did not marry. They had two children, born in 1982 and 1986. In 1985, they bought a house in their joint names for £30,000. Patricia contributed £6,000 to the purchase price, the balance being provided by an interest-only mortgage supported by an endowment policy. Leonard contributed £100 per week towards the household expenses, mortgage, outgoings and endowment policy premiums. He was also primarily responsible for building an extension to the property, which increased its value by 50%. It was agreed that in 1993, when the couple separated, they had owned the property in equal shares. After separation, Patricia assumed sole responsibility for the maintenance for the children and the outgoings on the property. She did not apply to the Child Support Agency, and Leonard made no attempt to pay maintenance. In 1996, Leonard bought another property in his sole name, using the proceeds of a joint endowment policy.

Patricia asked the county court to declare that she was solely entitled in the property. The judge ruled that the shares in the property had changed and that Patricia was now entitled to a 90% share. That decision was upheld by the High Court. However, Leonard appealed to the Court of Appeal. The Court of Appeal reversed the decisions of the two lower courts and took a very simple and legalistic approach. It held that they still owed the property as stated on the title in equal shares.

Allowing Patricia's appeal to the Supreme Court, it ruled that the Court of Appeal's approach had been too inflexible. The key point concerns the scenario where it is clear that the parties agreed, either from the start or later on, that they would hold the property in unequal shares, but there is no evidence as to what were to be the precise shares. That was the case here, where it was clear that the parties had abandoned their original intention that that they would own the property on a 50 / 50 basis but there was no evidence of them having reached a new agreement as to their respective shares. The Supreme Court said that in such a case, each party is entitled to the share that the court decides is fair, taking all the circumstances of the case into account.
When a relationship breaks down, there is often an understandable desire to sort things out as quickly and cheaply as possible, so that those involved can get on with their lives. However, failing to sort things out properly may prove a costly mistake. Many years later, the parties may find themselves embroiled in costly and time-consuming litigation in an attempt to sort things out. Problems are particularly likely to arise where the parties have not married / entered into a civil partnership. In such cases, the courts have none of the powers to adjust the parties' property and pension rights available to it in the case of a married couple or civil partners. The Supreme Court's decision in this case is certainly good news in that it increases the courts' room for manoeuvre in such cases. However much will depend on the facts of each case and there remains much scope for disputes leading to costly courtroom battles. In this case the case was judged by four levels of court. The costs will have been immense and probably exceeded the value of the assets in dispute. The couple may have made legal history, but probably wish they had simply sorted things out much sooner!

Over the years, there has been much talk of reform of the law in this area, but change does not appear to be imminent. Cohabitees who have decided to call it a day should seek professional advice so to ensure that all loose ends are securely tied up. Otherwise, they may find that the past returns to haunt them.

If you would like to know more, please contact Dawn Millar, Caroline Wilton or Esther Marchant.

Filed: 24/11/2011 08:32:04