'The answer is that each is entitled to that share which the court considers fair having regard to the whole course of dealing between them in relation to the property.' (Chadwick LJ in Oxley v Hiscock).
Following the Supreme Court decision in Jones v Kernott, will the courts decide a cohabiting couple’s respective shares in property on the basis of 'fairness'? If so, is the position of cohabiting couples the same as that of married couples when their relationship breaks down?
This question comments specifically on the property consequences for cohabiting couples on relationship breakdown. Therefore your answer should focus on this aspect of the differences between the position of cohabiting and married couples, rather than simply listing all of the differences between their positions. It is unlikely you would have time to cover all of the points below in an exam but they are a guide to the sort of issues you may consider in answering the question.
You should start by summarising the Supreme Court decision in Jones v Kernott. Outline the facts very briefly, making sure to highlight that the property was registered in joint names and that there was no express declaration of trust.
The majority held that where parties purchase a property in joint names for joint occupation, and both a responsible for the mortgage, there is no presumption of resulting trust. Instead the presumption is that the parties intended a legal and beneficial joint tenancy. The presumption can be rebutted by evidence of contrary intention.
A strong answer will pick up on the differences between the majority and the minority views. In particular, a distinction was drawn between ‘inference’ and ‘imputation’ (see paragraph 26 for an explanation of the difference). Whilst the majority (Lord Walker and Lady Hale, with whom Lord Collins agreed) held that there was evidence on which they could infer a change in intention, the minority thought that there was not enough evidence to do this but they were prepared to impute an intention.
A strong answer will also pick up that the property was registered in joint names and that a distinction was drawn between these cases and matters where the property was registered in the sole name of one of the parties (paragraph 17 and 52).
Remember that the question asks whether courts will now decide on parties' shares on the basis of fairness. Do you think that is an accurate reflection of what the court decided in Jones v Kernott? Does it make a difference to your answer whether the courts can only infer intention or whether they can impute intention too?
A good answer will pick up on the fact that Chadwick LJ's statement is only approved as the approach to use in quantifying the parties shares where they did not intend a joint tenancy at the outset or changed their original intention ‘but it is not possible to ascertain by direct evidence or by inference what their actual intention was as to the shares in which they would own the property’.
Outline the other methods by which cohabitees may have a share in property – you should run through the elements of express trusts, resulting trusts and proprietary estoppel. A good answer will make a comment about the significance of these other methods. So, for example, where the parties have an express trust there may be less likely to be a dispute about ownership. Similarly, following Jones v Kernott, resulting trusts are likely to apply in far more limited situations.
Discuss how the position of married couples differs from that of cohabiting couples. You should explain how the courts decide the financial and property consequences of divorce: using section 25 of the Matrimonial Causes Act and the case law. Remember that in the majority of cases all of the resources will be required to meet the parties' needs. It is only in ‘big money’ cases that the case law becomes relevant.
As the question specifically refers to fairness, it is important to explain how fairness applies to married couples. You should discuss White v White and Miller v Miller; McFarlane v McFarlane and what they say about the use of fairness.
Keep addressing the question, so make sure you comment on whether the courts decide the affairs of married couples on the basis of fairness. Although this is a highly discretionary area, fairness is only a guide to the interpretation of s 25. The statutory factors are the basis for dividing resources and in the majority of cases, needs are key. This is different to the position of unmarried couples who have no statutory regime and may only be able to claim a share of property using the law of trusts.
Mention the Law Commission proposals for reform, which have been rejected. Do you think the law should be reformed and, if so, how?