ABSTRACT
328The Supreme Court in Jones v Kernott did not deliver a single model for the law in this area. In consequence, this chapter is modelled on the joint judgment of Lady Hale and Lord Walker (with which Lord Kerr agreed for the most part). That judgment did not overrule much earlier case law. Instead, it retained the concept of ‘common intention’ and therefore much of the earlier case law will remain important. The approach which was taken in Jones v Kernott was the following (qualifying the earlier decision of the House of Lords in Stack v Dowden). The common intention must be identified using objective evidence where possible.
First, if only one person is entered on the legal title over the property then that person is presumed to be the sole equitable owner. Whereas, if two or more people have been entered on the legal title then those people are presumed to be joint owners in equity of the property. Second, these two presumptions can be rebutted by evidence that the parties’ ‘common intention’ was something different. The concept of ‘common intention’ has been discussed in many cases and applied in several different ways. This chapter seeks to organise those different ways under five headings.
(1) The decision of the House of Lords in Lloyds Bank v Rosset in which a common intention constructive trusts is created either (a) when the parties form an agreement, arrangement or understanding as to their rights in the property before the date of acquisition and in circumstances in which they suffer some detriment, or (b) when a party contributed to the purchase price or to the mortgage instalment such that it will be at least extremely doubtful whether anything less will do. This approach was ignored in most of the later cases. (2) Where, on resulting trust principles, the parties have contributed to the purchase price, including by way of a reduction in the value of the property by statutory discount. This is dubbed ‘the balance sheet approach’. (3) The court will conduct a survey of the entire course of dealing between the parties and take into account many more factors than mere contribution to the purchase price. This is dubbed ‘the family assets approach’. (4) Some courts have focused on avoiding ‘unconscionability’ being suffered by either one of the parties. This is dubbed the 329‘unconscionability approach’. (5) The doctrine of proprietary estoppel will grant an equitable interest to a person who has been induced to suffer detriment in reliance on a representation that she would acquire some rights in the property as a result. Proprietary estoppel is a remedial doctrine whereby the court may award any one of a number of rights ranging from the entire freehold through to merely equitable compensation in money.
Jones v Kernott suggests that if the ‘common intention’ will not reveal an answer, then the court may have resort to what is ‘fair’.
