Ten Years On From Jones v Kernott
It may come as a surprise to discover that it is now nearly ten years since the Supreme Court handed down its decision in Jones v Kernott  UKSC 53, a case which in many ways epitomises this area of law. It related to a modest bungalow in Thundersley, Essex and involved the sort of questions only Chancery lawyers could devise: ‘Can a constructive trust be ambulatory?’, ‘Should the court impute to the parties a common intention which was neither expressed nor could be implied?’
And, like all good TLATA cases, no one in Jones could agree on the law. The Supreme Court reversed the Court of Appeal ( EWCA Civ 578), which by a 2:1 majority allowed an appeal from the deputy High Court judge, Nicholas Strauss QC ( EWHC 1714(Ch), who had dismissed an appeal from the trial judge, HHJ Dedman in Southend on Sea.
The conclusion of this monumental litigation was that the Supreme Court restored the judgment of first instance (i.e. that the parties held the property in 90% / 10% shares), but were unable otherwise to reach agreement on the legal principles. Four Justices gave their own judgments and the question of whether a common intention can be imputed was narrowly allowed (3:2).
In reading this, family lawyers may already be breaking out in hives, or recalling the elegant description of this area of law as a ‘witch’s brew’, by Carnwath LJ (as he then was) in Court of Appeal in Stack v Dowden  EWCA Civ 857:
But what has happened in the intervening decade? What cases should occasional travellers in this area of law, be aware of since the Supreme Court decisions in Stack v Dowden  UKHL 17and Jones v Kernott? The following is offered as a swift canter through the last decade, along the lines of ‘essential TLATA for the family lawyer’
Pankhania v Chandegra  EWCA Civ 1438, is an important CA decision which confirms that the law in relation to express trusts has not changed since Goodman v Gallant  Fam 106, i.e. that an express declaration in signed writing, e.g. contained on a Transfer Form, conclusively declared co-owner’s beneficial shares, save in cases of fraud or mistake etc. There is no room to run a constructive trust analysis. Per Patten LJ:
“ … reliance on Stack v. Dowden and Jones v. Kernott for inferring or imputing a different trust in this and other similar cases which have recently been before this court is misplaced where there is an express declaration of trust of the beneficial title and no valid legal grounds for going behind it.”
Curran v Collins  EWCA Civ 404: the CA put to bed a similar misreading of Stack v Dowden, to the effect that detrimental reliance remained an essential part of any constructive trust analysis (see Lewison LJ at )
In Graham-York v York  EWCA Civ 72 the CA provided guidance on the quantification of share in a sole ownership case, i.e. (1) there was no presumed starting point of equality; (2) the judicial evaluation of a fair share involved a discretion and there was no right answer; (3) the court was not concerned with some form of ‘redistributive justice’; (4) a ‘fair share’ is decided only by considering the parties’ dealings in relation to the property
Barnes v Phillips  EWCA Civ 1056: The court may only consider imputation (where it arises) at the stage of quantifying interests; not the primary stage of establishing whether a party has an interest or whether there has been a change of intention
Marr v Collie  UKPC 17, an appeal from Bahamas to the Privy Council, confirmed that where co-owners within the ‘domestic consumer context’ buy a property as an investment, ‘it did not follow inexorably’ that the court would apply a resulting trust analysis (cf. Laskar v Laskar  EWCA Civ 347)
Begum v Hafiz  EWCA Civ 801 confirms that court’s powers under s.14 of TLATA does not include an order to transfer property (a common misconception with family lawyers), but does extend to a limited discretion to give one beneficiary the first opportunity to purchase the other’s share at market value. In the event that this was not paid within a set period of time, the property would go to the open market. (Also see Kingsley v Kingsley  EWCA Civ 297, which confirms that ‘Begum orders’ are not governed by any valuation threshold
Dibble v Pfluger  EWCA Civ 1005, which is not an unpublished story by Dickens, casts (not very much) light into a long ignored area of law, i.e. the court’s powers under the Law Reform (Miscellaneous Provisions) Act 1970, which extended s 37 of the Matrimonial Proceedings and Property Act 1970 to cohabitees, whereby the court can take into account any contribution made in money or money’s worth in acquiring a beneficial interest
‘Ch FDR’: The Chancery Guide now makes reference to the availability of a ‘Chancery Financial Dispute Resolution’ hearing: see Chancery Guide (2019) at § 18.16
Civil Procedure generally: The shockwaves from the Jackson Reforms and Mitchell v News Group Newspapers  EWCA Civ 1537 have subsided, and the leading case is now Denton, Decadent and Utilise  EWCA Civ 906 (another brilliantly named case) which provides for a three-stage test (per Dyson MR and Vos LJ)
“ … A judge should address an application for relief from sanctions in three stages. The first stage is to identify and assess the seriousness and significance of the “failure to comply with any rule, practice direction or court order” which engages rule 3.9(1). If the breach is neither serious nor significant, the court is unlikely to need to spend much time on the second and third stages. The second stage is to consider why the default occurred. The third stage is to evaluate “all the circumstances of the case, so as to enable [the court] to deal justly with the application including [factors (a) and (b)]”.
Part 36 offers: be aware of the pro forma template at Form N242
Arbitration: a TLATA claim can be arbitrated under the IFLA scheme, with the presumption (subject to the parties’ agreement) that there will be order as to costs. Following the CA decision in Haley v Haley  EWCA Civ 1369, the court may decline to turn an arbitral award into an order where the decision was wrong, whereas previously it was thought that the routes of challenge were narrow and limited to those under the Arbitration Act (see BC v BG  EWFC 7). Query if this broader route of challenge also applies to TLATA claims arbitrated under IFLA where the court has no supervisory jurisdiction in terms of approving an order.
Magiera v Magiera  EWCA Civ 1292, considered the jurisdiction of English courts, in the context of Article 22 of Brussels I: was the TLATA claim made in personem or in rem, and did the EU State have exclusive jurisdiction?
Watch this space
Bear in mind the imminent change to Civil Procedure Rules with respect to witness statements at the Business and Property Courts. From 6 April 2021, Practice Direction 57AC (Witness Evidence at Trial) in claims before the Business and Property Courts – still in draft – which seek to further control the content of statements, with a certificate of compliance signed by the party’s lawyer.
Finally, at some point it will hopefully be possible to deal with a TLATA claim in the family court. This prospect was recommended as long ago as 2016 by Briggs LJ in his final report on the Structure of Civil Courts. However until primary legislation is brought forward, this remains some way off.
8 March 2021