Kernott v Jones: Supreme Court rules on cohabitation property rights



The Supreme Court has now ruled in the 2010 case of Kernott v Jones, in which the respective shares of a property bought by a couple who cohabited and then split had to be decided.  The published decision can be found at: http://www.bailii.org/uk/cases/UKSC/2011/53.html.

The Court of Appeal had previously awarded Mr Kernott 50% of the value of the house  in which he had lived with Ms Jones.  The Supreme Court has now overturned that decision and instead awarded him only 10%.  The reduced award means that the amount that he will recover from the sale of the property will be dwarfed by his legal costs.


The case highlights the importance of signing a Declaration of Trust when cohabiting or buying a property with another person, setting out how the proceeds of sale are to be split if the property is later sold.

HMRC Crack Down on Foreign Property Tax Avoidance

HM Revenue and Customs (HMRC) has established a new team of investigators and specialists in order to identify wealthy tax avoiders.

One of the first targets of the 200-strong ‘Affluent Team’ is wealthy individuals who own land and property abroad.  HMRC is applying sophisticated data mining techniques to publicly available information in order to identify individuals who own property abroad.  Risk assessment tools will then be used to highlight those who do not appear able legitimately to afford the property, as well as those who do not appear to be declaring the correct income and gains from the property.

The Affluent Team will also focus on commodity traders and people holding offshore accounts. It will work in co-ordination with existing units from across HMRC, including those that deal with corporate entities, residence and domicile issues, and trusts and estates.

Noel Edmunds in Court over Gentleman’s Agreement

TV presenter Noel Edmunds’ argument that a friend had agreed to supervise major renovations to his house in Exeter – later sold for £2 million – without charge, was rejected by the court this week.  Edmunds argued that Ulrik Lawson had agreed out of his friendship to undertake the exercise for nothing.  There was no paperwork, the agreement having made ‘on a handshake’.

This claim was made in relation to one of two disputes between the two men, both of which were decided in favour of Mr Lawson.  In addition to the sum awarded by the court to Mr Lawson, Mr Edumunds now faces an order for legal costs estimated at £800,000.

The case highlights the importance of recording all agreements in writing, even if made between friends, in case there is a dispute in the future.

‘Boiler Room” Front Man Jailed

An estate agent who acted as a ‘front man’ for a dubious investment company and persuaded wealthy people to invest in what appeared to be a respectable investment company in Switzerland (but which was in fact a ‘boiler room’ operation selling valueless ‘investments’) has been jailed at Exeter Crown Court.

The scam involved the promise of exceptional returns for little risk, and was supported by impressive-looking but fictitious marketing material.

Despite using an alias and taking elaborate procedures to avoid detection, the fraudster was caught when the use of his girlfriend’s mobile phone enabled her to be located.

He admitted defrauding investors of more than £160,000, but investigators believe that the true scale of the losses to investors is far greater.

If you are offered returns on investments which are well above the market rate and which seemingly involve little risk, be very sceptical and do your homework thoroughly.  In the UK, investment advisors are required by law to be regulated by the Financial Services Authority and redress may be available for bad advice or fraud.  Where the investment advisor is not based in the UK, there is likely to be little or no investor protection.

First Conviction Under the new Bribery Act

The Bribery Act 2010 came into force on 1 July 2011. It is an offence under the Act for a person to request, agree to receive or accept a financial or other advantage intending that, in consequence, a relevant function or activity should be performed improperly.

In what is the first conviction under the Act, Munir Yakub Patel, a former Magistrates’ Court clerk, has pleaded guilty to bribery and misconduct in public office.  Mr Patel admitted taking a £500 bribe from a member of the public to prevent details of a speeding charge from appearing on the Court database.  He also pleaded guilty to misconduct in public office regarding similar offences.  Mr Patel will be sentenced on 11 November.