House of Lords
Published April 26, 2007
Stack v Dowden
Before Lord Hoffmann, Lord Hope of Craighead, Lord Walker of Gestingthorpe,
Baroness Hale of Richmond and Lord Neuberger of Abbotsbury
Speeches April 25, 2007
A conveyance of a domestic property into the joint names of cohabitants
established a prime facie case of joint and equal beneficial interests in
the property until the contrary was proved.
The House of Lords so held, Lord Neuberger dissenting as to the reasoning, in
dismissing an appeal by the claimant, Barry Alan Stack, from a decision of
the Court of Appeal (Lord Justice Chadwick, Lord Justice Carn-wath and Lady
Justice Smith) ([2006] 1 FLR 254) allowing an appeal by the defendant, Dehra
Ann Dowden, and varying an order made by Judge Levy, QC, at Central London
County Court ([2005] 2 FCR 739) so that the proceeds of sale of the property
which the parties had occupied should be divided 65 per cent to Ms Dowden
and 35 per cent to Mr Stack.
Ms Lucy Theis QC, Mr Francis Wilkinson and Ms Miriam Shalom
for Mr Stack; Mr Christopher Lundie and Ms Emily Saunderson
for Ms Dowden.
LADY HALE said that the Land Registry form in use from April 1, 1998, provided
a box for the transferees to declare whether they were to hold the property
on trust for themselves as joint tenants, or on trust for themselves as
tenants in common in equal shares, or on some other trusts which were to be
inserted on the form.
Unfortunately, however, the transfer would be valid whether or not that part
of the form was completed. So there would still be transfers of registered
land into joint names in which there was no express declaration of the
beneficial interests.
However desirable such a declaration might be, it was unrealistic, in the
consumer context, to expect that it would be executed independently of the
forms required to acquire the legal estate.
The Land Registry form which had been prescribed since 1998 was to be
applauded. If its completion and execution by or on behalf of all joint
proprietors were mandatory the problem the House now faced would disappear.
However, the form might then include an option for those who deliberately
preferred not to commit themselves as to the beneficial interests at the
outset and to rely on the principles discussed below.
In what circumstances should it be expected that, independently of the
information required by the Land Registry forms, joint transferees would
execute a declaration of trust?
Was it when they intended that the beneficial interests should be the same as
the legal interests or when they intended that they should be different?
At first blush, the answer appeared obvious. It should be expected that joint
transferees would have spelt out their beneficial interests only when they
intended them to be different from their legal interests.
Otherwise, it should be assumed that equity followed the law and that the
beneficial interests reflected the legal interests in the property.
That proposition was not controversial, even in old-fashioned unregistered
conveyancing. It had even more force in registered conveyancing in the
consumer context.
Just as the starting point where there was sole legal ownership was sole
beneficial ownership, the starting point where there was joint legal
ownership was joint beneficial ownership. The onus was upon the person
seeking to show that the beneficial ownership was different from the legal
ownership.
So in sole ownership cases it was upon the nonowner to show that he had any
interest at all. In joint ownership cases, it was upon the joint owner who
claimed to have other than a joint and equal beneficial interest.
The question was, how, if at all, was the contrary to be proved?
Was the starting point the presumption of resulting trust, under which shares
were held in proportion to the parties’ financial contributions to the
acquisition of the property, unless the contributor or contributors could be
shown to have had a contrary intention?
Or was it that the contrary could be proved by looking at all the relevant
circumstances in order to discern the parties’ common intention? The
presumption of resulting trust was not a rule of law. Equity, being
concerned with commercial realities, presumed against gifts and other
windfalls. But even equity was prepared to presume a gift where the
recipient was the provider’s wife or child.
These days, the importance to be attached to who paid for what in a domestic
context might be very different from its importance in other contexts or
long ago.
The law had indeed moved on in response to changing social and economic
conditions. The search was to ascertain the parties’ shared intentions with
respect to the property in the light of their whole course of conduct in
relation to it: see Oxley v Hiscock ([2005] Fam 211).
Curiously, it was in the context of homes conveyed into joint names but
without an express declaration of trust that the courts had sometimes
reverted to the strict application of the principles of the resulting trust:
see Walker v Hall ([1984] FLR 126), Springette v Defoe
([1992] 2 FLR 388) and Huntingford v Hobbs ([1993] 1 FLR 736).
The approach to quantification in cases where the home was conveyed into joint
names should certainly be no stricter than the approach to quantification in
cases where it had been conveyed into the name of one only. To the extent
that Walker v Hall, Springette v Defoe and Huntingford v Hobbs held
otherwise, they should not be followed.
The burden would therefore be on the person seeking to show that the parties
did intend their beneficial interests to be different from their legal
interests, and in what way. That was not a task to be lightly embarked upon.
In family disputes, strong feelings were aroused when couples split up. Those
often led the parties, honestly but mistakenly, to reinterpret the past in
self-exculpatory or vengeful terms.
They also led people to spend far more on the legal battle than was warranted
by the sums actually at stake. A full examination of the facts was likely to
involve disproportionate costs.
In joint names cases it was also unlikely to lead to a different result unless
the facts were very unusual.
It could not be the case that all the hundreds of thousands, if not millions,
of transfers into joint names were vulnerable to challenge in the courts
simply because it was likely that the owners had contributed unequally to
their purchase.
In law, context was everything and the domestic context was very different
from the commercial world. Each case would turn on its own facts. Many more
factors than financial contributions might be relevant to divining the
parties’ true intentions.
Those included: any advice or discussions at the time of the transfer which
cast light upon their intentions then; the reasons why the home was acquired
in their joint names; the reasons why, if it was the case, the survivor was
authorised to give a receipt for the capital moneys; the purpose for which
the home was acquired; the nature of the parties’ relationship; whether they
had children for whom they both had responsibility to provide a home; how
the purchase was financed, both initially and subsequently; how the parties
arranged their finances, whether separately or together or a bit of both;
how they discharged the outgoings on the property and their other household
expenses.
When a couple were joint owners of the home and jointly liable for the
mortgage, the inferences to be drawn from who paid for what might be very
different from the inferences to be drawn when only one was owner of the
home.
The arithmetical calculation of how much was paid by each was also likely to
be less important. It would be easier to draw the inference that they
intended that each should contribute as much to the household as s/he
reasonably could and that they would share the eventual benefit or burden
equally.
The parties’ individual characters and personalities might also be a factor in
deciding where their true intentions lay. In the cohabitation context,
mercenary considerations might be more to the fore than they would be in
marriage, but it should not be assumed that they would always take pride of
place over natural love and affection.
At the end of the day, having taken all that into account, cases in which the
joint legal owners were to be taken to have intended that their beneficial
interests should be different from their legal interests would be very
unusual.
That was not, of course, an exhaustive list. There might also be reason to
conclude that, whatever the parties’ intentions at the outset, those had now
changed.
An example might be where one party had financed, or constructed himself, an
extension or substantial improvement to the property, so that what they had
now was significantly different from what they had then.
The starting point, therefore, for the defendant in the instant case was to
show that the common intention of the parties was that they should hold the
property otherwise than as beneficial joint tenants.
There were many factors to which the defendant could point to indicate that
the parties did have such a common intention. The first was that on any view
she had contributed far more to the acquisition of the house than had the
claimant.
The context was supplied by the nature of the parties’ conduct and attitudes
towards their property and finances. It could not be said that the parties
had pooled their separate resources for the common good.
The only things they ever had in their joint names were the house and the
associated endowment policy. Everything else was kept strictly separate.
Each made separate savings and investments most of which it was accepted
were their own property.
The instant case was, therefore, very unusual. There could not be many
unmarried couples who had lived together for so long, who had had children
together and whose affairs had been kept as rigidly separate as the instant
couple’s affairs had been kept.
That was all strongly indicative. The defendant had made good her case for a
65 per cent share.
Lord Hope and Lord Walker delivered concurring speeches. Lord Hoffmann agreed.
Lord Neuberger delivered a speech concurring in the result.
Solicitors: Attiyah Lone, Hammersmith; Walter Jennings & Son,
Kentish Town.
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