Stack v Dowden

Where a home is conveyed into the joint names of unmarried cohabitants without an express declaration of their beneficial interests, each will usually have some beneficial interest. Their shares are determined by inferring their common intention from the whole course of dealing concerning the property.

The absence of any discussion about shares does not compel division according to financial contributions. The court must determine the fair shares attributable to the parties’ inferred common intention, while giving proper weight to their contributions. A receipt clause permitting the survivor to receive capital money does not itself declare an express beneficial joint tenancy. Payments by an occupying beneficiary may be ordered only after considering the trust’s purposes, the beneficiaries’ circumstances and, where relevant, the housing needs of their children.

The parties were unmarried cohabitants whose family home was registered in their joint names. The transfer contained no express declaration of their beneficial shares, although it authorised the survivor to give a valid receipt for capital money. Miss Dowden supplied substantially more of the purchase funds, while both parties contributed towards the mortgage and family expenses.

His Honour Judge Levy QC declared that they held the property in equal beneficial shares, ordered its sale and provided for payments to Mr Stack towards alternative accommodation. Miss Dowden appealed, seeking a 65% share and challenging the prospective accommodation payments. Mr Stack relied on the receipt clause as an express trust and sought permission to cross-appeal concerning savings held in Miss Dowden’s name.

The central questions were how the parties’ beneficial shares should be determined and whether compensation for Mr Stack’s restricted occupation was justified.

1. The appeal was allowed unanimously. Chadwick LJ gave the leading judgment, with which Carnwath and Smith LJJ agreed. The net proceeds of sale were to be divided 65% to Miss Dowden and 35% to Mr Stack. The prospective monthly payments for Mr Stack’s accommodation were set aside, and permission to cross-appeal concerning Miss Dowden’s savings was refused.

2. The receipt clause did not constitute an express declaration that the parties were beneficial joint tenants. The court was bound by Harwood v Harwood and Huntingford v Hobbs. Although such a clause is consistent with survivorship, it cannot establish an inferred intention to create a beneficial joint tenancy unless the parties understood its significance.

3. In the absence of an effective written declaration, sections 53(1)(b) and 53(2) of the Law of Property Act 1925 left the beneficial interests to be determined through resulting, implied or constructive trust principles. Joint registration usually establishes that each party was intended to have some beneficial interest. The remaining question is the extent of their shares.

4. The court must infer the parties’ probable common understanding from their conduct. The absence of discussions about the amount of their shares does not require ownership in proportion to purchase contributions. Following Oxley v Hiscock [2004] EWCA Civ 546, each is entitled to the share which the court considers fair, having regard to the whole course of dealing concerning the property. Financial contributions remain important and must receive proper weight.

5. Mr Stack had established no beneficial interest in Miss Dowden’s earlier sole-name property or her sole-name savings. There had been no discussion creating such an interest and no proved direct contribution to the earlier property’s purchase price. Cohabitation, household expenditure and work performed after acquisition were insufficient. Miss Dowden therefore supplied all the non-mortgage purchase funds for the joint home, making an equal division unsustainable.

6. Sections 13 and 14 of the Trusts of Land and Appointment of Trustees Act 1996 permitted payments by an occupying beneficiary to one whose occupation had been excluded or restricted. The power required consideration of the trust’s purposes and every beneficiary’s circumstances. The judge had not considered the children’s need to remain in their home or established that Miss Dowden had delayed the sale. The prospective monthly payments therefore lacked a proper basis.

1. Court of Appeal (Civil Division): The appeal was allowed. The equal division was replaced by a division of 65% to Miss Dowden and 35% to Mr Stack, and the prospective accommodation payments were set aside. Permission to cross-appeal was refused.
2. Central London County Court: His Honour Judge Levy QC declared that the parties held the property in equal shares, ordered its sale and directed specified payments to Mr Stack before division of the proceeds.