Stack v Dowden

This appeal concerned the division of the beneficial interest in a family home conveyed into the joint names of an unmarried cohabiting couple without an express declaration of trust. The House held that, as a general starting point, joint legal ownership gives rise to a presumption of joint beneficial ownership in equal shares; the onus lies on the party who asserts that the beneficial shares differ from the legal title to prove a different common intention. The court explained the relationship between resulting trusts and constructive (common intention) trusts: a resulting trust proportional to contributions is a strong evidential starting point but may be displaced by evidence of a common intention to share otherwise, inferred (but not imputed) from the whole course of dealings. The Trusts of Land and Appointment of Trustees Act 1996 (sections 12–15) governs compensation for exclusion from occupation.

This case arose after a long cohabitation in which the parties bought a dwelling first in the sole name of the respondent and later in their joint names (Chatsworth Road). The claimant (Stack) sought an equal division of the proceeds of sale and an order for interim payments to compensate for his exclusion from occupation. The trial judge ordered sale and an equal division; the Court of Appeal allowed the respondent's appeal and ordered a 65:35 division in her favour. The claimant then appealed to the House of Lords.

The issues framed by the House were:

• What is the correct legal starting point when land is conveyed into joint names without an express declaration of beneficial interests?
• How is the beneficial share to be quantified — by presumption of resulting trust (shares proportionate to contributions) or by a broader inquiry into the parties' common intention based on the whole course of dealings?
• Whether the excluded party should receive interim compensation under the Trusts of Land and Appointment of Trustees Act 1996.

The House reasoned that where property is registered in joint names, the starting presumption is joint beneficial ownership in equal shares and the onus of proving otherwise lies on the party asserting an unequal division. The presumption of a resulting trust (shares proportionate to financial contributions) remains an important evidential tool and is often reflected in the parties' intentions; however, it can be displaced by evidence of a common intention — which may be inferred from conduct but should not be imputed. Relevant factors include discussions at the time of acquisition, reasons for taking title in joint names, the purpose of acquisition, how the purchase was financed, arrangements for meeting outgoings, and any later significant events (for example, substantial improvements or repayment of mortgage capital). On the facts, the House (by a majority) agreed with the Court of Appeal that the respondent had established a 65:35 split and that the appellant had not proved an equal beneficial interest. The House also considered interim compensation for exclusion and applied the criteria in sections 12–15 of the 1996 Act.

Appeal dismissed. The House reaffirmed that where property is conveyed into joint names without an express declaration of beneficial interests, a presumption of joint beneficial ownership in equal shares arises and the burden rests on the party asserting otherwise to prove a different common intention. The appellant could not discharge that burden on the evidence and the Court of Appeal's 65:35 division was upheld. The statutory criteria in the Trusts of Land and Appointment of Trustees Act 1996 govern compensation for exclusion from occupation and such orders should be assessed against those criteria.

Trial judge (Central London County Court) ordered sale and equal division (50/50). Court of Appeal allowed the respondent's appeal and ordered division 65% to 35% in her favour ([2005] EWCA Civ 857). The claimant appealed to the House of Lords ([2007] UKHL 17).