Stack (Appellant) v. Dowden (Respondent)

Where a domestic home is conveyed into joint names without an express declaration of trust, equity follows the law. The starting point is joint and equal beneficial ownership. The party asserting unequal shares bears a considerable burden of proving a different shared intention.

That intention must be ascertained from the parties’ whole course of conduct concerning the property. Relevant matters extend beyond direct financial contributions. The court seeks the parties’ actual, inferred or imputed shared intention; it cannot substitute its own view of a fair division.

An express declaration of beneficial ownership is generally conclusive. A standard-form declaration that the survivor may give a receipt for capital money is not, without more, such a declaration.

Stack v Dowden concerned an unmarried couple who had lived together for many years and had four children. Their family home was conveyed into their joint names without an express declaration of their beneficial shares. The respondent contributed substantially more of the purchase money, while the parties otherwise maintained unusually separate finances.

The Central London County Court ordered equal division of the proceeds and directed a monthly payment to the appellant while he was excluded from the home. The Court of Appeal, [2005] EWCA Civ 857, allowed the respondent’s appeal. It awarded her 65% of the proceeds and set aside the monthly payment.

The issues before the House were whether joint legal ownership presumptively entailed equal beneficial ownership, how any contrary intention should be established and quantified, and whether the excluded co-owner should receive compensation under the Trusts of Land and Appointment of Trustees Act 1996.

1. Disposition. The House dismissed the appeal by a majority. Baroness Hale delivered the leading speech. Lord Hoffmann, Lord Hope and Lord Walker agreed with her reasons. Lord Neuberger agreed that the beneficial shares should remain 65% to the respondent and 35% to the appellant, but would have allowed the appeal concerning compensation for exclusion from the property.

2. Presumption arising from joint title. Per Baroness Hale, the starting point in a domestic joint-names case is joint and equal beneficial ownership. The person asserting that the beneficial interests differ from the legal title bears the burden of proving both that the parties intended a different arrangement and the nature of that arrangement. The burden is considerable, and departures from equal ownership will be unusual.

3. Shared intention and quantification. The court must ascertain the parties’ shared intention, whether actual, inferred or imputed, from their whole course of conduct concerning the property. Relevant circumstances include discussions at acquisition, the reason for using joint names, the purpose of the purchase, the nature of the relationship, responsibility for children, financing, the organisation of the parties’ finances, property outgoings and significant later improvements. The approach in Oxley v Hiscock [2004] EWCA Civ 546 was approved insofar as it required a holistic inquiry. Its reference to the share which the court considered fair was qualified: fairness was not an independent yardstick, and the court could not impose its own preferred division.

4. Application. The respondent discharged the burden. Her substantially greater contribution, the parties’ rigid separation of their finances and their separate responsibility for expenditure demonstrated an intention to hold unequal shares. These were exceptional facts. The respondent established the 65% share for which she contended.

5. Occupation compensation. Per Baroness Hale, sections 12 to 15 of the Trusts of Land and Appointment of Trustees Act 1996 replaced the former equitable-accounting approach. The court had to apply the statutory criteria, including the trust’s purposes, the welfare of minor occupants and the beneficiaries’ circumstances and wishes. Although exclusion could support compensation, the appellant had agreed to leave, the respondent maintained the family home, and a prompt sale was intended. The monthly payment was therefore correctly set aside.

6. Separate opinion. Lord Neuberger preferred a resulting-trust presumption where unequal purchase contributions were the only additional evidence. He considered that an actual intention could be inferred but not imputed. On compensation, he considered the appellant’s exclusion, alternative accommodation costs, the earlier agreed payment and the statutory factors sufficient to justify £900 per month.

1. House of Lords: The appeal in Stack v Dowden [2007] UKHL 17 was dismissed. The Court of Appeal’s orders dividing the proceeds 65% to the respondent and 35% to the appellant, and setting aside occupation compensation, remained in force.
2. Court of Appeal: In Stack v Dowden [2005] EWCA Civ 857, the respondent’s appeal was allowed. The court substituted a 65:35 division in her favour and set aside the monthly payment to the appellant.
3. Central London County Court: The court ordered sale of the property, equal division of the net proceeds and the joint endowment policy, and payment of £900 per month to the appellant from the proceeds pending sale.