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Stack v. Dowden (Respondent)
Factual and Procedural Background
The Appellant and the Respondent co-habited for many years and had four children. In 1993 they purchased a house in The City in their joint names. The Respondent supplied most of the cash for the purchase while both parties assumed joint liability under the mortgage. No express declaration of trust accompanied the conveyance.
When the relationship ended the Appellant left the property. The Respondent remained in occupation with the children. The Appellant sought (i) an order for sale and (ii) an equal division of the net proceeds, plus a monthly payment to compensate him for being excluded from occupation. The trial judge ordered an equal split and awarded the monthly payment. The Court of Appeal varied that order, deciding that the Respondent was entitled to 65% of the net proceeds, the Appellant 35%, and removed the monthly payment. The Appellant appealed to the House of Lords.
Legal Issues Presented
- What is the correct starting presumption when property is conveyed into the joint names of co-habiting partners without an express declaration of trust?
- What type and quality of evidence is required to rebut that presumption and establish unequal beneficial shares?
- Did the facts of this case justify departing from equal beneficial ownership, and if so to what extent?
- Was the Appellant entitled to occupational compensation after leaving the property?
Arguments of the Parties
The opinion does not contain a detailed account of the parties' legal arguments.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Pettitt v Pettitt [1970] AC 777 | Rejected wide discretion under Married Women’s Property Act; emphasised need for actual intention | Foundation for requiring evidence rather than fairness to determine shares |
| Gissing v Gissing [1971] AC 886 | Concept of common-intention constructive trusts; distinction between inferring and imputing intention | Court followed majority view that intention may be inferred but not imputed |
| Lloyds Bank v Rosset [1991] 1 AC 107 | Two-stage test for establishing constructive trusts; evidential threshold | Re-affirmed that financial contribution is strong evidence but not the only route |
| Oxley v Hiscock [2005] Fam 211 | Quantification where sole legal ownership; consider whole course of dealing | Cited as helpful but limited to sole-name cases; joint names require heavier burden to displace equality |
| Mortgage Corporation v Shaire [2001] Ch 743 | Receipt clause not an express declaration of trust | Supported view that Land Registry “receipt” wording does not fix beneficial shares |
| Galloway v Galloway 1929 SC 160 | Scottish presumption of equal shares in common ownership | Used comparatively to show consistency north and south of the border |
| Wissenbruch v Wissenbruch 1961 SC 340 | Contributions may rebut equality in Scots law | Illustrative of Scottish approach paralleling English |
| Denvir v Denvir 1969 SLT 301 | Evidence may displace presumption of equal shares | Used analogically |
| McKenzie v Nutter 2007 SLT (Sh Ct) 17 | Unjust enrichment between co-habitants | Cited to show restitutionary trend in Scotland |
| Satchwell v McIntosh 2006 SLT (Sh Ct) 117 | Restitutionary recovery where title in one name only | Comparative reference |
| Eves v Eves [1975] 1 WLR 1338 | Common-intention constructive trust inferred from conduct | Historical development of modern approach |
| Bernard v Josephs [1982] Ch 391 | Married and unmarried couples subject to same principles | Cited for equality of legal test |
| Bedson v Bedson [1965] 2 QB 666 | Section 17 of 1882 Act procedural only | Historical context |
| McFarlane v McFarlane [1972] NI 59 | Earlier uncertainty over discretion to vary property rights | Background |
| Hine v Hine [1962] 1 WLR 1124 | Attempt to expand section 17 discretion | Overruled approach contrasted |
| White v White [2001] 1 AC 596 | Redistributive powers on divorce | Shows statutory solution for married couples absent for co-habitants |
| Crabb v Arun DC [1976] Ch 179 | Minimum equity to satisfy proprietary estoppel | Referenced when distinguishing estoppel from trusts |
| Yaxley v Gotts [2000] Ch 162 | Overlap of proprietary estoppel and constructive trust | Judge’s earlier support later tempered |
| Drake v Whipp [1996] 1 FLR 826 | Resulting vs constructive trust where mixed contributions | Cited to caution against rigid resulting-trust arithmetic |
| Muschinski v Dodds (1985) 160 CLR 583 | Australian approach; unconscionability and partnership failure | Comparative illustration |
| Grant v Edwards [1986] Ch 638 | Inferred common intention from excuse given for sole title | “Turning point” in constructive-trust cases |
| Stokes v Anderson [1991] 1 FLR 391 | Broad view of contributions post-Rosset | Part of Court of Appeal line of authority |
| Midland Bank v Cooke [1995] 2 All ER 562 | Whole-course-of-dealing approach in sole-name cases | Informative but distinguished for joint names |
| Walker v Hall [1984] FLR 126 | Applied strict resulting-trust arithmetic in joint names | House disapproved of strictness |
| Springette v Defoe [1992] 2 FLR 388 | Resulting trust presumption in joint purchase | Listed among cases not to be followed |
| Huntingford v Hobbs [1993] 1 FLR 736 | Receipt clause not trust declaration | Relied on to reject Appellant’s argument |
| Crossley v Crossley [2006] 2 FLR 813 | Later Court of Appeal view on joint names | Cited as contrasting authority |
| Steadman v Steadman [1976] AC 536 | “Uniquely referable” test in part-performance | Used by analogy to caution against technical tests |
| Dyer v Dyer (1788) 2 Cox 92 | Classic statement of resulting-trust presumption | Approved as statement of general rule |
| Malayan Credit v Jack Chia-MPH [1986] 1 AC 549 | Presumption of equality between legal co-owners; when displaced | Supported burden-of-proof analysis |
| Westdeutsche Landesbank v Islington LBC [1996] AC 669 | Nature of resulting trusts | Cited to show conceptual basis |
| Royal Bank of Scotland v Etridge (No 2) [2002] 2 AC 773 | Meaning of “presumption” as evidential tool | Applied to explain resulting-trust presumption |
| Ulrich v Ulrich & Felton [1968] 1 WLR 180 | Mortgage liability not equal to cash contribution | Discussed in assessing mortgage repayments |
| Rimmer v Rimmer [1953] 1 QB 63 | Equal division where evidence too vague | Illustrative of discretionary outcome in evidential void |
Court's Reasoning and Analysis
The majority (Judges Hale, Hope and Walker) held that:
- The correct “starting point” in joint legal ownership is a presumption of joint and equal beneficial ownership.
- That presumption is rebutted where one party proves that the common intention as to beneficial interests differed from the legal title.
- Evidence of unequal financial contributions, coupled with the parties’ clear practice of keeping their finances separate, demonstrated such an intention here.
- The Respondent’s substantially greater cash contribution (and larger share of mortgage capital repayments) justified her receiving 65 % of the net proceeds.
- Factors such as length of relationship, presence of children or pooling of day-to-day outgoings do not by themselves shift the presumption; direct evidence or compelling inference of a different intention is required.
- The Land Registry “receipt clause” is not an express declaration of trust and could not, without further evidence, prove an intention to share equally.
- Occupancy compensation is governed by ss 12–15 Trusts of Land and Appointment of Trustees Act 1996; on the facts the majority agreed with the Court of Appeal that no further payments were due.
Judge Neuberger agreed that the appeal on beneficial ownership should be dismissed but dissented on the compensation point, reasoning that fairness and the statutory factors justified continued monthly payments to the Appellant while the Respondent remained in sole occupation.
Holding and Implications
APPEAL DISMISSED.
The House of Lords affirmed that the net proceeds of sale should be divided 65 % to the Respondent and 35 % to the Appellant and that no occupational compensation was payable (majority view).
Implications: the decision clarifies that in joint-name cases the burden lies on the party asserting unequal shares; mere domestic co-habitation factors are insufficient without clear evidence of a different common intention. The ruling provides greater predictability for advisers and emphasises the utility of express declarations of trust in residential conveyancing.
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