this reached the house of lords on 5 fen 2007
judgment was given on 25 april. . stacck v dowden . v significant in at least 2 respects. in first case in Trusts of Land and Trustees Act 1996 ever to have been decided by the house of Lords
judgment laid down principles for the distribution of the assets of cohabitees on the dissolution of a relationsghip
given that the law commission has recentrly reviewed this difficult issue there could be radical change in the relevant legal principles in the near future
although there currenly appears to be no political appetite to embrace the law commissions proposals
ms downde and mr stcack cohabited for 20 years and had foru children
their first home together was bought i 1983 for 30 k in miss downden name with mortgage of 22 k and despoit of 8 k from miss downden’s savings. that house was then sold
they bought a new house was bought in joint na,mes/. 65 k of the 190k purvhass price was provided by a mortgage and the remainder came from the proceeds of sale of the first 66 k proft and also froma bank account in miss dowden’s name 59 k
the relationship eneded in 2002
after moving out of the house mr stackj obtained a court order under TLATA tthat he was entitled to half of trhe proceeds of sale of the house now valued at 770 k as a tenant in common and also obtained an order for sale
miss downden appealed and succeeded in estavlsihing that she was entitled to at least 65% of the proceeds of the sale of the house
mr stack had not been entitled to any share of the proceeds of sale of the first house or of the savings in miss downdens name
miss dowden might well have received greater share iof she has not limited her clianm to 65%
stack then appealed to the house iof lords contedning that he was entited to 50% of the proceeds of sale
miss downde argyued that she had always paid the vast amjoroty of the proceeds of sale. miss downe argyued that she has always paid the vast manjority of the housing costs
there was never a written agreement as to tghe beenfrical ownershipo of the house as as is often the case the parties disputed whather there was any discussion as to this vitl issue
both at first instance and in the court of appeal the court found that where there was no declatriont of the share sin property was registered in one name only
this required use of approach from oxley v hiscock
as seen the house of lordss held tat when there is joint legal ownership it is presumed that there is joint ownership also in equity . the burden is on the party seeking to show thjat the parties intened their equitable interest to be difdferent from their lega interesr and there are many re;lvant factors in deciding whewther there was such a commion interes
it would only be in unusual case that a claimant would succeed in showing that the beneficial interest were different from the legal interests
this was just an unusual case since the parties had kept their finances separate even though they had cohabited for many years and had children together this was strong evidence that they did not intend their shares to be equal even when the house was put into joint names
thus the appeal was dismissed.
the court also found that the trial judge had been wrong in failing to apply the TLATA criteria to the issue of whether D should pay the cost of alternative accommodation and hence the court of appeal had been correct to overturn the first instance judge on this issue
house of lords decision is much broader than the issue technically before the court – that of quantification of shares – and signals that courts are now taking a more flexible approach than that set out in lloyd’s v rossett. baroness hale who gave the leading judgment listed the factors relevant to quantification of shares in the absence of a written declaration at paragraph 69 these are wide enough to give judges a great deal if discretion. lord neuberger gave the only dissenting judgment , arguing for a more structured and traditional approach and the avoidance of uncertainty.
jones v kernott is a important example of the courts applying tack principles broadly. on the issue of whether fairness is a factor to be taken into account by courts when quantifying a partys interest , the judge at first instance
nichoals strauss qc – sitting as a deputy high court judge – stated that ”what the majority in stack held was only that the court should not override the intention of the parties, in so far that appears from what they have said or drom their conduct , in favour of what the court itself considers fair.”
in the present case there was evidence that the beneficial shares had altered after the couple had ceased to cohabit wince one of them has ceased to contribute to the mortgage.
hence the county court had been right in the absence of evidence A RO HOw the shares were intended to alter, to do what was fair and just.
strauss qc also conducted a useful analysis of cases since stack
the court of appeal heard the case in may 2010 and found that the 90 to 10 split of property had been wrong
the property was in joint names and there had been nothing tio displace the presumption raise by the fact
if the parties had truly intended that their shares would be adjusted post split then they should have ensured thatbwould happe
hence a 50 – 50 split was ordered, and the court urged unmarried couple to write things down when agreeing beneficial ownership.
the saga continued; on successful appeal to the suprem court restated and clairifie the familiar
principles of stack and dowden and confirmed the approach taken in oxley v hsicock
but there is less unanimity between the supreme court restated and clarified the familiar principles of stack and dowden and confirmed the approach taken in oxley v hsicock
but there was less unanimity between the supreme court judges on when common intention should be inferred or imputed
or whether fairness is the key issue – for a unanimous judgment, there is a lot of disagreement with judges reaching their decision by completely different routes
the core principles as lady ahle and lord walker see them are stated in parapgraph
51 judgment
”in summary therefore the following are the principles applicable in a case such as this where a family home is bought in the joint names of a cohabiting couple who are both responsible for any mortgage but without any express declaration of their beneficial interests
1. startiung pojt is the equity follows th law and they are joint tenants both in law and in equity.
2. that presumption can be displaced by shoewing a. that the partioes had a different common intenyion at the time when they acquired at the home (b) that they later formed the common intention that their respective shares would chnage
3. tgeir common intention is to be deduced objectively from their conduct ”the relevant intention of each party is the intention which was reasonably understood by the other party to be manifested by that party’s words and condyuct notwithstanding that he did not consciously formulate that intention in his own mind or even acted with some different intention which he did not communicate that to the other party. ” – lord diplock. gissing v gissing 1971
examples of this sort of evidence which might be relevant to dawiing such inferences are given in stack v dowden.
4. in those cases where it is clear either (a) that the parties did not intend joint tenancy at the outset or (b) had changed their original intention but it is not possible to ascertain by direct evidence or by inference what their actual intention was as to the shares in which they would own the property, ”the anser is that each is entitled ti that share which the court considers fair having regard t the whole course of dealing between them in relation to the property” chadwick LJ in our judgment , ”the whole course of dealing … in relation to the property” should be given as broad meaning, enabling a similar ranger of factors to be taken into account as may be relevant to ascertaining the parties actual intention.
5. each case will turn on its own facts. financial contribution are relevant but there are many other factors which may enable the court to decide what shares were either intended as in the case or fair.”
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admittedly within a few weeks of stack in abbott v abbott the privy council had appeared to apply its principles to a case where the legal title was not in joint names
but in that occasion acquisition was not in question as the legal owner had already conceded that his wife had a beneficial interest and thus the judgment was only concerned with quantification.
case involved an appeal from antigue and barbuda
– there are no provisions in this jurisdictions to reassign property interest on divorce
but of three judges also gave opinions in stack
hale , neuberger and walker
family home was in the sole name of the husband and the trial judge awarded a 50% split- this was overturned by the court of appeal
this was because the wife has not satisfied lord bridge’s criteria in rosset
the court of appeal found that th wife was entitled to only to a small share represented by her actual financial contributions to the mortgage
privy council restored the trial judges award with baroness hale reiterating lord bridges approach in rosste was outdated
applying stack a holistic view of the facts should be taken in modern teims. common intention could be inferred where there was a direct or indirect contribution to the acquisition of land. tis is going beyond the ratio of stack which relates to the quantification of shares not their establishment but it does appear clear that a more flexible approach is now tkane than that found in rosset.
thus in abbott either because the case did not consider acquisition or because as a privy council decision it was only of persuasive and not binding authority, some continued to argue that rosset remained the applicable authority when the legal title was in a single name notwithstanding baroness hale’s forthright comments
but the court of appeal rejected such arguments in greary v bankine 2012
the case involved a property in the name of one trustee but the CA made clear that stack v dowden rather than lloyd’s bank v rosset was the relevant authority
thus appears to settle the argument as to whether rosset should be followed i such cases
obviously where the legal title is in a single name the non legal owner first as to show she has acquired an interest before it can be quantified udner stack v dowden
the CA consequently held there was two stage test in which the claimant first had to show a common intention that she should acquire an interest and then a common intention as to what that interest should be
although the common intention as tp acquisition could only be deduced from express words or inferences
the court of appeal was willing to allow the size of the share to be imputed in the absence of express words or inferences concerning quantification
clearly the restrictive approach in rosset is now history with stack going some way to address the legitimate expectations of those who make a non financial contribution to the family home – as usually the women in terms of child care and home making – and who could rarely , absent a direct financial contribution or an express arrangement, come within the terms of rosset
but the price paid is high one with baroness’s holistic approach importing a large degree of uncertainty into the law
eac case is likely to turn on its own particular facts – and dare one say it is each judge’s particular view as to what is and is not significant – making it v difficult for solicitors to advise clients of their position; a point implicitly recognised in baroness’s hale judgment where was a former law commissioner she calls for legislative intervention in this field
it is indeed not just the court who are pressing for change n this issue . law commission ”cohabitiation” the financial consequences of relationship breakdown
found that the current laws is a patchwork of principles which is complex uncertain expensive to rely on and as it was not designed for family circumstances often gives rise to outcome that are unjust. while not recommending that cohabitees should have access to the same remedies as married couples the law commission proposes that where an unmarried couple have cohabited for a set number of years – precise number to be agreed later – or had a child together , and have not expressly agreed that the new shcme would not apply them, then new principles should apply to the allocation of their property on dissolution of the relationship
it would be necessary for a claimant to show that he had suffered an economic disadvantage by making contributions to the relationship. a court would then have discretion to grant appropriate financial relief while having regard to the needs of any dependent children
the proposals limitations should be noted however they would ot apply where the cohabitants are not a couple or where a third party is involved in the facts as in rosset. Thus even if the proposed new scheme did become law some cases would still fall to be decided under whatever version of the stack v dowden principles applies
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