Introduction: Stack& Dowden case (2007)1,Dowden (defendant) and her partner (Stack-claimant) jointly purchased property,with a contribution of 65% of purchase price coming from D’s saving, and 35%coming from a mortgage advancement – later paid off by the claimant.
Nostatement of intention whether the property was to be held as joint tenants2or on trust as tenants in common was made. After19 years, D and her partner split with four children, the claimant had left hispartner and the four children living in the house applied for an order for saleof the property with an equal share of the beneficial interest from theproperty (50-50)3 Courtof Appeal allowed an appeal to split the proceeds 65/35 defendant-claimant;claimant appealed on this decision following sharing of beneficial interest amongunmarried couple after the cohabiting relationship had broken down. There is apresumption that a property held in joint names will be held as joint tenantswith equal beneficial interest, based on the fact that the tenants operateseparate account, held the house in proportion to purchase contribution thepresumption may be refuted.
Thetradition in English law has its notable distinction between legal ownership inland and its beneficial ownership. The trusts under which the land is held willdetermine the extent of each party’s beneficial ownership. Theclaims under the Trusts of Land and Appointment of Trustees Act 1996 (TOLATA)commonly privileged under s.14 of the Act asserting the nature and extent of aperson’s interest in property subject to a trust of land (under section14(2)(b)) and/or for an order for sale of the property (under section14(2)(a)).
In order for any party tobring a claim, it must establish from its origin that they either are a trusteeof land or have an interest in the property subject to a trust of land. Whena property is in joint name, is known as Joint Tenancy means that the propertyis held by a joint owners together and not in shares. Legally, there can onlybe four joint tenants at once, the first four names on the list becomes thejoint tenants, and the names of which must be registered (s.
34 Law of PropertyAct; LPA 1925). In case of death of one of the owners, the propertyas a whole belongs to the remaining joint tenant/s as listed on the deed. Right of Survivorship is not allowed, as theproperty cannot be disposed in a will. Moreover,in the case of only two legal tenants on the deed and both died at the sametime, it is presumed that the older one dies first (s.184 LPA 1925). With no right to survivorship, unity ofpossession is required for the separate interests to be disposed freely.
Thebeneficial interest/ownership is said to be held under a joint tenancy this islegally binding. In addition it becomesan essential tools in future in case of dispute that may arise between partiesin share of beneficial interest, the tool will reflect the intention of eachparty from the point of initial purchase of the property statement seen inBedson v Bedson;4Goodman v Gallant.5 Thompson,1987 in his argument calls for abolition of equitable joint tenancies aslittle it serves. He drew upon one setback this could cause in tenants in common if one tenant dies, appointee of asecond trustee will be required for the sale of the property. It is conclusively presumed that survivorwill take under the will of deceased thereby ceasing ownership. Little of advantage would be lost if jointtenancies were confined to ownership of the legal estate.
Another crucial pointadded to this is the, interpretation of the Forfeiture Act 1982, this would be precludedand, finally, each party would be encouraged to agree from onset thedistribution of shares in case of a sale. Equitablemay prove in three way with single legal owner by expressed trust, resultingtrust and constructive trust all known as implied trust; Jones v Kernott . Trustacquisition, there are three types of trust: express, resulting and constructive– the three method are differ in their creation and their intention. Expresstrust actual intention is subject to compliance with formality requirements ins.53(1)(b) of LPA 1925.
If the parties specific shares is express too, this is conclusive,if not, then constructive/resulting principles are applied. Oralagreements/promises binding for constructive/impliedtrusts – s.53(2) LPA 1925 Eves v Eves6. Resultingtrust most common resulting trust is purchase money trust an example when oneperson contributes to property in another person’s name, trust arises since itis assumed that the person did not intend to gift the money. Each partyreceives a share proportionate to their share of the purchase money. Scope of purchase money resulting trust also applieswhere the parties purchase the land in their joint names and there is noexpress declaration of trust regarding the parties’ respective shares. The resultingtrust then determines their shares based on their financial contributions.
Practical difference betweenresulting/constructive trusts relates to the quantification of their respectiveshares. Resulting trust usually used in commercial context, Stack v Dowden7removed the application of the resulting trust where the property in questionis a home. Constructivetrusts this is the widest and least clear category of trust; Paragon Finance v DB Thakerar & Co8suggest it arises “whenever the circumstances are such that it wouldbeunconscionable for the owner of the property to assert their own beneficialinterest in the property and deny the beneficial interest of another Institutionalconstructive trust arises by operation of law as from date of the circumstancesunder which it arises.
Remedialconstructive trust judicial remedy giving rise to an enforceable equitableobligation and the extent to which it applies retrospectively, is up to thecourt. Solelegal owner, Jones v Kernott9case diminished the role of the resulting trust. Lord Walker suggesting the constructive trustshould be applied in the case of a single legal owner, then it is a commonintention constructive trust focus is on the parties’ conduct, which included,as seen in Gissing v Gissing10and Stack v Dowden11on day-to-day expenses such as household bills; indirect contributions. Anyindication that the parties’ wished to share the home; this would be inferredas common intention. There is no resumption of equal shares in sole name cases.
Jointlegal owner Conveyance to joint owners is conclusive to the existence of atrust. Equity follows the law therefore joint tenants are also joint beneficialinterest holders with the starting point at 50:50, as held in Stack v Dowden.The presumption is that with evidence, common intention can be rebutted Legalstand before in coownership in co-habiting.
In Oxley & Hiscock12,it was held that the judge had taken wrong turning in presiding in thecase. The law in the area were not veryclear and the judges had taken wrong approach based on outdated and artificial decision. Parties conduct were used to infer intentionat the time the property was purchased.
Whereasin the instant case, there were some evidence that the parties had intendedsome form of shared ownership but had not agreed in what proportion to bedistributed. They were each entitled tothe share which the court considers as fair. Held,allowing the appeal in part, that the judge had taken the wrong approach and afair division of the proceeds was 60 per cent to H and 40 per cent to O.
Theauthorities in this area of law were to some extent unclear, and the judge hadbased her decision on a somewhat outdated and “artificial” approachin which the conduct of the parties throughout the relationship was used topiece together an inferred intention at the time the property was purchased.Where, as in the instant case, there was some evidence that the parties hadintended some form of shared ownership but had not discussed in what proportionthose shares should be, Yaxley v Gotts13. They were each entitled to that share whichthe court considers fair having regard to the whole course of dealing betweenthem in relation to the property”.
Thejudge had wrongly dwelt on conduct going towards intention instead of steppingback and looking at it from the point of view of overall fairness. Although Oand H’s cohabitation had involved a “classic pooling of resources”,H’s greater financial contribution had to be taken into account and an equalsplit would therefore not be fairer quantification of the beneficial interest. BasicFactsStack& Dowden case look into common intention constructive trust arise.
Lord Walker dismissed the appeal. Looking at when a common intentionconstructive trust, by contrast, is identifying the true beneficial owner/s andthe proportion of their beneficial interests. Proprietary estoppel naturally consists of stressing an equitable claimagainst the integrity of the true owner. The claim is a “mere equity” henceproprietary estoppel and common interest constructive trust should not beadapted as this is gratified by the minimum award necessary to do justice whichmay not benefit than the monetary terms. Similarly the difference between resulting and constructive trust focuson certain conduct that lead to presumed intention of the party who in itseffects holds the shares in proportion to purchase price contributed andconstructive emphasis is on intention whether this is actual or imputed. As resulting trust is commonly used in commercialinterest this should be avoided in family context and should not be consideredas legally. LordBridge in Rosset14case only considered direct financial contributions as relevant and whethercommon intention could be inferred in absence of express agreement.
As the law has moved on, Baroness Hale ascendin the same direction that when a property is on a sole owner, the burden lieson the the person seeking to show that the beneficial ownership is differentfrom the legal ownership. To overturnthe burden, all conduct in relation to the property is considered not only directcontribution of finance as context to be considered as stated in law and familyfactors such the rationale behind the joint names, purpose for acquiring thehome is beyond financial contribution and will state the financial contribution Nevertheless,Lord Neuberger also dismiss the appeal whether whether an intention is inferredor expressed it should not be imputed • While an intention may be inferred aswell as expressed, it should not be imputed. An inferred agreement is one which is objectively deduced to be theactual subjective intentions of the parties from their actions and statements. An imputed agreement is one which isattributed to the parties even though no such actual intention can be deducedfrom their conduct. LJ Hopkins: Maj by-passthe above notion by taking broad approach looking at the effect of majority approach is that whethercommon intention is found depends on considering the acts of the parties andthe context that the actions took place in.
Post-Stackdevelopments is not satisfactory to take a strictly chronological overview ofthe cases. This is because there havebeen two important House of Lords decisions dealing with proprietary estoppel,one of which considered the doctrine in a commercial context Cobbe v Yeoman’sRow Ltd15and one that looked at the doctrine in a more “domestic” context Thornerv Majors16. In grappling with the applicability ofdoctrines of proprietary estoppel, therefore, the practitioner should firstlook to these two cases and, of the two, should concentrate primarily onThorner v Majors.17 Theapplication of Stack & Dowden in subsequent cases, Holman v Howes18was the earliest application of case of Stack by the Court of Appeal. Citing the speech of Baroness Hale Lloyd LJstated at paragraph 30 that the Court’s inquiry should be directed to whatwas intended between the parties or, if that cannot be identified directly,what they must be taken from their conduct to have intended.
“It is not for that which the courtconsiders fair.” This was a casewhere attempts were made to rely on “post-acquisition” matters aspart of the whole course of dealings in relation to a property as indicatingthe necessary common intention to share ownership. The legal owner of the property, a man, hadleft the property in 1980 and the woman had then been solely responsible forits upkeep and did not pursue claims for maintenance in respect of the parties’daughter.
The Court of Appeal declinedto take these matters into account (at paragraph 32):Thevalue in Stack v Dowden case seems to be irrelevant in the above and toconsider what the court considers as fair in the case is like going back to theoriginal of where the court previously considered inference and not imputationis like a flaw in the case. 1 Stackv Dowden 2007 2 AC 4322 Definition– each owns the whole rather than any form of share in it: Roger Smith,Property Law, Longman Law Series, (6th edt.)3 Goodmanv Gallant 1986 Fam 1064 Bedsonv Bedson 1965 2 QB 6665 Goodmanv Gallant 1986 Fam 1066 Eves& Eves1975 1 W.L.R. 1338; 1975 3 All E.
R. 768; (1975) 119 S.J. 3947 Stack& Dowden 2007 UKHL 17; 2007 2 A.C. 4328 ParagonFinance Plc v DB Thakerar & Co 1999 1 All E.
R. 400 (21 July 1998)9 Jonesv Kernott 2009 EWHC 171310 Gissingv Gissing 1971 AC 88611 Full reference on previous footnote12 Oxleyv Hiscock 2004 EWCA Civ 54613 Yaxleyv Gotts 2000 Ch. 162; 1999 3 W.L.R. 121714 LloydsBank Plc v Rosset 1989 Ch.
350; Guardian, June 9, 1988 (CA)15 contextCobbe v Yeoman’s Row Ltd 2008 1 WLR 1752)16 Thornerv Majors 2009 2 FLR 405)17 Thornerv Major 2009 UKHL 1818 Holmanv Howes 2007 EWCA Civ 877