Stack v Dowden

In England, where  ‘family’ property is in joint names (necessarily under a statutory trust), where there is no  express declaration as to the form of the co-ownership nor as to how ownership is to be shared, the starting presumption is that the property is owned by the couple as beneficial joint tenants (resulting in equal shares on severance). This presumption can be departed from in exceptional circumstances.

In Stack v Dowden ([2007] UKHL 17, [2007] 2 AC 432) an unmarried couple bought a home in joint names. There was no express declaration that they were beneficial joint tenants nor as to how the beneficial ownership of the property was to be divided between them. Ms Dowden contributed around 65% of the purchase price (in the form of an initial down payment and of mortgage contributions) and Mr Stack the remaining 35%.  When the relationship broke down, Mr. Stack sought an order for sale and half of the proceeds of sale. The majority of the House of Lords took a constructive trust approach. Baroness Hale (with whom the majority aligned themselves) held that where  ‘family’ property is in joint names and there is  no express declaration as to how ownership is to be shared, the starting presumption is that the parties intended a beneficial joint tenancy. Following a severance, in the absence of a contrary intention, this results in equal beneficial shares under a tenancy in common. This presumption can be departed from in exceptional circumstances. Here the fact of unequal contributions and the fact that the parties had kept their finances and savings separate justified a departure from the presumption. Mr. Stack was entitled to 35% of the proceeds of sale.

Lord Neuberger agreed with the conclusion but not the approach. He thought that  a resulting trust approach should be taken to the calculation of the respective interests of the parties. In cases such as this, equal beneficial ownership should be the starting point unless there was relevant evidence (concerning the parties’ respective contributions to the purchase price) pointing to a different conclusion.

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