| Stack v Dowden | |
|---|---|
 | |
| Court | House of Lords |
| Decided | 25 April 2007 |
| Citation(s) | [2007] UKHL 17; [2007] 2 AC 432; [2007] 2 WLR 831; [2007] 2 All ER 929 |
| Court membership | |
| Judge(s) sitting | Lord Hoffmann, Lord Hope, Lord Walker, Baroness Hale and Lord Neuberger |
| Keywords | |
| Constructive trust, family home, resulting trust | |
Stack v Dowden [2007] UKHL 17 is a leading English property law case concerning the division of interests in family property after the breakdown of a cohabitation relationship. [1]
Mr Stack and Ms Dowden were in a long-term relationship with four children, though they had never married. They had almost always kept their respective financial affairs separate. When they moved home in 1993 they registered the new house in their joint names, but did not specify on the Land Registry Form what their respective shares were. Generally, this would mean a presumption that they would share the property equally. However, in this case 65% of the purchase price had been provided by Ms Dowden (largely from the sale of their previous home which was in her sole name, and from her investments), and 35% by Mr Stack (who had lived in the previous home for 10 years and had made numerous improvements to it).
Nine years after purchasing the house, their relationship broke down and they agreed a court order to the effect that Mr Stack would move out and that Ms Dowden would pay for his alternative accommodation. Mr Stack then sought a declaration that the house was held upon trust by the couple as tenants in common, and an order for its sale.
The High Court declared that they owned the property in equal shares. Ms Dowden appealed.
The Court of Appeal overturned the High Court and ordered that the net proceeds be divided 65 per cent to Ms Dowden and 35 per cent to Mr Stack. [2] The declaration as to the receipt for capital money in the transfer document could not be taken as an express declaration of trust, nor could it infer an intention that the beneficial ownership be equal, because there was no evidence that either of them had understood the declaration to carry such significance. The issues were whether a conveyance into joint names established a prima facie case of joint and equal beneficial interests and whether the Court of Appeal had been correct to overrule the judge's order that Ms Dowden compensate Mr Stack for the cost of his accommodation. Mr Stack appealed.
The House of Lords held that Ms Dowden owned a greater share than half the equity, and so although she and Mr Stack were joint tenants of the legal estate, Ms Dowden was entitled to a 65 per cent interest. Lord Hoffmann said he concurred with Baroness Hale. Lord Hope, gave a short judgment also concurring with Baroness Hale. He emphasised that, departing from Lloyds Bank plc v Rosset , when deciding whether a constructive trust existed,
... indirect contributions, such as making improvements which added significant value to the property, or a complete pooling of resources in both time and money so that it did not matter who paid for what during their relationship, ought to be taken into account as well as financial contributions made directly towards the purchase of the property. [3]
Therefore, because the couple had maintained their financial independence from each other throughout their relationship, Lord Hope reasoned that the appeal should be dismissed.
Lord Walker, agreeing with the reasons given by Baroness Hale, was also of the opinion that the appeal should be dismissed.
Baroness Hale said that the onus is upon the person seeking to show that the beneficial ownership is different from the legal ownership [4] and that the key question in cases such as this is “did the parties intend their beneficial interests to be different from their legal interests?”, [5] although she acknowledged that cases of this type would be very unusual. [6] She stated that, contrary to Lloyd's Bank plc v Rosset, many factors other than financial contributions may be relevant to divining the parties' true intentions, such as any discussions at the time of the transfer which cast light upon their intentions; the reasons why the home was acquired in their joint names; the nature of their relationship; whether they had children for whom they both had responsibility to provide a home; how the purchase was financed, both the initial purchase price and the subsequent mortgage payments; how the parties arranged their finances, whether separately or together or a bit of both; how they discharged their household expenses. Baroness Hale stated that these and other factors should be taken into account when deciding whether the parties' beneficial interests should be different from their legal interests and whether a constructive trust existed. [7]
Because the parties had kept their finances rigidly separate, Baroness Hale was of the opinion that, taking their entire course of conduct into account, the appeal by Mr Stack should be dismissed and the Court of Appeal's order of a 65/35 split in favour of Ms Dowden should stand. She further stated that the court can look at other elements such as the purpose for which the home was acquired, whether the parties have children for whom they both have a responsibility to provide a home, and how they managed outgoings on the property and other household expenses.
There cannot be many unmarried couples who have lived together for as long as this, who have had four children together, and whose affairs have been kept as rigidly separate as this couple's affairs were kept. This is all strongly indicative that they did not intend their shares, even in the property which was put into both their names, to be equal. [8]
Lord Neuberger, dissenting in his reasoning (but not on the result of the 65 to 35 per cent split), advised against easy and frequent changes to law (especially by the judiciary rather than Parliament) that might give rise to new and unforeseen uncertainties and unfairnesses. [9] He advocated the use of the resulting trust where evidence of factors other than direct financial contributions were absent [10] and expressed concern about imputing intentions to the parties rather than inferring their intentions in light of their actions and statements - the former involves concluding what the parties would have intended whereas the latter involves concluding what they did intend. [11] Lord Neuberger held that there were no grounds for varying the 65/35 split which he believed originated on the acquisition of the property and the establishment of a resulting trust. He was of the opinion that nothing other than "subsequent discussions, statements or actions, which can fairly be said to imply a positive intention to depart from that apportionment, will do to justify a change in the way in which the beneficial interest is owned." [12] He thought that the facts that they lived together for a long time, have been in a loving relationship, have children, operated a joint bank account and shared the outgoings of the household could not of themselves indicate an intention to vary this unequal split, and that even payments on decoration, repairs, utilities and council tax did not suffice on their own without evidence of an express agreement to vary their shares. [13] He agreed that the appeal should be dismissed, though for different reasons than the majority.
In trust law, a constructive trust is an equitable remedy imposed by a court to benefit a party that has been wrongfully deprived of its rights due to either a person obtaining or holding a legal property right which they should not possess due to unjust enrichment or interference, or due to a breach of fiduciary duty, which is intercausative with unjust enrichment and/or property interference. It is a type of implied trust.
Regina v. Special Adjudicator ex parte Ullah, also known as Do v. Secretary of State for the Home Department[2004] UKHL 26 on appeal from [2002] EWCA Civ 1856, was a legal case in the United Kingdom. This was a joint decision, meaning two cases were heard at the same time, so the case may be cited as either of the case titles.
David Edmond Neuberger, Baron Neuberger of Abbotsbury is an English judge. He served as President of the Supreme Court of the United Kingdom from 2012 to 2017. He was a Lord of Appeal in Ordinary until the House of Lords' judicial functions were transferred to the new Supreme Court in 2009, at which point he became Master of the Rolls, the second most senior judge in England and Wales. Neuberger was appointed to the Supreme Court, as its President, in 2012. He now serves as a Non-Permanent Judge of the Hong Kong Court of Final Appeal and the Chair of the High-Level Panel of Legal Experts on Media Freedom.
English trust law concerns the protection of assets, usually when they are held by one party for another's benefit. Trusts were a creation of the English law of property and obligations, and share a subsequent history with countries across the Commonwealth and the United States. Trusts developed when claimants in property disputes were dissatisfied with the common law courts and petitioned the King for a just and equitable result. On the King's behalf, the Lord Chancellor developed a parallel justice system in the Court of Chancery, commonly referred as equity. Historically, trusts have mostly been used where people have left money in a will, or created family settlements, charities, or some types of business venture. After the Judicature Act 1873, England's courts of equity and common law were merged, and equitable principles took precedence. Today, trusts play an important role in financial investment, especially in unit trusts and in pension trusts. Although people are generally free to set the terms of trusts in any way they like, there is a growing body of legislation to protect beneficiaries or regulate the trust relationship, including the Trustee Act 1925, Trustee Investments Act 1961, Recognition of Trusts Act 1987, Financial Services and Markets Act 2000, Trustee Act 2000, Pensions Act 1995, Pensions Act 2004 and Charities Act 2011.
English contract law is the body of law that regulates legally binding agreements in England and Wales. With its roots in the lex mercatoria and the activism of the judiciary during the industrial revolution, it shares a heritage with countries across the Commonwealth, from membership in the European Union, continuing membership in Unidroit, and to a lesser extent the United States. Any agreement that is enforceable in court is a contract. A contract is a voluntary obligation, contrasting to the duty to not violate others rights in tort or unjust enrichment. English law places a high value on ensuring people have truly consented to the deals that bind them in court, so long as they comply with statutory and human rights.
Lloyds Bank plc v Rosset[1990] UKHL 14 is an English land law, trusts law and matrimonial law case. It specifically deals with the translation into money of physical contributions from a cohabitee or spouse, under which its principles have been largely superseded.
Gissing v Gissing [1970] UKHL 3 is an English land law and trust law case dealing with constructive trusts arising in relationships between married couple. It may no longer represent good law, since the decisions of Stack v Dowden and Jones v Kernott.
Paul v Constance[1976] EWCA Civ 2 / [1977] 1 W.L.R. 527 is an English trust law case. It sets out what will be sufficient to establish that someone has intended to create a trust, the first of the "three certainties". It is necessary that a settlor's "words and actions ... show a clear intention to dispose of property ... so that someone else acquires a beneficial interest."
Williams & Glyn's Bank v Boland [1980] is a House of Lords judgment in English land and trusts law on an occupier's potentially overriding interests in a home.
Re Vandervell Trustees Ltd [1974] EWCA Civ 7 is a leading English trusts law case, concerning resulting trusts.
English land law is the law of real property in England and Wales. Because of its heavy historical and social significance, land is usually seen as the most important part of English property law. Ownership of land has its roots in the feudal system established by William the Conqueror after 1066, but is now mostly registered and sold on the real estate market. The modern law's sources derive from the old courts of common law and equity, and legislation such as the Law of Property Act 1925, the Settled Land Act 1925, the Land Charges Act 1972, the Trusts of Land and Appointment of Trustees Act 1996 and the Land Registration Act 2002. At its core, English land law involves the acquisition, content and priority of rights and obligations among people with interests in land. Having a property right in land, as opposed to a contractual or some other personal right, matters because it creates priority over other people's claims, particularly if the land is sold on, the possessor goes insolvent, or when claiming various remedies, like specific performance, in court.
Jones v Kernott [2011] UKSC 53 is a decision by the UK Supreme Court concerning the beneficial entitlement to a co-owned family home under a constructive trust. The court ruled there was a 90:10 split of ownership in favour of the main child-caring partner who contributed 80% of the equity to the home in which she lived. The non-resident partner had also ceased to pay bills and maintenance for the children for a considerable time.
Bristol & West Building Society v Henning [1985] EWCA Civ 6 is an English land law case that holds a person can consent to give up the right to an overriding interest in land, that will bind third parties, such as banks, that purchase a property. Although dealing with unregistered land, it is equally applicable in the case of registered land and now falls under the Land Registration Act 2002.
Abbott v Abbott [2007] UKPC 53 was advice from the Privy Council on a case from the Court of Appeal of Antigua and Barbuda, that is relevant for English land law and concerns the nature of constructive trusts.
Sinclair Investments (UK) Ltd v Versailles Trade Finance Ltd[2011] EWCA Civ 347 is an English trusts law case, concerning constructive trusts. Sinclair was partially overruled in July 2014 by the UK Supreme Court in FHR European Ventures LLP v Cedar Capital Partners LLC.
Cuckmere Brick Co v Mutual Finance[1971] EWCA Civ 9 is an English tort law case, establishing the lender must publish/promote the materially beneficial key, intrinsic facts as to land in mortgage repossession sales. As it affects the duty of mortgagees, to that extent it can be considered within the periphery of English land law also.
Prest v Petrodel Resources Ltd[2013] UKSC 34, [2013] 2 AC 415 is a leading UK company law decision of the UK Supreme Court concerning the nature of the doctrine of piercing the corporate veil, resulting trusts and equitable proprietary remedies in the context of English family law.
Geary v Rankine[2012] EWCA Civ 555 is an English land law case, concerning constructive trusts, and the establishment of a beneficial interest in an enterprise between a business owner and his or her lover and co-worker. It specifically concerned a case where the latter person received no formal wages and had entered no formal ownership nor partnership agreement nor directly or indirectly contributed in money to the purchase price.
FHR European Ventures LLP v Cedar Capital Partners LLC[2014] UKSC 45 is a landmark decision of the United Kingdom Supreme Court which holds that a bribe or secret commission accepted by an agent is held on trust for his principal. In so ruling, the Court partially overruled Sinclair Investments (UK) Ltd v Versailles Trade Finance Ltd in favour of The Attorney General for Hong Kong v Reid (UKPC), a ruling from the Judicial Committee of the Privy Council on appeal from New Zealand.
Akers v Samba Financial Group[2017] UKSC 6, [2017] AC 424 is a judicial decision of the Supreme Court of the United Kingdom relating to the conflict of laws, trust law and insolvency law.