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Stack v Dowden

[2007] 2 All ER 929

Case summary last updated at 08/01/2020 15:04 by the Oxbridge Notes in-house law team.

Judgement for the case Stack v Dowden

P and D owned a house in both of their names whose mortgage was paid off 65% by D and 35% by P. It was accepted by the parties that both had a beneficial share- the question was the size of respective shares. P tried to claim 50% of the house. HL awarded him 35%. HL held that where a domestic property is conveyed into both cohabitants’ names without a declaration of trust, there is a prima facie presumption that both the legal and beneficial interests in the property were joint and equal. The burden of evidence was on the party trying to rebut the presumption. Such a party had to prove that the parties had held a common intention that their beneficial interests be different from their legal interests, and in what proportions. In order to discern the parties' common intention the court should look at the parties' whole course of conduct in relation to the property and the law was no longer limited to looking at direct financial contributions (i.e. it has moved on from the doctrine of resulting trust). However, it would be hard to rebut the prima facie presumption. The presumption was rebutted on the unusual facts of the case (D over the course of the marriage had always contributed far more money in every respect of family life than P, including paying household bills etc). 
 
Lord Hope: In cases where single legal ownership is assumed, the burden is on the party claiming to have a beneficial interest. In cases of assumed joint legal ownership, the onus is on the party claiming that the shares of ownership are not to be equal. 
 
Lord Walker: Lord Bridge’s doubt as to anything less that direct financial contributions will do in Lloyds Bank v Rosset was contrary to the dictum of Lord Diplock in Gissing and is widely criticised. “The presumption [of a 50-50 split in joint ownership cases i.e. where the house is in both parties’ names] will be that equity follows the law.” In Oxley v Hiscock the law moves towards the position of HL in this case, since Chadwick LJ said that the parties would be “entitled to that share which the court considers fair having regard to the whole course of dealing between them in relation to the property.” Lord Neuberger  dissented on this point, arguing that the court could not do as was ‘just’, as Chadwick LJ said in Oxley 
 
Baroness Hale: All that is needed for an common intention constructive trust to arise is a common intention that both parties should have a beneficial share. This intention can be ‘implied, actual or imputed’. “Just as the starting point where there is sole legal ownership is sole beneficial ownership, the starting point where there is joint legal ownership is joint beneficial ownership. The onus is upon the person seeking to show that the beneficial ownership is different from the legal ownership.” In seeking to overturn the burden, all conduct in relation to the property is considered: NOT solely direct financial contributions. The reason for the strength of the presumption is that, following break up of relationships, parties tend to reinterpret the past in vengeful ways and misrepresent the nature of the relationship’s arrangements. 

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