The Law Relating to Co-ownership of Land - Stack v Dowden - Essay Example

Critically discuss this ment, with particular reference to the law relating to co-ownership of land Word count 2185 excluding end s and bibliography) Introduction This research essay will analyse in detail through decided cases what will happen to the rights to the property when the unmarried cohabitating couple separate? What will be the fate of the house which they have bought through their contribution? Whether the right to property is to be decided upon whose name been shown on the Land Registry records. Will it be decided upon the fact who has contributed major share of money to buy such home? Analysis In Stack v Dowden1, for the first ­­time, the law of both implied and express trust of the family home since 1990 has been considered. Here, the norms and policies to be adhered are the subject matters in deciding the proper share in a property where there exists no express declaration of trust.2 In this case, the House of Lords examined the law in the background of a row emanating on the parting of cohabiting couple. The House of Lords also for the first-time considered the impact of a transfer of ownership of a home into combined names of cohabiting couple in the absence of written affirmation of the couple’s beneficial interest3. In this case, two significant issues were raised. In transfer of property which involves more than one person, whether a standard form of phrases employed amounted to an express affirmation of trust, thereby establishing a beneficial joint tenancy? How the beneficial interest of joint owners was to be determined, if the above did not materialise. As regards to the first issue as above, the House of Lords were of the view the kind of phrases employed in this transfer – that survivor while disposition of the land can offer a valid receipt for capital money which the Lords were of the view that it did not itself amounted to a declaration of trust. In case of separation of parties, each will be having a right to receive an equal share of net of the sale proceeds. Nonetheless, this case could be regarded as an extraordinary case in which the supposition could be invalidated4. In “Stack v Dowden”, it was held that where the legal ownership is supposed in joint names, there will be an assumption that the equitable interest is correspondingly held jointly; where if the legal title is held by a single person in his sole name, then the assumption will be that person is the sole owner of the equitable interest. However, these assumptions are just presumptions, and hence, it can be refuted by any proof which advocates that the common intent is something different5. A and Ms B were the cohabitating partners, and they had four children. In 1993, they bought a property and the same was registered in joint names. The major purchase price was paid by Ms B. A paid the premium on endowment policy, and the mortgage interest for the property and Ms B paid the utility bills and premium on her endowment policy. Later, the mortgage was paid back with funds from both A & B. In October 2002, the couple separated and in a proceeding in the Family court, Mr A agreed to stay from Ms B who occupied the property with her four children and Ms B agreed to pay £1000 per month to meet the cost of Mr. A’s accommodation6. At the first instance, both A & B were ordered to divide the sale proceeds of the property equally as both had long relationship and good partnership. Aggrieved by this, Mr. B appealed to the Court of Appeals. The property in question was transferred through the standard form Land Registry transfer, and one of the core questions was the impact of the declaration as regards to capital money received. The Court of Appeals considered the verdict given in Huntingford v Hobbs7 , when there is no evidence available that the parties had appreciated its importance, it could not be banked upon in making any deduction as to their objectives. The Court of Appeal held that the sale proceeds of the property be shared between A and B in proportion of 35% and 65% respectively, and B had to pay compensation for his accommodation costs.” On appeal to the House of Lords, it was held;” The core issue in this case was the impact of owning a home by a cohabitating couple in their joint names without a precise assertion of their respective beneficial interest over the home. In this case, their marital status has to be drawn through conduct the parties concerned. The argument that the survivor of a joint property “can offer a legitimate receipt for the capital money received from the sale of the land itself results in conveyance of a declaration of a beneficial joint ownership was rejected by the Court of Appeals in this case citing the precedents in 8”Mortgage Corporation v Shaire”9 and in “Huntingford v Hobbs”10. “The Law of Property Act, 1925”, vide section 53(1) (b) specifies that an assertion of trust with regard to any interest in land can be noticeable and established by making it in writing and signed. However, section 53(2) of the above Act says that the above does not influence the establishment or operation of implied, resulting or constructive trust. In response to ever transforming economic, social scenarios, the Law Lords have to ascertain the intentions of the parties regarding their entitlement or share through inferred, actual or imputed with regard to the property in the background of their complete option of their conduct in relation to it. For arriving into the Presumption of Resulting Trust, Law Lords considered the view expressed for the approach on common intention in “Oxley v Hiscock”11 and for the assumption of resulting trust in “Pettit v Pettit”12. A resulting trust is one where the ownership of property will be ambiguous as the transfer of property might have been incomplete or failed or more than one person might have contributed to purchase that property. In such scenarios, the doctrine of resulting results will be applied to find out a solution to the ownership issue13. Lord Browne –Wilkinson in “Westdeutsche Landesbank v Islington”14 case was of the opinion that the resulting trust would arise under the following two scenarios; When there is confusion to find out which individual contributed to the purchase consideration of property, then, the contributors will acquire an equitable interest in that property in the ratio of their contribution and is known as purchase price resulting trust. When there is a “gap” in the equitable trust, resulting trust where no satisfactory disposal of the equitable interest arises. For instance , if A establishes a trust over property but fails to come out the name of the beneficiary under that trust ,then the property will be held on resulting trust for A as held in “Pettit v Pettit”15 . Law Lords also considered the view of Chadwick LJ in” Oxley v Hiscock”16 where it was held that each contributor is authorised to that share which the court thinks of fair (principles of equity) as regard to the entire gamut of dealings between them with regard to the property. However, the main question is to be answered is that in case of joint names, what is the magnitude of favourable interests of the parties and whether the parties aim their advantageous interests to be varied from their legal interest? However, the onus will be on the person aiming to demonstrate that the parties did aim their advantageous interests to be divergent from their lawful interest. “Jones v Kernott”17 pertains to a joint-ownership case and due to change in scenario, if a man departed his spouse and did not have any connection with the residential home for several years will automatically be resulting to transfer to 90% /10% share from that of 50/50 % of ownership. The court will have to infer what their aim was at that particular point of time while deciding whether the interest of the parties has changed or not. If it is divergent to their aim, the court cannot inflict a resolution upon them. Nonetheless, if the court cannot infer precisely what shares were meant, the court may inquire what their aims as just and rational people would have been believed about it at that point of time. Fundamentally, the court in those scenarios will determine what is “fair18. Ms. Jones got 90% and Mr. Kernott got 10% of the property, and the trial judge verdict was footed upon the basis “what is just and fair between the litigating parties” keeping in mind “the whole part of dealing between the parties.” On appeal to High Court, it upheld the trial court’s verdict. High Court was of the view that some change in the litigating parties’ desire as to their beneficial interests could be deduced or accredited from their demeanour. The court can come to a conclusion on looking into the circumstances of the case in the absence of any clue by conduct or words how capital gains can be allocated between estranged couples. However, the Court of Appeal turned down the trail and High Court’s verdict and viewed that there was nothing available to hint that the intentions of the partied had transformed after their parting. Law Lords, based on the decision on “Stack v Dowden”, held that it did not allow courts to deduce, through the imputation route as the objective of parties where nothing was inferentially informed or expressly stated .However, the Supreme Court turned down the findings of Law Lords and confirmed the findings of trial judge in this case. In arriving at its findings, the Supreme Court observed that common aim is to be inferred from the conduct of the parties’ .The Supreme Court cited the findings in Gissing v Gissing19 where the main aim of the party to be inferred from the party’s conduct and words in spite of the fact that he was not intentionally made up his mind or even functioned with some other ulterior intention, which failed to inform to the other party20. Though , the financial contributions are considered crucial factor but many other factors like contribution to mortgage , the period of dwellings , the other party’s financial involvement in the family maintenance which would facilitate the court to decide what percentage of shares are to be either considered as fair or intended. It is to be observed that the principle laid down in “Stack v Dowden “is not only applicable to the estranged cohabitating couples but also extended to some other categories like a row between son and mother, daughter and mother, statement of shares in case of bankruptcy and in case of sham –declaration of trust. In “Adekunle v Ritchie”, 21it was held by HHJ Behrens that the principles laid down in “Stack v Dowden “ could be extended to a domestic affiliation between son and mother22. In “Laskar v Laskar”,23 it was held that it was not correct to extend the logic of Stack’s case to litigation where the purchase of a property is mainly as an investment for capital appreciation and rental income, despite the fact the association is of a family one24. In “Hurst v Supperston”,25 it was held that a wife of a bankrupt who had an equal interest in the beneficial ownership of their property was not permitted to retract from her earlier statement to avail more than 50% of the share in the property, and if allowed, would be not fair26. In “Painter v Hutchinson”, 27 where a written declaration of trust was produced before the court which was ruled down by the court as a sham 28. Conclusion To sum up, the impact of owning a home by a cohabitating couple in their joint names without a precise assertion of their respective beneficial interest over the home is to be decided by circumstances of each case. The onus will be on the person aiming to demonstrate that the parties did aim their advantageous interests to be divergent from their lawful interest. The court will have to infer what their aim was at that particular point of time while deciding whether the interest of the parties has changed or not. If it is divergent to their aim, the court cannot inflict a resolution upon them. Nonetheless, if the court cannot infer precisely what shares were meant, the court may inquire what their aims as just and rational people would have been believed about it at that point of time. Fundamentally, the court in those scenarios will determine what is “fair. It is also worthwhile to note that the Supreme Court cited the findings in “Gissing v Gissing” where the main aim of the party to be inferred from the party’s conduct and words in spite of the fact that he was not intentionally made up his mind or even functioned with some other ulterior intention, which failed to inform to the other party. End Notes Read More