Stack v Dowden

This is an appeal from an order made on 6 October 2004 by His Honour Judge Levy QC sitting at the Central London County Court in proceedings brought under section 14 of the Trusts of Land and Appointment of Trustees Act 1996. The property to which the proceedings relate is a dwelling house known as 114 Chatsworth Road, Willesden Green, London N2. The property is registered at Her Majesty’s Land Registry in the joint names of the parties to the proceedings, Miss Dehra Anne Dowden and Mr Barry Alan Stack. The appeal provides an opportunity to review the principles by which the respective beneficial interests of unmarried co-habitees in property registered in their joint names are to be determined in the light of the recent decision of this Court in Oxley v Hiscock [2004] EWCA Civ 546, [2005] Fam 211.

The proceedings were commenced by Mr Stack in or about September 2003. His claim was for a declaration that the property was held by the parties upon trust for themselves as tenants in common in equal shares; and for an order for sale. The judge made an order in those terms. He directed payment out of the proceeds of sale, in advance of division into equal shares, of sums intended to recompense Mr Stack for his cost of renting alternative accommodation since October 2002.

The property was transferred to Miss Dowden and Mr Stack, as purchasers, by a transfer dated 27 August 1993. The transfer contains no words of trust. But it does contain a declaration by the purchasers that the survivor of them is entitled to give a valid receipt for capital money. Paragraph 2 is in these terms:

“The Purchasers declare that the survivor of them is entitled to give a valid receipt for capital money arising from a disposition of all or part of the property.”

It was Mr Stack’s primary submission at the trial that the property had been transferred to the parties subject to the express trust that they held the beneficial interest as joint tenants in equity. In November 2002 Miss Dowden served notice of severance. It is common ground that, if there were a joint tenancy in equity, it was then severed and the parties held the property thereafter as beneficial tenants in common in equal shares.

A declaration in the form of that in paragraph 2 of the transfer deed in this case is consistent with the right of survivorship, inherent in a joint tenancy, extending to the beneficial interests in the proceeds of sale – section 36(2) of the Law of Property Act 1925. It is not apt in a case where there is a beneficial tenancy in common – section 27(2) of that Act. The appropriate (and usual) declaration in a case where the parties intend from the outset that their beneficial interests shall be as tenants in common in equity – whether in equal or unequal shares – is that a valid receipt for capital monies cannot be obtained from the survivor alone. A declaration in that form will lead to a restriction on the register to that effect under section 58(3) of the Land Registration Act 1925.

The judge did not accept that the declaration contained in paragraph 2 of the transfer deed was sufficient, of itself, to lead to the conclusion that the property had been transferred subject to an express trust for the parties as beneficial joint tenants in equity. He addressed the point, shortly, in the opening sentence of paragraph 19 of his judgment:

“The second paragraph of that transfer certainly suggests that there was to be a joint tenancy of the Property, but it is not sufficient by itself for there to be an express declaration of trust, as was found in one of the cases to which [counsel] had referred me.”

The case which the judge had in mind as authority for that proposition was, I think, Huntingford v Hobbs [1993] 1 FLR 736.

The submission advanced on behalf of Mr Stack in the court below - but rejected by the judge - is pursued in this Court by a respondent’s notice. Mr Stack invites this Court to uphold the judge’s order directing payment out of the proceeds of sale to the parties in equal shares on the grounds that this is a case in which the property was transferred subject to an express trust declared in the transfer deed, that the beneficial interests of the parties under that express trust were as joint tenants and that the beneficial joint tenancy under that express trust has been converted into a beneficial tenancy in common in equal shares by severance.

It is, I think, common ground – and, if it is not common ground, it is not open to serious dispute – that, if there were an express trust from the outset, there would be no need to consider, as the judge did, what interests might have arisen (in the absence of an express trust) under resulting or constructive trusts. The express trust would be determinative of the present interests. It is appropriate, therefore, to address that issue first.

That can be done shortly. Huntingford v Hobbs (supra) was a decision of this Court. The facts in that case (so far as material in the present context) are indistinguishable from those in this case. The property had been transferred into the joint names of the parties by a transfer which contained no declaration of trust in express terms, but which did include a declaration as to the power of the survivor to give a receipt for capital money arising on a disposition of the land. The primary submission advanced on the appeal was that a transfer in that form was to be construed as a declaration by the parties that they held the property for themselves as joint tenants (ibid 740E). As Sir Christopher Slade observed (ibid 740 F-G), if that submission were correct, it would follow from the decision in Goodman v Gallant [1986] Fam 106 that, in the absence of any claim for rectification or rescission, the declaration of trust in the transfer conclusively defined the parties beneficial interests, and the effect of the notice of severance (which had been served in that case, as in this) would be to leave the two parties entitled to the proceeds of sale in equal shares.

The Court was divided on the point. Sir Christopher Slade, following the earlier decision of this Court in Harwood v Harwood [1991] 2 FLR 274, held that – on a fair reading of the words of the declaration as to the power of the survivor to give a valid receipt – they did not constitute a declaration of trust. Lord Justice Dillon took the opposite view. He distinguished Harwood and indicated that he would have preferred to adopt the approach in Re Gorman [1990] 2 FLR 284; a decision of the Divisional Court in Bankruptcy which had, itself, been distinguished in Harwood. The third member of the Court, Lord Justice Steyn, held that this Court was bound by the reasoning in Harwood; but that, in any event, he found the reasoning in Harwood “wholly persuasive”. He said that he would follow it even if precedent did not compel that course.

Whatever view I might have taken of the effect of a receipt clause in the form of that contained in the transfer deed in the present case if I had been required to consider the matter without the benefit of authority, I have no doubt that it is not open to this Court to depart from the position established by its earlier decisions in Harwood v Harwood and Huntingford v Hobbs. This must be seen as a case in which the transfer of the property into the joint names of the parties contained no declaration of the trusts upon which they were to hold the proceeds of sale.

There is, of course, no doubt that the parties do hold the property, 114 Chatsworth Road, as trustees – sections 34 and 36 of the Law of Property Act 1925. Nor is there any suggestion, in this case, that there is any person other than the parties who is beneficially interested under the trusts upon which the property is held. The question is as to the extent of the respective beneficial interests of the parties under those trusts.

In addressing that question it is necessary to have in mind that section 53(1)(b) of the Law of Property Act 1925 requires that a declaration of trust respecting any land must be in writing. In the absence of a declaration of trust which meets that requirement, the answer must be found in the principles of law relating to resulting, implied or constructive trusts. The requirement as to writing does not affect the creation of resulting, implied or constructive trusts – section 53(2) of that Act. The position was explained by Lord Justice Slade (giving the judgment of the Court) in Goodman v Gallant [1986] Fam 106, 110F-H:

“In a case where the legal estate in property is conveyed to two or more persons as joint tenants, but neither the conveyance nor any other written document contains any express declaration of trust concerning the beneficial interests in the property (as would be required for an express declaration of this nature by virtue of s 53(1)(b) of the Law of Property Act 1925), the way is open for persons claiming a beneficial interest in it or its proceeds of sale to rely on the doctrine of ‘resulting, implied or constructive trusts’ (see s 53(2) of the Law of Property Act 1925). In particular, in a case such as that, a person who claims to have contributed to the purchase price of the property which stands in the name of himself and another can rely on the well-known presumption of equity that a person who has contributed a share of the purchase price of property is entitled to a corresponding proportionate beneficial interest in the property by way of implied or resulting trust (see, for example, Pettitt v Pettitt [1970] AC 777 at 813-814, per Lord Upjohn). . . .”

Goodman v Gallant was not, itself, a case in which a claim based on resulting, implied or constructive trusts could be advanced. The reason appears in the next sentence of the passage which I have just set out (ibid, 110H-111A):

“. . . If, however, the relevant conveyance contains an express declaration of trust which comprehensively declares the beneficial interests in the property or its proceeds of sale [as was the position in that case], there is no room for the application of the doctrine of resulting, implied or constructive trusts unless or until the conveyance is set aside or rectified; until that event the declaration contained in the document speaks for itself.”

But it is pertinent to note, first, that the Court accepted, in that case, that a conveyance into joint names which contains no declaration of the beneficial interests does not lead necessarily to the conclusion that the parties were entitled beneficially in equal shares – (ibid, 118D) - and, further, that, although this Court referred in Goodman v Gallant to “the well-known presumption of equity that a person who has contributed a share of the purchase price of property [which stands in the name of himself and another] is entitled to a corresponding proportionate beneficial interest in the property by way of implied or resulting trust”, the Court did not suggest that that was the only basis upon which a person could establish a beneficial interest. It was open to a person claiming a share in the property to rely upon a constructive trust arising out of the common intention of the parties as to what their respective shares should be.

The proposition that a person claiming a share in the property could rely upon a trust arising out of the common intention of the parties – that is to say, the common intention of the claimant and the other person (or persons) in whom the legal estate is vested – had not been in doubt since the observations of Lord Diplock in Gissing v Gissing [1971] AC 886, 905C-D, 907B-D, 907E-G, 908D-909C. The basis upon which the trust arises – or is imposed – is that the claimant has acted in reliance on that common intention in circumstances in which it would be inequitable to allow the other party or parties to refuse to give it effect. The point was put by Lord Diplock in Gissing (ibid, 905C-D) in these terms:

“A resulting implied or constructive trust – and it is unnecessary for present purposes to distinguish between these three classes of trust – is created by a transaction between the trustee and the cestui que trust in connection with the acquisition by the trustee of a legal estate in land, whenever the trustee has so conducted himself that it would be inequitable to allow him to deny to the cestui que trust a beneficial interest in the land acquired. And he will be held to have so conducted himself if by his words or conduct he has induced the cestui que trust to act to his own detriment in the reasonable belief that by so acting he was acquiring a beneficial interest in the land.”

Those observations were made in the context of a dispute between husband and wife in proceedings which predated the Matrimonial Property and Proceedings Act 1970. But they are of general import; and, in particular, they remain applicable to cases where the parties have not been married.

Gissing was a case in which the property had been conveyed into the sole name of one of the parties to a marriage. There were, therefore, two distinct questions to be addressed: (i) whether the party in whom the legal title was vested (in that case, the husband) held the property upon a trust to give effect to the beneficial interest of the other party (the wife) and, if so, (ii) to what shares in the property were the parties respectively entitled beneficially. It was in relation to that latter question that Lord Diplock explained (ibid, 908D-909C):

“In such a case [where the court is satisfied that it was the common intention of both spouses that the contributing wife should have a share in the beneficial interest and that her contributions were made upon this understanding] the court must first do its best to discover from the conduct of the spouses whether any inference can reasonably be drawn as to the probable common understanding about the amount of the share of the contributing spouse upon which each must have acted in doing what each did, even though that understanding was never expressly stated by one spouse to the other or even consciously formulated in words by either of them independently. It is only if no such inference can be drawn that the court is driven to apply as a rule of law, and not as an inference of fact, the maxim ‘equality is equity’, and to hold that the beneficial interest belongs to the spouses in equal shares.

The same result however may often be reached as an inference of fact. The instalments of a mortgage to a building society are generally repayable over a period of many years. During that period, as both must be aware, the ability of each spouse to contribute to the instalments out of their separate earnings is likely to alter, particularly in the case of the wife if any children are born of the marriage. If the contribution of the wife in an early part of the period of repayment is substantial but is not an identifiable and uniform proportion of each instalment, because her contributions are indirect or, if direct, are made irregularly, it may well be a reasonable inference that their common intention at the time of the acquisition of the matrimonial home was that the beneficial interest should be held by them in equal shares and that each should contribute to the cost of its acquisition whatever amounts each could afford in the varying exigencies of family life to be expected during the period of repayment. In the social conditions of today this would be a natural enough common intention of a young couple who were both earning when the house was acquired but who contemplated having children whose birth and rearing in their infancy would necessarily affect the future earning capacity of the wife.”

In a case where the property has been transferred into joint names, it can usually be taken for granted that each was intended to have some beneficial interest in the property. In such a case, the focus is on the second of the two questions which Lord Diplock identified in Gissing. But the principle remains the same. The court must do its best to discover from the conduct of the parties whether any inference can reasonably be drawn as to the probable common understanding about the amount of their respective shares upon which each must have acted in doing what each did.

Huntingford v Hobbs (supra) was a case in which the property had been conveyed into joint names. As I have already explained, it was held (by the majority in this Court) that the conveyance contained no express declaration of trust. It was held, also, that it was not open to the claimant to advance a case (on appeal) that the receipt clause in the transfer (if not sufficient to constitute an express declaration of trust) could, nevertheless, be relied upon as compelling evidence of a common intention that he should take an interest as joint tenant in equity (ibid, 744A-C). Nor could other evidence as to common intention could be relied upon; that had not been an issue at trial (ibid, 749G, 753A).

It was on the basis that there was no (or no admissible) evidence of common intention before this Court in Huntingford v Hobbs that Sir Christopher Slade said this (ibid, 744C-G):

“There is no dispute that when the property was placed in joint names, the two parties intended that that they should each have a beneficial interest in it. The difficulty lies in establishing the extent of those beneficial interests in the absence of any declaration of trust.

In the absence of any declaration of trust, the parties respective beneficial interests in the property fall to be determined not by reference to any broad concepts of justice, but by reference to the principles governing the creation or operation of resulting, implied or constructive trusts which by s 53(2) of the Law of Property Act 1925 are exempted from the general requirements of writing imposed by s 53(1).

In Walker v Hall [1984] FLR 126 at p 133, Dillon LJ made the following statement of a well known general principle:

‘. . . the law of trusts has concentrated on how the purchase money has been provided and it has consistently been held that where the purchase money for the property acquired by two or more persons in their joint names has been provided by those persons in unequal amounts, they will be beneficially entitled as between themselves in the proportions in which they provided the purchase money. This is the basic doctrine of the resulting trust and it is conveniently and cogently expounded by Lord Upjohn in Pettitt v Petitt [1970] AC 777 at p 814’

The application of this principle ordinarily gives rise to no difficulty where the whole of the initial purchase price has been contributed by the two or more interested parties in the form of cash derived out of their respective resources without the benefit of a loan.”

He then went on to address the more usual case where the parties do not (together) contribute the whole of the initial purchase price out of their own resources. The property is purchased with the benefit of a loan . He said this (ibid, 744G-745D):

“Greater problems arise in cases such as the present, where part of the money required has been borrowed on mortgage. On the particular facts of some such cases the court, for the purpose of ascertaining the parties’ proportionate interests in the property, has thought it right to attribute to them the intention that their contributions to the purchase should be ascertained as at the date when the property eventually came to be sold.”

He referred to the observation of Lord Diplock in Gissing ([1971] AC 886, 909D-E) that:

“. . . there is nothing inherently improbable in their acting on the understanding that the wife should be entitled to a share which was not to be quantified immediately upon the acquisition of the home but should be left to be determined when the mortgage was repaid or the property disposed of, on the basis of what would be fair having regard to the total contributions, direct or indirect, which each spouse had made by that date. Where this was the most likely inference from their conduct it would be for the court to give effect to that common intention of the parties by determining what in all the circumstances was a fair share.”

In Huntingford v Hobbs the purchase price had been provided, in part, from the proceeds of sale of Mrs Hobbs’ former home and in part with the aid of a building society advance. Mr Huntingford had made no cash contribution of his own; but the court treated him as if he had provided the whole of the building society advance. The reason was explained by Sir Christopher Slade (ibid, 745E-746B):

“As appears from the passage from Lord Diplock’s speech in Gissing v Gissing quoted above, the task of the court in cases such as this is to draw the most likely inference as to the common intention of the parties at the date of the purchase from their conduct. This must depend on the facts of the particular case. On the particular facts in Young v Young and Passee v Passee, the evidence disclosed no clear arrangement or understanding between the parties, as at the date of the purchase, in regard to the manner in which the mortgage payments were to be provided for. In the present case, in contrast, while both parties as joint proprietors had to join in the mortgage and assume joint and several liability to the mortgagee building society, there was a clear agreement or understanding that, as between the two of them, Mr Huntingford would pay all the interest due under the mortgage and all the endowment policy premiums which would in due course, if the policy were duly kept up, discharge the capital debt owed to the lender. As at the date of the purchase, while Mrs Hobbs no less than Mr Huntingford was assuming a liability to the lender, it was not contemplated that, as between the two of them, she would have to pay anything towards the discharge of this liability.

‘It is of course always possible to look at the subsequent conduct of the parties to see if it shows any light on what they originally agreed, but in the absence of a new or varied agreement, subsequent conduct cannot affect what was originally agreed.’ Marsh v von Sternberg (above) at p 533 per Bush J.)

Drawing the most likely inference from the conduct of the parties in the present case, in my judgment the proper common intention to impute to them is a common intention as at the date of purchase that Mrs Hobbs should be treated as having contributed her cash contribution, Mr Huntingford should be treated as having contributed the whole of the sum borrowed on mortgage, and that the property should be owned by the two of them in shares proportionate to such contributions.”

On the basis that Mrs Hobbs had contributed £38,860 out of the proceeds of sale of her former home and that Mr Huntingford was to be treated as having contributed the whole of the mortgage advance of £25,000, the property was held in the proportions 61% and 39%.

The judgments of this Court in Huntingford v Hobbs were handed down on 10 March 1992. On the same day the same Court (Lord Justice Dillon, Lord Justice Steyn and Sir Christopher Slade) handeddown their judgments in Springette v Defoe [1992] 2 FLR 388. The latter case has been relied upon, in later cases, as authority for the proposition that, if there had been no discussion between the parties as to the extent of their respective beneficial interests at the time of the purchase, then it must follow that the presumption of resulting trust was not displaced and the property was held for the parties in beneficial shares proportionate to their contributions.Therearepassages in Springette v Defoe which might be thought to support that view. Lord Justice Dillon explainedthe principle upon which he reached his decision in that case in these words (ibid, 392E-F):

“In Walker v Hall I expressed the view at p 134C that it was not open to this court, in the absence of specific evidence of the parties’ intentions, to hold that the property there in question belonged beneficially to the parties in equal shares, notwithstanding their unequal contributions to the purchase price, simply because it was bought to be their family home and they intended – or possibly one should say ‘hoped’ – that their relationship should last for life. The effect is that, in the absence of an express declaration of the beneficial interests, the court will hold that the joint purchasers hold the property on a resulting trust for themselves in the proportions in which they contributed directly or indirectly to the purchase price, unless there is sufficient specific evidence of their common intention that they should be entitled in other proportions – eg in equal shares notwithstanding unequal contributions – to rebut the presumption of resulting trust.”

There is, if I may say so, nothing controversial in that statement of principle. Nor in his subsequent observation (ibid 393D)that:

“The common intention must be founded on evidence such as would support a finding that there is an implied or constructive trust for the parties in proportions to the purchase price. The court does not as yet sit, as under a palm tree, to exercise a general discretion to do what the man in the street, on a general overview of the case, might regard as fair.”

But Lord Justice Dillon went on to say this (ibid, 393E):

“But the common intention of the parties must, in my judgment, mean a shared intention communicated between them. It cannot mean an intention which each happened to have in his or her own mind but had never communicated to the other.”

And, (ibid, 393G):

“Since, therefore, it is clear in the present case that there never was any discussion between the parties about what their respective beneficial interests were to be, they cannot, in my judgment, have had in any relevant sense any common intention as to the beneficial ownership of the property. . . . The presumption of resulting trust is not displaced.”

Both Lord Justice Steyn (ibid, 395G) and Sir Christopher Slade (ibid, 396F) agreed with that approach. As Lord Justice Steyn put it:

“Given that no actual common intention to share the property in equal beneficial shares was established, one is driven back to the equitable principle that the shares are to be presumed to be in proportion to the contributions.”

In the recent decision in Oxley v Hiscock [2005] Fam 211 this Court reviewed the law in relation to the beneficial interests of co-habitees. It did so in the context of property which had been transferred into the sole name of one of them, but in circumstances in which there was evidence from which to infer a common intention, communicated by each to the other, that each should have some beneficial share. The amount of the respective shares had not been discussed between them. In the course of that review the decision in Springette v Defoe (supra) was considered at some length – see paragraphs 45 to 49 of my judgment, with which the other members of the Court (Lord Justice Mance and Lord Justice Scott Baker) agreed.

The issue in Oxley was whether, absent discussion between the parties as to the extent of their respective beneficial interests at the time of the purchase, it must follow that the presumption of resulting trust was not displaced and the property was necessarily held in beneficial shares proportionate to the respective contributions to the purchase price. After referring to the passages from the judgments of Lord Justice Dillon and Lord Justice Steyn which I have already set out in this judgment – which, as I observed, provided (at first sight, at least) support for the defendant’s contention that that issue should be answered in his favour – I said this at paragraph 49 (ibid, 740D):

“But, for the reasons which I have sought to explain, it is (at the least) open to serious doubt whether those passages did reflect the state of the law as it had developed in this area by the time that Springette v Defoe [1992] 2 FLR 388 was decided in March 1992.”

It is unnecessary to rehearse, in this judgment, the reasons which led me to that conclusion. They are set out at length in my judgment in Oxley. It is sufficient to refer to the observation of Lord Diplock in Gissing (ibid, 908F-G) which I have already set out:

“. . . the court must first do its best to discover from the conduct of the spouses whether any inference can reasonably be drawn as to the probable common understanding about the amount of the share of the contributing spouse upon which each must have acted in doing what each did, even though that understanding was never expressly stated by one spouse to the other or even consciously formulated in words by either of them independently.” [emphasis added]

and to say that I have not altered my view that, properly understood, the authorities before (and after) Springette v Defoe do not support the proposition that, absent discussion between the parties as to the extent of their respective beneficial interests at the time of the purchase, it must follow that the presumption of resulting trust is not displaced and the property is necessarily held in beneficial shares proportionate to the respective contributions to the purchase price. That is not to say, of course, that there will not be cases where the correct conclusion is that the parties’ beneficial interests are proportionate to their respective contributions. Cases turn on their own facts.

In Oxley v Hiscock I referred (ibid, 246B-H, paragraphs [68] and [69]) to the two distinct questions which arise in cases where property had been purchased in the sole name of one of two cohabitees. The first question is whether there was evidence from which to infer a common intention, communicated by each to the other, that each should have a beneficial share in the property. As I have said, in a case (as the present) where the property has been transferred into the joint names of co-habitees, the answer to that question is unlikely to present any difficulty. It can usually be taken for granted that each was intended to have some beneficial interest in the property. Why else was the property transferred into their joint names? But an affirmative answer to the first question leads to the second question: “what is the extent of the parties’ respective beneficial interests in the property?”. It was in relation to that question that I said this (ibid, 246F-H, paragraph [69]):

“Again, in many such cases, the answer will be provided by evidence of what they said and did at the time of the acquisition. But, in a case where there is no evidence of any discussion between them as to the amount of the share which each was to have – and even in a case where the evidence is that there was no discussion on that point – the question still requires an answer. It must now be accepted that (at least in this Court and below) the answer is that each is entitled to that share which the court considers fair having regard to the whole course of dealing between them in relation to the property. And, in that context, ‘the whole course of dealing between them in relation to the property’ includes the arrangements which they make from time to time in order to meet the outgoings (mortgage contributions, council tax and utilities, repairs, insurance and housekeeping) which have to be met if they are to live in the property as their home.”

I remain of that view. Further, as it seems to me, there is no reason in principle why the approach to the second question – “what is the extent of the parties’ respective beneficial interests in the property?” – should be different, in a case where the property is registered in the joint names of cohabitees, from what it would be if the property were registered in the sole name of one of them; although the fact that it has been registered in joint names is, plainly, to be taken into account when having regard “to the whole course of dealing between them in relation to the property”.

As I have said, the property was purchased in August 1993. The purchase price was £190,000. Of that sum £19,000 had been paid, by way of deposit, from an account (No 4257552) in the name of Miss Dowden with the Halifax Building Society. The balance on completion was funded, in part, by an advance of £65,025 from Barclays Bank plc, secured by a mortgage executed by both Miss Dowden and Mr Stack. The judge held, at paragraph 19 of his judgment, that “other than the mortgage monies which were provided to the parties jointly, all the monies for the purchase appear to have been provided by [Miss Dowden].”

The judge’s observation that the purchase monies, other than the mortgage advance, “appear to have been provided by Miss Dowden” reflects the fact that the completion monies (other than the advance) were transferred to the solicitors acting in the purchase by cheques delivered by Miss Dowden. Although it was not wholly clear from the evidence, it seems likely that at least £105,000 of those completion monies came from the Halifax account to which I have just referred. As at 6 April 1993 the balance on the Halifax account had stood at £57,179. The proceeds of sale of an earlier property, 160 Purves Road, London NW10, (in the sum of £66,663.13) had been sent to her on 18 May 1993. For the purposes of this appeal the purchase of 114 Chatsworth Road (£190,000) may be treated as funded from three sources (i) the mortgage advance (say, £65,000), (ii) the proceeds of sale of 160 Purves Road (say, £67,000) and (iii) building society savings (£58,000).

There is no doubt that, vis à vis the Bank, the parties were jointly and severally liable to repay the mortgage advance. The advance was, in fact, repaid by lump sum payments over the period 1993 to 2002. The judge found (at paragraph 38 of his judgment) that the redemption monies had been provided as to £27,000 by Mr Stack and as to £38,435 by Miss Dowden. That finding is a little more generous to Miss Dowden than her own pleaded case, which had put her contribution towards the redemption monies at £35,169.19 (or “at least £35,000”); but nothing turns on that. It is clear that each party made a substantial contribution to the repayment of the mortgage advance.

Mr Stack made the monthly interest payments due under the mortgage – in amounts which reduced as the capital monies were paid off. He put the aggregate of those interest payments at £17,988.30. The judge made no finding; but I do not understand that sum to be in dispute.

Repayment of the mortgage advance had been secured by a collateral endowment policy (Barclays Endowment Insurance Policy No 08/10799842/030021), written to mature at the end of 15 years. The monthly premiums in respect of that policy (£153.63) were paid by Mr Stack. He continued to make those premium payments after the mortgage advance had been redeemed; thereby keeping the policy alive. His claims in the proceedings included a claim that the endowment policy be surrendered and its proceeds divided equally between the parties. The order of 6 October 2004 required the surrender of the policy, for payment of £3,639 to Mr Slack out of the proceeds, and for the division of the balance (after that payment) between the parties equally. The payment of £3,639 in advance of division represented the aggregate of the premiums paid by Mr Stack after the date in October 2002 on which the mortgage advance was finally redeemed. There is no appeal or cross-appeal from that part of the judge’s order.

At the time of the purchase of 114 Chatsworth Road Mr Stack and Miss Dowden were, respectively, aged 38 years and 35 years. They had been going out together since 1975 or thereabouts; had been living together as man and wife since 1983; and were parents to four children, then aged between 7 and 2 years. Miss Dowden, who was a qualified electrical engineer, was in full time employment with the London Electricity Board. Mr Stack was employed by the Hammersmith and Fulham London Borough Council, earning (as the judge found) between £20,000 and £24,000 per annum. It was common ground that Miss Dowden’s earnings were greater than his. The judge found that, during the period when they were both living at 114 Chatsworth Road, each made contributions to the joint living expenses. He said this (in answer to question 14 under paragraph 39 of his judgment):

“Although the parties kept separate bank accounts and they had different savings accounts, I accept the evidence of [Mr Stack] that effectively they managed their affairs together”

And, at paragraph 40 of his judgment:

“It seems to me, although [Miss Dowden] has been the bigger wage-earner over this very long association between the parties, they have both put their all into doing the best for themselves and their family as they could.”

Mr Stack’s primary case, on the pleadings – as I have said – was that the transfer deed by which 114 Chatsworth Road was transferred “contained a declaration that the parties were the joint beneficial owners”. In the alternative it was pleaded (at paragraph 9 of the particulars of claim) that:

“The Transfer deed indicated the parties’ intention to be the joint beneficial owners of the property at 114 Chatsworth Road, and the parties can therefore be treated as the beneficial tenants in common in equal shares without further analysis.”

The judge did not address the contention that (absent an express declaration of trust) sufficient evidence of the parties’ intention to be joint beneficial owners of the property could, nevertheless, be found in paragraph 2 of the transfer deed. Although Mr Stack had said, at paragraph 5 of his witness statement dated 4 September 2003, that “We purchased the property at Chatsworth Road put in our joint names (sic) to ensure that if one of us died, the property would pass to the other under the rule of survivorship”, the judge made no finding to the effect that the significance of the declaration was brought to the attention of either party. He would, I think, have been entitled to be sceptical of Mr Stack’s assertion that, absent an explanation from the solicitor acting in the purchase, he was aware of “the rule of survivorship”. There was no evidence of a solicitor’s letter – comparable to that set out in the judgment of the Court in Harwood v Harwood (ibid,279E-F) – which explained why it was thought appropriate to include paragraph 2 in the transfer deed. There was nothing (other than the declaration and Mr Stack’s witness statement) to suggest that the principle that a joint tenant takes the whole property by survivorship was ever in the minds of the parties. Miss Dowden’s pleaded case, which she supported in evidence, was that the purchase proceeded in joint names without discussion. As she put it, at paragraph 16 of the witness statement which she made on 23 January 2004:

“I don’t think we ever talked about who should be the legal owner of Chatsworth. It just happened that both our names were put forward to the agents as purchasers and the purchase went through in joint names. To the best of my recollection there was never any discussion between myself and Barry about ownership of the house at Chatsworth.”

Mr Stack pleaded, in the further alternative (at paragraph 10 of the particulars) that:

“In the premises there is to be inferred a common intention that the Claimant and the Defendant hold the property at 114 Chatsworth Road . . . legally for themselves as beneficial owners in equal shares . . .”

The judge did not think it necessary to resolve the question whether the parties had discussed the beneficial ownership of 114 Chatsworth Road at the time of the purchase. At paragraph 20 of his judgment he said this:

“The Claimant said there was conversation about joint ownership at that time; the Defendant said otherwise. Assuming against the Claimant, there was no such conversation, it seems to me, having regard to the good relationship that the parties had up to then enjoyed, both before and after the purchase, it is likely that there was some understanding between them. As was said in one of the cases cited to me, it takes little to assume that there was such common intention.”

In those circumstances, as it seems to me, this Court has to approach this appeal on the basis that there was no discussion, at the time of the purchase of 114 Chatsworth Road, as to the respective shares of the parties in that property. Mr Stack did not assert in his pleadings that there was; Miss Dowden said in her evidence that there was not; and the judge made no finding.

If, on a true analysis, the whole of the purchase price for 114 Chatsworth Road other than the mortgage advance was provided by Miss Dowden from her own funds, then - subject to the question whether (as pleaded in paragraph 9 of the particulars of claim) an inference as to intention should be drawn from the declaration in paragraph 2 of the transfer deed (to which I shall need to return) – it is impossible, as it seems to me, to reach the conclusion that it is fair, having regard to the whole course of dealing between the parties in relation to that property, that their beneficial shares should be equal. If the whole of the purchase price for 114 Chatsworth Road other than the mortgage advance was provided by Miss Dowden from her own funds, that conclusion would fail to give proper weight to her financial contribution to the acquisition of the property.

The judge did not reach his conclusion on the basis that the whole of the purchase price for 114 Chatsworth Road other than the mortgage advance was provided by Miss Dowden from her own funds. He treated Mr Stack as having some beneficial interest in the proceeds of sale of 160 Purves Road (paragraph 17 and the answer to question 12 in paragraph 39 of his judgment); and he treated the savings in the Halifax account as joint savings, at least in part (as appears from the answer to question 13 in paragraph 39 of his judgment). But he does not seem to have thought it necessary to quantify the share in the Purves Road property to which (as he found) Mr Stack was entitled; nor did he quantify the extent that Mr Stack was entitled to the savings in the Halifax account. It is to those matters that I now turn.

The property at 160 Purves Road was purchased in 1983 from the executors of a friend known to Miss Dowden as “Uncle Sidney”. The purchase price was £30,000 and the property was transferred into the sole name of Miss Dowden. There was some suggestion that the purchase was at less than market price because the executors were anxious to give effect to the deceased’s wish that Miss Dowden should have the opportunity to acquire the property; but the judge made no finding and nothing, I think, turns on that point. The purchase price was provided (i) as to £22,000 by an advance from the Halifax Building Society (in respect of which Miss Dowden was the sole borrower) and (ii) as to the balance (£8,000) from monies drawn from an account in her name.

In relation to the Purves Road property, therefore, it was necessary for the judge to address the first of the two questions identified in paragraph [68] of my judgment in Oxley v Hiscock ([2005] Fam 211, 246C): “whether there was evidence from which to infer a common intention, communicated by each to the other, that each shall have a beneficial share in the property”. And, in addressing that question, he needed to have in mind the two categories of case identified by Lord Bridge of Harwich in Lloyds Bank plc v Rosset [1991] 1 AC 107, 132E-133B. As I sought to explain in Oxley, cases within the first category are those in which there has been some discussion between the parties at the time of the acquisition from which it can be seen or inferred that each intended that the party who is not the legal owner should have some beneficial interest. Cases within the second category are those in which there is no evidence of any such discussion; but where the common intention can be inferred from their conduct at the time of the acquisition. And, in cases which fall within that second category, as Lord Bridge observed in Rosset (ibid, 133A-B):

“. . . direct contributions to the purchase price by the partner who is not the legal owner, whether initially or by payment of mortgage instalments, will readily justify the inference necessary to the creation of a constructive trust. But, as I read the authorities, it is at least extremely doubtful whether anything less will do.”

What will not do in that context, as Lord Bridge made clear (ibid, 131D-G) is work done in and about the property (including decoration and renovation) after the property has been acquired.

Mr Stack did not allege, in his pleadings or in his witness statement, that there had been any discussion as to beneficial ownership of 160 Purves Road at the time of the purchase in 1983. The judge made no finding to that effect. This, therefore, is a case in which a finding that there was a common intention, at the time of the purchase, that each party should have some beneficial interest must be based on an inference from conduct at the time of the purchase. If such a finding is to be made, the case must be brought within Lord Bridge’s second category in Rosset.

Mr Stack’s pleaded case was that 160 Purves Road was purchased in the sole name of Miss Dowden “as at that time she could more readily obtain a mortgage loan as she was employed while [he] was self-employed”. The property was bought for £30,000, of which £22,000 was borrowed from the Halifax Building Society “and the parties from their joint savings contributed the remaining £8.000”. At paragraph 6 of his witness statement he referred to “a down payment of £8,000 funded from our joint savings”. He said that: “I made regular contributions to the household expenditure, which freed [Miss Dowden’s] salary to pay the mortgage”.

Miss Dowden’s case was that the £8,000 was provided by funds saved by her in her Halifax savings account and that she paid all the mortgage instalments. It can be seen from the completion statement on the sale of the Purves Road property in 1993 that the redemption figure in respect of the Halifax mortgage was in excess of £22,000. It is clear that the “mortgage instalments” to which she referred are payments of interest. In her witness statement dated 23 January 2004 (at paragraphs 7 and 8) she said this:

“The money to purchase Purves Road was raised by myself. I was working at the time and [Mr Stack] was not officially working. He did a little unofficial painting and decorating. I had some savings which we used as a deposit and the rest of the money was raised on mortgage. The deposit monies did not come from a joint savings account as [Mr Stack] alleges in paragraph 6 of his statement because we have never had a joint account. It was my money and it came out of my account. The mortgage was in my name as I was the only one working. I paid the mortgage payments and the household bills, although [Mr Stack] may have occasionally contributed to some household expenses. The bills were all in my name and I always paid them.

[Mr Stack] did not want to be on the deeds as he did not want the responsibility of the mortgage or household debts and running costs. . . . [He] did not want to commit to me or seemingly the children. ”

In support of that last sentence she drew attention to the fact that, when the birth of their first child was registered (on joint information), Mr Stack gave his address as 76 Taplow, Adelaide Road, NW3 - although he was, in fact living at 160 Purves Road at the time – and the child was registered with her surname rather than his.

The judge accepted that the £8,000 paid on the purchase of 160 Purves Road came from an account in the sole name of Miss Dowden (paragraph 9 of his judgment). But he thought it likely that “there was some sort of contribution – it is not possible to quantify the sum – from [Mr Stack]”. In answer to question 1 in paragraph 39 of his judgment “Was the £8,009 invested in the purchase of the Purves Road Property joint or sole savings?” the judge held “In my judgment, they should be considered as joint savings”. In the circumstances that, as the judge found, at paragraph 9 of his judgment, Mr Stack “had no records whatsoever of his income at that time” and had made no tax returns it is not clear how the judge was able to find that money in Miss Dowden’s account was, in part, his money. The only explanation which the judge gave was that they had been living together for some time before 1983.

The judge asked himself the question, at paragraph 16 of his judgment, whether, if the relationship between Mr Stack and Miss Dowden had broken down in 1993 (at the time of the sale of 160 Purves Road), Miss Dowden would have been able to say that the whole of the proceeds of sale belonged to her alone. He answered that question at paragraph 17:

“Given the fact that by that time [1993] there had been a relationship stretching from 1975 or so, certainly from a little later as man and wife, and given the work that [Mr Stack] had done on the Purves Road Property, and given that although their finances were kept separately there had been contributions to their living between the parties, I should have been surprised if [Mr Stack] would not have been found to have certainly some entitlement to a part of the proceeds of sale.”

The judge’s approach, in that paragraph, fails to address the first of the two questions identified in paragraph [68] of my judgment in Oxley v Hiscock ([2005] Fam 211, 246C): “whether there was evidence from which to infer a common intention, communicated by each to the other, that each shall have a beneficial share in the property”. It gives no weight to Lord Bridge’s observation, in Lloyds Bank Plc v Rosset [1991] 1 AC 107, 133A-B, that in cases where there has been no discussion between the parties at the time of the purchase – that is to say, cases within his second category – it is extremely doubtful whether anything less than a direct contribution to the purchase price by a person who does not become the legal owner will justify an inference that it is the common intention that he or she is to have a beneficial interest. In my view the reasoning in paragraph 17 of the judge’s provides no basis for a conclusion that Mr Stack would have been entitled, in 1993, to any share in the proceeds of sale of 160 Purves Road.

The judge returned to that issue in answer to question 12 in paragraph 39 of his judgment – “At the moment that the Purves Road Property was sold, did [Mr Stack] have any beneficial interests (sic)?”. He said that he had already answered that question affirmatively. That, as it seems to me adds nothing to the answer which he had given at paragraph 17 of his judgment.

It is important to keep in mind (i) that the Halifax mortgage by which the purchase of 160 Purves Road was funded (as to £22,000) required no periodic repayments of capital, and (ii) there was no evidence that, at the time of the purchase, it had been the common intention of the parties that Mr Stack would contribute to interest payments. There was no evidence to contradict Miss Dowden’s statement that the mortgage was taken in her name because Mr Stack wanted no responsibility in relation to the mortgage debt. In those circumstances his subsequent contributions to household expenses cannot be relied upon as evidence that, at the time of the purchase, there was a common intention that he should have a beneficial interest in that property.

The only matter that could have been relied upon as evidence of such common intention, at the time of the purchase, would be a contribution by Mr Stack to the £8,000 deposit. But that money came from Miss Dowden’s savings account; there was no evidence to support a finding that the monies in that account represented joint savings; the judge provided no satisfactory explanation for his conclusion that “there was some sort of contribution – it is not possible to quantify the sum” from Mr Stack into that account; and the judge did not, himself, rely on any contribution by Mr Stack to the £8,000 deposit in his reasoning in paragraph 17 of his judgment.

In my view the judge was wrong to treat Mr Stack as having any beneficial interest in the proceeds of sale of the Purves Road property; and so wrong to treat the application of those proceeds towards the purchase of 114 Chatsworth Road as representing a contribution by Mr Stack to that purchase.

I turn now to the monies standing to the credit of Miss Dowden’s Halifax account in 1993, immediately before the sale of the Purves Road property. As I have said, £58,000 or thereabouts was provided from that source towards the purchase price of 114 Chatsworth Road. The judge treated the savings in the Halifax account (in 1993) as joint savings, at least in part, as appears from the answer which he gave to question 13 in paragraph 39 of his judgment:

“Was the £30,000 invested in 114 Chatsworth Road joint savings, or not? I cannot say that the whole of the £30,000 was joint savings, but certainly by that time, taking account of the way in which [Mr Stack] and [Miss Dowden] conducted themselves, there was, as [Mr Stack] said in his evidence, really a partnership between them in the way they lived.”

Confidence in the judge’s conclusion is not enhanced by his apparent failure to appreciate that the amount found from Miss Dowden’s Halifax account was £58,000 rather than £30,000; although his mistake may have come from paragraph 8 of Mr Stack’s witness statement (where he refers to £30,000 of the purchase price of 114 Chatsworth Road coming “from our joint savings”). And, if the judge could not say that “the whole of the £30,000 was joint savings” he may, perhaps be taken to have thought that less than one half of the £58,000 was joint savings.

Mr Stack’s pleaded case was that the £58,000 was “a contribution from the joint savings of the parties”. That is elaborated, shortly, in paragraph 6 of his witness statement: “The relatively small mortgage that we obtained [to fund the purchase of 160 Purves Road] enabled us to pool surplus monies left over after payment of monthly bills into a Halifax savings account”. Miss Dowden took issue with that. At paragraph 14 of her witness statement she said:

“When we purchased Chatsworth Road in August 1993 I contributed £125,020 to the purchase price of £190,000. This was my own money. It comprised £66,663.13 from the proceeds of sale of Purves Road and the balance came from my own savings. [Mr Stack] says at paragraph 8 of his statement that £30,000 came from our joint savings. This is not true. We did not have a joint bank account. All the money was mine. I earned it from working hard at my job.”

There was no evidence that the parties had ever agreed that the Halifax account was to be treated as a joint account. The issue for the judge was from what source or sources had that account been funded. He accepted (at paragraph 35 of his judgment) that throughout the relationship Miss Dowden had greater earnings than Mr Stack. There was no reason to disbelieve her when she said that the savings came from her earnings; and no evidence on which the judge could find (and he did not find, in terms) that Mr Stack had made any payments into the Halifax savings account. The only basis for his conclusion that Mr Stack had any interest in the savings account seems to have been that “there was really a partnership between them in the way they lived”. But a finding of a joint property interest requires more than that. As Lord Bridge put it in Rosset (ibid, 127H-128A):

“Spouses living in amity will not normally think it necessary to formulate or define their respective interests in property in any precise way. The expectations of parties to every happy marriage is that they will share the practical benefits of occupying the matrimonial home whoever owns it. But this is something quite different from sharing the beneficial interest in the property asset which the matrimonial home represents.”

Although those observations were made in the context of a marriage and in relation to the interests of the parties to that marriage in the matrimonial home, they apply with at least equal force to property owned by unmarried cohabitees. No doubt both Mr Stack and Miss Dowden would readily accept that, in the loose sense in which the word is now used in this context, they were “partners”. But that has nothing to do with partnership in the strict (or Partnership Act) sense of that word; and to describe them as “partners” in that loose sense says nothing about their respective property interests.

In my view the judge was wrong to hold that Mr Stack had any interest in the monies standing to the credit of Miss Dowden’s Halifax savings account immediately before the sale of the Purves Road property; and so wrong to treat the application of those monies towards the purchase of 114 Chatsworth Road as representing a contribution by Mr Stack to that purchase.

As I have said, if, on a true analysis, the whole of the purchase price for 114 Chatsworth Road other than the mortgage advance was provided by Miss Dowden from her own funds, then - subject to the question whether an inference as to intention should be drawn from the declaration in paragraph 2 of the transfer deed – it is impossible to reach the conclusion that it is fair, having regard to the whole course of dealing between the parties in relation to that property, that their beneficial shares should be equal. That conclusion fails to give proper weight to Miss Dowden’s financial contribution to the acquisition of the property.

I return, therefore, to the question whether an inference as to the parties’ common intention should be drawn from the declaration in paragraph 2 of the transfer deed. The point is not pursued in the respondent’s notice, which invites the Court to uphold the judge’s order by finding an express trust – a finding which, as I have said, is not open to this Court in the light of its earlier decisions in Harwood v Harwood [1991] 1 FLR 274 and Huntingford v Hobbs [1993] 1 FLR 736. The point is not pursued (as an alternative to express trust) in the respondent’s skeleton argument; and it was not pursued in oral argument. Nevertheless, the point was pleaded in paragraph 9 of the particulars of claim; it is some importance; and I think it right to address it.

A declaration that the survivor should be entitled to give a good receipt for capital money is consistent with a beneficial joint tenancy and (prima facie, at least) inconsistent with a beneficial tenancy in common (whether in equal or unequal shares). Should that lead the court to conclude that the inclusion of such a declaration in the transfer of property to persons as joint tenants in law is indicative of the parties’ common intention that they should hold the property transferred as joint tenants in equity? Sir Christopher Slade addressed the point directly in Huntingford v Hobbs [ 1993] 1 FLR 736, 744A-B:

“[Counsel] submitted that, even if the declaration at the end of the transfer did not constitute an actual declaration of trust, nevertheless, having regard in particular to the form of the transfer and the statements in Mrs Hobbs’ first affidavit, there was compelling evidence that the parties intended that Mr Huntingford should take an interest as beneficial joint tenant in the property or its proceeds of sale. I do not, for my part, accept that there was any such compelling evidence. However, this point as to the parties’ intentions was not taken in the court below. If it had been, its validity could have been, and no doubt would have been, tested by cross-examination of Mr Huntingford [by] Mrs Hobbs’ counsel. As the case was argued at the trial, she had no occasion to put questions to him on this point, or to call evidence on it. In the circumstances, I do not think it right to allow this point to be taken and I put it on one side.”

Lord Justice Dillon did not treat the point as distinct from the submission that (as a matter of construction) the transfer contained an express trust ( a point on which he was in the minority). Lord Justice Steyn did not address the point in express terms; but, had he thought it a good point, the decision in Huntingford v Hobbs would have gone the other way.

For my part, I have little doubt that if it had been established in evidence that the parties understood the significance of the declaration in paragraph 2 of the transfer deed – and, in particular, understood that (in the circumstances of this case, where there was no other person who could have a claim to a beneficial interest) a paragraph in those terms was consistent only with an intention that the whole property should pass to the survivor on the death of the first of them to die – the inference that they intended a beneficial joint tenancy would have been irresistible. But what if, as in the present case, there is no finding of fact (and no independent evidence) that both parties did understand the significance of the declaration?

I accept, of course, that – as Lord Justice Dillon observed in Huntingford v Hobbs (ibid, 754G-H) – “. . . a party who signs a document is bound by the terms of that document even if he or she did not trouble to read it”. But the question – in the present context - is not whether Miss Dowden is bound by the declaration. Plainly, she is – at least vis à vis a purchaser. The question is whether the court should draw an inference in respect of her intention as to beneficial ownership – a matter in relation to which the declaration in paragraph 2 of the transfer deed cannot, of itself, be determinative. In that context the declaration points in one direction rather than another if, but only if, the parties understand its significance. If they do not understand why the declaration is in the transfer deed, it seems to me impossible to rely upon it for the purpose of drawing an inference as their intentions; other than as indicative of a common intention that they should be bound by it in respect of the matter (the power of a survivor to give a receipt for capital monies) for which it actually provides.

It follows that I would allow the appeal from the judge’s conclusion that the parties were entitled beneficially to equal shares in 114 Chatsworth Road. By her appellant’s notice Miss Dowden sought a declaration that the respective beneficial interests of the parties in that property were 65/35 in her favour “or such other shares as the Court of Appeal finds just and fair according to the evidence”. But it is clear from her skeleton argument – and was confirmed in oral argument – that she was not seeking a greater share than 65%. We did not hear argument on the question whether – adopting the approach indicated in Oxley v Hiscock [2005] Fam 211 – she would have been entitled to a share greater than 65%. For my part, I have no doubt that she is entitled to at least 65% of the proceeds of sale of 114 Chatsworth Road. It is unnecessary – and, in the absence of argument, would be inappropriate – to decide whether a claim for a greater share (and, if so, in what amount) would have succeeded.

The parties lived together at 114 Chatsworth Road as a family with their four children from September 1993 until October 2002. By that date the relationship had broken down. Mr Stack moved out of the former home. Miss Dowden commenced proceedings in the Inner London and City Family Proceedings Court, seeking an order to restrain Mr Stack from molesting her or the children. On 11 April 2003 the parties gave mutual undertakings in those proceedings. Mr Stack undertook to leave 114 Chatsworth Road by 25 April 2003 and not to return (save for specified periods which, during the school holidays, were limited to one in each week with not less than 2 days notice through solicitors). He undertook, also, not to use or threaten violence against Miss Dowden or the children. Miss Dowden undertook that, subject to documentary proof being provided, Mr Stack should be reimbursed the cost of renting alternative accommodation (to be capped at £1,000 per month) until the sale of 114 Chatsworth Road, such reimbursement to be paid from the proceeds of sale of that property before division. Those undertakings were given over until 10 January 2004. Fresh undertakings were given on that day; but (of importance in the present context) Miss Dowden’s undertaking to reimburse to Mr Stack the cost of renting alternative accommodation was not renewed. He, however, gave an undertaking not to return to 114 Chatsworth Road save for a period of 2 hours on the first Sunday of each month.

Paragraph 1(c) of the order of 6 October 2004 provides for payment to Mr Stack out of the proceeds of sale of 114 Chatsworth Road before division between the parties of (iii) the sum of £8,100 and (iv) a sum equal to £900 per month from that date until completion of the sale of the property. The basis upon which the judge made that order appears from paragraph 42 of his judgment:

“One further issue arises for decision. . . . [A]fter the parties split [Mr Stack] moved out of the house and there was an undertaking given to the Magistrates’ Court that . . . an allowance of [£900] should be made to him from the net proceeds of sale before division. In January of this year . . . [Mr Stack’s] undertaking for that allowance to continue (sic) was refused. There was an application to this Court when an order might have been made where the undertaking was continued. That undertaking was not signed by [Miss Dowden]. It is not clear to me that there was any consideration by the Court of the decision by the Magistrates’ Court, so in those circumstances there should, in my judgment, be no deduction for the period from the time of the Magistrates’ Court order to now from the sum to be mutually shared. It seems to me, though, that as the sale is very much, I suspect, going to be in [Miss Dowden’s] hands, it would be fair to both parties if there should be such an allowance from the month of October until there is a sale of the Property.”

It is, I think, reasonably clear that the sum of £8,100 which the judge allowed to Mr Stack out of the proceeds of sale before division represents the amount due (at the rate of £900 per month) in respect of the nine months (April 2003 to January 2004) during which the undertaking given by Miss Dowden to the Inner London and City Family Proceedings Court was in place. Miss Dowden does not appeal from that part of the judge’s order. But she does appeal from the order that Mr Stack be allowed a sum equal to £900 per month from 6 October 2004 until completion of the sale of the property.

In my view she is entitled to succeed on that point. The only reason which the judge gave for the order which he made was that “the sale is very much, I suspect, going to be in [Miss Dowden’s] hands”. But that, as it seems to me, was to overlook the fact that he had ordered a sale of 114 Chatsworth Road on the open market for the best price reasonably obtainable; that there was nothing in the order which had the effect of postponing that sale; and that his order named the agents who were to have conduct of the sale and provided that the solicitors to act in the sale were not to be the solicitors for either party. It is impossible to say that Miss Dowden has control of the timing of the sale; and it was no part of Mr Stack’s case before this Court that she had been the cause of any (or any unreasonable) delay. It seemed to be common ground that neither party was anxious to press for a sale at a time (October 2004 to April 2005) when the market was perceived to be slack.

The judge seems to have overlooked, also, that (until sale) a home must be provided for the four children of the couple; and that (in the order of 6 October 2004 itself) Mr Stack continued his undertaking not to intimidate, harass or pester the children. It is clear, therefore, that the order was made on the basis that the children would continue to live at 114 Chatsworth Road with their mother until that property was sold. Absent any allegation that she was delaying a sale, there was no basis upon which to make an order that she should pay an occupation rent for 114 Chatsworth Road; no basis upon which that rent could be assessed at £900 per month or any other figure; and no basis upon which to order that she should pay Mr Stack’s accommodation costs (whatever they might be).

The jurisdiction to make an order that a beneficiary under a trust of land who is in occupation of that land make payments to a beneficiary whose own entitlement to occupy the land has been excluded or restricted is not in doubt – section 13(3) and (5) and section 14(2)(a) of the Trusts of Land and Appointment of Trustees Act 1996. But that power must be exercised with regard to the intentions of the persons who created the trust, the purposes for which the land is held and the circumstances of each of the beneficiaries – section 13(4) and (8). It is not at all clear that, in making the order that he did, the judge was purporting to exercise a power under the 1996 Act. But, if he were, he was required to take account of the obligations of both parents towards their children; and, in particular, the need for the children to remain in their home, under the care of their mother, until the house was sold. He failed to give any consideration to those matters.

In his particulars of claim Mr Stack had sought an order that cash held as at 1 October 2002 in a Chelsea Building Society savings account in the name of Miss Dowden be divided equally between the parties. It was said, at paragraph 7 of the particulars, that Mr Stack had contributed to the household expenditure while at 114 Chatsworth Road and “the excess of the parties’ income over expenditure was used to build up a savings account which contained £60,000 at the time of the separation of the parties in October 2002”.

The judge rejected that claim. At paragraph 41 of his judgment, he said this:

“As to the Chelsea Building Society account in [Miss Dowden’s] name, which did contain, I think, £60,000, which is now reduced to £18,000, this seems to me to be one of the ways where the parties have allowed their earnings and their savings to be separately divided. It has been accepted that most of their shares, et cetera, and PEPs, et cetera, should lie where they are without any judgment from the Court. I do not see any reason to take a different decision so far as the Chelsea Building Society account is concerned.”

By a respondent’s notice filed on 9 March 2005 Mr Stack seeks to challenge the judge’s decision to make no order in respect of the Chelsea account. He seeks an order that £30,000 (being one half of the monies standing to the credit of that account in October 2002) be paid to him out of the proceeds of sale of 114 Chatsworth Road before division. A challenge to the judge’s decision on that point could only be made by way of cross-appeal; for which Mr Stack requires permission.

I would refuse permission to cross-appeal on that point. There is, at first sight, some force in the contention, advanced on behalf of Mr Stack in his counsel’s skeleton argument, that the judge’s treatment of the monies in the Halifax account (both in 1983 and in 1993) as joint savings – notwithstanding that the account was in Miss Dowden’s sole name – is inconsistent with his refusal to treat the monies in the Chelsea account (in 2002) also as joint savings. But the force that that point might otherwise have had is lost if (as I have held) the judge were wrong to treat the monies in the Halifax account as joint savings. The correct view, as it seems to me, is that monies in savings accounts held by Miss Dowden in her own name were her monies; and that that was the position in respect to the monies in the Chelsea account as it was in respect to the monies in the Halifax account.

I would allow the appeal. I would set aside sub-paragraphs (iv) and (v) in paragraph 1 of the judge’s order of 6 October 2004. In the place of those sub-paragraphs I would direct that, after payment of the sums mentioned at sub-paragraphs (i) to (iii) of paragraph 1 the net proceeds of sale of 114 Chatsworth Road be divided in the ratio 65% to Miss Dowden and 35% to Mr Slack. And I would set aside paragraph 6 of that order and invite submissions as to what provision should be made for the costs of this unfortunate litigation.

I agree. I add a few comments, with particular reference to the work of the Law Commission in this field, in which I took a small part during my period as Chairman.

In its Discussion Paper, “Sharing Homes” (2002), the Law Commission summarised the conclusions of its study of the law relating to “the property rights of those who share homes”. We emphasised the broad range of circumstances covered by the study including -

“… not only couples, married or unmarried, but also friends, relatives and others who may be living together for reasons of companionship or care and support”.

The paper summarised the development of the law in this country, and in other parts of the Commonwealth (notably Australia, New Zealand and Canada), and considered alternative approaches to future legislation, including “property-based” and “relationship-based” approaches. The paper made no formal proposals, principally because, as we said –

“… it is quite simply not possible to devise a statutory scheme for the ascertainment and quantification of beneficiary interest in the shared home which can operate fairly and evenly across the diversity of domestic circumstances which are now to be encountered” (para 3.1).

More recently the Commission has been invited by the Lord Chancellor to undertake a more limited project on “Cohabitation”. According to the most recent annual report (Law Com 294), the project –

“… will focus on the financial hardship suffered by cohabitants or their children on the termination of their relationship by separation or death. It will restrict its review to opposite or same sex couples in clearly defined relationships. While there need not necessarily be a sexual element to the relationship, at the very least the relationship should involve cohabitation and bear the hallmarks of intimacy and exclusivity, giving rise to mutual trust and confidence between partners”.

It is to be hoped that this project - which, as the annual report makes clear, will address the viability of a “relationship-based” approach in clearly defined circumstances - will in due course enable a line to be drawn, in those cases, under the unfortunate history of the attempts of the courts to grapple with these issues over more than 35 years. But it will leave cases which fall outside those defined relationships to be dealt with on the traditional “property-based” approach

That history dates back at least to the House of Lords’ judgments in Pettitt v Pettitt [1970] AC 777, which laid the foundation for the modern development of the law. However, even by then, as Lord Reid noted (p792D), the law had been in an unsatisfactory state for the previous 20 years, and there had been an acute difference of opinion in the Court of Appeal.

At that time, the focus of attention was on the treatment of what some called “family assets”, held between husband and wife. That was before the Matrimonial Property and Proceedings Act 1970, which established the modern statutory basis for dealing with assets on the breakdown of marriage, and gave the court wide discretionary powers to make orders for financial provision and property adjustment. For that reason the subsequent development of common law principles has been principally in relation to couples living together outside marriage. That issue has of course become increasingly pressing in recent years, as more couples choose to live together and bring up families outside marriage, without necessarily understanding the inadequacies of the law to adjust property interests when such a relationship breaks down.

Unfortunately the speeches in Pettitt v Pettitt did not speak with one voice, and it is difficult to extract even a single majority view. The problems are compounded by the fact that in the following case, Gissing v Gissing [1971] AC 886, the House itself found some difficulty in agreeing on what had been decided by Pettitt v Pettitt, and the speeches give further twists to the arguments. This was bad start. For developments since then I am content to adopt the Law Commission’s discussion of the law as it stood in 2002, taken with the comprehensive and authoritative review by Chadwick LJ in Oxley v Hiscock [2004] 3WLR 715. An illuminating discussion of the various concepts from an academic point of view is to be found in Professor Gray’s Elements of Land Law, Chapter 10.

To the detached observer, the result may seem like a witch’s brew, into which various esoteric ingredients have been stirred over the years, and in which different ideas bubble to the surface at different times. They include implied trust, constructive trust, resulting trust, presumption of advancement, proprietary estoppel, unjust enrichment, and so on. These ideas are likely to mean nothing to laymen, and often little more to the lawyers who use them.

Underlying this apparent confusion, is a range of conflicting policy factors which can be validly used to support different ideas. For example, the following ideas can all found in the cases, and all can be supported by respectable arguments:-

These ideas are not comprehensive or mutually exclusive. They represent a spectrum. Policy justifications at one end can be found in principles of legal certainty (supported in respect of land by the policy implicit in section 53 of the Law of Property Act 1925). At the other end, the ideas arguably offer a fairer approach to what are in effect “family assets”, corresponding to the policy approach imposed by Parliament in respect of marriages. Professor Gray shows how the courts in other Commonwealth Countries have felt able to take a more adventurous approach than the English courts (para 10.152 FF). He also suggests some “possible directions for English Law” (para 10.161 FF).

Returning to the present case, I have no doubt that, pending the Law Commission’s further work, we should stick closely to the principles enunciated by Chadwick LJ in Oxley v Hiscock. If we had been starting afresh, I could see attractions in the argument for distinguishing that case, on the grounds that in the present case the parties had specifically agreed that the legal interest should be held as joint tenants. It is arguable that the presumption should be that beneficial interests should follow the legal interests in the absence of clear evidence of a contrary intention. In the present case the power of the survivor to give a receipt for capital monies points to the absence of any contrary intention. However, I agree with Chadwick LJ that, having regard to the way the law has developed, that would not be a defensible distinction.

Accordingly, I gratefully adopt the whole of the reasoning of Chadwick LJ, and agree with the order he proposes.

I also agree with Chadwick LJ.