One of the great gaps in family law in this country is in the area of cohabitants’ property rights. Whereas when a married couple separate the court has a discretion to divide their property between them in a way that it considers fair and appropriate, no such discretion applies when an unmarried couple separate. How, then, is the court to approach the problem of division of property between former cohabitants? That was the issue before the House of Lords in the 2007 case Stack v Dowden.
The facts in Stack v Dowden are somewhat complicated, but the essential points are as follows:
- Mr Stack and Ms Dowden cohabited for over 20 years and had 4 children.
- They lived firstly in rented accommodation, then in a property in Ms Dowden’s sole name and finally in a property that they owned jointly.
- The purchase price of that last property (£190,000) came essentially from the net proceeds of sale of Ms Dowden’s previous property (£65,025), her savings (some £57,000) and a joint mortgage.
- The mortgage was repaid, with Mr Stack contributing £27,000 and Ms Dowden contributing £38,435 towards the repayment.
- They separated in October 2002, when Mr Stack left the property.
- Mr Stack then applied to the court for an order that the property be sold and that the net proceeds be divided equally.
- That application was heard in October 2004, when the judge concluded that after such a long relationship a 50/50 division was appropriate. He therefore made the order sought by Mr Stack.
- Ms Dowden appealed.
- In July 2005 the Court of Appeal allowed her appeal and ordered that the net proceeds of sale be divided 65% to 35% in her favour (she had made it clear that she was not then seeking any greater share than that).
- Mr Stack appealed to the House of Lords.
The judgment of the House of Lords is long and complex, and their Lordships weren’t entirely in agreement with one another. However, the most important points can be summarised as follows.
The starting-point when determining shares in a property is what the deeds say. Accordingly, if they say that the property is owned by one person, the starting-point is that they own it 100%, and if they say that the property is owned jointly without specifying shares, the starting point is that each party owns 50%.
The onus is on the person claiming a different share from that stated in the deeds to prove that they are entitled to that share. So, in a sole ownership case that person would be a non-owner and in a joint ownership case where the deeds don’t specify shares, that person would be the one claiming more than 50% – Ms Dowden, in this case.
How was Ms Dowden to prove that she was entitled to the share she was claiming? Well, she would have to show that this was the shared intention of both her and Mr Stack. As Baroness Hale said:
“The search is to ascertain the parties’ shared intentions, actual, inferred or imputed, with respect to the property in the light of their whole course of conduct in relation to it.”
Baroness Hale then went on to list some of the factors that may be relevant in determining the true intentions of the parties. These include not just their financial contributions but also such things as discussions at the time of purchase, the reasons why the home was purchased in joint names, the purpose for which it was acquired, the nature of the parties’ relationship and how they arranged their finances. However, warned Baroness Hale, having taken all of the relevant factors into account, the cases in which a joint owner succeeds in proving that they are entitled to more than stated in the deeds will be “very unusual”.
Was Stack v Dowden a very unusual case? Yes it was, said Baroness Hale:
“There cannot be many unmarried couples who have lived together for as long as this, who have had four children together, and whose affairs have been kept as rigidly separate as this couple’s affairs were kept. This is all strongly indicative that they did not intend their shares, even in the property which was put into both their names, to be equal…”
Accordingly, Baroness Hale indicated that she would dismiss Mr Stack’s appeal. The other four Law Lords agreed, although Lord Neuberger did not agree with the reasoning of Baroness Hale.
Stack v Dowden remains a leading case in the difficult area of cohabitants’ property rights, although just how much help it gives in determining those rights is a moot point – some commentators have even doubted whether it was “very unusual” at all. Unfortunately, Parliament shows no sign of bringing in property rights for cohabitants in the foreseeable future and therefore the case continues to be essential knowledge for anyone dealing with the area.
Photo by Teresa via Flickr