Cohabitants in law may seem deceptively simple, as eachindividual holds their own legal rights.
According to the UK families legalright bureau the standard definition for cohabitants is “couples in the UKchoose to cohabit, rather than marry or enter a civil partnership. If you areco-habiting, you do not have the same rights as a married couple1”. Similarto Judge Norris QC in Churchill v Roach2cohabitation occurs when man and woman live together as a married couple. HopeLJ recognised in Stack 3it hasbecome an increasingly pressing social problem, as house prices rise and moreand more people are living together without getting married or entering into acivil partnership.
There is no current law which is satisfactory as it stillhas not adapted on the social and economic changes of the society. Section 32, of Law property act 1925 states where land isconveyed to co-owners who are of full age they; must be joint tenants andcannot be more than four4. Anexpress trust is where the legal owner(s) of the property declare that theyhold the property on trust for specified beneficiaries. Where there is anexpress declaration, this will override the principles of resulting orconstructive trusts5.If there is no express declaration this could lead to either resulting trust orconstructive trust. Resulting trust arise in the absence of an expressdeclaration where a person holds legal title in circumstances where they cannotbe taken to have full equitable ownership6.Constructive trust can be defined as a trust that emerges by operation of lawwhere it would be unconscionable for a person (A) who holds an asset to denythe beneficial interest from securing someone else in the benefit7.Stack V Dowden 2007UKHL 178 judgment which was given by the Houseof Lords held that the defendant (Ms Dowden) was entitled to a 65% share in theproperty.
Mr Stack was awarded a 35% share, not the 50% share for which hecontended. In effect, the House of Lords upheld the decision of the Court ofAppeal. The transfer in of the property to the couple did not contain anexpress declaration of their respective beneficial interest in their home. Aftercareful examination on the judgment of this Stackhad rolled out a radical improvement in approach which was taken.
Itdemonstrated that never again was a constructive trust favoured; the familyhome itself has gone under changes comprising of not only married couples, aswell as cohabiting couples. In earlier decades this sort of trust was impracticaland the utilization of which equitable device could be used ended up noticeablyunclear. The judgment of Stack had established the relevance sofar as it sets a precedent and changes the common presumption of the 50/50split shares.Before the instance ofStack it was simple for the courts to follow the maxim that equity shouldfollow the law where a property, in particular a home would be enrolled injoint names. However if the parties purchase contributed unequally9,then the presumption would be rebutted, and the courts would decide every parties equitable interest basedon the concept of a resulting trust, for instance this implies parties who areobtaining a property together as opposed to owning an even share of theproperty gained, this would be a 50/50 split between the proprietors will nowclaim diverse proportions of the equitable shares as indicated by theirfinancial contributions to the purchase price.
The pertinence of resultingtrust put into question when Lord Diplock neglected resulting trust as in Gissing v Gissing 10wherehe asserted that resulting trusts are not rule of law accordingly hasrestricted use. Oxley V Hiscock2004 suggested that judges have looked at the surrounding circumstancesto make a decision which is a result of Stackin Oxley, the courts came to adecree that indirect contributions to the purchase price may suffice. Theconclusion was that it would be unfair to award the claimant a 50% share, giventhat the defendant’s contribution to the purchase was greater than theclaimant. After careful assessment the claimant share would be of 40% on thebasis the purchase price was attributable to the claimant’s contributions11.
It was clear that the decision lower courtshad made was based on the facts given; the judge found evidence to indicate theexistence of a common intention trust and inferred an equal beneficial share inthe property. This case shows the extent to which cohabitation could beconsidered as a condition for equally distributed shares in property law aswell as relating to wills and property that are shared or distributed. Theimportance of Oxley lies in the factthat it shows the limitations applicable in the case of cohabitation or evenmarriage. When appealed the case its judgment gave knowledge into the idea ofhow continues of property in which an unmarried couple have been living as manand spouse ought to be shared between them when the relationship arrives at anend12. Analysisof the case in depth showed the judgment of Oxleyhad meant the law has progressed vastly in terms of the approach judges take oncohabitant couples which is clearly demonstrated in Stack. In the case of Stack itset more precedent than Oxley as thecourts carefully analysed the sources of the purchase price of the property aswell as making specific reference to the fact that the finances of the partieswere kept strictly separately apart from the joint ownership of the property.Not only this Stack set example tothe law after the case of Oxley as itrevisited how to determine shares in which the beneficial interest in propertyis to be divided where the parties have not made an express agreement as tothose shares.
Baroness Hale also concluded that “one does not start fromresulting trust, but rather by looking at all the circumstances surrounding thecase”.13This meant after the case of Oxley the law was looked in a different approach asit was more than just about fairness, Stackenabled courts to develop rules relating to resulting and constructive trust inhope that decisions would lead to greater certainty in the law. This approachwas to be relevant In Cox v Jones14case where Mann J expressed that all conditions of the case should beconsidered so neither of the party is dealt with unconscionably.Oxley was stillan important case and brought relevance as it was cited in Stack, most of the decisions were a result from Oxley happenings. After this case the uncertainty within law had changed its viewson cohabiting couples; this was put into application in the earliest case afterStack in the case of Fowler V Barron 2007 where Mr Barron andMs Fowler had a relationship for many years, they decided to purchase aproperty in joint names, however there was no declaration of trust but thesurvivor could give valid receipt for capital money.It was held before the caseof Stack in the Lords rejected MrsFowlers claim for beneficial interest in the property and declared Mr Barron asthe sole beneficial as the sole beneficial owner. Contrary the court of appealallowed Mrs Fowlers appeal. Following the case of Stack it held that the relevant technique in such cases was thecommon intention constructive trust, rather than a resulting trust.
Inconcentrating on the parties’ financial contributions, rather than their sharedintentions, the judge had erred in principle and the Court of Appeal had tointervene and reach its own conclusions15.This signified that Stack had a vastaffect on similar cases as such, it showed in Fowler it applies Stackfairly strictly and emphasises the need for something exceptional to rebut thepresumption created by putting the property into joint names. It also showed inthe judgment of Fowler when Stack was applied it indicated withoutany declaration of trust the onus to rebut the presumption was on theindividual asserting that the property was owned other than in equal shares.An important case which preceded Fowler was Lloyds Bank VRosset 1991 defendant Mrs Rosset, was married to Mr Rosset, who was thesole registered proprietor of the property in question, the issue for this casewas the appeal concerned whether the respondent had a beneficial interest forthe house and in the event that she was qualified to remain in the propertyunder segment 70(1) (g) of the Land Registration Act 1925. The complainantscontended that Mrs Rosset did not have rights in the property and her redesignsdid not enable equitable rights in the property to emerge16. Althoughthe case of Fowler mentioned that thefocus was not on the intention but the financial contribution, yet Mrs Rossetdid contribute towards renovation of the property and the courts held this wasinadequate for her to get an interest. In comparison to the cases of Stack andFowler Mrs Rosset did not contribute to the mortgage but she did all themaintenance work , however had this case come after Fowler and Stack it wouldhave been highly inevitable that the courts would have voided her appeal. Correspondingly the determination issue in alliance tocohabitees came up Jones V Kernott 2011in which both partners were cohabiting for several years before theirrelationship ended.
They decided to make a purchase of a home as beneficialjoint tenants. The cost of home was funded by Ms Jones and the remainderbalance from an interest only mortgage. The following next year’s Mr Kernottsought payment of his half share of the property he purchased with Ms Jones17.
Nonetheless Ms Jones responded by claiming under Trust of Land and Appointmentof Trustees Act 1996 for a declaration that she owned the entire beneficialinterest in the property18.During Trial the Judges considered carefully through Oxley V Hiscock 2004 and Stackheld that Ms Jones was awarded a 90% interest in the property on the basisthat this was “fair and just”19. Although the courts applied Stack it is arguably questionable thatin this case the couple’s finances were even more separate and they no longerintended equal beneficial ownership. The result of Jones repeats and elucidates the position for cohabitees concerninghow the beneficial interests in property held in their joint names will bedivided after a relationship has separated. A crucial part of the reasoning inthe Court of appeal by LJ Rimer in the case of Jones was the interpretation of the decision in Stack that it did not “enable courts tofind, by way of the imputation route, an intention where none was expresslyuttered nor inferentially formed”20. Insummary to this, the following principles pertinent for a case as such as this,where a family home is purchased in the joint names of cohabiting couple whoare both in charge of any mortgage, yet with no express declaration of theirbeneficial interests.The government presented a Cohabitation Rights Bill 2015-1621,a Private members Bill in the House of Lords.
The point of Bill was to givesecurity to cohabiting couples especially in connection to property andprogression rights. Some contend that this Bill is attempting to go up againstthe paternalistic state of mind and take away the self-rule of free choicesmaking of cohabitees. However Bill has been slowed down. Despite the fact thatthe primary perusing occurred on 4 June 2015 the booking for second perusingnever happened and as the 2015/16 session of parliament has finished and this Billwill gain no further progress.Dissimilarity to this there is benefits which Stack has provided for unmarried couplesliving together as it assists the partner to move in with other partners ifthey wanted to. It also allows them to invest in other properties withouthaving the fear of losing their assets, money or should there be a split as thelaw for married couples is different. With accordance to the UK government lawthe following rules apply to married couples whom have legally ended theirrelationship “the judge will decide on the fairest way to divide the assets ifthere are enough assets to meet everyone’s needs.
The judge will usually try toarrange a clean break, so everything is shared out, and you no longer have anyfinancial ties to one another”22. Thisshows that the law for married couple is based on equally dividing the assetsto ensure both partners are benefitting and are satisfied from the possessionsonce legally separated. It means that unmarried couples are able to invest inmassive financial goods such as mortgages, which means it is favourable whenthe separation occurs the courts will consider how much the partner has fundedtowards the house, the mortgage, rent, bills and other maintenance as well asfinancing for the children (if involved) which allows the partner to have afair split. It is evident after thorough analyses the case of Stack has made a huge impact on the lawparticularly for unmarried couples as it leaps towards equality. In spite ofthe fact that it creates a new trust that has originated in the judicialattempts to discover a system to manage the family home asset in therepercussions of end in cohabiting relationship. It is still significant to alarge extent as it abandons the traditional law of trusts by considering manymore factors as opposed to just the party’s original intentions. In finalconclusion the choice furnishes one path in managing the division of the familyhome for cohabiting couples in the disappointment of a relation until statutoryreform is brought about.1Step Family advising bureau (Cohabiting couples) https://www.step.org/sites/default/files/Publications/cohabiting-couples-legal-rights-uk2.pdfOnline Accessed: 26th December 2017 2Churchill V Roach 2003 All ER 3483Stack V Dowden2007 UKHL 17, Hope LJ (Para.2)4Law of Property Act 1925, Section 34 (2)5 E-Law resources (Land Law) http://e-lawresources.co.uk/Land/Express-Trusts.phpOnline Accessed: 26th December 2017 6E-Law resources (Land Law) http://e-lawresources.co.uk/Land/Resulting-trusts.phpOnline Accessed: 26th December 20177 E-Law resources (Land Law) http://e-lawresources.co.uk/Land/Constructive-trusts.phpOnline Accessed: 26th December 20178Stack V Dowden 2007 2 AC 432 House Of Lords9House Of Lords (Judgments Stack V Dowden) (Published 2006-07) https://publications.parliament.uk/pa/ld200607/ldjudgmt/jd070425/stack-1.htmOnline Accessed: 27th December 201710Gissing V Gissing1970 UKHL 311Oxley V Hiscock 2004 EWCA CIV 54612 Swarb Published 14 November 2007 (Oxley V Hiscock 2004) http://swarb.co.uk/oxley-v-hiscock-ca-6-may-2004/Online Accessed: 27th December 201713 Stack V Dowden 2007 UKHL17 Para.6814Cox V Jones 2004 3 FCR 69315Fowler V Barron CA 23 April 2008 , EWCA CIV 37716Lloyds Bank V Rosset 1991 1 A.C 10717John Duddington, Land Law, Law Express (5th Edition 2015, PG.72)18Trust of Land and Appointment of Trustees Act 1996, Section 14 (2)19 Michealmas Term (2011) UKSC 53, Jones VKernott 2011https://www.supremecourt.uk/cases/docs/uksc-2010-0130-judgment.pdfOnline Accessed : 1st January 2018 20Stack V Dowden 2007 UKHL 17 para.7721 Cohabitation Rights BillHL 2015-1622 Money & Property (GOV.UK) https://www.gov.uk/money-property-when-relationship-ends/how-the-court-splits-assetsOnline Date Accessed: 03//01/2018