Family Homes

When a marriage, civil partnership, or relationship between a cohabiting couple comes to an end
they face the difficult task of dividing their assets.

There is legislation giving the courts authority to adjust spouses and civil partners property rights
such as the Matrimonial Causes Act and the Civil Partnership Act.

When the parties are neither married nor in a civil partnership courts do not have the power to
adjust their property rights but can only declare what those rights are. The most valuable asset is
normally the family home and the courts can declare that it is held in trust for the parties in equal or
unequal shares.

What is the source of that trust? Operation of law. What defines its terms? The discretion of the
judge. What is the role of detrimental reliance? The other party’s shares in the trust could be
founded on proprietary estoppel, in which case detrimental reliance would be essential. Detrimental
reliance would also be essential if the court wants to impose a common intention constructive trust
(where the courts adopt a broad brush approach in determining how the parties intended the
beneficial interest to be divided rather than presuming), in Gissing v Gissing without detrimental
reliance the wife would have had no better interest than a stranger. Before 2007, discussion and
detriment were required, now much is left to judge’s discretion though it is likely this logic would be
continued in equity.

Does it matter whether it is registered in joint names or in the sole name of one party? If parties are
joint tenants at law they will be assumed to be joint tenants in equity unless one party can prove
otherwise. When the property is in one name alone, the presumption is that there is sole ownership
in the named proprietor but, as previous paragraph, there are 3 ways to discern if the other party
has an equitable interest. Is there evidence they’ve discussed it, is there an inferred common
intention or is there an imported common intention (Diplock in Gissing). To ascertain whether there
is an imported common intention we have to look at the actions of the parties over the entire course
of their relationship relating to the house such as contributions to the purchase price etc and
everything is left to the discretion of the judge.

Box 11 of the Land Registry TR1 form the transferees of land can declare that they will hold the
property on trust for themselves as joint tenants or tenants in common in equal shares, or on some
other trusts. Barones Hale believes that disputes over ownership of the family home would
disappear if box 11 was always completed.

Equality in the family home? Stack v Dowden. It was decided that there would be a rebuttable
presumption of equality in residential properties provided that the requirement of joint tenancy is
met (property taken in joint names) even when couples contributed unequally. Prior to this case
there had to be evidence of clear intention to find a constructive trust, now, ‘context is everything’
and ‘many more factors than financial contributions may be relevant in divining the parties true
intentions’ (Hale).
Stack answers a number of other significant family homes questions. What is the
significance/purpose of s37 of the matrimonial proceedings and property act 1970 and s 65 of the
civil partnership act 2004? These sections ensured that a partner who spent a lot improving real or
personal property can have a share or an enlarged share of the beneficial ownership of the property.
This ensures that they are guaranteed to be repaid for their contribution rather than having to hope
common law finds for them. Have they been made redundant by Stack? No, it’s statute and also, this
‘new’ approach still takes financial contributions into account.

Have the presumptions of resulting trust and advancement been changed by Stack? The
presumption of advancement was deemed unanimously by the house as no longer appropriate for
determining property disputes (at least between husband and wife). A resulting, implied or
constructive trust will be found when the court would infer common intention from [the parties]
conduct. The court determined that the resulting trust should not operate as a legal presumption
although it may (when it accounts for more than just financial contribution) happen to be reflected
in the parties’ common intention though it may still have a useful function in cases where two
people have lived and worked together in what has amounted to both an emotional and commercial
partnership. In this case the new presumption of equality was rebutted as the couple, whilst keeping
their finances strictly separate, indicated that they did not intend their shares in property to be
equal.

In Abbott v Abbott an Antiguan and Barbudan couple had married and lived in a home on the
husbands mothers land, built by further gifts from the mother and a bridging loan, later replaced by
a mortgage in the husband’s name (though the wife was made joint and severally liable for
repayments, secured by insurance policies on both parties and the loan was paid into the joint
account). Following the couple’s divorce, the husband claimed that the land and gifts from his
mother were solely for his benefit and the mothers intentions could not be ascertained as she died
before proceedings began. Baroness Hale found that in light of the assumption that a gift to a
married couple was usually inferred as for both parties, the acceptance of the husband in the court
that the wife had a beneficial interest (though only valued at 8%) and the conduct of the parties with
the mortgage and the use of the joint bank account the wife was entitled to a 50% interest in the
home because a constructive trust was established. .