In English land law, disputes between cohabiting partners over the ownership of property have often involved the doctrine of constructive trusts. The courts are frequently tasked with identifying whether there was a common intention as to ownership and, if so, how to quantify each party’s beneficial interest in the property. The case of Oxley v Hiscock is significant because it addresses both questions and provides a framework for assessing fairness when no express agreement exists.
Facts of Oxley v Hiscock Case
The claimant, Mrs Elayne Oxley, was living in public housing at Page Close, Bean, near Dartford. She had a statutory right to buy her rented property under the Housing Act 1985, which was a valuable right that she would likely have exercised in the future. However, she relinquished this tenancy — and with it the right to buy — to live with the defendant, Mr Allan Hiscock, a former First Gulf War soldier who had been captured in 1987.
The couple purchased a new property at 35 Dickens Close, Hartley for £25,200. The title was registered in Hiscock’s sole name. The financial contributions towards the purchase price were:
- Oxley: approximately 28% of the purchase price.
- Hiscock: approximately 48% of the purchase price.
- The remaining balance was financed through a mortgage.
Both parties contributed to mortgage repayments, household expenses (including council tax, utilities, and insurance), maintenance, and improvements to the property.
The relationship broke down, leading to a dispute over the division of the proceeds from the property’s sale. Oxley claimed she was entitled to a 50% share, arguing that the parties had intended to share the property equally. Hiscock contended that she should receive no more than 22%, citing his greater initial cash contribution and the value of the improvements he had personally funded.
Trial Court Decision in Oxley v Hiscock
At first instance in Bromley County Court, HHJ Hallon accepted Oxley’s evidence that the parties had pooled resources in a manner indicative of an intention to share ownership equally. Although there was no joint bank account, the judge found that both parties had contributed to the “benefit and burden” of the property and had conducted themselves in a way that suggested an equal division was intended.
The trial judge therefore declared that Oxley was entitled to a half share in the proceeds of sale of the property.
Appeal to the Court of Appeal
Hiscock appealed against the decision, arguing that the trial judge had erred by awarding an equal share despite the unequal initial contributions and the additional improvements funded by him.
Court of Appeal Judgement in Oxley v Hiscock
The Court of Appeal, led by Lord Justice Chadwick, allowed the appeal in part. The court agreed that Oxley had a beneficial interest in the property under a constructive trust, but disagreed with the trial judge’s conclusion that her share should be equal to Hiscock’s.
Legal Issues
- Existence of a Constructive Trust
- Was there a shared intention, express or inferred, that Oxley would have a beneficial interest in the property despite the legal title being in Hiscock’s name?
- Quantification of Beneficial Interest
- If so, how should her share be determined when there was no express agreement as to the proportion?
Reasoning
1. Existence of a Constructive Trust: The Court of Appeal accepted that the evidence of pooled resources, joint contributions to mortgage repayments, and shared responsibility for household expenses and maintenance all pointed towards a common intention constructive trust. Even though the property was in Hiscock’s sole name and there was no written agreement, the parties’ conduct demonstrated that Oxley was to have a beneficial share.
2. Quantification of Beneficial Interest: The court emphasised that the challenge in Oxley v Hiscock was to determine the extent of that share. Lord Justice Chadwick set out a two-stage approach:
- Determine whether there is a constructive trust.
- If there is no express declaration of shares, decide what would be fair, having regard to the whole course of dealing between the parties in relation to the property.
Chadwick LJ stated at paragraph [69]:
“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.”
He explained that the whole course of dealing includes:
- Initial cash contributions to the purchase price.
- Mortgage repayments.
- Council tax, utilities, insurance, and other household expenses.
- Repairs, maintenance, and improvements.
- Any other relevant financial or non-financial contributions that impact the value or enjoyment of the property.
Importantly, the quantification should be carried out at the time of sale, not fixed at the date of purchase. This allows the court to take into account subsequent contributions that may have altered the fairness of the division.
Outcome
The Court of Appeal concluded that a fair division of the proceeds, considering all contributions, would be:
- Oxley: 40%
- Hiscock: 60%
Thus, Oxley’s share was less than the equal division ordered by the trial judge, but greater than the 22% proposed by Hiscock.
Significance of the Decision
Oxley v Hiscock is widely cited as authority on the quantification of beneficial interests under constructive trusts between cohabiting partners. The case clarified that:
- In the absence of an express agreement, the court has the discretion to decide what is fair, based on the entire history of the parties’ financial and other contributions.
- The “whole course of dealing” test is broad and not limited to contributions at the time of purchase.
- Non-financial contributions (such as maintenance and upkeep) may be relevant in assessing fairness.
- Quantification is assessed at the point of sale, reflecting the parties’ full history of contributions.
The approach in Oxley v Hiscock laid the groundwork for later decisions, including Stack v Dowden [2007] UKHL 17 and Jones v Kernott [2011] UKSC 53, where the courts further developed the law on common intention constructive trusts.
Key Principles from Oxley v Hiscock
- Common Intention: A constructive trust can arise where the parties’ conduct shows a shared intention for both to have a beneficial interest, even if the legal title is in one name.
- Fairness in Quantification: In the absence of an express agreement on shares, fairness governs the division of proceeds.
- Whole Course of Dealing: The court will look at the entirety of the parties’ financial and practical dealings in relation to the property.
- Timing of Assessment: Shares are determined at the point of sale, not fixed at purchase.
- Flexibility: Courts are not bound by strict mathematical formulas but aim for a just outcome reflecting the realities of the relationship and contributions.
Application of the Case
The principles from Oxley v Hiscock have been applied in numerous cohabitation disputes. For example:
- Where partners have contributed differently at different times, the court can adjust shares to reflect later contributions.
- In situations where one partner made significant non-financial contributions (e.g., managing renovations, maintaining the property), these can influence the court’s fairness assessment.
- The case supports a pragmatic approach, resisting rigid formulas in favour of outcomes that reflect the lived reality of the relationship.
Critical Analysis
The decision in Oxley v Hiscock strikes a balance between respecting initial financial contributions and acknowledging the broader financial and non-financial inputs over time. By focusing on fairness, the Court of Appeal avoided the extremes of rigidly adhering to initial proportions or assuming equal division without justification.
However, the “whole course of dealing” test leaves considerable judicial discretion, which can lead to unpredictability. While flexibility is valuable in adapting to varied circumstances, it can also result in uncertainty for parties who do not formalise their arrangements.
Moreover, Oxley v Hiscock demonstrates the vulnerability of cohabitants who do not have their property interests clearly recorded. Despite her substantial contributions, Oxley received less than an equal share because of her smaller initial cash input, illustrating the importance of express agreements or declarations of trust.
Conclusion
Oxley v Hiscock remains a leading case on the quantification of beneficial interests between cohabiting partners under a constructive trust. The Court of Appeal’s insistence on fairness, assessed through the “whole course of dealing” approach, provides a flexible framework for resolving such disputes. The case is a cautionary tale for cohabitants about the importance of clarifying ownership arrangements at the outset and a foundational authority for practitioners advising clients in similar situations.
