Stack v Dowden is a leading decision of the House of Lords on how beneficial interests are determined when unmarried cohabitants hold property in their joint names. The case is significant because it reshaped the approach to constructive trusts in the domestic context and clarified how courts should assess the parties’ common intention regarding ownership.
It remains one of the most important authorities on the division of property between cohabiting partners whose financial arrangements differ from their legal title.
Facts of Stack v Dowden
Mr Stack and Ms Dowden were partners for many years and had four children together, although they never married. Throughout their relationship they kept their finances strictly separate. In 1993 they purchased a new family home, registering the property in their joint names.
They did not declare any specific shares on the Land Registry transfer form. Normally, this would carry a presumption that the couple intended to hold the beneficial interest in equal shares.
However, the financial contributions were unequal. Approximately 65 per cent of the purchase price came from Ms Dowden, primarily from the sale of her previous home (which was in her sole name) and from her personal investments.
The remaining 35 per cent was contributed by Mr Stack, who had lived in the previous property for ten years and had made improvements to it, although it belonged legally to Ms Dowden.
When the relationship ended nine years later, they agreed that Mr Stack would leave the house and that Ms Dowden would pay for his alternative accommodation. Mr Stack later applied for (1) a declaration that the home was held on trust for them as tenants in common, and (2) an order for its sale. He argued that the beneficial ownership should be divided equally. The High Court agreed and held that they each owned half.
Ms Dowden appealed.
Court of Appeal
The Court of Appeal overturned the High Court. It concluded that the property should be divided 65 per cent to Ms Dowden and 35 per cent to Mr Stack. It held that the declaration in the transfer document regarding the receipt of capital money was not an express declaration of trust, nor did it show an intention to hold the beneficial interest equally.
There was no evidence that either party understood the document as determining their beneficial shares. The Court of Appeal therefore relied on broader evidence concerning their financial arrangements and contributions.
Mr Stack then appealed to the House of Lords.
Issues
The central issues in Stack v Dowden before the House of Lords were:
- Whether a conveyance into joint names automatically creates a presumption of joint and equal beneficial interests.
- Whether the Court of Appeal was correct to determine that the beneficial interests should instead be divided according to the parties’ financial contributions.
- Whether the Court of Appeal was correct to reverse the High Court’s decision on occupation rent payable to Mr Stack.
These issues required the House of Lords to clarify the principles by which constructive trusts arise between unmarried cohabitants holding property in joint names.
Stack v Dowden Judgment
The House of Lords dismissed the appeal. It held that although the legal estate was held jointly, the beneficial interest was not equal. Instead, the appropriate division was 65 per cent to Ms Dowden and 35 per cent to Mr Stack, reflecting the parties’ overall financial arrangements and intentions. The decision confirmed that the earlier equal-split order was incorrect.
Baroness Hale (leading judgment)
Baroness Hale delivered the principal judgment, and the majority agreed with her reasoning.
Her key points included:
Presumption that equity follows the law
Where property is conveyed into joint names in a domestic context, the starting point is that the beneficial interest is also joint and equal. However, this presumption may be rebutted by evidence that the parties intended their shares to be different.
Determining common intention
Baroness Hale emphasised that the crucial question is:
“Did the parties intend their beneficial interests to be different from their legal interests?”
The burden lies on the party who seeks to establish that the beneficial ownership diverges from the legal title.
A wider approach to constructive trusts
Baroness Hale stated that previous restrictive approaches, such as those in Lloyds Bank plc v Rosset, were too narrow. Courts should consider a range of factors when determining common intention, not only direct financial contributions.
At paragraph [69], she provided a non-exhaustive list of relevant considerations, including:
- Any discussions at the time of purchase.
- The reasons for buying the property in joint names.
- The nature and stability of the relationship.
- Whether the couple had children.
- How the purchase and mortgage were funded.
- How the couple managed their finances generally.
- How they shared household expenses.
Application to the present case
Baroness Hale noted that the couple’s finances had been kept “rigidly separate” throughout their lengthy relationship, despite having four children. Their overall conduct strongly indicated that they did not intend an equal beneficial share, even though the property was placed in joint names. This separation of finances, combined with the unequal financial contributions, rebutted the presumption of equality.
Consequently, the Court of Appeal’s 65/35 split correctly reflected the parties’ intentions.
Occupation rent
Baroness Hale observed that the statutory framework in sections 12–15 of the Trusts of Land and Appointment of Trustees Act 1996 replaced older doctrines of equitable accounting relating to occupation rent.
She found that the judge at first instance had failed to consider the statutory factors properly. Given that the home continued to house the couple’s minor children, that Ms Dowden bore the outgoings on the property, and that the house was due to be sold promptly, the Court of Appeal was right to refuse occupation rent.
Concurring Opinions
Lord Hoffmann
Lord Hoffmann agreed with Baroness Hale.
Lord Hope
Lord Hope also concurred and emphasised that indirect contributions, such as improvements to the property or pooling resources entirely, may be relevant when assessing common intention. This confirmed that the earlier narrow approach from Rosset should not control cases of this type.
He concluded that because the parties maintained financial independence throughout, the appeal must be dismissed.
Lord Walker
Lord Walker agreed with the reasoning and result.
Lord Neuberger (dissenting in reasoning)
Although Lord Neuberger ultimately agreed with the outcome (the 65/35 split), he dissented on the appropriate legal approach.
His concerns included:
- Courts should avoid rapid or judicially created changes to the law, as these may cause uncertainty.
- Resulting trusts should remain the starting point where evidence of shared intention is absent.
- Courts should not impute intentions to parties—that is, decide what the parties would have intended. Instead, courts should infer what they actually intended based on their conduct.
He believed the unequal shares arose at the time of acquisition through a resulting trust. Only clear subsequent discussions or agreements, he argued, could justify any change in beneficial shares.
Despite this reasoning, he agreed with the result reached by the majority.
Conclusion
Stack v Dowden remains one of the most important cases in family property law. The House of Lords made clear that the legal and beneficial ownership of a property held by cohabiting partners may differ where the presumption of equality is rebutted by evidence of the parties’ true intentions.
In this case, the couple’s strict separation of finances, substantial difference in contributions and overall conduct demonstrated that the beneficial interest should not be equal.
The judgment established a modern framework for determining beneficial interests, emphasising a broad factual inquiry into the couple’s whole course of dealings. It is now a central authority in disputes involving property ownership between unmarried partners.