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Home > Judgments > 2008 archive

Fowler v Barron [2008] EWCA Civ 377

Appeal against finding that the appellant had no beneficial interest in a property in which she cohabited with her unmarried partner for seventeen years. Appeal allowed.

The couple had moved to the property in question in 1988 after the birth of their son and it was purchased in joint names but it was also common ground that: i) the respondent paid the deposit and the balance out of the sale of his flat; ii) a mortgage of £35,000 in joint names was taken out on the property which was paid out of the respondent's pension, who also paid direct fixed costs and; iii) the parties never had a joint bank account.

At the original hearing the respondent argued that the property would only go to his partner if she survived his death and mutual wills leaving the property to the other supported this argument. The judge accepted this argument and found that there was a resulting trust which could be valued by the respective contributions of the parties; he found that the appellant had not made any such contributions and so the claim for beneficial interest must fail. He referred to the Court of Appeal's judgment in Stack but he did not have the benefit of the House of Lords judgment.

In this judgment, Arden LJ reviews the decision in the light of the Lords decision in Stack v Dowden and concludes that the judge erred in that he applied the test for a resulting trust rather than a common intention constructive trust as is required following the decision in Stack. Accordingly, as the tenancy was in joint names, there was an onus on the respondent to rebut the presumption of shared beneficial ownership, which in this case he failed to do. Therefore, the appellant had a 50% share in the property regardless of her lack of quantifiable contribution.

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Neutral Citation Number: [2008] EWCA Civ 377
Case No: B2/2007/1014
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM CHICHESTER COUNTY COURT
HIS HONOUR JUDGE BARRATT QC

Royal Courts of Justice
Strand, London, WC2A 2LL

Date: 23/04/2008
Before :
LORD JUSTICE WALLER
Vice-President of the Court of Appeal, Civil Division
LADY JUSTICE ARDEN
and
LORD JUSTICE TOULSON
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Between :

LYNNE FOWLER (Appellant)

- and -

CARL ANTHONY BARRON (Respondent)

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Mr Dirk Van Heck (instructed by Messrs George Ide, Phillips) for the Appellant
Mr Marc Living (instructed by Messrs Staffurth & Bray) for the Respondent

Hearing date : 16 January 2008
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Judgment

Lady Justice Arden:
Introduction
1. This is an appeal by Miss Fowler from the order of HHJ Barratt QC dated 19 April 2007 declaring that the property, which was registered in joint names and in which they had lived together for about seventeen years, belonged beneficially to Mr Barron, her former partner. The issue is whether the judge made any error of law. He sought to apply the judgment of this court in Stack v Dowden [2005] EWCA Civ 857 [2006] 1 FLR 254, which has since been affirmed on different grounds by the House of Lords in Stack v Dowden [2007] UKHL 17 [2007] 2 AC 432.

Background
2. As often occurs in a case of this kind, the facts as found or appearing from the evidence in this case are not detailed, and in themselves raise many issues. The court however must just do the best it can on the evidence that the court has and the inferences that may properly be drawn therefrom.

3. The parties had had an unmarried relationship for 23 years from 1983 to 2005, when they separated. The relationship began when Miss Fowler was only seventeen. Mr Barron was then forty-seven years old. He was at that stage a fireman. In 1985, he retired on the grounds of ill-health and was subsequently in receipt of a pension.

4. In 1988, Mr Barron was discharged from the fire service for medical reasons and he and Miss Fowler decided to move to Bognor Regis. On 30 June 1988, they bought the freehold interest in 10 Arun Road, Bognor Regis, West Sussex (registered title no. WWS64761) ("the property") for £64,950 to provide a home for themselves and their son, Nicholas, born 23 September 1987. The parties made a conscious decision to put the property into joint names but they did not take any legal advice as to the consequences of doing so. There was no discussion or agreement between them as to how the property should be held. On 23 September 1994, their daughter, Sarah, was born. It was also common ground before the judge (1) that Mr Barron paid the deposit on the property; (2) that a mortgage of £35,000 was taken out in the parties' joint names to help fund the balance of the purchase price and acquisition costs; (3) that Mr Barron paid the balance of the purchase price out of the proceeds of sale of his flat, where the parties had presumably been living prior to the move to Bognor Regis; (4) that Mr Barron paid the mortgage instalments out of his pension; (5) that the parties never had a joint bank account; and (6) that Mr Barron paid the direct fixed costs of the property such as the council tax and utilities' bills.

5. The transfer document dated 30 June 1988 did not contain any declaration of trust but stated that the survivor of Mr Barron and Miss Fowler could give a valid receipt for capital money arising on the disposition of the property. The transfer document was not signed by the parties though it clearly ought to have been as it contained an indemnity from them in the vendors' favour. On the face of it, the declaration confirmed that the parties intended that they should be joint tenants in equity. However, it was common ground before the judge that this declaration was not dispositive in this case. A similar declaration was present in Stack and the House of Lords held that it was of no significance unless the parties understood its effect.

6. The judge accepted the evidence of Mr Barron that, when he agreed to the property being registered in joint names, he intended that the property would become Miss Fowler's home and sole property by way of survivorship only in the event that he were to die before she did. He formed this intention on the footing that they would continue to live together, and indeed, at the time of giving evidence at least, he found it difficult to accept that she had decided that they should now part. The judge also accepted his evidence that the reason why the property was put into joint names was only so that she should benefit in the event of his prior death. The judge did not refer to the fact that, according to the evidence of Mr Barron, shortly after they bought the property, he and Miss Fowler executed mutual wills each leaving the interest in the property to the other. That evidence suggests that he did not think that she would otherwise inherit his share of the property and also that he thought that she also had a share of the property which she could devise by will in his favour.

7. Mr Barron paid the mortgage payments and the other outgoings out of his pension. Miss Fowler worked for much of the period of the parties' cohabitation although she did not work for some time after the birth of Sarah. She told the judge that Mr Barron paid for most things including the weekly shop. Mr Barron cared for the children while she was at work. The judge found that, with the exception of some money that she saved, she always spent her income on herself and the children. She met additional expenditure for such day-to-day costs as miscellaneous items of food, seasonal gifts, school clubs and trips, some personal clothing, holidays and special occasions as she deemed appropriate and necessary. These included items for the children as well as herself.

8. After the relationship broke down the parties continued living in different households in the property. In June 2006, the value of the property was estimated at £150,000 approximately.

Judgment of the judge
9. As regards Miss Fowler's income, the judge held at [11] of his judgment as follows:

"Because the respondent paid all the essential outgoings of his pension, the applicant kept all her net income, child benefits and other receipts to spend as she wished and when she chose."

10. Miss Fowler contended that the fact that she paid these items enabled Mr Barron to build up savings and the judge recorded this submission without rejecting it (judgment, [17]).

11. The judge then directed himself in accordance with this court's decision in Stack and set out [25], [52] and [55] of the judgment of Chadwick LJ, with which both Carnwath LJ, who also gave a short concurring judgment describing recent work done by the Law Commission of England and Wales, and Smith LJ agreed. Of those passages, [55] concerns the declaration in the transfer, which the judge found had no bearing on this case (and the contrary has not been suggested on this appeal). In the earlier paragraphs cited by the judge, Chadwick LJ made a number of points but among them was a point taken from an important earlier decision of his in Oxley v Hiscock [2004] EWCA Civ 546; [2005] Fam 211 as follows:

"…in the case where the evidence is that there was no discussion [of the question as to the extent of the parties respective beneficial interests in the property] the question still requires an answer. It must now be accepted (at least in this court and below) that 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….."

12. In the House of Lords in Stack, Baroness Hale, with whom the Lords Hoffmann, Hope and Walker agreed, cited this passage but preferred the view that the search was to find what the parties, in the light of their conduct, were to be taken to have intended ([61]).

13. The judge then held as follows (italics added):

"22. I find myself in the light of the written submissions in this case driven to the conclusion the claimant is entitled to no beneficial interest in this case. Although where a property has been transferred into joint names, it can usually be taken for granted what each party intended, namely that they would have some beneficial interest in the property, in the absence of any express declaration of trust in this case, I have to concentrate on how the purchase money was actually provided.

23. The inference will be likely to be, where it is provided by the two parties in unequal amounts, the principles governing the creation or operation of resulting implied and constructive trusts apply and each legal owner should be beneficially entitled as between themselves in the proportions in which they provided the purchase money.

24. It may be deduced in a case where both names were on the mortgage deed that they were acting on an understanding at purchase that the applicant should become entitled to a share which would not be quantified immediately. The precise proportion it can be assumed by inference on all the facts would be left to be determined when the mortgage was paid or the property disposed of, if this preceded the death of one of them. It was agreed that the share would be determined on the basis of what would then be fair having regard to the total contributions direct and indirect, which each partner had made by that date (see Lord Diplock in Gissing 1971 AC 886 at 909D-E).

25. I am satisfied on the evidence in this case however and having regard to what occurred throughout their relationship that there was no actual common intention to share the property in equal beneficial shares. No such intention was expressed or ever communicated in this case. Whatever either of them thought about the issue at the time of transfer, nothing was ever said.

26. The presumption of a resulting trust therefore should apply. The property must be taken necessarily to be held in shares proportionate to the respective contributions to the purchase price.

27. The evidence is plain. The applicant made no contribution to the purchase price or any mortgage payment. Nor furthermore did she make any indirect contribution to either of them. In the particular circumstances of their relationship it was completely understood and accepted by the respondent that her money was hers to spend as she chose when she wanted. Thus it would not be possible let alone fair to infer that it was their common intention at purchase that she would acquire a beneficial interest in the property. She plainly and deliberately kept her finances wholly discrete and separate from the household purse which was used to fund all the necessary outgoings to maintain the property. It was only the respondent who ever paid into that resource in terms of either capital or income.

28. It follows in my judgment that her application for a declaration that she is entitled to an equal beneficial share in the property must fail. The property was put in joint names. It was not because they agreed the beneficial shares would be shared equally. It was solely for the purpose of survivorship.

29. In conclusion any indirect contribution which might have occurred seems to me on the evidence to have been far too fortuitous, tentative, speculative and haphazard to support any such conclusion. It would not be fair as it seems to me to draw any different inference. Indeed the applicant does not venture any form of quantification of any such indirect contributions over any identified time period or with any consistent pattern despite her employment for much of the relationship.

30. While I appreciate these parties have lived together under the same roof for a very long time, I am not invested with some sort of general discretion based on a general overview as to what is fair."

Stack v Dowden [2007] 2 AC 432
14. It is necessary to examine both the facts and holdings in this case. Mr Stack and Ms Dowden first began to live together in 1975 when they were teenagers. In 1983 Ms Dowden had the opportunity to buy a house (in Purves Road) as a result of the wish expressed by a deceased relative. The house was conveyed into her sole name. She paid the deposit of £8,000 out of an account into which some monies had been contributed by Mr Stack. She took out a mortgage for the balance of the price (£22,000). She made all the payments under the mortgage and paid all the outgoings. The couple lived at this house and brought up three children. Mr Stack did a substantial amount of work to the property, but these improvements were not valued. In 1993 this house was sold. The parties bought a second property in Chatsworth Road which was transferred in to the parties' joint names. The form of transfer contained no declaration of trust but stated that the survivor could give a valid receipt of the capital monies arising from the sale of the property. The purchase price was £190,000, of which approximately two-thirds came from the building society account of Ms Dowden. The proceeds of sale of the house in Purvis Road had been paid into that account. The balance of the purchase price was provided by a loan secured by a mortgage and two endowment policies. One of these policies was in joint names, and one in the name of Ms Dowden alone. Mr Dowden paid the mortgage interest and the premiums due under the endowment policy in joint names. He thus paid approximately £34,000. The mortgage loan was repaid by a series of lump sum payments. Mr Stack contributed £27,000 to these and Ms Dowden, £38,435. Ms Dowden also paid the premiums on the endowment policy in her name. She further paid all the outgoings and all the other household expenses. Her income was at times about twice as much as that of Mr Stack. Throughout this time, the parties kept separate bank accounts and made a series of separate investments and savings.

15. In 2002, the parties separated. The trial judge held that they were entitled to the proceeds of sale of the house in Chatsworth Road in equal shares. This court held that the proceeds of sale should be divided 35% to Mr Stack and 65% Ms Dowden. This court examined the whole course of dealing between the parties in relation to the property and held that was the fair result.

16. In the House of Lords, Baroness Hale, with whom Lords Hoffmann, Hope and Walker agreed, gave the leading speech. Her speech is detailed and needs to be read in its entirety. However, the salient points in my judgment so far as this case is concerned are as follows. She held that where property was put into joint names, the starting point was joint beneficial ownership. The onus was on the person seeking to show that the beneficial ownership was different from legal ownership ([56]). It was unlikely that the parties intended that the beneficial ownership should be held as joint tenants, because, if one of them died, the entire property would pass to the other by virtue of the right of survivorship (see [57] and the citation from the speech of Lord Brightman in Malayan Credit Ltd v Jack Chia-MPH Ltd [1986] AC 559). At the least in the domestic consumer context, a transfer into joint names indicated both legal and beneficial joint tenancy unless and until the contrary was proved ([58]). The contrary could be shown by ascertaining 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 ([60]). In this regard, Baroness Hale noted that the law had moved on in response to changing social and economic conditions.

17. At [61], Baroness Hale held that it was preferable to ask what shares were intended rather than what was fair. She gave two reasons:

"First, it emphasises that the search is still for the result which reflects what the parties must, in the light of their conduct, be taken to have intended. Second, therefore, it does not enable the court to abandon that search in favour of the result which the court itself considers fair. For the court to impose its own view of what is fair upon the situation in which the parties find themselves would be to return to the days before Pettitt v Pettitt [1970] AC 777 without even the fig leaf of section 17 of the 1882 Act."

18. Baroness Hale accepted that the intention of the parties could change over time ([62] and [70]). She held that the burden was on the person alleging that the parties intended their interests to be different from their legal interests and in what way. She observed that this task was not to be embarked on lightly because the parties might reinterpret events after their relationship broke down. Baroness Hale clearly contemplated that the parties could be equal joint owners even though their financial contributions to the purchase cost had been unequal (see [68]).

19. At [69], Baroness Hale identified some of the factors which might be relevant to the ascertainment of a shared intention about beneficial ownership:

"In law, "context is everything" and the domestic context is very different from the commercial world. Each case will turn on its own facts. Many more factors than financial contributions may be relevant to divining the parties' true intentions. These include: any advice or discussions at the time of the transfer which cast light upon their intentions then; the reasons why the home was acquired in their joint names; the reasons why (if it be the case) the survivor was authorised to give a receipt for the capital moneys; the purpose for which the home was acquired; the nature of the parties' relationship; whether they had children for whom they both had responsibility to provide a home; how the purchase was financed, both initially and subsequently; how the parties arranged their finances, whether separately or together or a bit of both; how they discharged the outgoings on the property and their other household expenses. When a couple are joint owners of the home and jointly liable for the mortgage, the inferences to be drawn from who pays for what may be very different from the inferences to be drawn when only one is owner of the home. The arithmetical calculation of how much was paid by each is also likely to be less important. It will be easier to draw the inference that they intended that each should contribute as much to the household as they reasonably could and that they would share the eventual benefit or burden equally. The parties' individual characters and personalities may also be a factor in deciding where their true intentions lay. In the cohabitation context, mercenary considerations may be more to the fore than they would be in marriage, but it should not be assumed that they always take pride of place over natural love and affection. At the end of the day, having taken all this into account, cases in which the joint legal owners are to be taken to have intended that their beneficial interests should be different from their legal interests will be very unusual."

20. Turning to the facts of the case, Baroness Hale held that the judge should have focused on the party's intentions with regard to the home rather than with regard to their relationship ([71]). She held that the statement about a receipt for the capital monies could not be relied on to establish a joint tenancy unless both parties understood the significance of it ([84]). She held that it was not enough for the judge to point to the length and nature of their relationship ([86]). She held that Ms Dowden could point to many factors to show that the parties did have an intention to own the property in Chatsworth Road other than in equal shares. They had made unequal contributions to the purchase price and to the lump sum repayments ([87]). She held that the context was supplied by the nature of the parties' conduct and attitudes towards their property and finances. This was not a case in which it could be said that the parties could be said to have pooled their separate resources for the common good. The fact that the property was held in joint names was an indication that the common intention was that Mr Stack should have some interest in it ([90]). The evidence did not support the finding that each would pay what they could. All regular commitments in both houses were undertaken by Ms Dowden and the only regular expenditure to which Mr Stack committed himself was the mortgage interest and premiums on the joint endowment policy ([91]). This was accordingly an unusual case. There could not be many unmarried couples who had lived together, and whose affairs had been kept as rigidly separate as this couple's affairs were kept. They could not have intended that their shares in the house should be equal in those circumstances ([92]).

21. Lord Hoffmann agreed with Baroness Hale, Lord Hope agreed with Baroness Hale and also gave his own reasons. In particular, he pointed out that it was necessary to look at who pays for what in the wider context of the whole course of dealing, including indirect contributions. He distinguished household running matters from large matters. Lord Walker agreed with Baroness Hale. He considered that the law should take a wide view of what counts as a contribution ([34] to [36]).

22. Lord Neuberger dissented on the principles to be applied to the determination of the beneficial interests of persons who had lived together and all property in their joint names. His opinion was that the same principles should apply whether the legal co-owners were cohabiting or whether they were for instance in a commercial relationship ([107]). Although at [106], he held that the decisions of this court in Stack and Oxley were correct, he also expressed concern about the nature of the jurisdiction. He considered that an intention could not be imputed to the parties (as opposed to inferred), and he agreed with Baroness Hale that the court's view of fairness was not the correct yardstick for determining the parties' shares ([127]).

23. I discuss various aspects of this decision below.

Submissions and conclusions
24. It must be remembered that the judge did not have the benefit of the decision of the House of Lords in Stack. To recapitulate, the important points decided by the House for the purpose of this appeal were as follows. The legal technique that the court will use to ascertain whether both joint owners who had been co-habitees had a beneficial interest is that of the common intention constructive test, rather than that of resulting trust. This will enable the court to take a holistic view of the whole of the parties' conduct so far as it illumines their shared intentions about the ownership of the property. The court will not impose any particular allocation of property on the parties. It is not a question of the court deciding what is fair as regards the division of ownership but of determining what the co-owners' shared intentions were as regards beneficial ownership. This was a deliberate policy choice to make the law respond to current needs: see per Baroness Hale at [60]. Where, as here, a house is transferred into the joint names of two individuals as their home, without any declaration of trust, the transfer will indicate that the parties intended to own the house in equal shares and thus the onus will be on the one (here, Mr Barron) who asserts that property is owned by them other than in equal shares to show that they had a shared intention to own the property in some other shares. The conduct that the court will take into account will include, but is not limited to, the financial contributions that they made towards the acquisition of the property or repayment of any loan raised for such purpose. The onus will not be easy for that person to discharge.

25. I shall need to deal separately below with the grounds on which the House held in Stack that the presumption of equal shares was rebutted.

26. Miss Fowler's case is that the judge used the technique of a resulting trust, rather than that of a common intention constructive trust to determine whether she had a beneficial interest in the property. He was in error in this and he was also in error in his approach to her income since he treated this as purely hers on the basis that she could decide how to use it. The judge should have drawn the inference that the parties' shared intention was that she should have a 50% interest in the property. The presumption of a beneficial joint tenancy was not to be rebutted simply because she had made no contribution to the costs of acquiring the property.

27. Mr Barron's case is that the judge correctly applied the principles in Stack and treated the burden as falling on him. He did not correctly understand the significance of the property being in joint names since his only intention was that Miss Fowler should inherit the property if he pre-deceased her and they were still together. If she had a beneficial interest, it could not have been 50% given the size of Mr Barron's contributions.

28. The issues raised in the parties' submissions may be grouped into the following issues:

(i) Was the judge in error in seeking to determine the parties' intentions with respect to the shares in which they owned the property by concentrating on the parties' financial contributions?

I answer this question below in the affirmative. This was an error of principle on the part of the judge which entitles and requires this court to intervene and reach its own conclusion as to whether Miss Fowler had a beneficial interest.

(ii) Has Mr Barron discharged the onus on him of showing that it was not the parties' shared intention that Miss Fowler should have a one-half share in the property?

I answer this question below in the negative.

29. I will take each of those issues in turn.

Issue (i) Was the judge in error in seeking to determine the parties' intentions with respect to the shares in which they owned the property by concentrating on the parties' financial contributions?

30. In my judgment the answer to this is yes. In Stack, the view of the majority was that, in the absence of an express agreement, "[t]he 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" (per Baroness Hale at [60]). The judge for his part concentrated on the parties' financial contributions: see the passages in [22] to [30] of his judgment which I have italicised at [13] of this judgment.

31. This was an error of principle on the part of the judge that entitles and requires this court to intervene and reach its own conclusion as to whether Miss Fowler had a beneficial interest.

Issue (ii) Has Mr Barron discharged the onus on him of showing that it was not the parties' shared intention was that Miss Fowler should have she should have a one-half share in the property?

32. For the purpose of determining the parties' shared intentions about the beneficial ownership of the property, the court must consider the whole of the parties' relationship so far it illumines their shared intentions about the ownership of the property and the court must draw any appropriate inferences.

33. The starting point is of course that the transfer of the property was into the joint names of Mr Barron and Miss Fowler. Whatever Mr Barron's motive was for doing this, it was a deliberate choice. As a matter of law, a presumption of joint beneficial ownership arose from the fact that they were joint legal owners: see Stack at [58] per Baroness Hale. It was open to Mr Barron to rebut this presumption. There was no direct evidence of the parties' intentions, and accordingly the only evidence was circumstantial.

34. At this point it may be appropriate to make some observations about the effect of the presumption. It provides a default rule that, unless and until the contrary is proved, joint tenants in this context are treated as joint legal and beneficial owners. If the contrary were not proved, the mere fact that the property was transferred into their joint names would be enough to give both parties an equal beneficial share.

35. In determining whether the presumption is rebutted, the court must in particular consider whether the facts as found are inconsistent with the inference of a common intention to share the property in equal shares to an extent sufficient to discharge the civil standard of proof on the person seeking to displace the presumption arising from a transfer into joint names.

36. The emphasis is on the parties' shared intentions. As Lord Diplock said in Gissing v Gissing [1971] AC 886 at 906B-C, "…the relevant intention of each party is the intention which was reasonably understood by the other party to be manifested by that party's words or conduct notwithstanding that he did not consciously formulate that intention in his own mind or even acted with some different intention which he did not communicate to the other party." This would be broadly consistent with the principles applicable to the interpretation of a written document, if that had set out their intention.

37. Thus any secret intention of Mr Barron, that Miss Fowler should only benefit in the event of his death and on the basis that they were then still living together, does not provide the evidential basis for rebutting the presumption, since it is not evidence of the parties' shared intention. (Moreover, there was nothing on the face of the document to prevent Miss Fowler from severing her interest before the date of his death.) For the same reason, the fact that Mr Barron was mistaken as to the effect of putting the property into joint names, and did not appreciate that that would give Miss Fowler an immediate and absolute entitlement to a beneficial interest is of no materiality. He did not communicate his belief to Miss Fowler, and there is no basis for saying that it should have been apparent to her.

38. On this point, I would add that the judge did not have the benefit of the warning given by Baroness Hale about the potential unreliability of evidence given about beneficial interests after the event. She said:

"In family disputes, strong feelings are aroused when couples split up. This often leads the parties, honestly but mistakenly, to reinterpret the past in self-exculpatory or vengeful terms. They also lead people to spend far more on the legal battle and is warranted by the sums actually at stake. A full examination of the facts is likely to involve disproportionate costs. In joint names cases it is also unlikely to lead a different result, unless the facts are very unusual." ([68])

39. Had the judge had in mind a warning that in this situation former co-habitees may (consciously or subconsciously) reinterpret the past, the judge might possibly have been more sceptical of Mr Barron's evidence. We have not been asked, however, to go behind his finding as to Mr Barron's secret intention that Miss Fowler should only have a beneficial interest if he predeceased her and the relationship subsisted at the date of death. It is not appropriate that this court to go behind a finding that is based on the way in which he gave his evidence. However, I note that the judge does not refer to another claim which Mr Barron made, namely that he was the primary carer for the two children. Miss Fowler hotly disputed this claim. In future cases, the warning given by Baroness Hale should be borne in mind.

40. Miss Fowler signed the mortgage, although she was not expected to make any payment towards the discharge of the mortgage debt. It is said on Mr Barron's behalf that her involvement in the mortgage was purely nominal, as in Carlton v Goodman [2002] 2 FLR 259. The significant point however is that the fact that she signed the mortgage is not inconsistent with the shared intention that she should be a joint beneficial owner. Signature of the mortgage cannot therefore of itself assist Mr Barron on his case that the presumption is rebutted.

41. Mr Barron also places reliance on the fact that Miss Fowler made no contribution to the cost of acquiring the property (whether directly or by paying off the mortgage). But the decision in Stack shows that the critical factor is not necessarily the amount of the parties' contributions: the court has to have regard to all the circumstances which may throw light on the parties' intentions as respects ownership of the property. In this case, the judge found that Miss Fowler paid a number of expenses: see the extract from [11] of his judgment set out above. He went on to hold that "it was completely understood and accepted [by Miss Fowler] that her money was hers to spend as she chose when she wanted." With respect to the judge, this makes it sound as if her income was no more than old-fashioned "pin money". The reality was that she spent much of her income and the child benefits principally on herself and her children and meeting what the judge termed "optional expenditure" such as gifts, school clubs and trips, personal clothing, holidays and special occasions. In my judgment, the proper inference is that, with the exception of clothing for herself, these payments were her contributions to household expenses for which both parties were responsible. As I see it, the correct finding is that Mr Barron paid some items properly described as household expenses, such as the council tax and the utilities bills, whereas she paid other such items. The division was perfectly logical if, as I assume, she did most of the shopping for the children. The further inference that in my judgment it is appropriate to draw is that the parties intended that it should make no difference to their interests in the property which party paid for what expense. Those payments also throw light on their intentions in this respect. There was no prior agreement as to who would pay what. The inference from this, especially when taken with the evidence as to mutual wills referred to below, was that the parties simply did not care about the respective size of each other's contributions.

42. The evidence about mutual wills came from Mr Barron and on the judge's approach it was not necessary to deal with it and he did not deal with it. However, if regard is had to the totality of the parties' conduct, it illumines their intentions about the beneficial ownership of the property. The parties would not need to have made mutual wills unless they thought that each had a beneficial interest to convey and that the execution of a will was necessary to vest the deceased partner's interest in the other. There is no evidence that the wills were revoked before the parties' relationship broke down. Accordingly, in my judgment, the proper inference from the execution of mutual wills is that they intended each to have an interest. Mr Barron of course says that this evidence is consistent with his case that Miss Fowler was only to have an interest if they stayed together and he pre-deceased her but I have already dealt with that point above.

43. That brings me to the submission by Mr Living, for Mr Barron, on the quantification of any interest on the part of Miss Fowler. Mr Living submits that this is one of the exceptional cases identified by Baroness Hale in Stack simply because the parties had never pooled their resources. He submits that the parties cannot have intended that she should have had as great an interest as 50%. He submits that her maximum share should be 25%, representing a one-half share of the contribution to the purchase price made by the mortgage to which she was a party.

44. This requires some analysis as to the basis on which Ms Dowden was able to rebut the presumption of equal shares in Stack and successfully assert that the parties' shares in the property should reflect their contributions to the purchase price in cash payments towards the price or the mortgage payments made in respect of it or the premiums on the endowment policies supporting the mortgage. At [87] to [92], Baroness Hale identified a number of points arising out of the facts in that case: the fact that Ms Dowden paid much more of the purchase price, the fact that she paid the greater part of the lump sums required to redeem the mortgage, the fact that Mr Stack's payments in respect of the mortgage were to service the interest payments due and to pay premiums on one of the endowment polices supporting it, the fact that the parties intended to reduce the mortgage as soon as they could, the fact that the parties kept their financial affairs "rigidly separate" and did not pool their resources "even notionally" for the common good, and the fact that Ms Dowden paid all the other household expenses. Baroness Hale considered that the case was very unusual with regard to the way the parties maintained their affairs separately.

45. In a case where the parties have made unequal contributions to the cost of acquiring their home, it is obvious that in some cases there may be a thin dividing line between the case where the parties' shared intention is properly inferred to be ownership of the home in equal shares, and the case where the parties' shared intention is properly inferred to be that the party who has contributed less should have a smaller interest than the other. The resolution of such cases must however all depend on the facts. In my judgment it is important to return to the ratio in Stack. The essential reasoning of the House was (1) that, where parties put their home into joint names, the burden is on the one asserting that they own the property other than in equal shares to rebut the presumption of joint beneficial ownership that arises from their legal co-ownership, and (2) that the court must have regard to all the circumstances which would throw light on their shared intentions and not just their financial contributions to the cost of acquiring the property. It is necessary to consider the resolution of the facts in Stack with these principles in mind. In other words, it was not the fact that the parties made unequal contributions to the cost of acquiring their property in Chatsworth Road that mattered so much as the inferences as to their shared intentions to be gleaned from the evidence overall.

46. The facts in this case are different in many respects. For instance, the evidence as to mutual wills is not replicated in Stack. Moreover, unlike the parties in Stack, there is no evidence that Mr Barron and Miss Fowler had any substantial assets apart from their income and their interest if any in the property, and Miss Fowler made no direct contribution to paying for the property. I do not think that it is reasonable to infer that the parties intended that Miss Fowler should have no share of the house if the relationship broke down. That might leave Miss Fowler dependent on state benefits and housing for support. The way that she used her own income indicates that the parties largely treated their incomes and assets as one pool from which household expenses will be paid. There is also important evidence about their wills. Moreover, there is no logical reason why Miss Fowler's interest should be equal to a one half-share of the proportion that the mortgage loan bore to the total acquisition cost to the property since the parties cannot have expected her actually to contribute to that amount. In those circumstances, I do not consider that the presumption of equal beneficial interests can be successfully rebutted.

47. This result can be criticised because it may leave Miss Fowler better off than the case of a cohabitee who contributes (say) 20% of the purchase price. But that would only be the case where the court found that the parties' shared intention was that they should share the beneficial interest in their home in proportion to the amount of their financial contributions to the cost. But the reason why the result in that case may be different is because that is what the court infers to be the parties' intention. It would have been open to them to agree to divide the ownership in any other way. The basis, on which Stack proceeds, is that the court's jurisdiction is based on the parties' common intention, expressed or inferred. The parties' autonomy to devise a solution suitable for their circumstances is preserved. Accordingly, subject always to the strength of the presumption arising from legal ownership in joint names, the result may depending on the facts be different in different cases.

Disposition
48. In my judgment, for the reasons given above, this appeal should be allowed. There will be a declaration that Miss Fowler is entitled to a half share in the property. There will be an order for sale of the property.

Lord Justice Toulson:
49. I agree. It was argued strongly on Mr Barron's behalf that even if the judge went too far in holding that Miss Fowler had no beneficial interest in the property, it would not be a fair overall result to hold that they should share the property equally. Opinions on that might differ but it is not the question to be decided. Baroness Hale made in clear in Stack v Dowden at [61] that it is not for the court to decide a case such as this on its own general view of what would be fair in the situation in which the parties find themselves. It is for the court to apply the law.

50. The law in this area has been the subject of much academic and other debate in recent years and the debate seems set to continue. Baroness Hale referred in her opinion to the Law Commission's Consultation Paper (2006) No 179 on Cohabitation: The Financial Consequences of a Relationship Breakdown. In its final report, (2007) Law Com No 307, the Commission considered the consequences of the House of Lords' decision in some detail . It concluded at para 2.12 that, despite Stack v Dowden, the need for statutory intervention remained if reform was considered desirable as a matter of social policy. The arguments for and against reform have been extensively rehearsed in the Law Commission's report and elsewhere. In general terms the case for reform is that the present law relating to domestic property interests of cohabitants on death or breakdown is complex, not well understood and prone to produce unfair results. The main argument against reform is that the legal principles are tolerably clear and that it is up to any person who enters into a cohabiting relationship to take steps to see that his or her needs and property interests are adequately protected by one means or another. The government has indicated that for the time being it does not intend to make a decision on the issue. Meanwhile cases will continue to come to this court and lower courts in which the principles to be applied will be those established in Stack v Dowden.

51. Where there has been no express agreement, arrangement or understanding between the parties, the court has to search for their inferred common intention. In an ordinary domestic case, the conveyance of property into the parties' joint names suggests that the parties intended to be joint sharers of the property in the absence of cogent evidence to suggest otherwise, and therefore there is a strong presumption that their beneficial interests were intended to be equal. The burden rests on the party challenging that presumption to show that the parties should be taken to have intended that their beneficial interests should be different from their legal interests. Lord Walker at [33] and Baroness Hale at [69] emphasised that the burden is heavy and that cases in which the joint legal owners are to be taken to have intended that their beneficial interests should be different from their legal interests will be very unusual.

52. The judge did not have the benefit of the decision of the House of Lords. I agree that in the light of that decision he can be seen to have erred in his approach by looking at the issue in terms of the principles of resulting trusts (in which respect he was in distinguished company, because this was the preferred approach of Lord Neuberger) rather than common intention constructive trusts. As we now know, he should have started with the presumption that the parties were joint beneficial owners of the property and asked himself whether there was sufficient evidence from which to infer that they mutually intended that their beneficial interests should be different from their legal interests (and, if so, how). I agree with Arden LJ that Mr Barron's evidence about his private reason for the property being put in their joint names (i.e. so as to benefit Miss Fowler only in the event of him pre-deceasing her) was irrelevant since it could not support an inference of a shared intention. By contrast, the evidence of mutual wills was plain evidence of a mutual supposition around the time of the acquisition of the property that the parties each had a beneficial interest in the property.

53. In Stack v Dowden the House of Lords regarded the facts as very unusual. In the present case there was nothing at all unusual about the circumstances in which the property was acquired. It was bought and conveyed into the parties' joint names in June 1988 at a time when they had a 9 month old baby, Nicholas. They had been in a relationship for 4 years. They had not been cohabiting but Miss Fowler said in her witness statement that the birth of Nicholas "was the spur for us to become a proper family unit". The judge found that the property was bought in order to provide a home for themselves and their son. The deposit was provided by Mr Barron and the balance of the purchase money came from a mortgage loan entered into by the parties in their joint names. They were therefore joint borrowers and jointly liable. The judge found that whatever either of them thought about the question of ownership of the property at the time of the transfer, nothing was ever said. Looking at the matter at the time of the acquisition, there was in my judgment nothing to rebut the ordinary presumption in such circumstances that the parties were intended to be joint beneficial owners in equal shares.

54. The judge, however, found that Miss Fowler made no contribution to any mortgage repayment nor did she make any indirect contribution to the acquisition of the property. He found that she kept her finances separate from the household purse which was used to fund all necessary outgoings to maintain the property, and that only Mr Barron paid into that resource in terms of capital or income. He therefore found that Miss Fowler had not rebutted the presumption of a resulting trust arising in favour of Mr Barron from his payment of the costs of acquisition of the property. This was to approach matters from the wrong direction.

55. On the basis that the property was acquired by the parties in joint beneficial shares (because there was nothing at the time of its acquisition to rebut that presumption), it would be for Mr Barron to show that there was later to be inferred a common intention to change their respective beneficial property rights in his favour, but the point was not argued in that way. The possibility was touched on in Stack v Dowden, where Baroness Hale recognised at [62] that the parties' intentions may change over the course of time, but it would be very difficult to establish in a case like the present.

56. As Baroness Hale observed at [69], in a family context many more factors than financial contributions may be relevant to defining the parties' true intentions. They include, among other things, the reasons why the home was acquired in the joint names, the purpose for which the home was acquired, the nature of their relationship and whether they had children for whom they had a shared responsibility to provide a home. She observed that when a couple are joint owners of the home and jointly liable for the mortgage, the inferences to be drawn from who pays what may be very different from the inferences to be drawn when only one is owner of the home. The judge in his analysis of the facts looked only at financial matters. That is too narrow an approach when addressing issues of inferred common intention. In this case the property served as a family home for the parties and their children from the time of its acquisition until the time of the breakdown of the relationship. During those 17 years Miss Fowler contributed to the life and wellbeing of the family in financial and other ways, to which Arden LJ has referred in fuller detail. In that family context I would reject any argument that a common silent intention should be inferred from the parties' conduct that their property interests were to be varied so as to reduce Miss Fowler's original share.

Lord Justice Waller:
57. I agree with both judgments.