Precisely what ‘detriment’ will be sufficient is a case-by-case assessment, but it does not necessarily need to be a direct financial contribution to the costs of acquisition or the mortgage. It could be, for example, where a person carries out renovation work to a property based on agreement that they would acquire an interest in it.
Joint name cases
When a property is held in joint names, that is, as joint tenants or tenants in common, it will need to be established if there is an express declaration of trust, for example a transfer deed (TR1) setting out the percentage shares held by the parties or a separate trust document specifying the division of the interest in the property.
If there is an express declaration of trust, that is generally final and conclusive evidence of the beneficial ownership.
If there is no express declaration of trust document, then there is a presumption of a beneficial joint tenancy in equal shares.
This is important to understand as couples will often assume on the breakdown of a relationship that the value of their individual shares in the property are based upon the specific sums contributed by each party to the purchase, particularly where one party has paid the full deposit and/or there has been a substantial gift from one party’s parent or relative.
To establish a financial interest that will show anything different to 50/50 ownership, the person trying to establish a different financial interest will need to produce evidence to challenge the 50/50 presumption.
In this situation the court can look at the parties’ intentions and the whole course of dealings using the following factors:
- advice or discussions at the time of the purchase, eg what was said or written down;
- the reason for the house purchase;
- why the property was purchased jointly;
- the nature of the parties’ relationship;
- the existence of children and responsibility to provide a home;
- how the initial purchase was funded; and
- how the financial arrangements were met thereafter in meeting household expenses and outgoings.
There are several key cases that set out what happens to property that is legally jointly owned by couples who then separate and where there is no express declaration of their beneficial interest in the property.
Stack v Dowden [2007] UKHL 17 found that where there is no express declaration of their interests, a couple hold their interest in a property in equal shares unless it can be proven that this was not the case and in doing so the court can look at the parties' shared intentions and whole course of dealings with the property using the above bulleted factors.
Due in part to the couple keeping their finances rigidly separated during their relationship, Ms Dowden was found to have a 65 per cent share to Mr Stack’s 35 per cent share.
