equally, but the Court of Appeal allowed Ms. D’s appeal and ordered that the proceeds instead be split 65/35 in her favour. The case was then appealed to the House of Lords, where Baroness Hale’s judgment in considering the situation by way of constructive trust, formed what is now the current law and precedent in beneficial interest disputes. Lord Neuberger gave the dissenting judgment, disputing not the outcome, but the methodology in reaching the outcome, preferring the approach that apportionment should be determined with a starting point of actual contributions to purchase price, thereby favouring resulting trusts over constructive trusts. His Lordship did however emphasise that the resulting trust should only form the basis of a presumptive entitlement and that it should not be conclusive, thus deviating from Lord Bridge’s stricter approach in Rosset.
The significance of the decision in Dowden is multifaceted with several key principles emerging. Firstly, where the beneficial interests are not declared, the presumption is that equity follows the law, with beneficial interests mirroring legal interests. In sole ownership cases prior to Dowden, the law focused on the concept of a common intention constructive trust, dependent on the shared intention of the parties. Following Dowden however, sole legal ownership operates on the presumption that there is also 100% beneficial ownership. With joint ownership pre-Dowden, the law often analysed in terms of resulting trusts, dependent upon the law’s presumption as to the intention of the party who made the contribution. Now, the presumption is of a 50/50 split. These assumptions however, are “readily displaced by any of a number of contra-indications that...equitable ownership was intended to take the form of a tenancy in common.”
The rebuttal of the presumptive entitlements in joint ownership cases will be far more onerous than that of sole ownership cases with Baroness Hale declaring that such a rebuttal would be “very unusual.” Should the presumption be successfully rebutted, the court must ascertain the shares the parties’ intended. To do so, Baroness Hale dissected Chadwick LJ’s formulation, upholding the latter half, that it should be determined in light of the whole course of dealing between the parties, whilst rejecting the former half, that it should reflect what ‘the court considers fair’. Factors which may be used to determine the parties’ beneficial interests include the rejection of jus accrescendi, the nature of the parties’ relationship, the allocation of their respected finances and any discussions at the time of transfer which revealed their intentions. The mere fact that the parties had contributed to the acquisition in unequal shares is not enough to rebut the presumption thereby disparaging the use of resulting trusts in such determinations.
The impact of Dowden’s principle that ‘beneficial ownership mirrors legal ownership’ is clearly illustrated in Fowler, where the original trial judge viewed the starting point under a resulting trust basis (much like Lord Neuberger) and since Fowler had contributed nothing, she was awarded no share. Under Dowden however, the Court of Appeal followed the starting point that in joint ownership, the presumption is 50/50 ownership bar any rebuttal. Fowler was subsequently awarded a 50% share. The judge concluded: “the legal technique that the court will use to ascertain whether both joint owners...had a beneficial interest is that of a common intention constructive trust test, rather than that of resulting trust.”
The principle put forth in Dowden has since been upheld by several recent cases, most notably Jones v Kernott. The case clarified the position and effect of Dowden: beneficial ownership mirrors legal ownership, the presumption can be displaced and that their common intention is to be objectively deduced. It also highlighted that the parties’ common intention forms at the time the property is acquired, but that such intention is susceptible to change, thus they can latterly form the common intention that their respective shares should indeed change (an ‘ambulatory’ constructive trust, per Lord Hoffman). This view is consistent with the judgment of Chadwick LJ in James v Thomas.
The distinction between inference and imputation of intention merits a brief point, as Lord Neuberger said that ‘an intention may be inferred...it may not be imputed.’ Inference is ‘objectively deduced to be the subjective actual intention’, whilst imputation is ‘attributed to the parties even though no such intention can be deduced.’ The Supreme Court stated that unlike a constructive trust, a resulting trust is an imputation of intention, thus under Neuberger’s own ‘dictum,’ a resulting trust should not be used as a presumptive starting point, nor should it be at odds with a common intention constructive trust. However, the distinction between the two and the difference in application has been considered arbitrary by some and so is unlikely to substantiate its own merit. Indeed, Knott argues that Dowden reintroduced the ‘notion of imputed intention, which was strongly rejected in Gissing.’
Clearly, the notion of beneficial interest mirroring legal ownership is axiomatic, but whether or not the principle in Dowden is essentially at odds with a constructive trust or resulting trust is open to debate, despite Baroness Hale’s assertion that a resulting trust should not form the presumption. In her Ladyship’s judgment at [86], it would appear that greater weight was given to their financial contributions and arrangements than relationship-based ones, both in rebutting the presumption and in the quantification of interest. Thus, although a resulting trust should not be the formation of the presumption, it seems that the essence of a resulting trust (i.e. direct financial contributions) may indeed be the deciding factor, thereby aligning itself with the proposition that ‘it is at odds with...a resulting trust’. On the other hand, although Dowden was primarily decided upon factors relating to finances, both at the time of acquisition and post-acquisition, this does not mean that the presumption ‘is at odds with...a resulting trust’. Instead, it could mean that in this case, it just so happened that no other factors in the rebuttal checklist at [59] were relevant. Therefore, whilst the decision may appear to manifest resulting trust characteristics, it was in fact coincidental. Indeed, even prior to the Dowden presumption, constructive trusts were applied over resulting trusts. In Drake v Whipp, the female partner made a direct contribution of 19.4% to the actual purchase price, but due to her subsequent labour and household contribution, she was awarded a share of 33%. Furthermore, the approach in Rosset that only express agreements or contribution to purchase price could constitute a beneficial interest was the primary point of law overruled in Dowden, thus the foundation of the presumption is not based on a resulting trust; it is clearly not at odds with the literal characterisation of resulting trusts, although the result achieved under constructive trust may well be the same.
Indeed, after analysing Dowden and subsequent cases, it becomes clear that the statement made by Lord Walker and Lady Hale in Jones v Kernott is only partially correct. Dowden does indeed elucidate that in joint ownership cases, a common intention constructive trust presumption is the default option. That it is at odds with a resulting trust however, is questionable. Whilst in Laskar it would certainly appear that Lord Neuberger’s dissenting judgment and preferential hierarchy of resulting trusts has some merit of applicability, this can only be seen to have merit in cases outside the scope of domestic ownership. This divergence from the normative presumption post-Dowden, does however has complications; where the intention shifts from domestic to commercial, should the presumption be founded upon constructive or resulting trusts?
To stipulate that all presumptive trusts are at odds with a resulting trust however is paradigmatically incorrect. Having a resulting trust as the presumptive starting point would be to ignore not only non-financial contributions, but most importantly, the essence of a joint title itself. The presumption that beneficial interest follows the legal ownership is imperative in order for a joint title to have any substance. For a trust to be at odds with a resulting trust, whereby one party is penalised for not being able to contribute as much financially as the other, despite the common intention that this is to be set-aside, is to manifest injustice. Furthermore, the constant reiteration that it is the parties’ ‘whole conduct’ which should be assessed surely connotes constructive trust. Taking into account the whole conduct means it cannot be at odds with a resulting trust, as the characteristics of such determines that one can only arise upon acquisitioned financial contributions. This would not be taking into account the whole conduct. As a result, it must be at odds with a constructive trust. Resulting trust characteristics may well form an initial foundation for beneficial interest and indeed help with quantification (particularly with regards to sole ownership cases) but cannot be singularly conclusive, nor a presumptive starting point, as the whole conduct must be taken into account (i.e. subsequent contributions, including non-financial) thereby forming the characteristics of a constructive trust.
Goodman v Gallant [1986] 2 WLR 236, CA
Law of Property Act 1925, s.53 (1) (b)
Land Registration Act 2002, s.44 (1) and Land Registration Rules 2003, r.95 (2) (a)
Burton v Camden London Borough Council [2000] 2 AC 399, HL
Gibson LJ in Curley v Parkes [2004] All ER (D) 344 (Oct)
Midland Bank Plc v Cooke [1995] 4 All ER 562
Lord Neuberger in Stack v Dowden [2007] UKHL 17 at [110]
Lloyds Bank Plc v Rosset [1990] UKHL 14
Gray & Gray, Elements of Land Law, 4th Edition (2005) at [11.57]
Stack v Dowden [2007] UKHL 17 at [69]
Oxley v Hiscock [2004] EWCA Civ 546 at [69]
Fowler v Barron [2008] EWCA Civ 377
Baroness Hale, Supra xviii at [62]
Jones v Kernott [2007] UKSC 53 at [26]
Nick Piska, Intention, Fairness and the Presumption of Resulting Trusts after Stack v Dowden (2008) at pp.127-128
Reform of the Law on Cohabitation: Review of the Current Law on Cohabitation (October 18th, 2007) at [6.3] Available at: (Accessed February 15th, 2012)
Laskar v Laskar [2008] 2 EGLR 70
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