Deciding the Beneficial Interest in Property

So, how does the court quantify the extent of each parties’ beneficial interest in a property whether held in one party’s sole name or in their joint names?

In identifying the extent of the parties’ interests, the court has to try and ascertain their shared intentions, actual, inferred or imputed with respect to the property in light of their “undertaking a survey of the whole course of dealing between the parties and taking account of all conduct which threw light on the question what shares were intended”.  This is inevitably a difficult exercise, however, the court must focus on a search for the result that reflects what the parties must, in light of their conduct, be taken to have intended.  The court cannot abandon that search in favour of the result the court itself considers to be “fair”.

The burden of proof falls on the person trying to show that the beneficial interest was intended to be different from the legal interest.  Many factors other than financial contribution are likely to be relevant, e.g.

1. a)            advice or discussions at the time of purchase or transfer;
2. b)            reasons for acquisition in one party’s sole name or in joint names;
3. c)            the purpose for which the home had been purchased;
4. d)            whether the parties had children for whom they were responsible;
5. e)            the financing of the purchase;
6. f)             the way in which the parties organised their finances;
7. g)            the financing of the household

The above list is not exhaustive.

Where the court is unable to infer the parties actual common intention from the evidence, it must determine what shares were fair having regard to the whole course of dealing between the parties in relation to the property.

The leading case is Stack –v- Dowden.  In this case the couple had co-habited for many years and had four children.  They had purchased a property in joint names.  However, they had kept their financial affairs entirely separate and this was seen by the court as being strongly indicative that they did not intend their beneficial interests, even in their jointly owned property, to be held equally.  In this case the court decided that the woman was entitled to 65% of the property having contributed far more to the purchase than the man.

Where the court finds there was an agreement or understanding between the parties as to their shares this is decisive.  There is no discretion for the court to substitute a different award to the one which the parties intended.  Neither is there any requirement for the outcome to be proportionate to the detriment suffered by the person bringing the claim.  Where children are involved, the common misunderstanding often seen is that one party assumes they are entitled to a greater than 50% share of a jointly owned property by virtue of the fact they are the children’s primary carer.  This simply is not the case and some very unfair results can occur, which were the parties married the court would be able to address, in a way it is not able to do if the parties are cohabitees and claims in respect of property, whether jointly owned or in one party’s sole name, are brought under the Trust of Land Act.

For advice on this, or any other family law matter, contact our specialist team of family lawyers today on 0800 015 0340 to arrange an initial free half hour appointment at any of our offices in Huddersfield, Halifax, Wakefield, Horbury, Leeds, Pudsey or Morley.