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Trusts of the family home — SQE1 Trusts question

A worked single-best-answer question on trusts of the family home, with why each wrong option is wrong — the way SQE1 traps candidates.

Trusts of the family home

Ali and Beth, an unmarried couple, bought a house in their joint names 15 years ago. The transfer contains no declaration of trust. Ali paid 70% of the deposit and Beth 30%; the mortgage was paid from their joint account, into which both paid their salaries, and they shared all household bills. They have now separated. Ali claims a 70% beneficial share in the house.

Which of the following best describes the likely beneficial ownership of the house?

  1. AAli and Beth are likely to own the house in equal shares, because Ali bears the burden of showing a different common intention and their pooled finances do not suggest one.
  2. BAli and Beth hold on a resulting trust in proportion to their contributions to the deposit.
  3. CThe court will divide the house in whatever shares it considers fair, regardless of the parties' intentions.
  4. DAli owns the house in proportion to the total of his direct and indirect contributions, assessed in money terms.
  5. EAli and Beth must own the house in equal shares, because the Trusts of Land and Appointment of Trustees Act 1996 requires it where there is no express declaration.
Show answer and reasoning
A is the best answer. Where a domestic home is in joint names with no express declaration, the starting point is that equity follows the law and the parties are beneficial joint tenants (Stack v Dowden). The party claiming otherwise must show a different common intention from the whole course of dealing, and unequal contributions alone will rarely be enough. Pooled finances and shared outgoings over 15 years point towards equality.

Rule: Where a domestic home is in joint names without an express declaration, the parties are presumed to own it equally, and the party asserting unequal shares must prove a different common intention.

  • B In the domestic context of a jointly owned home, the presumed resulting trust has been displaced by the common intention approach (Stack v Dowden). (wrong rule)
  • C The court first looks for the parties' actual or inferred intention; it imputes a fair share only where an intention to depart from equality is shown but the shares cannot be deduced (Jones v Kernott). (wrong rule)
  • D A purely arithmetical approach to contributions is not the test; the whole course of dealing in relation to the property is considered. (wrong rule)
  • E TOLATA 1996 does not fix the shares; equality is only a rebuttable starting point in equity. (wrong rule)

Source: Stack v Dowden [2007] UKHL 17; Jones v Kernott [2011] UKSC 53

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