Setting down on paper their intentions regarding the ownership of assets is not likely to be one of the first things two people think about when they start living together, but a recent case shows the wisdom in such circumstances of making sure that at least some aspects of your arrangements are properly agreed and evidenced.
The case, which reached the House of Lords, concerned the division of the value of a house. The property had been bought by Barry Stack and Dehra Dowden and was in their joint names. They lived together for almost thirty years and had four children, but they eventually parted.
When the house was purchased, Mr Stack paid both the endowment premiums required to repay the mortgage and the mortgage interest. There were two policies, one in his name and one in their joint names. The house cost £190,000, of which Ms Dowden had contributed nearly £129,000 from her savings and the sale of her own house. The couple had lived together in that property for ten years, but it had been owned in Ms Dowden’s name only. During the time they lived in the house they owned jointly, Mr Stack paid £27,000 and Ms Dowden paid £38,435 in capital repayments. The arrangements of the couple were unusual in that their financial affairs were kept completely separate and each was responsible for specific areas of expenditure.
When a property is bought jointly, there is a presumption that it will be owned equally. However, that presumption can be overturned if there is evidence that equality was not the common intention of the owners. Mr Stack claimed he was entitled to a half share in the value of the house. Ms Dowden disagreed.
Lord Hope of Craighead, in his judgment, said, “I do not think that it is possible to ignore the fact that the contributions which they made to the purchase of that property were not equal. The relative extent of those contributions provides the best guide as to where their beneficial interests lay, in the absence of compelling evidence that by the end of their relationship they did indeed intend to share the beneficial interests equally.”
In this case, the fact that the couple’s resources were never ‘pooled’, together with the greater contribution made by Ms Dowden, led the Lords to conclude that her share should be 65 per cent of the total.