I. The Present Law

The present law is largely the territory of the common intention constructive trust. The principal sources are the decisions of the House of Lords in Stack v Dowden Footnote ⁴ and, especially, the Supreme Court in Jones v Kernott.Footnote ⁵ By these, briefly, where a family member is dissatisfied with the beneficial interest, if any, that he has by virtue of the paper title to his home, he may claim more by pointing to a common intention to this effect between himself and the (other) proprietor(s). For example, if you are the sole registered proprietor of our family home, and in terms of the title I have no interest in it at all, I can nonetheless claim an interest if you and I commonly intended that I should have one, of a size determined by that common intention.Footnote ⁶ A common intention as to the first matter – that the claimant should have an augmented share at all – must be genuine,Footnote ⁷ but may be either express or tacit (“implied”), and if tacit, is proved by reference to the parties' “whole course of conduct in relation to [the property]”.Footnote ⁸ Given this, a common intention regarding the second matter – the precise size of the claimant's augmented share – may be genuine, express or tacit and proved in the same way, but otherwise is invented (“imputed”) by the court, so as to achieve “fairness”.Footnote ⁹

Ms Miles criticises this set of rules for “uncertainty”. All law is uncertain to some extent, so the complaint must be of an unacceptable level of uncertainty. And the identification of the latter is a question of degree, judged with an eye on inter alia the context. A greater degree of uncertainty may be tolerable in some contexts than in others, because of such variables as the extent to which persons operating in the context in question may guide their behaviour by reference to the rules. There is perhaps less need for lapidary rules in the present context than in for example the law of charterparties, given the unlikelihood that family members who leave their property shares informal will nonetheless shape their relationships and dealings in conscious interaction with the law governing their case. Moreover, if lapidary rules would, by boxing the law in, hinder it from doing effective justice (one thinks of securing the best interests of children, or sentencing offenders), the same reflection suggests that such rules should be positively eschewed. At the same time, even in contexts such as this, other considerations nonetheless argue against a neglect of certainty: including the desirability of being able to predict litigation outcomes, and of guarding against the intrusion of judicial idiosyncrasy. So all in all, there are limits to the degree of uncertainty to be tolerated even in this area of the law, and such significant uncertainty as is present should be accepted only if helpful as promoting some countervailing good.

Against this background, what should we make of the rules under discussion? They feature two main areas of uncertainty.Footnote ¹⁰ One consists in the difficulty of predicting when a genuine but tacit common intention will be found, when this is to be done by reference to the parties' “whole course of conduct in relation to [the property]”. Lady Hale has explicated this expression,Footnote ¹¹ but, to remain faithful to its headline rubric, her explication had to embrace all manner of potentially relevant material, and even then to remain non-exhaustive, and so could not and does not ultimately give much help at all. So the discovery of such intentions is indeed at large. But what else would it be? For sure, the law could require specific forms of evidence, themselves possessing a bright line and highly visible quality, and so introduce more certainty. But the effect of doing so would be to sacrifice claimants who could indeed show genuine common intentions, on a balance of probabilities, on the basis of looser material … and so prioritise certainty over veracity: not an attractive choice.

The other main uncertainty in the current rules is as to the import of “fairness”. Remember, fairness is the yardstick by which a judge is to invent a common intention as to the size of a successful claimant's interest, if no genuine common intention can be found on the point. Lady Hale has said that fairness is to be assessed by reference to the same material as will count as evidence of a tacit genuine common intention,Footnote ¹² but this tells us nothing, as omitting to indicate the normative lens through which such material is to be viewed. (For example, exactly what does it mean in terms of fairness that the parties had children, and brought them up in such-and-such a way?) And there is no other worked-out judicial treatment of the matter. In particular, when the minority judges in Jones v Kernott Footnote ¹³ reached an outcome in the name of fairness, they offered no justification for it. (It was the outcome fixed by the trial judge, but his thinking is lost to us.) It may however be possible to analyse the various decisions in terms of their individual facts and outcomes, see a pattern, and thence distil a recipe for fairness. As is well known, I myself am attracted by an account whereby for parties in “materially communal” relationships, fairness means eitherFootnote ¹⁴ 50:50 shares or elseFootnote ¹⁵ what it does under the Matrimonial Causes Act 1973 ss. 24 and 25;Footnote ¹⁶ while for parties in “non-materially communal” relationships, it means an outcome reflecting the parties' respective financial contributions,Footnote ¹⁷ maybe in restitution of the claimant's net unjust enrichment of the defendant.Footnote ¹⁸ Nonetheless, the lack of an authoritative 360° exegesis remains a cause for concern and complaint, for in its absence a judge could not unreasonably strike out in a number of different directions.

Besides – or I suppose it should be despite – her concern about its uncertainty, Ms Miles believes that the current law is dysfunctional for another reason: it can yield unjust results. In particular, she says, facts such as those in Burns v Burns Footnote ¹⁹ would elicit the same unsatisfactory outcome – no relief for the claimant – under today's law as they did in that decision itself, 30 years ago.

To explain: Mr and Mrs Burns were an unmarried couple, whose home was in Mr Burns's sole name. After 18 years together, they split up, and Mrs Burns claimed a beneficial interest. Her claim failed, on the ground that it was impossible to find the necessary common intention between the parties that she should have such an interest. There was no express common intention. Her hope was that a tacit one would be found on the strength of her contributions within the relationship. The Court of Appeal decided otherwise, holding that such a finding was possible only where a claimant has made a financial contribution to the acquisition of the property concerned (including, to repaying the mortgage used to acquire it).Footnote ²⁰ Her contributions had not been of that kind. She had given the family some financial support, but this was supererogatory to Mr Burns's ability to pay for the house. Other than that, her input to the family economy (as opposed to activities on her own behalf) was by way of home-making and child-raising, which the court regarded as not representing even an indirect financial contribution to the house's acquisition.

Ms Miles offers no argument for her view that it was unjust that Mrs Burns should thus have no relief, but I shall not contest it. The question on which I shall concentrate is whether this would be the outcome under today's law. It seems to me likely that it would not; that Mrs Burns would have relief, probably in the shape of an interest of 50% or so.

The place to start is with the holding in Burns v Burns Footnote ²¹ that a tacit common intention could not be found in the absence of a financial contribution by Mrs Burns to the acquisition of the property. The judges there may have seen this as a rule, prohibiting the discovery of a tacit common intention from other material. Certainly, such a rule was enunciated a few years later, by the House of Lords in Lloyds Bank plc v Rosset,Footnote ²² requiring indeed that the financial contribution be “direct”, where the court in Burns v Burns had accepted “indirect”.Footnote ²³ But in turn, this was aspersed in at least some measure by the House of Lords in Stack v Dowden,Footnote ²⁴ and appears to have disappeared from the current law, in favour of (as explained earlier) discovery from the parties' whole course of conduct in relation to the property, this being a reference to all manner of material.

One might, then, conclude that under the current law, Mrs Burns could point to her home-making and child-raising to establish a tacit common intention between her and Mr Burns that she should have a share in the house after all. Upon which, that share would almost certainly be quantified by reference to fairness.

A number of decisions seem to treat fairness as a function of a claimant's monetary contributions.Footnote ²⁵ If this approach were followed, it would not be good news for Mrs Burns, as her monetary contributions were insignificant. Likewise, then, for all those similarly circumstanced, the issue to which Ms Miles seeks to draw attention.

The modern rules would operate dreadfully cynically if they meant, in this way, that while (departing from the restrictive older rules) a common intention can be established at the first stage by reference to all manner of material, the resultant interest will be quantified at zero unless the claimant has contributed monetarily (much as under the older rules). Ms Miles's case-note is valuable for having drawn attention to this possible horror. However, as explained earlier, it is possible to treat the decisions fixing quantum by reference to monetary contributions as relating only to the case of a non-materially communal relationship. The type of relationship with which we are concerned is materially communal. This is clearest in the paradigm scenario of which Burns v Burns Footnote ²⁶ is the rough icon, where the claimant makes no monetary contribution at all: there, the parties necessarily pool their resources. It is less immediately clear, but nonetheless still the case, on the facts of this decision itself. Mrs Burns had some earnings, and they were not pooled with Mr Burns's. But they were small and intermittent, and were spent, at any rate in Mr Burns's eyes, as “pin money”; the household economy ran substantially on the basis that Mr Burns's income covered all the family's needs. The authority tracking financial contributions in non-materially communal relationships is thus distinguishable. In the present context, as explained above, fairness denotes either a 50% share, or the outcome that would be forthcoming under the Matrimonial Causes Act 1973 ss. 24 and 25. So a modern Mrs Burns would have maybe half the equity in the home, very possibly more.

However, the understanding just outlined has in principle to rest on the finding of a genuine common intention that Mrs Burns should have an interest in the house. The abandonment of the old rule, that a tacit common intention could be discovered only from a direct financial contribution, removed a possible blockage to such a finding. But on its own it clearly does not guarantee that finding: the parties might, simply, not have had such an intention, and then, in principle, there would be no claim.

This state of affairs might be regarded as unsatisfactory.Footnote ²⁷ If so, it could be corrected via the following reflection: in this area of the law, alleged findings of genuine common intentions come quite cheap. This was true in the days of the direct financial contribution rule, when judges often circumvented that rule by more or less unlikely findings of an express common intention, to which it did not apply.Footnote ²⁸ It seems to be true today too. In Jones v Kernott Footnote ²⁹ itself, the Supreme Court unanimously purported to discern a genuine common intention as to departure from the prima facie position, relying however on a finding by the trial judge, which the Court of Appeal had described as without evidential foundation.Footnote ³⁰ The majority in the Supreme Court even went on to discern a genuine common intention as regards the size of the resultant interest when the judge himself had not done so, preferring to impute a common intention on the basis of fairnessFootnote ³¹ – the approach also taken by the minority in the Supreme Court.Footnote ³² Moreover, it is probably no coincidence that the outcome reached under both routes was the same (a 90:10 split); and we should also notice the view taken in the majority judgments that the inference of a tacit genuine intention, and the imputation of a fair non-genuine one, are practically the same thing.Footnote ³³ This view was rejected by the minority,Footnote ³⁴ for persuasive reasons, but for present purposes it is important as having despite those reasons attracted the majority, further supporting the observation that ostensible findings of genuine common intentions commonly, in truth, represent exercises in imputation.

It is this observation that allows one, returning to the position of Mrs Burns, to doubt that a modern court would deny relief on the ground that, regardless of the removal of the direct financial contribution rule, there was no genuine common intention that she should have an interest. If it be fair that she should have an interest (and this is very much indicated by the proposal, above, that fairness would require any such interest to be of 50% or more), then the material in the previous paragraph suggests that a court would not be slow to make the purportedly required finding of a genuine common intention to that effect. Or, to call a spade a spade, fairness per se would yield her such an interest.Footnote ³⁵ In short, I suggest, in opposition to the view expressed by Ms Miles, that the prevailing law would be very likely indeed to give a modern Mrs Burns her result.Footnote ³⁶

II. The Law Commission's Scheme

To come finally to the Law Commission's proposals for statutory reform,Footnote ³⁷ which Ms Miles commends.

In brief, the proposed scheme would apply in a context roughly describable as the breakdown of a quasi-matrimonial relationship,Footnote ³⁸ and would operate to recompense the claimant where, as a result of his or her contributions within the relationship, either the claimant now suffers a material disadvantage, or the defendant enjoys a material benefit. For example, where a woman relinquished employment to bring up the children she had with her partner, and as a result of this her earning capacity is now reduced, and/or her partner's is now increased, as compared with how each would have stood if she had continued in employment.

In its own sphere, the scheme would override the otherwise prevailing law, notably the trust rules discussed hitherto in this article.Footnote ³⁹ And herein lies the problem. The effect would be to remove entitlements acquired by parties under those rules.

Consider an example. Say a man and a woman are partners, living in a house registered in the man's sole name, and having a materially communal relationship. Say further that there are no arguable complications, and that the woman thus has a 50% beneficial interest in the house. And say too that her contributions in the relationship have caused her relatively little enduring loss, and her partner relatively little enduring gain (for instance, that they have had little impact on their respective career prospects); so that removing the imbalance between the parties on this account would require the woman to receive the equivalent of only a 5% capital interest.

Now consider how the proposed scheme would deal with these circumstances. So long as the parties' relationship remains on foot, the woman would continue to have her 50% interest.Footnote ⁴⁰ But in the event of breakdown, she would lose this interest and instead receive relief in correction of the identified imbalance: as specified, the equivalent of a 5% interest.

It seems to me that this cancellation of her 50% interest would interfere with the woman's right to her possessions, engaging Article 1 of the First Protocol to the European Convention on Human Rights (Protection of Property), and so requiring justification as a proportionate (“necessary”) means of achieving a legitimate public interest goal. Such a goal might well be present, in the shape of the correction of the scheme's selected kind of imbalance, just described, after relationship breakdown. But the cancellation of the woman's trust interest is not a proportionate means of achieving this, because it does not conduce to, promote, this goal at all.

I must begin in developing this argument by noticing that some apparent interferences with possessions do not normally engage Article 1 at all. According to Bramelid and Malström v Sweden,Footnote ⁴¹ excepted from the Article's scope are rules that address “private-law relations between individuals”, and “determine, so far as property is concerned, the effects of those legal relations and, in certain cases, oblige one person to surrender to another property of which the former has hitherto been the owner.”Footnote ⁴² This exception may well be seen to cover what happens on divorce under the Matrimonial Causes Act 1973 s. 24, where the parties' prior rights are reallocated so as to deliver future fairness for the family members. And likewise what would happen under the proposed scheme for non-marital relationships, to the extent that this would reallocate the parties' prior rights so as to correct the kind of extant material imbalance at which it is directed. However, the exception seems to me not, or not always, to encompass the aspect of the scheme on which I am focusing: the suppression, or cancellation, or removalFootnote ⁴³ of any rights enjoyed by a party under the constructive trust rules.

If the point of suppressing a party's trust right were to reallocate it to the other party in satisfaction of a desert on the latter's part, one might readily discern here another instance of the Bramelid and Malström exception. The Law Commission's accountFootnote ⁴⁴ is unclear as to the thinking involved, but it certainly contains nothing on these lines, nor is it easy to see how such a vision of the exercise could be suggested. Remember the example raised earlier. Suppressing the woman's 50% beneficial interest means that the man, as legal owner, regains a 100% beneficial entitlement to the house, while having to pay the woman the equivalent of a 5% interest. There is no suggestion that this near-doubling of the man's entitlement should occur because he actually deserves it per se.

Rather (though one cannot say for sure, given the lack of clarity), the suppression seems to be a ground-clearing exercise, aimed at facilitating the application of the remainder of the scheme by disallowing the setting up of trust rights as an alternative to it.

In some cases this might make sense. These would be cases where the trust interest and the proposed scheme represent rival ways of responding to the same consideration – i.e. of correcting extant material losses and/or enrichments traceable to the claimant's contributions. Then, a suppression of the trust interest would prevent double recovery,Footnote ⁴⁵ and as such would promote the scheme's overall project, and thus could be seen as another instance of the Bramelid and Malström exception.

But the discussion of the trust rules above indicates that, to put it at its lowest, they do not always operate in this way. Consider a case where the rules react, in the way suggested earlier, to the parties' materially communal relationship, i.e. to the fact that they lived together on the basis of sharing rather than keeping separate accounts. Here, the rules are driven by a consideration altogether different from the correction of extant material losses and/or enrichments traceable to the claimant's contributions. So in these cases a double recovery argument could not be made.

Nor does there appear any other basis for seeing a suppression of trust rights generated in this way as within the Bramelid and Malström exception.Footnote ⁴⁶ As such, the suppression would involve an interference with the claimant's possessions after all, engaging Article 1, and so requiring justification as proportionate.

Coming then to the question of proportionality, I am sure that the general aim of the proposed scheme – correcting extant material losses and/or enrichments traceable to the claimant's contributions – is a legitimate one, or would be, once adopted into the positive law. The question is whether the suppression of the claimant's trust rights would be necessary to it. It seems to me plainly not. Remember the example. Under the scheme, and clearly in furtherance of its aim, the woman in it would receive an award in correction of the extant material losses and/or enrichments traceable to her limited qualifying contributions. But she would simultaneously lose the 50% trust right to which she is entitled for the quite different reason of her materially communal relationship with the man. Given the lack of connection between the two, this loss of her trust right would not even conduce to, let alone be necessary to, the delivery of the scheme's aim. So the interference it represents with her possessions could not be justified so as to satisfy Article 1.

There is, finally, an even more fundamental point to be made, as follows. The trust rules display a commitment to taking material communality, where it exists, seriously: that is, to following the parties' own choice to pool their resources, rather than keep separate accounts. This would continue after the introduction of the proposed scheme, as we would be reminded by the rules' enduring operation in the pre-breakdown context. The law could not properly contradict its own appreciation of such relationships by attending, in the breakdown context, to their parties' individual losses and/or enrichments, as the scheme would entail.

Contrast the position in respect of the Matrimonial Causes Act 1973 s. 24, relating to marriage and civil partnership. On divorce, this operates to deliver fairness, which the courts view in terms of the family members' interests and needs and the achievement of equality between the couple.Footnote ⁴⁷ A marriage or civil partnership is by definition a materially communal relationship; regardless of how the couple may in practice organise their finances, this is part of what their status fundamentally entails, as can indeed be regarded as the foundation of the courts' understanding of fairness. The relevant constructive trust rules will therefore, depending on just how one reads them,Footnote ⁴⁸ deliver either equal shares in the family home, or a replica of the position under the Act. So there is little or no disjuncture of principle between the statutory regime and the constructive trust rules (which are not only of theoretical interest, but continue to apply to every situation except divorce). This position is, of course, as one would wish. The point is that the Law Commission's vision for the quasi-matrimonial context compares disadvantageously with it.