The Law Commission

PART VI

CONCLUSIONS

In this Discussion Paper, which concludes the present project, we are not making specific proposals for legislation. It is therefore not a Consultation Paper in the usual format, nor are we seeking responses. The purpose is to provide a legal framework for future public debate and consideration by Government. The main points emerging from the Paper are as follows.

(1) Greater numbers of people are living together in circumstances which are characterised by informality.^[1] The present law does not deal adequately with these changing conditions.

(2) Although the trust of land offers a machinery for the establishment of beneficial interests in the shared home which is both coherent and flexible, the current requirements for proving the existence of an interest under a trust are not ideally suited to the typical informality of those sharing a home. To demand proof of an intention to share the beneficial interest can be unrealistic, as people do not tend to think about their home in such legalistic terms. The emphasis on financial input towards the acquisition of the home fails to recognise the realities of most cohabiting relationships. Finally, the uncertainties in the present law can cause lengthy and costly litigation, wasting court time, public funding and the parties' own resources.^[2]

(3) It is not possible, however, to devise a statutory scheme for the ascertainment and quantification of beneficial interests in the shared home which can operate fairly and evenly across the diversity of domestic circumstances which are now to be encountered.^[3]

(4) It is essential that those who are living together are positively encouraged to investigate the legal consequences of doing so and to make express written arrangements setting out clearly their intentions. Where they purchase property jointly, they will be required to stipulate their beneficial entitlements by HM Land Registry. In these and other circumstances, it is essential that the courts continue rigorously to enforce express declarations of trust. ^[4]

(5) It is difficult to present a convincing case for any more effective criteria than "common intention" on which an assessment of beneficial entitlement could be based. Intention is clearly important, as it would be wholly unsatisfactory if a person were to obtain a beneficial interest where it was made extremely clear that a particular contribution, by financial or other means, would not be met this way.^[5]

(6) In our view, however, the courts have made it too difficult for a person to bring a claim to beneficial entitlement in two respects:

(a) The first is the requirement that the claimant make a direct financial contribution to the acquisition of the shared home. In our view, an indirect contribution to the mortgage (by means of paying the household bills and thereby enabling the other party to pay the mortgage instalments) should be sufficient to enable the courts to infer a common intention that the beneficial entitlement be shared.^[6]

(b) The second concerns the quantification of beneficial entitlement. We believe that there is much to be said for adopting a broader approach to quantification, undertaking a survey of the whole course of dealing between the parties and taking account of all conduct which throws light on the question what shares were intended.^[7]

Recent reported decisions have indicated that the courts are capable of the flexibility of approach which will be necessary to move the law in the desired direction.

(7) We have however identified, in the course of this project, a wider need for the law to recognise and to respond to the increasing diversity of living arrangements in this country. We believe that further consideration should be given to the adoption, necessarily by legislation, of new legal approaches to personal relationships outside marriage, following the lead given by other jurisdictions (such as France, Australia, and New Zealand).^[8]

(8) These approaches may include such mechanisms as the formal registration of civil partnerships, or, less formally, a power for the court to adjust the legal rights and obligations of individuals who are or have been living together for a defined period or in defined circumstances.^[9] Any status must be clearly and readily identifiable such that all can ascertain whether any such status has been acquired. The consequences of any status must be prescribed so that those involved are fully aware of its legal implications.^[10]

(9) The definition of any status conferring legal rights or imposing legal obligations involves broad questions of social policy which fall outside the present project, and which are in any event more appropriate for political debate and decision, rather than for a law-reform body. However, the Law Commission would be prepared, if asked, to contribute to any further work in this area which is appropriate given its role as a body concerned with law reform.

(Signed) ROBERT CARNWATH, Chairman ^[11] HUGH BEALE STUART BRIDGE MARTIN PARTINGTON ALAN WILKIE

MICHAEL SAYERS, Secretary18 July 2002

Note 1    Para 1.7, Part I generally.     [Back]

Note 2    Para 2.112, Part II generally.    [Back]

Note 3    Para 1.31(1), Part III generally.    [Back]

Note 4    Para 2.52.    [Back]

Note 5    Para 4.24.    [Back]

Note 6    Para 4.26.    [Back]

Note 7    Para 4.27.    [Back]

Note 8    Part IV.    [Back]

Note 9    Part V.    [Back]

Note 10    Para 5.43.    [Back]

Note 11    At the date this report was signed, the Chairman of the Law Commission was the Right Honourable Lord Justice Carnwath CVO.    [Back]