Whitlock and another v Moree

This appeal from the Court of Appeal of the Bahamas is about the beneficial ownership of money held on joint account at a bank. The account holders were Mr Francis Lennard until his death in February 2010, and his friend Mr David Moree, who is the respondent to this appeal. The money in the account, which amounted to some $190,000 by the date of his death, was all contributed by Mr Lennard, mainly if not entirely from an account previously in his sole name at the same bank, the First Caribbean International Bank (Bahamas) Ltd. The sole question in these proceedings is whether, upon Mr Lennard’s death, the beneficial interest in the previously joint account passed to Mr Moree by survivorship, or whether it formed part of Mr Lennard’s estate, by reason of the operation of the equitable doctrine of presumed resulting trust, since Mr Lennard had provided all the money.

On the setting up of the joint account in November 2009, both Mr Lennard and Mr Moree signed an account opening application in the Bank’s standard joint account form which included the following provision, at clause 20:

Does clause 20 deal with the beneficial ownership of the joint account, or merely with the bare legal title to the chose in action against the bank represented by the account?

Is the fact that Mr Lennard and Mr Moree opened the joint account by means of a signed written application containing clause 20 determinative of its beneficial ownership, as at the date of Mr Lennard’s death?

This was not how the issues were identified in the courts below. There, it appears to have been common ground that, upon Mr Lennard’s death, Mr Moree held the money on resulting trust for Mr Lennard’s estate unless he could prove, the burden being on him, that Mr Lennard had intended to make a gift of the money to him. The Chief Justice decided at the trial that Mr Moree had failed to discharge this burden. The Court of Appeal took the opposite view.

Mr Lennard was a successful businessman, in his mid-90s by 2009. By his will dated 19 October 2009 he gave his home in Nassau to Mr Moree. Out of the rest of his estate, including “Cash in Banks”, he gave a number of pecuniary legacies, including $55,000 to Mr Moree and $75,000 each to the Bahamian Salvation Army and the Bahamas Humane Society. He divided the residue equally between Mr Moree, Dorothy Jack and Norman Whitlock. In the event of a shortfall for the payment of legacies he specified that the requests to the Salvation Army and the Humane Society should abate first, so as to enable payment of the other legacies in full. The executors named in the will were Mr Moree and a lawyer named Mr Pinder.

On 20 November 2009 Mr Lennard and Mr Moree visited the First Caribbean International Bank (Bahamas) Ltd (“FCIB”) for what the judge described as the purpose of joining Mr Moree to Mr Lennard’s existing bank accounts. There is some uncertainty whether Mr Lennard had one or more accounts at FCIB. In any event Mr Moree was to be joined to all such accounts. Nothing turns on whether there was one or more and, like the judge and the parties, the Board will refer to the accounts or account in the singular. The mechanism adopted was for both Mr Lennard and Mr Moree to sign account opening forms as joint account holders on FCIB’s standard forms for that purpose. The substantial balance then standing to the credit of what had until then been Mr Lennard’s sole account was thereafter treated as standing to the credit of the newly opened joint account.

The only evidence about what, if anything, was explained to Mr Lennard and Mr Moree by FCIB on the opening of the joint account, as to the consequences of Mr Moree’s joinder, was a statement from Mr Moree that both he and the late Mr Lennard “understood that it was explained to us that we were converting his personal account to a joint account between us, so that upon his death the amounts held on that account became my property”. No evidence was called from any bank official about that event, nor was there any documentary record of what took place, other than the account opening forms themselves.

The judge did not accept Mr Moree’s evidence, regarding it as self-serving. The account opening form signed by Mr Lennard also contained, in a box headed “State Purpose of Account”, a manuscript note “to pay utilities” which, it was common ground, had been made by an unidentified bank official. Both forms contained, immediately above Mr Lennard’s and Mr Moree’s respective signatures, a declaration in the following terms:

By codicil to his will made on 12 January 2010 Mr Lennard revoked the legacies to the Salvation Army and Humane Society, thereby reducing the aggregate amount of the specific legacies by $150,000.

Mr Lennard died on 18 February 2010, at which time the joint account was in credit in the amount of $190,000.

On 11 March 2010 Mr Moree attended FCIB and re-constituted the former joint account with Mr Lennard as a joint account between himself and his wife.

Meanwhile, as the legally qualified executor, Mr Pinder set about preparing for the administration of Mr Lennard’s estate, and in particular for the obtaining of probate. He obtained information from his co-executor Mr Moree on 30 March which, he said, included being told that the assets of the estate included $190,000 (on current and deposit accounts) at FCIB. Later, on 9 June 2010, Mr Pinder and Mr Moree signed the Executors’ Oath for the purposes of obtaining Probate. The annexed Schedule makes reference to $100,000 held at FCIB. This may have been a misprint for $190,000, since otherwise the aggregate in the Schedule cannot be reconciled with its detail.

In July 2013 each of Mr Moree’s fellow residuary beneficiaries, Ms Jack and Mr Whitlock, issued originating summonses in the administration of Mr Lennard’s estate seeking declarations that the balance held in the joint account at Mr Lennard’s death was thereafter held by Mr Moree on trust for the three residuary beneficiaries, rather than having passed to Mr Moree by survivorship.

A singular feature of the litigation which then ensued, both at first instance and in the Court of Appeal, was that it was treated as common ground between counsel, and therefore accepted by both courts, that a resulting trust of the money in the joint account was to be presumed in favour of the estate if Mr Moree could not discharge the burden of proving that Mr Lennard intended to make a beneficial gift of that money to him. In substance therefore, the litigation took the form of Mr Moree seeking to prove the requisite intention on the part of Mr Lennard, and the plaintiffs Mr Whitlock and Ms Jack seeking to challenge that evidence, but otherwise to rely upon the presumption. Mr Moree and Mr Pinder gave evidence by affidavit, and were cross-examined at the trial. Mr Moree relied upon his own statement, summarised above, about what happened at FCIB when the joint account was opened and, heavily as the judge noted, on the terms of clause 20 in the account opening forms.

The judge directed himself (at para 20) as follows:

The judge noted that the only evidence supportive of such a finding was Mr Moree’s statement about what happened at FCIB, which the judge rejected, as noted above. He expressed surprise that no one had been called to give evidence from FCIB either as to a recollection of the transaction in question, or as to the bank’s usual practice when opening joint accounts. He rejected the submission that clause 20 was probative of Mr Lennard’s intention mainly because of the absence of any evidence showing that clause 20 had been explained to Mr Lennard, or drawn to his attention.

He concluded that a number of factors, including the “to pay utilities” notation on the account opening form, the terms of Mr Lennard’s recently made will dealing with cash at banks, and Mr Moree’s information to Mr Pinder about the joint account money being an asset of the estate made it more likely than not that Mr Lennard had no intention to make a gift to Mr Moree, but had added him to the account in his old age simply to assist him in paying his bills.

The Court of Appeal reviewed the same evidence, but reached the opposite conclusion, namely that Mr Moree had indeed discharged the burden of proving that Mr Lennard intended to make a beneficial gift to him. The Court of Appeal were persuaded by the combination of the following four factors:

The close personal and intimate relationship between Mr Moree and Mr Lennard.

The terms of FCIB’s account opening documents which indicated that the survivor should have the moneys standing at the time of the other’s death.

The revoking of the bequests to the Humane Society and the Salvation Army, and

The devise of his house to Mr Moree, together with his body and his pets.

After considering the extent to which the Court of Appeal should interfere with findings of the trial judge, it was held that the Judge had unreasonably failed to draw an inference that Mr Lennard had been aware of the terms of the account opening form. At para 50, giving the leading judgment, Isaacs JA said:

Before the Board, the appellants’ main submission was that the Court of Appeal had been wrong to interfere with what was essentially a fact-finding exercise by the Judge, since it was not vitiated by any error of law, nor was it plainly wrong. Further, it had been arrived at after hearing cross-examination at trial, such that the Judge was better placed to make reliable findings of fact than an appellate court, looking at the documents.

There are a large number of dicta from eminent courts around the common law world, including Australia, Canada, the Caribbean, England, Hong Kong, Ireland and Singapore, about the principles to be applied for the resolution of disputes about the beneficial ownership of money held on joint account at a bank. Some of them were cited in the judgments of the courts below. Several more were cited by the parties on this appeal. Many of them are helpfully summarised in Ellinger’s Modern Banking Law 5th ed (2011) at pp 327-332. They are not all easy to reconcile. It is therefore necessary to start from first principles.

Under the common law, legal title to (as opposed to beneficial ownership of) property in co-ownership can only be joint title. Survivorship, that is the devolution of those legal rights upon the survivor or survivors of joint owners is an inevitable, indeed inherent, aspect of joint legal title.

In sharp contrast, joint ownership (often called joint tenancy), with a right of survivorship, is only one of numerous ways in which property may be co-owned beneficially. The interposition of a trust between the persons with legal title and the beneficial owners means that there is an almost infinite variety of ways in which the property may be beneficially co-owned, even when the beneficial owners are the same as those holding the legal title.

There are well-established principles which assist the courts in resolving disputes as to beneficial ownership of property, and the order in which what may be described as the contents of an equitable toolkit are to be deployed for that purpose. Thus, where the relevant property is transferred to the legal holders by a written instrument, a statement as to the beneficial ownership of the property in that instrument is usually conclusive: see Vandervell v Inland Revenue Commission [1967] 2 AC 291, at 312 per Lord Upjohn. The same passage makes clear that any question whether the instrument does address beneficial ownership, and any issue as to what that beneficial ownership is, falls to be decided as a matter of construction of the instrument, which is an objective process, in which evidence as to the subjective intention of the maker of the instrument is inadmissible. See also Inland Revenue Commission v Raphael [1935] AC 96, per Lord Wright at 142-143. Of course, the binding effect of instruments of that kind is subject to the usual equitable challenges such as fraud, duress, undue influence, misrepresentation and rectification, and to the more restricted common law doctrines of non est factum and mistake: see generally Goodman v Gallant [1986] Fam 106, at 114A-117D.

Next, the co-owners receiving a transfer of property into joint names may themselves declare their agreement as to the beneficial interests on which that property is or is to be held and, if they do so in a written instrument, such as the conveyance to them, the identification of those beneficial interests will again be a matter of construction of the instrument, and recourse to doctrines of resulting, implied or constructive trust is impermissible: see Pettitt v Pettitt [1970] AC 777, per Lord Upjohn at 813 and Gissing v Gissing [1971] AC 886, per Lord Diplock at 905.

Persons acquiring property, in particular residential property in joint names, at least in England, have a notoriously poor track-record in making an express declaration as to their beneficial interests in relation to the property. In the numerous cases where this has not been done, equity has recourse to a variety of techniques for establishing what those beneficial interests are. They include the constructive or common intention trust, the implied trust and the resulting trust. Generally speaking, the resulting trust is the solution of last resort, where the intention of the joint holders of the property as to their beneficial interests cannot otherwise be ascertained. Indeed, in the context of joint residential property, the presumption that the beneficial interest accrues to the provider of the money has now been replaced by the opposite assumption, namely that the beneficial interest follows the joint legal title unless the contrary is shown: see Stack v Dowden [2007] UKHL 17; [2007] 2 AC 432, paras 53 and following.

These principles are by no means confined to beneficial interests in real property. Inland Revenue Commission v Raphael was about personal property, namely an interest in a fund. There is no reason why property which is, slightly misleadingly, described as money in a bank account should be subject to any different principles when the court is called upon to resolve a dispute about its beneficial ownership. The property in question consists, of course, not of money, but of a contractual chose in action enjoyed by the account holder (or holders in the case of a joint account) as against the bank. The rights by which that chose in action is constituted derive entirely from the contract between the account holders and the bank, whereby the account is set up and operated. Where, as here, the joint account has two account holders, there are three parties to the relevant contract, namely the account holders and the bank. It is, and must be, if it is to work at all, a single contract, not two separate contracts between each account holder and the bank. That is so, regardless of whether the account is established pursuant to a single account opening document signed by both account holders, or (as here) two identical documents, each signed by one of them. If by some mishap two separate account opening documents used to establish a single joint account are not in identical form, this may give rise to problems of construction or rectification, but it cannot give rise to separate, different, contracts.

If the question is asked, in relation to money held in a joint bank account, what instrument might be thought to constitute the appropriate document (by way of analogy with co-ownership of land) where a binding declaration as to beneficial interests might be expected to be found, the obvious answer lies in the account opening document. This is because it sets out the contract pursuant to which the chose in action which constitutes the relevant property is created. It will not necessarily be a document of transfer (like a conveyance in relation to land or, in England, a Land Registry Transfer) but, since it creates the relevant property, it is none the worse for that. Furthermore, if, as in this case, the account opening document contains an express assignment by each account holder to the two of them jointly of any money separately owned by that account holder, it does indeed constitute a document of transfer, even in the strict sense.

The fact that an account opening document, duly signed by the joint account holders, would qualify as a binding declaration of the beneficial interests in the account does not of itself answer the question, in relation to any particular document of that kind, whether it contains any such declaration. That is a separate question which depends upon the true construction of the document, in its context, in accordance with modern principles of interpretation.

The application of this simple analysis based upon established principles about the ascertainment of beneficial interests in co-owned property leads the Board to this conclusion: that where two or more holders of a joint account all sign an account opening document (or separately sign identical documents) which, on their true construction, declare or set out their respective beneficial interests in the property constituted by the account (loosely, the money in the account), then those are the beneficial interests of the account holders, pending any subsequent variation of them by agreement or otherwise, and an examination of the subjective intentions of the account holders, or of those of them who place money in the joint account, is neither relevant nor permissible. Still less is recourse to the doctrine of presumed resulting trusts permissible, because the potential beneficial owners have declared what are their beneficial interests by signed writing. Further, this must be a fortiori the position where the accounting documents contain an express assignment of the type found in clause 20 in the present case, although this is not in the Board’s view necessary for the application of this principle.

A number of consequences flow from this conclusion. The first is that the question whether the attention of an account holder was drawn to the terms of any such declaration as to beneficial interest, or had it explained, is in principle irrelevant, unless of course a case of mistake or non est factum is being deployed, or the document is challenged on the basis of fraud, duress, undue influence, misrepresentation and the like, or if it is sought to be rectified. In all those cases the onus lies squarely on the person challenging the effect of the document, and no such case has been advanced in these proceedings. The reason why the extent to which the document has been read, explained to or understood by an account holder is irrelevant is because the document is determinative of itself in relation to the beneficial interests in the account, rather than merely a guide, of infinitely variable weight, to the common intention of the account holders or to the intention of those of them who deposited money in the account.

The second is that there is plainly no room for the application of the doctrine of presumed resulting trusts, in favour of an account holder who places money in the account, as Mr Lennard did in this case. This is because the account holder is a party to the document which is determinative of the account holders’ beneficial interests, and because they have been ascertained by the primary tool for the determination of any dispute as to beneficial interests, namely the terms of the document creating or transferring the property, just as much as beneficial interests in other types of co-owned property are determined by a conveyance, a transfer or a declaration of trust.

The third consequence is that, where such a document upon its true construction does deal with the beneficial interests of the account holders, the question what precisely those interests are is a question of law (like any other question of construction) and not a fact-finding exercise. Provided therefore that there is no factual uncertainty about the terms of the relevant document, an appellate court is as well placed as the trial judge to apply the law, that is, to construe the document. To this general proposition may be added this caveat: that the first instance and appellate courts which sit habitually in the jurisdiction where the relevant documents were created and signed may sometimes be better placed than this Board, because they may be better attuned to the context of business life against which the document falls to be construed.

This is all as it should be. Where the parties to a joint account have declared their beneficial interests in it in signed writing, it would be both extraordinary and unsatisfactory for the courts to have to resolve a dispute about their beneficial interests by an open-ended factual inquiry about their subjective intentions, or the subjective intentions of whichever of them provided the money. If the dispute is about beneficial survivorship, one of the original account holders will have died, and be unable to give direct evidence of intention. If the presumption of a resulting trust would otherwise leave the money beneficially part of the estate of the first to die, evidence of intention by the survivor will always be self-serving. The account may have been opened many years previously, and it will often be pure chance whether any independent witness of the opening of the account can assist, either with evidence of the deceased’s intention, or with a recollection of whether the deceased had the terms of the account opening form explained, before signing it. Above all, the expense and delay involved in a fact-finding inquiry of that type will far exceed that of the occasional case where the signed declaration raises a real issue of construction.

It comes as some surprise to the Board that the principles thus stated should not be found to be the unanimous conclusion of those reported cases in common law jurisdictions where recourse has been had, with varying degrees of success, to bank account opening documents for the purpose of resolving disputes as to the beneficial interests of joint account holders. In his dissenting opinion, Lord Carnwath analyses a number of those authorities.

Some of them appear to regard a statement as to beneficial interests in a signed joint account opening document as just evidence of intention of varying weight from case to case, as part of a wider fact-finding inquiry in which any other evidence of intention is also admissible. A comprehensive analysis may do no more than reveal that, as between the Bahamas and some of those jurisdictions, the relevant streams of the common law diverge rather than converge. It is not however suggested that there is as yet a such divergence as between the common law of the Bahamas and that of England.

Perhaps the nearest recent antecedent statement of the principle enunciated above is to be found in the judgment of Lawrence Collins J (as he then was) in Aroso v Coutts & Co [2002] 1 All ER (Comm) 241. That was a case about a joint account, the mandate for which contained these provisions:

This valuable dictum goes part, but not quite all, the way towards the conclusion which the Board conceives to be correct. It is apparent from elsewhere in his judgment that Lawrence Collins J regarded the mandate in that case as the “document making or directing the transfer”, and that, as a matter of construction, it clearly dealt with the beneficial interests in the account: see para 35. The Board agrees with his conclusion that where such a document, upon its true construction, does so, that is the end of the matter, so as to exclude any further evidence. But it does so not merely because it is incontrovertible proof of the transferor’s intentions. Rather it is because it is itself dispositive of those beneficial interests, where (as here) the transferor is one of the account holders.

In Niles v Lake [1946] 2 DLR 177, the Court of Appeal of Ontario had to consider the terms of a document described as an “Agreement re joint account” addressed to the bank which contained the following terms:

Giving the leading judgment, Laidlaw JA said that the language of the agreement was perfectly plain and free from all ambiguity and doubt although, on appeal, the Supreme Court of Canada took the opposite view. But Laidlaw JA continued, at p 180:

By this dictum (with which Roach JA in substance agreed) Laidlaw JA recognised that a joint account agreement may be effective in itself to determine the beneficial interests of the account holders, if on its true construction it declared them, rather than merely serve as a guide to the intentions of the contributor of the money. Roach JA held that the agreement prevailed, there being no defence of non est factum.

In the Supreme Court [1947] SCR 294, there was found to be a resulting trust in favour of the deceased’s estate, mainly upon the ground that the court did not share the Court of Appeal’s view about the true construction of the joint account agreement. In their view it related only to the legal rather than beneficial title. The question whether, if it had on its true construction been dispositive of the beneficial ownership, it would have bound the joint account holders did not therefore arise, although there are dicta which suggest that the question remained, from first to last, one of rebutting a presumed resulting trust.

There is a much more recent analysis by the Supreme Court of Canada of the approach to the ascertainment of beneficial interests in joint accounts, in Pecore v Pecore [2007] SCC 17; [2007] 1 SCR 795. At para 60-61 there is a brief observation by Rothstein J that, in the past, the Supreme Court had held that bank documents that set up a joint account are an agreement between the account holders and the bank about legal title, not evidence of an agreement between the account holders as to beneficial title, and reference was made to Niles v Lake. But it does not appear that, in that case, there were any words in an account opening agreement dipositive of the beneficial interests in the joint account nor, therefore, any submission that, if there had been, this would be determinative of those beneficial interests so as to absolve the court from any examination of the transferor’s subjective intention. In the Board’s view, there can be no general rule that account agreements are only about legal title, or only about the relationship between the account holders and the bank, rather than their relationship as beneficial owners inter se. In each case it will depend upon the true construction of the relevant agreement. If either of the decisions of the Supreme Court of Canada in Niles v Lake and Pecore v Pecore are to be read as deciding that there is such a general rule, then the Board agrees with the submission of counsel for Mr Moree that the common law of the Bahamas contains no such rule.

Reference in this context is frequently made to Russell v Scott (1936) 55 CLR 440, a joint account decision of the High Court of Australia in which a presumption of resulting trust in favour of a deceased account holder was rebutted. There is, in the joint judgment of Dixon and Evatt J, at pp 450-451, a well-known and, in the Board’s view, entirely accurate description of the way in which the contract between the bank and the account holders creates a chose in action which constitutes the property in issue. There was nothing in that case about the terms of the contract between the bank and its customers constituting a declaration or statement as to the beneficial interests in the account. Unsurprisingly therefore, the High Court had recourse to questions of intention and resulting trust in concluding that the survivor had obtained a beneficial interest in the joint account.

Lord Carnwath makes reference to the dictum of LaForme JA in Saylor v Madsen Estate (2005) 261 DLR (4th) 597, at para 27, to the effect that bank documents do not even have a presumptive value in the search for evidence of subjective intention sufficient to rebut the presumption of advancement. For the reasons already given, the Board respectfully disagrees with that analysis.

It is fair comment that, reading the common law authorities about beneficial ownership in relation to joint bank accounts as a whole, there emerges a general impression that, where the deceased account holder is the contributor of the money, the approach which requires the survivor to discharge the burden of proving an intent to benefit him, in which account opening documents play a purely evidential role in the search for subjective intention, has been widely adopted. But, with the exceptions of the Aroso v Coutts, Niles v Lake and Saylor v Madsen cases, none of them appears to come near to addressing the question arising in this case, where there is an allegedly clear declaration as to beneficial interests in the account opening agreement between the joint account holders and the bank.

As noted above, the Court of Appeal in this case regarded the interpretation of the account opening documents, and of clause 20 in particular, as a pellucidly clear declaration that the survivor of Mr Lennard and Mr Moree was to have the beneficial interest in the joint account. For the appellants, Mr Gavin Kealey QC submitted that clause 20 related to nothing more than legal title, and was silent as to beneficial interest. Relying on dicta in Yanner v Eaton [1999] HCA 53 (by Gummow J at para 85) and Slater v Pinder (1871) LR 6 Exch 228 (by Martin B at 236) about the inherent or potential ambiguity in the meaning of the word “property”, he submitted that the first sentence of clause 20 did not (or at least not clearly) refer to anything other than joint legal property with its inherent right of survivorship, that the second sentence merely explained the first in terms, and that the assignment was no more than what was needed to achieve survivorship, quoad legal title alone. He contrasted clause 20 with provisions in other account opening documents in reported cases which referred (as in the Aroso case) expressly to a beneficial interest, and he relied upon the common features as between clause 20 and the relevant clause in Niles v Lake, as supportive of the submission, accepted by the Supreme Court of Canada in that case, that the relevant words, including the express assignment, concerned nothing more than the legal title.

On this issue, the Board respectfully agrees with the Court of Appeal. clause 20 falls to be construed in its context, in a standard form of joint account agreement prepared for FCIB for use by private customers seeking to open joint accounts in the Bahamas in the 21st century. In the Board’s view, the key phrases are: “Joint Tenancy”, “our joint property with the right of survivorship” and “if one of us dies, all money in the Account automatically becomes the property of the other account holder(s)”. The meaning of those phrases is to be ascertained by reference to an objective assessment as to what reasonable Bahamian private customers of a bank would think that they meant. Private customers of a bank, whether in the Bahamas or elsewhere in the common law world, do not go around, like lawyers, thinking constantly of distinctions between legal title and beneficial ownership when contemplating the ownership of property. Even to a lawyer, the part of clause 20 which would stand out would be the opening words “Joint Tenancy”. There would be no need to make express provision by clause 20 merely in relation to the bare legal title, which would be held jointly in any event, whereas beneficial ownership might be as joint tenants or tenants in common, or in some other form. Furthermore the phrase “unless otherwise agreed in writing” can only have been about beneficial ownership, since there is only one form of joint legal title, whatever the parties may otherwise purport to agree. Thus, in the Board’s view, even a legally qualified intending customer of FCIB would regard clause 20 as there for a purpose, namely to deal with beneficial ownership.

It is true that the account opening form in Niles v Lake was expressed in similar terms to that in the present case. There were however other passages in it which did point to its purpose being limited to ensuring that the bank could obtain a good receipt from the survivor. But it would be wrong, in the Board’s view, to treat a decision about the meaning of a different document, made in a different context and in a different era, as having binding force in the present context.

In his dissenting opinion, Lord Carnwath places emphasis on two factors: first, the fact that clause 20 is part of a standard form prepared by the bank, and second, the insertion of the phrase “to pay utilities” in the purpose box on the form. As to the first, the additional phrase “unless otherwise agreed in writing” (absent from the document in Niles v Lake) shows that the bank was not dictating to its customers what were to be the beneficial interests in the joint account, but merely (and sensibly in the Board’s view) requiring the customers to identify in writing any agreement that the beneficial interests were to differ from joint tenancy. As to the second, the statement as to the purpose of the joint account during Mr Lennard’s lifetime is not inconsistent with there being a beneficial joint tenancy, still less with Mr Moree having a beneficial right of survivorship, on Mr Lennard’s death. In the Board’s view neither of those two factors, separately or in the aggregate, come near to displacing the clear meaning of clause 20, as identified above and by the Court of Appeal.

This is, therefore, a case in which the two holders of a joint account have, by an agreement with the bank to which they were both parties, expressly set out above their signature a declaration as to the beneficial interests in that joint account which, on its true construction, provides for any balance on the account to be the beneficial property of the survivor, upon the death of the other account holder, regardless who contributed the money to the credit of the account before that date. It is, in the Board’s view, a case in which there was no need to conduct an open-ended factual analysis as to the subjective intention of Mr Lennard, since the account opening forms signed by him and Mr Moree were, by themselves, dispositive of the beneficial interest in that account, subject to any contrary agreement or later variation, and there was none. Had the matter turned on such a factual analysis there would, in the Board’s view, have been much force in the appellants’ submission that the analysis conducted by the trial judge should not have been disturbed by the Court of Appeal. But for the reasons given above, the Court of Appeal’s decision was correct. It was based upon a sound perception as to the meaning of clause 20 with which the Board agrees.

The Board will therefore humbly advise Her Majesty that this appeal should be dismissed. It is understood that in these circumstances issue (4) relating to costs does not arise. Accordingly, subject to any submissions received within 28 days of this judgment, costs before the Board will follow the event.

The issue which divided the courts below, and the only issue raised by the appeal as presented, was whether the Court of Appeal erred in disturbing the Chief Justice’s conclusion that the presumption of resulting trust had not been rebutted. On that issue, as I understand, the Board is of one mind. Apart from the issues of construction considered below, and applying the ordinary principles applicable to the role of an appellate court, there were insufficient grounds for the Court of Appeal to interfere with the Chief Justice’s assessment of the evidence as to the testator’s intentions.

However, in the view of the majority, the decision of the Court of Appeal should be upheld on a narrower ground, that is, that the meaning of clause 20 is clear in effect and itself determinative of the disposition of both legal and beneficial interests. Further, the majority have highlighted what they regard as a lack of clarity or consistency in cases from around the common law world. They have therefore thought it necessary to go back to “first principles”, and to provide a plain man’s guide to the law of co-ownership, so that the common law of The Bahamas and England may be set on the true path, whatever divergences there may be in other parts of the common law world (para 35).

I am unconvinced, with respect, that there is any difficulty or uncertainty about the general principles governing joint bank accounts, whether in the courts of The Bahamas, or in the common law world more generally. I agree with the majority that there is an area of potential uncertainty in relation to the relevance in that context of the specific terms of the bank documents under which the joint account was established. This arises in particular out of a line of judgments of the Canadian courts. However, although this appeal provides an opportunity to review those cases, the issue is not critical for the present appeal. As both parties accept, in my view rightly, the law was accurately stated by Lawrence Collins J in Aroso v Coutts & Co [2002] 1 All ER (Comm) 241, which was the case principally relied on (but misapplied - see below) by the Court of Appeal.

Furthermore, the emphasis placed by the majority on authorities from other property contexts, such as Vandervell v Inland Revenue Commission [1967] 2 AC 291 and Stack v Dowden [2007] UKHL 17; [2007] 2 AC 432, seems to me with respect misleading, in that it tends to divert attention from the particular characteristics of a joint banking account, as compared to other forms of property transaction. For example, in Vandervell there was no doubt that the purpose of the relevant transaction was to effect a permanent transfer of property; the only issue was as to the effect in law of that transfer. By contrast, from the point of view of the customer, the purpose of a bank account is not generally seen as to effect the transfer of property in the longer term, but rather to provide a convenient vehicle for holding and dealing in money for the time-being. It does involve the transfer of funds to the bank, and the creation of a new form of property, a chose in action; but they are no more than the mechanisms which the law uses to achieve that purpose, and of which the customer is likely to be unaware. The same in principle applies to a joint bank account. The ordinary expectation is that, rather than being intended to effect a permanent transfer of value from one customer to the other, it is intended as no more than a convenient vehicle for their co-operation (for whatever reasons) in handling funds for the time-being. Issues of construction should be approached against that background.

Accordingly, if one is to go back to first principles, it is more useful in my view to go back to the established principles relating to joint bank accounts, and to consider issues of interpretation of a particular bank agreement in that context.

As noted by the majority (para 43) a 1936 judgment of the High Court of Australia (Russell v Scott (1936) 55 CLR 440) contains an “entirely accurate” description of the legal status of such a joint account. That concerned a joint bank account set up by an elderly lady of means and her nephew, with funds provided by her. Her intention was that the account should be used until her death to supply her own wants, but on her death the balance would go to her nephew. At her death some £1,395 stood to the credit of the account, and the question for the court was whether the nephew was beneficially entitled to this sum.

The concurring judgment of Dixon and Evatt JJ (p 450-1) explained the issue in these terms:

In that case, as the majority rightly observe, there was no suggestion that the answer could be found in a specific clause in the banking contract. However, the judgment provides a clear indication of the position as it would have been in the present case, if there had been no clause 20. On that basis, there could have been no criticism of the court’s use of the ordinary equitable toolbox, including the presumption of a resulting trust, to arrive at the answer. Thus the issue comes down, not to any debate about general principles, but to a narrower question about the interpretation of clause 20 in the context of this particular banking agreement.

Nor is there any reason to think that the relevant principles diverge materially across the common law world. A valuable discussion of the topic of joint accounts is found in Ellinger’s Modern Banking Law 5th ed (Oxford 2011) pp 320-332 (a work edited by authors from Singapore, London and Auckland). Under the heading “Survivorship” (p 324ff) the authors deal with what happens where one of the holders of a joint account dies. As they point out, the issue is not the ownership of the funds as such, which remains with the bank; but the right to -

A later section, under the heading “Beneficial entitlement to the chose in action representing the credit balance” (pp 327-328) discusses the “more complicated situation” where the joint account balance is largely the result of deposits by the deceased account-holder. In such a case, it is said, the beneficial interests depend on the deceased account holder’s intention in maintaining the funds in the joint account, in particular whether the joint account was established “purely out of considerations of convenience” or whether the deceased intended to make a gift of the equitable interest; “as the deceased’s intention is not usually on record its determination depends largely on the operation of presumptions”. The cases cited by way of illustration include Niles v Lake [1947] SCR 294, to which I shall return, and Aroso v Coutts & Co [2002] 1 All ER (Comm) 241. The authors also refer to the latter decision as suggesting that the presumption of resulting trust is “seen as formally quite weak”; but they note that in Pecore v Pecore the Canadian Supreme Court confirmed that such presumptions “continue to have a role to play in disputes over gratuitous transfers in the context of joint accounts”.

As I have said, the only area of potential uncertainty in the authorities concerns the relevance to this exercise of any specific terms about the nature of the account-holders’ interests, in the banking agreement under which the joint account was established. As already noted, this is not a point of material disagreement in this case, since there is no dispute that, in the words of Lawrence Collins J in Aroso v Coutts & Co [2002] 1 All ER (Comm) 241, para 22:

It is right, as the majority point out (para 37), that if this test is satisfied, that is not merely conclusive as to the testator’s intentions, as Lawrence Collins J indicated, but also dispositive of the relevant beneficial interest. That I take as having been implicit in Lord Upjohn’s formulation. However, I do not see that this comment affects the nature of the test. The question is what the clause discloses about the common intentions of the parties, in respect of the beneficial (as opposed to the legal) interest in the relevant funds. Like any issue of construction, that has to be considered objectively from the point of view of the reasonable observer and in the context of the contents and purpose of the agreement as a whole, and against the factual background as known to the parties.

In reaching the conclusion that the test was satisfied - indeed that the clause was “pellucidly clear” - Isaacs JA relied in terms on the decision in Aroso, (para 50), having earlier underlined the words quoted above when referring to the case (para 18). By way of explanation he observed simply that the document, although for the protection of the bank, was “a clear agreement … that the appellant was to have the legal and beneficial interests in the account”. He gave no further explanation. Nor did he mention the fact that, as noted by him earlier, the corresponding clause in Aroso had the significant difference that it referred in terms to the funds being in “our beneficial ownership”.

It is unfortunate that it was only during the hearing of the present appeal that the Board’s attention was drawn to the decision of the Canadian Supreme Court in Niles v Lake [1947] SCR 294, which concerned a clause much closer in language to clause 20 than the clause in Aroso. That case was mentioned in passing by Isaacs JA (para 33), but by reference only to a partial, quotation taken out of context from a Singapore judgment (Lim Chen Yeow Kelvin v Goh Chin Peng [2008] 4 SLR 783), which omitted the most material part. It is not surprising therefore that Isaacs JA saw no inconsistency between that decision and his interpretation of clause 20. The full text of the Supreme Court’s judgment in Niles v Lake was not available to the Board until after the hearing. The parties were invited to submit written comments on the decision, including whether it was “wrong or distinguishable”.

The relevant facts can be shortly stated. The case concerned a joint bank account, opened by Mrs Arnott and her sister Mrs Lake. The money was all contributed by Mrs Arnott. The Bank’s standard form, signed by them both, contained the following clause:

Although the decision was unanimous, there are some variations in the reasoning of the four substantive judgments. In the first judgment Kerwin J accepted that “the legal property in the chose in action” was now vested in Mrs Lake as the surviving account-holder, but that the estate of Mrs Arnott had an equitable interest by virtue of the doctrine of resulting trusts. In his view there was

Taschereau J accepted that the document being under seal should be considered as “conclusive”, but its terms did not warrant the view that it related to more than the legal title:

Rand J considered that the language of the clause made it clear that what was intended was the creation of a relationship to the bank “in such terms as would preclude any challenge to the irrevocable authority of either of the depositors to deal with the account in unqualified fashion”, and to remove the possibility of controversy involving the bank (p 307). References in the clause to “joint property” and “assignment” were “constituent elements of a conclusive relation to the bank”, but irrelevant to “questions of ownership of funds dehors the bank”:

To similar effect the fourth judge, Kellock J, held that the document was to be construed as -

It is a fair criticism of some of the judgments that they do not distinguish clearly between the clause as evidence of subjective intention (potentially relevant to the application of equitable presumptions) and objective intention as an aspect of contractual interpretation. The judgment of Rand J seems to me, with respect, the most useful, since it has a detailed analysis of the contractual language, set in the context of the “common sense” of the agreement as it would have been understood by the parties, and the reasonable observer. I find that reasoning compelling.

The comments of the court in Niles v Lake seem to have been taken in some later cases as having wider significance than as directed simply to the clause there in issue. There was a brief reference to Niles v Lake in Edwards v Bradley [1957] SCR 599, p 600, where Kerwin CJ (as he had become) said:

Much more recently, in Pecore v Pecore [2007] SCC 17; [2007] 1 SCR 795, Rothstein J made a brief reference to the case in the context of his discussion of different categories of evidence, although the issue did not arise directly on the facts of that case. Under the heading “Bank Documents” he said:

In a concurring judgment Abella J also expressed the view that the law had moved on since the time of Niles v Lake:

Such comments seem with respect to overstate the effect of the court’s decision in Niles. As I read it, although there were differences in the various judgments, the ratio of the decision turned on the effect of a particular clause in a particular agreement, rather than on any more general statement about the relevance of bank documents in relation to beneficial interests.

In Ellinger (p 329), Pecore is relied on to support the inclusion of “bank documents” in a list of “types of evidence that might be adduced to rebut the presumptions”. Footnote (86) observes that “English cases have indicated that these documents … may be of limited assistance in determining the rights of the joint account holders”. However, it is not clear that the cases referred to in the footnote (Aroso para 33; Sillett v Meek [2007] EWHC 1169 (Ch), para 40) provide adequate support for that proposition. In Aroso the main difficulty seems to have been that the bank document had not been signed. In Sillett the matter was apparently put beyond doubt by a specific term in the agreement:

Finally a similar issue arose in the Singapore High Court in Lim Chen Yeow Kelvin v Goh Chin Peng [2008] 4 SLR 783; [2008] SGHC 119. The joint bank account had been set up by the deceased testator (“Bee Bee”) and her boyfriend and cohabitant (the defendant), all the money having been contributed by her. It was held (by Chan Seng Onn J) that the presumption of advancement did not apply as they were not legally married. However, the same result was achieved on the basis of the evidence of her intentions, as evidenced (inter alia) by a term in the bank’s standard agreement which she had signed:

The judge said of the deceased’s signing of the bank agreement with her partner (para 80):

The judge considered but distinguished Niles v Lake on the basis that -

As to the relevance of bank documents in general, he referred with approval to a judgment of LaForme JA in the Ontario Court of Appeal: Saylor v Madsen Estate (2006) 261 DLR (4th) 597, where the latter had said:

Adopting the same approach Chan Seng Onn J said (para 118):

I have quoted these authorities at some length in an attempt to bring greater clarity to the discussion, and in particular to emphasise the distinction between two issues: first the relevance of bank documents in general, and secondly the interpretation of a particular clause. I agree with the majority that, by focussing on the status of such documents as evidence of intention, there is a danger of overlooking their significance as binding contractual commitments, which are not merely relevant as evidence but dispositive of the interest in question. However, to my mind that does not necessarily undermine their value as guidance on the possible approach of the court to interpretation of different forms of standard clause in typical banking agreements.

Thus, taking the Singapore case as an example, one may not endorse the judge’s comments on the status of the bank documents as evidence, nor his adoption of the comments to similar effect of LaForme JA in the Ontario Court of Appeal (paras 78-79 above). On the other hand, his analysis of the particular clause (para 76 above) seems an entirely valid approach to the interpretation of the relevant contractual term, which could and should have led him to the same conclusion by a simpler and more direct route.

I turn to the banking agreement in the present case. It was on a document headed “Personal Account and Services Application”. The first page had a number of printed boxes in which were inserted in handwriting the name and other details of the “First/Sole Applicant”, namely Mr Lennard. In the box headed “State purpose of account”, there was inserted “to pay utilities”. The second page provided similar boxes for “Information on First Joint Applicant”, which were filled in with the name and details of Mr Moree. There followed one-and-a-half pages of 23 closely printed terms, covering such matters as “1. Basic terms”, “4. Security”, “9. Overdraft and Credit Limit”, and “23. Jurisdiction”. Clause 20 which is directly in issue in this case read:

Although there were some differences in the language of the clause in Niles v Lake and that of the clause in the present case, Mr Parker, rightly in my view, does not suggest that the differences were material in respect of the distinction between legal and beneficial interests. He relies on some factual differences in the surrounding circumstances and in the relationships of the parties. However, they can have no direct relevance to the issue of construction, which turns on the objective consideration of the document itself. Mr Parker is driven to argue that Niles v Lake was wrongly decided. For the reasons given above I do not agree.

Like the Canadian court in that case, I see nothing in the language of clause 20 to indicate an intention to deal with beneficial interests, rather than simply spell out the consequences of holding a legal estate in a joint bank account. The majority suggest that private customers do not go around “thinking constantly of distinctions between legal title and beneficial ownership”. That may be true, but neither do ordinary people use language like that in clause 20 to make a personal gift. In any event, the meaning of such a standard clause cannot vary depending on the degree of sophistication or legal understanding of individual customers. It is designed to be part of a set of standard conditions, and as such to have a standard meaning.

Further, the particular clause cannot be read in isolation from the consideration of the purpose of the agreement as a whole, and the place of the clause within it, as understood by a reasonable observer. There is no doubt that it was a tri-partite agreement binding all three parties, the bank and each of its clients; and that it constituted a chose in action in which each of the account-holders had an interest. But what was the agreement for? Was it an agreement designed simply to provide a mechanism for the holding and handling of money by the customers, and to settle the legal relationship between them and the bank? Or was it intended to go further and to constitute a substantial gift from one customer to the other? That is a straightforward and common-sense distinction which does not require sophisticated understanding of banking law.

The first pointer to the answer is that the clause was part of a standard form prepared by the bank, with no input from the customers. The natural assumption is that it was designed to deal with matters in which the bank was concerned, that is in legal not beneficial interests. As Rand J observed in Niles v Lake, it is difficult to see any reason for the bank to use its standard terms to dictate to its customers how to dispose of the beneficial interests in funds held in its accounts. From the customers’ point of view the primary purpose of a bank account is as a mechanism to hold and handle money. As I have said, it is not the sort of instrument one would expect to be used to make a very generous gift (in this case a half share in a fund of some $190,000) to a personal friend.

In any event, any suggestion that this was the purpose of the arrangement was negated in my view by the specific indication of the purpose of the document - not to make a substantial gift but for a more mundane purpose - “to pay utilities”. In that respect it is a stronger case than Niles v Lake where the banking agreement contained no such indication. In general such handwritten additions to a standard form of contract should bear added weight, “inasmuch as the written words are the immediate language and terms selected by the parties themselves for the expression of their meaning” (Chitty on Contracts para 13-072).

For these reasons in my view, in respectful disagreement with the majority, the appeal should be allowed, and the decision of the Chief Justice restored.