Whitlock and another v Moree

Where joint account holders sign an account-opening document which, on its true construction, declares their beneficial interests, that declaration governs the account unless later varied or successfully challenged. The document is construed objectively in context. Evidence of the contributor’s subjective intention and the presumption of resulting trust have no role once the document is dispositive. A signed clause providing for survivorship can operate on beneficial ownership, not merely legal title, even where one account holder supplied all the funds. Whether the clause has that effect is a question of construction and law. Equitable and common-law challenges, such as fraud, mistake, undue influence or rectification, remain available to a party who properly raises them.

The appeal concerned money transferred from Mr Lennard’s sole bank account into a joint account opened with his friend, Mr Moree. The account-opening form provided for joint property and survivorship. After Mr Lennard’s death, his residuary beneficiaries claimed that the balance was held on resulting trust for the estate.

The Chief Justice held that Mr Moree had not rebutted the presumed resulting trust. The Court of Appeal reached the opposite conclusion, treating the documents and surrounding circumstances as sufficient evidence of an intended gift. The central issues before the Board were whether clause 20 governed beneficial ownership and whether the courts were entitled to examine Mr Lennard’s subjective intention.

Majority

Lord Briggs delivered the leading judgment, with Lady Hale and Lord Sumption agreeing. The appeal was dismissed.

1. A joint bank account creates a contractual chose in action. Legal title survives to the surviving account holder, but beneficial ownership is a separate question.
2. Where the account holders sign an account-opening document which, properly construed, declares their beneficial interests, the document is itself dispositive. Subjective intention and presumed resulting trusts cannot be used to contradict it. The question whether the document addresses beneficial ownership is determined by objective construction in context.
3. Clause 20’s references to Joint Tenancy, joint property, survivorship and the automatic transfer of all money to the survivor indicated beneficial, as well as legal, ownership. The phrase permitting a different arrangement by written agreement reinforced that construction. The handwritten reference to paying utilities did not displace it.
4. The account documents were therefore determinative of the beneficial interest, regardless of who contributed the money. Whether the documents had been explained to the parties was irrelevant because no challenge based on mistake, non est factum, fraud, duress, undue influence, misrepresentation or rectification had been advanced. Construction was a question of law, on which an appellate court was generally as well placed as the trial court.

The Board rejected any general rule that bank agreements concern legal title only, or merely the relationship between the bank and its customers. It disagreed with the approach in Saylor v Madsen Estate (2005) 261 DLR (4th) 597 that bank documents had no presumptive value in assessing intention.

Dissent

Lord Carnwath, with Lord Wilson, would have allowed the appeal. He considered that clause 20 merely regulated the legal relationship with the bank. The standard form and the stated purpose of paying utilities pointed away from a substantial gift, so the Chief Justice’s factual assessment should have been restored.

Subject to submissions within 28 days, costs before the Board were to follow the event.

1. Privy Council: dismissed the appeal, holding that the signed account-opening documents determined beneficial ownership. [2017] UKPC 44
2. Court of Appeal of the Commonwealth of the Bahamas: reversed the Chief Justice’s conclusion and held that Mr Moree had proved an intention to make a beneficial gift.
3. Chief Justice: held that Mr Moree had failed to rebut the presumed resulting trust in favour of the estate.