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Privy Council considers clash of presumptions in beneficial interest cases

Case remitted for consideration of parties’ ‘actual intentions’

In Marr v Collie [2017] UKPC 17 the Judicial Committee of the Privy Council has allowed the appeal in a Bahamian case concerning the correct legal test to be applied in determining the beneficial ownership of certain property following the breakdown of a personal relationship.

The Court – comprising Lord Neuberger, Lady Hale, Lord Kerr, Lord Wilson and Lord Sumption – decided that the case should be remitted for hearing before the Supreme Court of the Bahamas in order that there should be determined the issues outlined in the Privy Council's opinion, particularly the intention of the parties at the time of the purchase of what have been described as the investment properties and in the course of dealing with those properties.

The parties became involved in a personal relationship in 1991 which broke down in July 2008. Between 2000 and 2008, the appellant purchased five real-estate properties (the "Investment Properties"). These were conveyed to the parties in joint names. The appellant purchased a truck and a boat (the "Vehicles") in 2007. The truck was licensed in joint names and the boat was registered solely in the respondent's name.

Following attempts to achieve a negotiated settlement concerning the ownership Investment Properties and the Vehicles, the appellant brought proceedings in the Supreme Court of the Bahamas seeking, amongst other things, a declaration that he owned the entire beneficial interest in these assets. Isaacs J decided this issue in favour of the appellant. The Court of Appeal allowed the appeal in part, ordering that the Investment Properties and Vehicles be sold and proceeds to be split between the parties.

Lord Kerr, delivering the unanimous judgment of the court, considered the possible conflict between two presumptions: Lady Hale's "starting point" in Stack v Dowden [2007] UKHL 17 that joint legal ownership should signify joint beneficial ownership, and that of a resulting trust where the parties have contributed unequally to the purchase of property in their joint names.

He said:

"The Board considers that, save perhaps where there is no evidence from which the parties' intentions can be identified, the answer is not to be provided by the triumph of one presumption over another. In this, as in so many areas of law, context counts for, if not everything, a lot. Context here is set by the parties' common intention – or by the lack of it. If it is the unambiguous mutual wish of the parties, contributing in unequal shares to the purchase of property, that the joint beneficial ownership should reflect their joint legal ownership, then effect should be given to that wish. If, on the other hand, that is not their wish, or if they have not formed any intention as to beneficial ownership but had, for instance, accepted advice that the property be acquired in joint names, without considering or being aware of the possible consequences of that, the resulting trust solution may provide the answer.

"Of course, the initial intention (or lack of it) at the time of purchase may change. This was the reason that the majority in Stack v Dowden emphasised that examination of the course of conduct of the parties over the years in which they dealt with the property is relevant. And it is why an intense examination is warranted of why the properties acquired in this case in 2008 were purchased in joint names. By that time, many of the contributions which, according to Mr Marr, he expected Mr Collie to have made, had not materialised. Why did he continue to agree that the properties should be acquired in joint names?"

Lord Kerr concluded:

"No proper examination of the actual intentions of the parties has taken place. … [T]he Board considers that such an examination is unavoidable if a proper determination is to be made of the respective beneficial interests of the parties in respect of the investment properties, the truck and the boat. Moreover, it is of the view that, in line with the decision in Muschinski [Muschinski v Dodds [1985] HCA 78], it is necessary that it be decided whether account be taken of the contributions made by the parties to the purchase of the various properties and assets whose beneficial interest is in dispute."

For the judgment, click here.