Family Law

Family Law Newsletter #0801.02.18

Case Updates

Whitlock and another v Moree (Bahamas) [2017] UKPC 44

Privy Council Lady Hale, Lord Wilson, Lord Sumption, Lord Carnwath and Lord Briggs

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 Lennard until his death in February 2010, and his friend Mr Moree, who is the respondent. The money in the account was contributed by Mr Lennard, mainly if not entirely, from an account previously in his sole name at the same bank.

The sole question was 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.

In the courts below, the question had been approached from the perspective that it was Mr Moree’s burden to displace the presumption of resulting trust. The trial judge held the burden had not been displaced, the Court of Appeal (Bahamas) overturned that decision. The Privy Council approached the estate’s appeal differently.

The Privacy Council allowed the appeal with Lord Briggs giving the majority judgment with Lady Hale and Lord Sumption in agreement. Lord Carnwath dissented with whom Lord Wilson agreed.

In the majority judgment Lord Briggs reviewed well-known authorities on beneficial ownership of property and concluded that these principles were not confined to beneficial interest in real property. There is no reason why property which is 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 question was therefore what instrument was the appropriate document where a binding declaration as to beneficial interests might be found. The answer was 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. As well, 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 constituted a document of transfer.

Of course, the fact that such a document might constitute a binding declaration of trust did not of itself answer the next question: did that document contain such a declaration?

Lord Briggs stated in paragraph 29 of the judgment that where two or more holders of a joint account all sign an account opening document which, on their true construction, declare or set out their respective beneficial interests in the property constituted by 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.

Three consequences flowed from this conclusion: first, whether or not the attention of the account holder was drawn to the terms of the declaration would be irrelevant in principle, unless challenging the document on the basis of mistake, fraud, duress, undue influence; secondly, there was no room for the doctrine of presumed resulting trusts; thirdly, where the document on its true construction did deal with the account holders’ beneficial interests, then the quantification of those interests was a question of law.

Lord Briggs then went on to ascertain the true construction of the account opening documents and held that there was indeed an express declaration as to the beneficial ownership of the money in the account. Mr Lennard’s beneficial interest in the money had passed to Mr Moree by way of survivorship.

Appeal allowed.

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In the matter of B (A Child) [2018] EWCA Civ 20

Court of Appeal: Sir James Munby, President of the Family Division, Davis LJ and Underhill LJ

B was born in the spring of 2016. B has an elder full brother (H) who was born in 2015. He was adopted in 2016. The essential issue before the first instance judge was whether B should be placed with H’s adoptive parents with a view to being adopted by them, or whether she should be placed with her father’s cousin and her partner who had been assessed as suitable carers.

The judge considered the pros and cons of an adoptive placement and concluded that the advantages to B being brought up with H outweighed her having a continuing relationship with other family members. She consequently made care and placement orders with a view to B being adopted by H’s adoptive parents.

B’s father sought permission to appeal, which was granted by McFarlane LJ who observed that the appeal raises an important point of principle. The point of principle relates to the decision in Re T (A Child) (Early Permanence Placement) [2015] EWCA Civ 983. Sir James Munby P had given the only judgment in Re T (A Child), determining that in making a placement order the question for the court was whether it was in a child’s best interests to be adopted but it was not for the court to consider the merits of proposed adopters. However, Sir James Munby P had noted that an exceptional case might justify a departure from that general approach.

In this case, the Court of Appeal dismissed the appeal with Sir James Munby P giving the approved judgment.

In considering if the first instance judge misapplied the principles in Re T (A Child) the answer was no. It was the father’s case that, in conflict with the principles in Re T (A Child) the judge had treated the matter as a competition between potential adopters and kinship carers and had been drawn into an inquiry as to which would be the “better” placement. That was not the case. The judge had carefully, conscientiously and correctly applied the learning in Re T (A Child). The fact that B’s only full sibling, a sibling close in age, had been adopted by adoptive parents who were willing to adopt her was not something she could ignore if she was to comply with her statutory duty under the Adoption and Children Act 2002 section1(4) and section1(4)(f).

There was nothing in Re T (A Child) to say that the court could ignore a crucial factor which was necessarily concomitant with a placement. The presence of H in B’s life fell in the credit side of the balance sheet in relation to a placement with H’s adopters, just as the loss of H fell in the debit side in relation to the kinship placement.

The next point was whether the first instance judge had taken the correct approach; the answer was yes. The judge understood she was considering only the making of care and placement orders as a prelude to the entirely separate adoption proceedings. In circumstances where the fact and reality was that H had been adopted by those who were offering a similar placement for B, the distinction between adoption per se and adoption by H’s adoptive parents was more apparent than real.

The third question was should the judge have embarked upon a full welfare evaluation and comparison of each prospective placement? The Court of Appeal said no. The father complained that the process adopted by the judge was an unfair half-way house which meant that she ended up weighing the “known” uncertainties in respect of the proposed kinship carers against the certainties of the adoptive placement. However, the judge knew all that she needed to know about the possible placement with H’s adoptive parents to be able properly to carry out the task she was embarked upon. To go further into that aspect of the matter than she did would have risked offending against the principle in Re T (A Child).

The final question was did the first instance judge prioritise B’s relationship with H over her relationship with her wider family? The answer was also no. The judge did not prioritise either of the placements over the other. She treated each as being viable and realistic and carefully evaluated the competing evidence and arguments before coming to her conclusion. The fact that her conclusion favoured one placement did not mean that she was prioritising that placement. Her conclusion that, in all the circumstances, B’s future relationship with H throughout their lives tipped the balance and was determinative of the outcome, was securely founded in the evidence and was plainly open to her.

Appeal dismissed.

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