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England and Wales High Court (Chancery Division) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Drakeford v Cotton & Anor  EWHC 1414 (Ch) (25 May 2012)
Cite as:  EWHC 1414 (Ch)
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33 Bull Street
Birmingham B4 6DS
B e f o r e :
| LYNN DRAKEFORD
|- and -
Mrs Nicola Preston (instructed on Public Access) for the Defendants
Hearing dates: 15th, 16th and 17th May 2012
Crown Copyright ©
Mr Justice Morgan:
The events of 1997
The building society accounts
The background evidence
The more specific evidence
"The Accounts were in the joint names of Mrs M Cotton and Ms M Stain. The money was given as a lifetime gift to Ms Stain, shortly after Mr Cotton's death and was held in joint names on the advice of an Accountant. Your letter from the Coventry Building Society dated 10th May 2010 correctly confirms that shortly after Mr Cotton's death, the Society's records were updated in accordance with Mrs Cotton's instructions and the accounts amended into joint names. There is no evidence that the transfer was purely for signatory purposes. We are instructed that Mrs Cotton made clear to all parties concerned that she did not wish your client to benefit in anyway from her assets, because of your client's behaviour at the time of Mr Cotton's death.
In any event, joint assets pass by survivorship to the surviving joint owner and are not part of Mrs Cotton's Estate. Therefore, there is no entitlement to anyone, other than Ms Stain, of the Coventry Building Society funds."
"On or around 16th June 2008, following an abusive telephone call from the Claimant, Mrs Cotton told the Second Defendant that she wished the Second Defendant to have the funds in the joint accounts on Mrs Cotton's demise. Mrs Cotton made it clear to the Second Defendant that she was gifting the funds in the said accounts to the Second Defendant. Mrs Cotton did this because the Second Defendant was her principal carer and she wanted to reward her for her care. Further, Mrs Cotton wanted to ensure that the Claimant would not be entitled to any of the funds in the said joint accounts after her death. Mrs Cotton told the Second Defendant that the moneys in the accounts were hers (that is, the Second Defendant's) for her to do with as she wished. Mrs Cotton emphasised on several occasions that she did not want the Claimant to have any of the said moneys." [Emphasis added]
"Accordingly, on the death of Mrs Cotton in August 2008, the second Defendant was solely entitled to the balance of funds in the said account by survivorship." [Emphasis added]
"The money from that date became Mrs Stain's to do with as she wished, and Mrs Stain claims survivorship rights to the account. Mr Cotton was fully aware that the money was gifted to Mrs Stain, and makes no claim to it."
That last statement might be said to contain an inconsistency between an outright gift as at 16th June 2008 and a claim to survivorship on the death of Mrs Cotton (unless the reference to survivorship was a reference to the legal title only). Under the first way of describing the matter, Mrs Stain is the sole beneficial owner from 16th June 2008 whereas under the second way of describing the matter, Mrs Stain has a beneficial interest before Mrs Cotton's death and becomes the sole beneficial owner on Mrs Cotton's death.
The four possible results
The first possible result
The second possible result
The third possible result
"The right at law to the balance standing at the credit of the account on the death of the aunt was thus vested in the nephew. The claim that it forms part of her estate must depend upon equity. It must depend upon the existence of an equitable obligation making him a trustee for the estate. What makes him a trustee of the legal right which survives to him? It is true a presumption that he is a trustee is raised by the fact of his aunt's supplying the money that gave the legal right a value. As the relationship between them was not such as to raise a presumption of advancement, prima facie there is a resulting trust. But that is a mere question of onus of proof. The presumption of resulting trust does no more than call for proof of an intention to confer beneficial ownership; and in the present case satisfactory proof is forthcoming that one purpose of the transaction was to confer upon the nephew the beneficial ownership of the sum standing at the credit of the account when the aunt died. As a legal right exists in him to this sum of money, what equity is there defeating her intention that he should enjoy the legal right beneficially? Both upon principle and upon English authority we answer, none. English authority is confined, so far as we can discover, to cases of husband and wife. But there is much authority to the effect that where a joint bank account is opened by husband and wife with the intention that the survivor shall take beneficially the balance at credit on the death of one of them that intention prevails, and, on the death of the husband, the wife takes the balance beneficially, although the deceased husband supplied all the money paid in and during his life the account was used exclusively for his own purposes."
"The fact that these cases arose between husband and wife affects only the burden of proof. In a case where there is no presumption of advancement, satisfactory affirmative proof of an intention to confer a beneficial interest supplies the place of the presumption. Once it appears, as it does in the present case, that a definite intention existed that the balance at the credit of the bank account should belong to the survivor, these cases become, in our opinion, indistinguishable.
In principle there is no reason why, when at law a chose in action accrues to the survivor of two persons in whom it was jointly vested, equity should fix the survivor with a resulting trust in favour of the personal representatives of the deceased who furnished the value it possesses, if the joint chose in action was so vested by the deceased with the purpose of imparting beneficial ownership to the survivor on his death. The reason which is assigned for such a resulting trust rests at bottom upon the notion that the deceased, by intending to reserve the right in her lifetime of applying all or any of the money in the account for her own purposes and by continuing in fact to enjoy the use of that money, retained the full beneficial ownership of the property which in law vested in herself and her nephew jointly in consequence of the account standing in the names of both of them."
"For it is said that the deceased's intention that her nephew on surviving her should take the amount of the bank account is a testamentary wish to which effect could be given only by a duly executed will. This must mean that, while retaining full beneficial property in a corpus, she intended that on her death some other person should succeed to her property in that corpus or to some interest therein to which he was not before entitled either absolutely or contingently, and to which the law gave him no title to succeed. It is only in this sense that an intention to benefit can be said to be testamentary. Law and equity supply many means by which the enjoyment of property may be made to pass on death. Succession post mortem is not the same as testamentary succession. But what can be accomplished only by a will is the voluntary transmission on death of an interest which up to the moment of death belongs absolutely and indefeasibly to the deceased. This was not true of the chose in action created by opening and maintaining the joint bank account. At law, of course, it was joint property which would accrue to the survivor. In equity, the deceased was entitled in her lifetime so to deal with the contractual rights conferred by the chose in action as to destroy all its value, namely, by withdrawing all the money at credit. But the elastic or flexible conceptions of equitable proprietary rights or interests do not require that, because this is so, the joint owner of the chose in action should in respect of the legal right vested in him be treated as a trustee to the entire extent of every possible kind of beneficial interest or enjoyment. Doubtless a trustee he was during her life time, but the resulting trust upon which he held did not extend further than the donor intended; it did not exhaust the entire legal interest in every contingency. In the contingency of his surviving the donor and of the account then containing money, his legal interest was allowed to take effect unfettered by a trust. In respect of his jus accrescendi his conscience could not be bound. For the resulting trust would be inconsistent with the true intention of that person upon whose presumed purpose it must depend."
"(c) a disposition of an equitable interest or trust subsisting at the time of the disposition, must be in writing signed by the person disposing of the same, or by his agent thereunto lawfully authorised in writing or by will."
The fourth possible result
The trust in relation to the house
The relief sought