Who is entitled to the contents of a joint bank account?

Who is entitled to the contents of a joint bank account?

2 May 2018

Former solicitor Nicola Laver is a freelance legal journalist/editor and an author and legal copywriter

Practitioners often have to explain the implications of joint ownership of land and property, but what about joint ownership of bank accounts? A recent ruling involving the implications of the death of a joint bank account holder demonstrates that the general right of survivorship of joint assets is not always straightforward. 

The interesting case of Whitlock and another v Moree [2017] UKPC 44 (Privy Council Appeal No 0075 of 2016), 21 December 2017, began in the Bahamas (where the legal system is based on English common law) and ended up before the Privy Council. The central issue was, who was beneficially entitled to the money held in the bank account which the deceased had made out into the joint names of himself and a close friend.

What was the background?

The deceased, D, was a successful businessman, who died in his 90s leaving a will. He left his home in Nassau to a close friend, M, who was also one of three residuary beneficiaries and an executor of the will. Soon after making his will, D took M with him to his bank and made him a joint bank account holder. 

The bank records included a handwritten note to the effect that this was to enable the friend to ‘pay utilities’ (para 7).  Importantly, the bank’s application form included a joint tenancy declaration stating expressly: ‘all money which is now or may later be credited to the account (including all interest) is our joint property with the right of survivorship’ (para 2).

D died a few weeks later leaving $190,000 in the account. The remaining two residuary beneficiaries sought a declaration that M held the money on trust for all three residuary beneficiaries, and the right of survivorship did not apply.  The trial judge ruled in favour of the beneficiaries. 

However, the Court of Appeal in the Bahamas disagreed. It found that M had discharged the burden of proving that D had intended to make a beneficial gift to him.

What did the Privy Council decide?

The Privy Council gives a useful and detailed analysis of the law on joint ownership of property, citing a number of previous rulings. The Privy Council concluded that M was fully entitled to the account on the testator’s death: the right of survivorship applied.

It found that two holders of a joint account, by agreement with the bank, had expressly set out a declaration about the beneficial interests in that joint account. On its true construction, the right of survivorship operated, ‘regardless who contributed the money to the credit of the account before that date’ (para 50).  There was no need to conduct an open-ended factual analysis about the subjective intention of the testator. It was also noted that no contrary agreement or later variation had been made.