Marr v Collie judgment handed down in Privy Council

25 May 2017

The Privy Council provides clarification of Stack v Dowden and Jones v Kernott and guidance as to the circumstances where a resulting trust analysis will be appropriate in a domestic-commercial relationship.

In Marr v Collie [2017] UKPC 17, a judgment handed down this morning, Aidan Casey QC and Tom Poole successfully appealed against a decision of the Court of Appeal of the Bahamas which held that certain properties purchased in the joint names of the appellant, Marr, and the respondent, Collie, were to be held in equal shares.

The parties were in a personal relationship between 1991 and 2008, during which time they had acquired several properties and other items (a boat, a truck, and a collection of artwork). One of the properties had been purchased for domestic cohabitation purposes, and the remaining properties had been purchased as investments and buy to lets. The parties had agreed that Marr would pay for the acquisition of the properties, and that Collie would carry out planned redevelopment works. The properties, however, had been put into joint names without specifying the parties’ respective beneficial interests.

The parties’ relationship ended and Marr sought a declaration as to the beneficial ownership of the properties and other items. At trial, it was held that all the properties and other items were held on trust for Marr. The trial judge relied upon the analysis of the Court of Appeal in Laskar v Laskar [2008] 1 WLR 2695 (essentially to the effect that the Stack v Dowden presumption only applied to properties acquired as the domestic home, and that investment properties even if acquired by cohabiting couples were to be treated by reference to ‘classical’ resulting trust principles).

Collie appealed this decision and was successful in large part. It was held that Marr intended to share equally with Collie the beneficial interest in the investment properties and that Collie also had a beneficial interest in the chattels.

Marr appealed against this decision to the Privy Council. Aidan Casey QC and Tom Poole argued that the investment properties, the boat and the truck were held on resulting trust for Marr and that Collie had not rebutted this presumption. It was further submitted that Marr would be entitled to the same beneficial interests found under a resulting trust even on the basis of a common intention constructive trust.

In an important decision, the Privy Council held that the courts below had failed to properly consider and make findings on the parties’ intentions at the time of the acquisition of the investment properties. The Board indicated that there is no ‘triumph of one presumption over another’ in determining whether the investment properties were held on resulting trust or a common intention constructive trust. What matters is the parties’ intentions, or lack of, at the time of purchase and, if relevant, whether those intentions changed over time.

The Privy Council’s judgment provides an insight into the House of Lords’ and the Supreme Court’s reasoning in their judgments of Stack v Dowden [2007] AC 432 and Jones v Kernott [2011] UKSC 53; [2012] 1 AC 776, and also attempts to clarify the circumstances in which a resulting trust analysis will be appropriate in a domestic-commercial personal relationship.

Following the successful appeal, the case has now been remitted to the Supreme Court of the Bahamas for a determination of the appropriate beneficial ownership of the investment properties, the boat and the truck.

 

The judgment can be read here.

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