Laws of Eve | Be careful when opening joint bank accounts
In an article I published on February 9, 2015, titled 'Ownership of money in joint accounts', I referred to the decision of the Jamaican Court of Appeal in the case of Clover Robinson v National Commercial Bank Jamaica Limited and Others  JMCA Civ 3.
In that case, an elderly customer of the bank added her caregiver's name to her bank account a mere five days before she died. After her death, the caregiver attempted to withdraw funds from the account, and the bank froze it. The elderly customer's executors laid claim to the funds in the account on the grounds that the caregiver had not deposited any money into the account, and that her name had merely been added for the sake of convenience.
Both in the Supreme Court and the Court of Appeal, it was found that the money in the account belonged to the estate, and that the caregiver had merely held the funds in the account on trust for the benefit of the elderly customer and had no beneficial entitlement to it.
The relevant clause in the Robinson case was that, "All moneys standing to the credit of a joint account ... shall be the joint property of the customers in whose name the joint account is held. In the event of the death of any one or more of the customers, the survivor shall have full control of all moneys then and thereafter standing to the credit of the customers' account(s) ... ." The Court of Appeal relied on the widely held view that the analysis must begin by determining the proper presumption to apply to the case. As stated in the decision of the Canadian Court of Appeal in Pecore v Pecore  SCC 17, " ... bank documents that set up a joint account are an agreement between the account holders and the bank about legal title, not evidence of an agreement between the account holders as to beneficial title ...". On that premise, the burden was on the surviving account holder, who had not placed any funds in the account to prove that she was not holding the funds on trust for the benefit of the deceased account holder's estate.
CHALLENGING THE PREVIOUS APPROACH
A majority decision of the Privy Council in the case of Whitlock and Another v Moree  UKPC 44 (appeal from the Court of Appeal of Bahamas) now challenges that approach to these matters. According to the Privy Council, the analysis of ownership of funds in a joint bank account should follow this logic:
" ... Where two or more holders of a joint account all sign an account opening document ... which ... set out their respective beneficial interests in the ... money in the account ... those are the beneficial interests of the account holders ... and an examination of ... who place[d] money in the joint account, is neither relevant nor permissible."
The Privy Council emphasised that the statement in the account opening document that, " ... 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. That means that if one of us dies, all money in the account automatically becomes the property of the other account holder(s) ..." was an express assignment of the funds in the account between the account holders. In other words, there was no need to look further to determine ownership of the funds when one account holder died, unless another account holder said that he did not sign the document, or challenged it on the basis of mistake, fraud, duress, etc.
In effect, the question as to who owns the funds in a joint bank account should begin with the legal interpretation of the contract that created the account. It is not based on the parties' subjective intentions or the question of who provided the money that was placed in the account. It is a question of law, not fact.
The guidance to banks and joint account holders from Whitlock's case is that care must be taken when opening joint bank accounts to ensure that the account-opening documents reflect the intentions of the parties as to ownership of the funds in the account, rather than merely relying on standard form documents. The fact is that, if the document is clear, the courts are unlikely to look any further.