Page 1 The West Indian Reports/Volume 15 /Bank Of Nova Scotia Trust Co (Caribbean) Ltd v Smith-Jordan - (1970) 15 WIR 522 Bank Of Nova Scotia Trust Co (Caribbean) Ltd v Smith-Jordan (1970) 15 WIR 522 HIGH COURT OF BARBADOS DOUGLAS CJ 13 JULY 1970 Trusts and Trustees - Joint account opened in names of two persons - All sums deposited in account provided by one of them who subsequently died - Whether survivor held balance beneficially or under resulting trust for estate of deceased. Richard Thomas Harewood, aged 86, died on 22 April 1969. In 1968 he had opened a joint account at the Bank of Nova Scotia, Bridgetown, in the names of himself and the defendant, his "companion, personal servant and caretaker". All of the money deposited in this account was provided by Harewood and on (1970) 15 WIR 522 at 523 his death there was $103,460.97 standing to the credit of the account. After Harewood's death the defendant withdrew this entire amount. The plaintiff, executor of the will of the deceased, brought an action seeking a declaration that the defendant was trustee for the estate of the deceased of the sum which he had withdrawn and an order for the payment of this sum, plus interest, by the defendant to the plaintiff. Held: that in coming to a conclusion as to what was intended by the person opening the account, all the evidence, and not merely the written agreement under which the account was opened, must be looked at; that Harewood's intention was that the defendant should be free to draw on the account during their joint lives and that the entire balance would go to the defendant on his (Harewood's) death; and that the evidence was overwhelmingly in favour of the defendant who had discharged the onus which was on him to rebut the presumption of a resulting trust. Judgment for the defendant. Cases referred to Marshal v Crutwell (1875), LR 20 Eq 328, 44 LJCh 504, 39 JP 775, 27 Digest (Repl) 152, 1108. McEvoy v Belfast Banking Co Ltd [1935] AC 24, [1934] All ER Rep 800, 103 LJPC 137, 151 LT 501, 40 Com Cas 1, HL, 25 Digest (Repl) 568, 140. Young v Sealey [1949] 1 All ER 92, [1949] Ch 278, [1949] LJR 529, 93 Sol Jo 58, 25 Digest (Repl) 568, 141. Re Figgis, Roberts & MacLaren [1968] 1 All ER 999, [1969] 1 Ch 123, [1968] 2 WLR 1173, 112 Sol Jo
Page 2 156. Freeman v Johnston [1942] 1 DLR 502. Armsworthy v Macdonald [1942] 1 DLR 110, 16 MPR 175. Russell v Scott (1936), 55 CLR 440, 36 SRNSW 454, 53 NSWWN 178, 42 Argus LR 375, 10 ALJ 211. Action Action by the Bank of Nova Scotia Trust Co (Caribbean), Ltd, executor of the will of Richard Harewood, deceased, to recover the sum of $103,460.97 from Simeon Smith-Jordan. JSB Dear QC and E Mottley (instructed by Cottle Catford & Co) for the plaintiff WHA Hanschell QC and H Forde (instructed by Yearwood & Boyce) for the defendant DOUGLAS CJ. In these proceedings the plaintiff trust company, as executor of the will of Richard Thomas Harewood, deceased (hereinafter referred to as "the testator") seeks a declaration that the defendant is a trustee for the testator's estate of the sum of $103,460.97 representing the amount standing to the credit of the defendant and the testator jointly at the Bank of Nova Scotia at the time of the testator's death on 22 April 1969. The plaintiff also seeks an order that the defendant pay to the plaintiff the above-mentioned sum together with interest thereon at the rate of 8 per cent from 22 April 1969, until payment. The joint account, the subject-matter of these proceedings, was opened in the year 1968. Early in that year, the testator summoned to his home a representative of the Bank of Nova Scotia Trust Company (Caribbean), Ltd and in the presence of the defendant requested the Trust Company to open an account in the joint names of the defendant and himself. There was some contretemps in connection with the instructions because at first the Trust Company opened a joint fixed deposit account. After further negotiation an agreement was entered into in regard to joint deposit account No 10773 to be maintained at the Bank of Nova Scotia. (1970) 15 WIR 522 at 524 The terms and conditions on which this account was to be kept are set out in the agreement dated 29 August 1968, which reads as follows: 'Account No 10773. AGREEMENT Joint Deposit Account To The Bank of Nova Scotia Trust Co Barbados
Page 3 The undersigned having opened a deposit account with you in their joint names, in consideration thereof hereby agree with you and with each other that all moneys now or from time to time deposited to the said account, and interest thereon, shall be and continue the joint property of the undersigned, and for the purpose of effectually constituting such joint account each of the undersigned hereby assigns and transfers to the undersigned jointly all such moneys together with all interest that may accrue thereon. Each of the undersigned further agrees with you and with each other that except only in the case of some lawful claim before repayment, all such moneys and interest on any part thereof may be withdrawn by any one of the undersigned or his or her attorney or agent, and each of the undersigned hereby irrevocably authorises you to accept, from time to time, as a sufficient acquittance for any amount so withdrawn, any receipt, cheque or other document signed by any one of the undersigned, his or her attorney or agent, without any further signature or consent. The undersigned further agree with you and with each other that in the event of the death of one or more of the undersigned, all such moneys deposited in said account, except in the case of some lawful claim as aforesaid and subject to any statute or law affecting such right, may be withdrawn by the survivors of the undersigned or any one of them or the sole survivor, and the discharge or receipt of such survivors or any one of them or the sole survivor shall constitute a valid and effectual discharge to you for the moneys so withdrawn. This agreement shall be binding upon the heirs, executors, administrators and assigns of the undersigned and each of them. WITNESS the hands of the undersigned at this 29th day of August 1968. Signed in the presence of: {Signed: Richard Thomas Harewood. JA Furze {Signed: Simeon Nathaniel Smith-Jordan.' It is common ground between the parties that all of the money deposited from time to time in the account was provided by the testator. It is also agreed that during the period from 21 December 1968, until 21 April 1969, the defendant withdrew from the account nine separate amounts totalling $4,800. Finally in this regard, the defendant admits that after the testator's death he withdrew the entire balance of the money standing to the credit of the account. On the pleadings, the defendant's case is that he is entitled as sole survivor to the funds held in pursuance of the agreement between the Trust Company and the testator and himself jointly. Further, in para 9 of his defence, he pleads an estoppel-that the plaintiff is estopped from alleging that any money withdrawn from the account by the defendant, whether during the lifetime of the deceased or after his death, was not properly withdrawn in the circumstances and in accordance with the terms of the agreement above-mentioned. Perhaps it might be as well to dispose of para 9 of the defence at this stage. (1970) 15 WIR 522 at 525 The plaintiff trust company has never denied the right of the defendant to withdraw money from the account. Indeed he has in fact withdrawn it all. The plaintiff's case is that the defendant is a trustee of this money under a resulting trust in favour of the testator's estate. In my view, there is a clear distinction between an entitlement under a contract and an obligation to retain funds received under the contract as a trustee for another. The defendant is described in pleadings filed on his behalf as a companion, personal servant, and caretaker of the testator. The association goes back 34 years when the defendant first started to work for the testator. Some 15 years ago, when one of the testator's sisters died, the defendant became his general servant. At
Page 4 first he was paid a wage and then that stopped and he was given pocket money only and, according to him, a promise that an additional amount would be kept for him and placed in a joint account. In 1968 the testator was 86 years of age, crippled with arthritis, unable to move about without assistance and capable of writing only with great difficulty. The defendant cooked for him, kept him tidy, received rent and wrote receipts on his behalf and generally looked after things. Mr Hinds, a witness in the case, described the defendant as a close, affectionate custodian. Whether this description is apt or not, there seems little doubt but that the defendant enjoyed the testator's trust and confidence. As for the testator, all the evidence pointed to his being in complete control of his mental faculties to the end, and indeed showed that he was a shrewd, strong-willed businessman who insisted on doing things in his own way, whatever other people had to say. On 19 April 1968, the testator had executed a will. Under the terms of that will the testator devised to the defendant a property known as "Hampton Court" comprising a dwelling-house and some five or six acres of land. Under the said will he also made provision for the employment of the defendant as caretaker of the estate, until it was wound up, at a salary of fifty dollars per week and finally he bequeathed the defendant a one-sixth share in the residue. The other residuary legatees are relatives of the testator resident abroad. On 30 August 1968, the testator executed a codicil substituting the plaintiff trust company for the executors named in the will. In spite of the devise of the property known as "Hampton Court" in the will executed on 19 April 1968, on 16 May 1968, the testator executed a deed of gift conveying the said property to the defendant so that the title passed to the defendant at that date. The evidence shows that withdrawal slips in relation to the joint account were signed by the defendant alone, and were drawn on the dates and for the amounts set out hereunder: $ 21 December 1968... 500 11 January 1969... 600 8 February 1969... 500 18 February 1969... 600 28 February 1969... 500 8 March 1969... 500 22 March 1969... 500 12 April 1969... 500 21 April 1969... 600 It is also shown in evidence that the withdrawals were for the purpose of the defendant building a chattel house. After the first three withdrawals, a further substantial deposit was made indicating that the testator, who had at that time custody of the pass-book, approved of the defendant's withdrawals from the account. (1970) 15 WIR 522 at 526 Before leaving the facts, it was disclosed that shortly after the testator's death, the witness Percival Hinds received a present of $26,000 from the defendant. There is conflict as to how he came by this substantial sum. The defendant says that he was present when the testator promised Hinds this amount out of the joint account. Hinds on the other hand says that it was a gift from the defendant himself for the "advice and enlightenment" rendered by Hinds and although the testator said that the defendant would give him something, no mention was made of any specific amount or of any fund from which it was to come. I must say that this episode seems very strange, but looking at all the facts, my conclusion is that the testator discussed this matter with the defendant and left it entirely to the defendant whether he should give Hinds a
Page 5 present. The question for decision is whether or not the defendant was beneficially entitled by survivorship to the balance of the funds in the joint account. In Marshal v Crutwell ((1875), LR 20 Eq 328, 44 LJCh 504, 39 JP 775, 27 Digest (Repl) 152, 1108) the plaintiff's husband, being in failing health, transferred his banking account from his own name into the joint names of himself and his wife. Cheques were drawn by the plaintiff at the direction of her husband and the proceeds applied in payment of household and other expenses. SIR GEORGE JESSEL MR, held on the facts that no gift was intended by the husband to his wife and that the transaction was not intended to be a provision for the wife but simply a mode of conveniently managing the husband's affairs. In McEvoy v Belfast Banking Co Ltd ([1935] AC 24, [1934] All ER Rep 800, 103 LJPC 137, 151 LT 501, 40 Com Cas 1, HL, 25 Digest (Repl) 568, 140) the testator, wishing to avoid estate duty, put 10,000 in a deposit account in his own name and that of his minor son. He later made a will directing that his business be carried on and that the residue be held in trust for his son. The case differs from the instant one in that the bank was the defendant and many collateral issues turned on the bank's obligations under the contract entered into with the testator. In the event, a majority of the House of Lords held that the testator's intention was that the 10,000 should be subject to the trusts of the will, and that it was put in joint names merely because of the possible effect on estate duty, and not to confer any beneficial interest on the son. In Young v Sealey ([1949] 1 All ER 92, [1949] Ch 278, [1949] LJR 529, 93 Sol Jo 58, 25 Digest (Repl) 568, 141) an aunt transferred certain balances to a new deposit account in the joint names of herself and her nephew. The nephew, the defendant, made no withdrawals nor did he pay anything in, and the aunt retained control of the pass-book. ROMER J, held that there being a general intention on the aunt's part to benefit the defendant, the defendant had not only a legal but also a beneficial title to the money. Re Figgis, Roberts v MacLaren ([1968] 1 All ER 999, [1969] 1 Ch 123, [1968] 2 WLR 1173, 112 Sol Jo 156) carried the question of intention a step further. MEGARRY J, said ([1968] 1 All ER at p 1011): 'If after the account is opened the husband changes his intention, I see no reason why effect should not be given to that change. An account initially opened for mere convenience may thus later become an advancement for the wife.' I found certain Canadian cases helpful. In Freeman v Johnston ([1942] 1 DLR 502), where the deposit agreement was similar to the agreement in the instant case, it was pointed out that the source of the money in the joint deposit account was immaterial. Having regard to the terms of the agreement in this case, that proposition seems to apply. The facts in Armsworthy v MacDonald ([1942] 1 DLR 110, 16 MPR 175) showed that a mother and daughter entered into an agreement with a bank in terms identical with those of the agreement in the instant case. It was held that while the evidence did not support an intention on the mother's part to make a gift of the whole amount to the daughter, the circumstances and the terms of the agreement clearly indicated the creation of a joint tenancy in the moneys (1970) 15 WIR 522 at 527 with the right of survivorship. The learned Chief Justice who delivered the judgment in which three other judges concurred, examined the deposit agreement and stated that outside of the agreement were other circumstances which threw light on the matter. He then dealt with the evidence relating to the mother's intentions. GRAHAM J, on the other hand regarded the written agreement as conclusive. My own opinion is that the written agreement is not conclusive and is no more than evidence which must be weighed along with
Page 6 the other evidence in the case in coming to a conclusion on what was intended by the person opening the account. Before leaving the cases, I would refer to the Australian case of Russell v Scott ((1936), 55 CLR 440, 36 SRNSW 454, 53 NSWWN 178, 42 Argus LR 375, 10 ALJ 211). I do so because the authorities I have cited involve either husband and wife, or blood relations. In the case before me, the persons involved are employer and personal-servant-companion. I would therefore adopt the language of the joint judgment of DIXON and EVATT JJ, in the Russell case (Russell v Scott (1936), 55 CLR 440, 36 SRNSW 454, 53 NSWWN 178, 42 Argus LR 375, 10 ALJ 211) in the High Court of Australia ((1936), 55 CLR at p 453): '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.' On the facts before me I find that by reason of the defendant's long and faithful service, the testator felt himself under an obligation to provide for him; that he did so provide for the defendant in his will; that he conveyed to the defendant by deed of gift the property "Hampton Court"; that he revealed his intention to benefit the defendant to Mr Hinds and Mr Rouse; that he signed the joint deposit agreement exhibited in court; and that the testator's intention was that the defendant should be free to draw on the account during their joint lives and that the entire balances would go to him at the testator's death. In my view, the evidence is overwhelmingly in favour of the defendant. The fact that the withdrawals were for the defendant's own purposes is significant, as is the concurrence of the testator in this pattern of withdrawals. Further, the clear statements in the will and in the deed of gift put the matter of the testator's intentions beyond any doubt. The onus is on the defendant to rebut the proposition that he is a trustee of the balance in the joint account by reason of a resulting trust. In my judgment the defendant has discharged that burden. In the result the declaration and order sought by the plaintiff must be refused. On the question of costs, I am satisfied that the executor was fully justified in testing this matter in court. The Trust Company was under a duty to get in the estate and I would not seek to discourage any executor acting in good faith from performing his duty firmly and fearlessly. Both the plaintiff and the defendant will have costs out of the estate, such costs to be taxed as between solicitor and client. Judgment for the defendant.