Marr v Collie: Deciding who owns what after relationship ends

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, the Appellant, instructing SM&B as Privy Council agents, successfully appealed against a decision of the Court of Appeal of the Bahamas which held that investment properties purchased in the joint names of the appellant, Marr, and the respondent, Collie, and some other high value items were to be held in equal shares.

The parties were in a personal relationship between 1991 and 2008. They acquired several properties and other items (a boat, a truck, and a collection of artwork). One of the properties had been purchased for the couple to live in together, and the remaining properties had been purchased as investments and buy to lets. Marr would pay for the acquisition of the properties, and it was agreed that Collie, as a commercial builder, would carry out planned redevelopment works.

The properties 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.

First instance: the judge ruled 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 (that the Stack v Dowden presumption (that beneficial ownership follows the legal ownership) 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.

Court of Appeal (Bahamas): 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 boat and truck.

Marr appealed against this decision to the Privy Council. SM&B instructed Aidan Casey QC and Tom Poole, of 3 Hare Court, who argued: 1) that the investment properties, the boat and the truck were held on resulting trust for Marr and that Collie had not rebutted this presumption; and 2) further, 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.

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 reasoning in 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.

The case has 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.

This case emphasises the need for those in personal relationships who invest in any property (whether to live together or for investment purposes) to seek independent legal advice and to make their intentions clear prior to making the investment.

Link to judgment

SM&B are experts in handling appeals to the Privy Council.  Contacts: Razi Mireskandari & David Phillips