Russell v Scott [1936] HCA 34

Russell v Scott [1936] HCA 34 - HCA 1936 case summary — Zoe

[11]

that he did not set up a donatio mortis causa. Between 1912 and 1930 he looked after, or assisted in looking after, the property of the deceased, mainly by doing repairs, and from 1930, when his father died, until the death of the deceased he managed her financial affairs and paid her bills. The deceased was a spinster, at the time of her death aged seventy-six years, who for some years prior to her death had lived at a boarding-house at Cremorne, a suburb of Sydney. She was a woman of some means, and when she died the gross value of her estate was estimated at £15,732. From the end of 1931 until her death she never went to Sydney alone. She was usually accompanied by the defendant, who visited her almost daily, and her physical infirmities were such that for some time she found it difficult to move about at all without help. In February 1932 she opened an account with the Commonwealth Savings Bank of Australia in the name of herself and the defendant, by withdrawing from an account which she had in the same bank the total amount standing to its credit, namely, £1,160 2s. 10d., and depositing that sum to the credit of the joint account. The moneys in her own account had been made up of the interest which accrued from time to time on certain Commonwealth bonds and of the dividends from her investments, and the joint account continued to be fed up to the date of the deceased's death from these two sources, the defendant not contributing anything at any time. As to the circumstances in which the joint account was constituted Nicholas J. accepted the evidence of the managing clerk for the firm of solicitors which for many years had attended to the legal work of the deceased. The managing clerk said that in February 1932 the deceased had called to see him immediately after she had opened the joint account. She handed him a pass-book in the name of herself and her nephew, the defendant, and told him that "she had arranged that Percy " (the defendant) "would look after her, pay her accounts and any money remaining in that bank would be Perey's."" The occasion of the opening of the account was explained by the defendant. He said that in February 1932 the deceased missed several withdrawal forms which she had promised to sign. He was afraid that something had happened and, as he said, " immediately rushed across to town to the bank and discovered that everything was in order." At the bank

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Srarke J. Miss Katie Russell (whom I shall call the donor) was an old lady of considerable wealth. She had deposited moneys in her own name in the Commonwealth Savings Bank. Into her account with this bank she paid her savings, and out of it she paid her current expenses. But she was not very active, and was some- what forgetful and careless: she once lost, or mislaid, her savings- bank pass-book, and later several forms for withdrawing money from the bank. The appellant, Percy John Russell, was her nephew, and he attended to her business and other affairs, and treated her with much kindness and consideration. About February 1932, when the donor lost or mislaid some forms for withdrawing money from the savings bank, the appellant inquired at the bank, and found that the forms had not been used. He had some conversation with the manager, or an officer, of the bank on the subject, and it was suggested as a precautionary measure that an account should be opened in the names of the donor and her nephew, the appellant. The donor agreed, and a joint account in her name and that of the appellant was opened with the savings bank. Into this account were transferred the moneys standing to the credit of the old account, and thereafter the donor's savings were paid into the joint account, and her expenses were drawn from that account. Substantially, the appellant operated the account by means of the savings-bank pass-book and withdrawal forms signed by both the donor and himself. Soon after the joint account was opened, the donor saw her solicitor's managing clerk; she had the pass-book with her, and she told the clerk that her nephew, the appellant, would look after her and pay her accounts, and that any money remaining in the account at her death would be her nephew's. She died in January 1934, leaving a will, whereby she appointed the appellant her executor, and devised and bequeathed all the residue of her real and personal property to the appellant and Percy Eric Macdonnell Scott in equal shares. Perey Eric Macdonnell Scott, the respondent on this appeal, brought an action against the appellant, claiming a declaration that the moneys standing to the credit of the joint account of the donor and the appellant, and also a sum of £75 drawn from the joint account and standing to the credit of

[47]

The right at law to the balance standing at the credit of the account on the death of the aunt was thus vested in the nephew. The claim that it forms part of her estate must depend upon equity. It must depend upon the existence of an equitable obligation making him a trustee for the estate. What makes him a trustee of the legal right which survives to him? It is true a presumption that he is a trustee is raised by the fact of his aunt's supplying the money that gave the legal right a value. As the relationship between them was not such as to raise a presumption of advancement, prima facie there is a resulting trust. But that is a mere question of onus of proof. The presumption of resulting trust does no more than call for proof of an intention to confer beneficial ownership ; and in the present case satisfactory proof is forthcoming that one purpose of the transaction was to confer upon the nephew the beneficial owner- ship of the sum standing at the credit of the account when the aunt died. As a legal right exists in him to this sum of money, what equity is there defeating her intention that he should enjoy the legal tight beneficially ? Both upon principle and upon English authority we answer, none. English authority is confined, so far as we can discover, to cases of husband and wife. But there is much authority to the effect that where a joint bank account is opened by husband and wife with the intention that the survivor shall take beneficially the balance at credit on the death of one of them that intention prevails, and, on the death of the husband, the wife takes the balance beneficially, although the deceased husband supplied all the money paid in and during his life the account was used exclusively for his own purposes. The first case appears to have occurred in the Court of Probate. In Williams v. Davies; In the Goods of Williams (1) Lord Penzance, as he became, held that the wife took by survivor- ship a sum paid by her husband into a joint account " as a provision

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the personal representatives of the deceased who furnished the value it possesses, if the joint chose in action was so vested by the deceased with the purpose of imparting beneficial ownership to the survivor on his death. The reason which is assigned for such a resulting trust rests at bottom upon the notion that the deceased, by intending to reserve the right in her lifetime of applying all or any of the money in the account for her own purposes and by con- tinuing in fact to enjoy the use of that money, retained the full beneficial ownership of the property which in law vested in herself and her nephew jointly in consequence of the account standing in the names of both of them. For it is said that the deceased's inten- tion that her nephew on surviving her should take the amount of the bank account is a testamentary wish to which effect could be given only by a duly executed will. This must mean that, while retaining full beneficial property in a corpus, she intended that on her death some other person should succeed to her property in that corpus or to some interest therein to which he was not before entitled either absolutely or contingently, and to which the law gave him no title to succeed. It is only in this sense that an intention to benefit can be said to be testamentary. Law and equity supply many means by which the enjoyment of property may be made to pass on death. Succession post mortem is not the same as testamentary succession. But what can be accomplished only by a will is the voluntary trans- mission on death of an interest which up to the moment of death belongs absolutely and indefeasibly to the deceased. This was not true of the chose in action created by opening and maintaining the joint bank account. At law, of course, it was joint property which would accrue to the survivor. In equity, the deceased was entitled in her lifetime so to deal with the contractual rights conferred by the chose in action as to destroy all its value, namely, by withdrawing all the money at credit. But the elastic or flexible conceptions of equitable proprietary rights or interests do not require that, because this is so, the joint owner of the chose in action should in respect of the legal right vested in him be treated as a trustee to the entire extent of every possible kind of beneficial interest or enjoyment. Doubtless a trustee he was during her life time, but the resulting

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Judgment (80 paragraphs)