Marr v Collie [2017]

Marr v Collie [2017] UKPC 17 clarified that the common intention constructive trust, traditionally associated with family homes, can be applied to investment properties jointly purchased by a cohabiting couple. The judgment addressed the interplay between the presumed resulting trust and the common intention constructive trust, emphasising the need to examine the parties' intentions beyond a domestic context.

A dispute emerged between a separated same-sex couple regarding the beneficial ownership of properties acquired during their relationship for investment purposes. The Privy Council addressed the applicability of the principle established in Stack v Dowden [2007], emphasising that beneficial ownership generally follows legal ownership unless proven otherwise. Notably, this principle is not confined to domestic situations and may extend to relationships with commercial aspects, contingent upon the parties' common intentions.

The appellant, Mr Marr, and the respondent, Mr Collie, were in a relationship from September 1991 to July 2008. During this time, they acquired various properties, including investment properties and a family home, as well as assets like works of art, a boat, and a truck. The dispute arose after their separation in 2008, focusing on the beneficial ownership of jointly purchased investment properties. Mr Marr financed the acquisition, legal fees, and most mortgage payments for the properties, while Mr Collie claimed an agreement for him to carry out redevelopment work that was never executed.

The Privy Council referred to key precedents, including Stack v Dowden, which established that joint legal ownership generally signifies joint beneficial ownership unless a contrary intention is proven. Laskar v Laskar [2008] and Jones v Kernott [2011] were also considered in the context of determining beneficial interests in jointly held property.

At the first instance, Isaacs J concluded that the presumption of a resulting trust favoured Mr Marr, but the Court of Appeal of the Commonwealth of the Bahamas overturned parts of the decision, emphasising Mr Marr's intention to benefit Mr Collie.

The Privy Council clarified that the principle in Stack v Dowden is not confined to domestic situations and can apply in relationships with commercial aspects. The starting point is the presumption that joint legal ownership indicates joint beneficial ownership. However, the parties' common intentions play a crucial role, and evidence of their intentions can rebut the presumption of a resulting trust.

The Privy Council criticised the lower courts for not adequately examining the central question of intention. While acknowledging a potential clash of presumptions, the Privy Council stressed the importance of context and the parties' mutual wishes in determining beneficial ownership. The case was remitted to the Supreme Court of the Bahamas for further examination.

Despite being a case of Bahamas, the Privy Council's decision is likely to influence similar principles in England and other jurisdictions. The judgment provides clarity on the applicability of Stack v Dowden to jointly owned investment properties. However, it underscores the necessity for detailed factual investigation and emphasises the significance of seeking legal advice when establishing intentions for joint property ownership, whether for investment or as a family home. Clear documentation of intentions before purchase and updates as needed throughout the relationship are crucial to avoiding arbitrary outcomes in cases of this nature.