Richard Harrison QC and Dakis Hagen (instructed by Withers LLP ) for the wife; Charles Howard QC, Harry Oliver and Jonathan Hilliard (instructed by Hughes Fowler Carruthers ) for the husband; Christopher Pocock QC and Laura Moys (instructed by Mills and Reeve ) for the husband’s adult children.
During the course of contested financial remedy proceedings, adult beneficiaries (being the adult children of the husband by a previous marriage) of a number of offshore discretionary trusts had been joined as parties on their application: see [2012] EWHC 4277 (Fam). Subsequently an order had been made that those beneficiaries, as parties, should disclose copies of documents which had been provided to them for the purposes of an application which had been made to the Royal Court of Jersey by the trustee of some of those trusts. The Royal Court had given the beneficiaries permission to make such disclosure, if ordered to do so by the English court, but had expressed a number of concerns and invited the English court not to require such disclosure. Although the financial remedy proceedings had been resolved by a consent order, the parties had requested a judgment dealing with the order for disclosure. Two of the key issues in the financial remedy proceedings had been: (a) whether the trusts were nuptial settlements for the purposes of section 24 of the Matrimonial Causes Act 1973 and, accordingly, directly subject to the powers given to the English court under that statutory provision (the wife having applied for the variation of all the trusts on the basis that they were post-nuptial settlements); and (b) whether the assets of the trusts were financial resources available to the husband within the meaning of section 25(2)(a) of the 1973 Act.
Disclosure ordered. The significance of the issue was enhanced because it appeared that the bulk of the wealth accumulated as a result of the husband's endeavours during the course of the marriage was held in the trusts and the outcome of the case at trial would have hinged to a considerable extent on whether the trusts were nuptial settlements and/or whether the trusts' resources were likely to be available to the husband. Given the pivotal importance of those issues and the importance of seeking to understand how and why the trustee was likely to exercise its powers, disclosure was ordered, including in particular disclosure of the “sensitive material”, notwithstanding the strong judgment of the Royal Court and the demands of comity. Any light on the "internal thinking" of the trustee would be significantly preferable to none and given the circumstances of the case, such evidence was not likely to be forthcoming from any other source. It remained a puzzle as to why such a trustee should not consider it in the interests of the beneficiaries to provide the evidence which would rebut a case if the trustee had that evidence available to it. If it did not so provide the evidence the English court would be left to draw inferences and make assumptions. Accordingly, the adult beneficiaries had been ordered to disclose the material, such being necessary and proportionate to assist the court in determining the issues raised in the proceedings. Since the proceedings had settled before any further substantive hearing took place, what the material comprised was unknown. However, given the circumstances of the case, it would be hoped that it did not impede or undermine the interests of comity. In any event, it was also to be hoped that co-operation between the English court and the Royal Court of Jersey, and other courts, in cases in which wealth was held in trusts or other similar vehicles would continue to develop. Such co-operation should not undermine legitimate wealth protection but would, in the context of financial remedy proceedings, assist the interests of justice for not only spouses and civil partners but also for trusts and beneficiaries (paras 43–46).