Strand, London WC2A 2LL
B e f o r e :
| Nichola Anne Joy
- and -
Clive Douglas Christopher Joy-Morancho
- and -
Nautilus Fiduciary (Asia) Ltd
(the trustee of the New HuertoTrust)
- and -
LCAL Anthology Inc
Mr Martin Pointer QC and Mr Nicholas Wilkinson (instructed by DWFM Beckman) for the First Respondent Husband
No representative appeared for either the Third or the Fourth Respondent
Hearing dates: 27 to 31 October, 3 to 7 November, 2 and 3 December 2014, 17 and 18 June 2015
Crown Copyright ©
Sir Peter Singer:
The Parties' aspirations
On 12 October 2013 TB in an email to H and to Jonathan Stocker, H's longstanding friend and personal banker at EFG, wrote that he (TB) "personally hand-delivered RFG's letter ["with the information they required in order to cancel EFG's suspension of the Facility"] last Friday 04 Oct in Guernsey." Logically one might expect that letter to maintain either that the trust provisions were not breached because all payments to H or made on his authority were in his capacity as NHT/Anthology's agent/representative and so not for his benefit; or would have explained how any irregularity would be corrected.)
"These events have unfortunately led to serious loss to the Trust in the amount of approximately US$18.9m. Further, as the Trustees understand it, the extinguishment of your personal liabilities without recourse to any of your own non-cash assets has in effect improved your own personal asset position by approximately US$7.06m. We will have to proceed to implement our back-to-back security charged over those assets immediately."
"The Trustees are obliged to act to protect the trust assets and in particular to safeguard them for all of the beneficiaries. The unwelcome developments of the recent past mean that the Trustees have no option but to consider whether to take measures to protect the trust assets from further losses which might arise as a result of the matrimonial proceedings.
In particular, it is clear from the drafting of the freezing order (even though it has now been discharged) that your wife and indeed possibly the Family Division of the English High Court also, appear to take the view that certain assets which are assets of the Trust are either 'your assets' or in some way available to you. That view is entirely incorrect, but the Trustees are also concerned that the Family Division of the English High Court may continue to try to take this approach.
In fact, we have always understood that your clear intention, at all times from the establishment of the Trust, has been that capital was not to be distributed to you (albeit the Trustees might have regard to any income requirements you might have) but was instead to be kept for the benefit of your children, and in due course your grandchildren.
We have considered the recent developments carefully, and our duties as Trustees, and have taken appropriate professional advice. The Trustees have had regard to the following:-1. your intentions as stated above;
2. the desirability of safeguarding the assets of the Trust, and indeed the duty of RFG as Trustees to do so;
3. the fact that you currently have, as a result of the actions of EFG referred to above, enjoyed an approximately US$7.06m improvement in your own net non-cash asset position;
4. that in any event you are presently excluded from receiving benefit under the Trust until at least 2017 (due to tax considerations arising from your residence in France); and
5. that you appear to intend to continue to reside in France indefinitely, such that the present exclusion will in all likelihood be extended beyond 2017.
Accordingly RFG as Trustees have determined that you should now be permanently and irrevocably excluded from benefit under the Trust. The minimal detriment that this may cause to you is outweighed by the benefit to the other beneficiaries under the Trust from your own exclusion. The Trustees have therefore executed a deed of appointment (a copy of which is enclosed) which has the effect of excluding you, as from the date hereof, from all benefit under the trust.
We hope that you will understand the reasons for this decision, even though it may be unwelcome to you, and we would be happy to discuss the reasons further should you wish. However, the execution of the deed is irreversible, and accordingly there is no question of undoing the exclusion.
"… by approximately US$7.06m, represented by the following free assets in France (and in Switzerland):
- your 10% holding in the [Château T SCI] and the related Loan Account with the SCI;
- your Bentley car;
- the Piper Archer Aircraft (in France); and
- your land in Zermatt, Switzerland (or the future proceeds of sale thereof)."
The 1928 Bentley
"… a more complicated issue is the intervention into the timetable of a claim by the New Huerto Trust (which I will refer to for convenience simply as "the Trust"), which took place on 19 March, after I had granted the stay, by the initiation of proceedings in the court in Aix-en-Provence as part of an attempt by the trustees to recover a debt from the husband … The judge in Aix on 20 March put in place a saisie conservatoire (which, so far as I can judge from the translation of the order, seems to be something either in the nature of an injunction or some form of attachment) over the car, which, according to the terms of the order, requires the vehicle to be seized within three months of the making of the order. Mr Pointer QC has told me this morning that there has been some form of walk-in [walking?] possession, but that the car physically remains at the husband's house in Provence."
The Piper Aircraft
The Swiss arbitration
"[NHT] has limited the actual amount it is claiming from [H] to US$7.06m with the reservation that it may make further claims. This is justified by NHT for the reason that this amount corresponds to the value of the still demonstrably existing assets in which [H] has invested. This is not contested by [H]. Such a contestation would, however, not be relevant because [NHT] its free to claim even just part of its total claim."
"Additionally, we wish to notify you that our client also intends to enforce the award decided upon by the sole arbitrator on 13 October 2014 in France, by claiming the assets which originally triggered the proceedings against your client. These are the assets listed below, which your client acquired using the financial resources granted by EFG and for which our client provided securities:
- Land in Zermatt (2.5 million CHF)
- Château T (2.7 million euros)
- Loan account (2.7 million euros)
- Motor vehicle produced by Bentley (400,000 GBP)
- Aircraft produced by Piper (317,000 USD)
We assume that you are aware that the claim of our client asserted so far (regarding which the announced award was in excess of 7,060,000 USD) covers only the expenditure for 10% of the shares in Château T, as the residual financial resources went to the children for the purposes of acquiring the castle. However all of the resources from the acquisition of the castle belong to our client, pursuant to the Counter-Indemnity Letter dated 30 August 2010. [My emphasis]
At the moment our client is still minded to seek a pragmatic solution, as he does not wish to cause any harm to your client if this can be avoided. Our client's sole priority is to fulfil his obligations as trustee of NHT; specifically, to cover the losses to the Trust from which your client financially benefited to a corresponding level in return."
The net effect of NHT's claim on H
The state of the parties' relationship before their marriage
My assessment of W's credibility
Was NHT from the outset nuptial?
"the Trustees stated that they were however prepared to provide SDM/H with copies of all documents that positively benefit the Trust and the Trust position. Accordingly, the Trustees will provide all security-type documents which prove that specific assets that are in H's name are not beneficially his."
• On 6 December 2002, NHT was established by H as a discretionary settlement with two classes of beneficiaries: H alone in Class A in his capacity as settlor, and H's children and remoter issue within Class B.
• W has never been nor could she become a beneficiary.
• On 26 June 2004 LCAL was incorporated and was from the outset and has throughout been owned by RFG as trustee for NHT. The shares, according to H's evidence, are bearer shares. H has never been nor has he been registered as a shareholder, per TB. The foundation of LCAL's fortune was not laid until the month following incorporation when contracts were agreed for the purchase of the aircraft with which the company traded.
• On 31 August 2010 a deed of appointment was executed under which H ceased to be eligible to receive benefits from the trust for a period of 7 years. The deed was revocable, and formed part of the "roadmap" planning whereby it was hoped to deflect potential liabilities to French tax.
• On 10 September 2010 a similar deed for a similar period and for similar purposes was executed in relation to the interests of the Class B beneficiaries, the three children.
• On 18 October 2011 H signed his most recent Letter of Wishes, the terms of which neither he nor the trustees has divulged.
• On 28 June 2013 Bannister J in the BVI made an order recording that H has no present entitlement to benefit under the trust and no right to require any such an entitlement to be conferred upon him; and that the trustees have no obligation to provide H with any information.
• On 8 November 2013 Bannister J dismissed RFG's application for approval of the draft deed they submitted seeking irrevocably to remove H from all potential benefit under NHT.
• On 26 November 2013 RFG executed a deed which they maintain effectively and irrevocably removes H as a beneficiary of NHT.
Has NHT since its inception become nuptialised?
58. I have also been addressed on the question of whether a trust , non nuptial at its inception, can later become nuptialised. (see Burnett v Burnett  P1).
59. The essential features of a PNS [a post-nuptial settlement] seems to be an existing disposition in favour of, one, other or both parties to the marriage (in their capacity as husband or wife) and for their present or future benefit. An existing intention to benefit one of the spousal beneficiaries is obviously a prerequisite.
60. In my judgment on the authorities, a settlement which is non nuptial at its creation could itself later become "nuptialised" if there was, in fact, a flow of benefit to the parties during the marriage from the trust . Alternatively a later disposition from the trust can itself constitute a post nuptial settlement without the main or superior trust necessarily becoming nuptial.
66 I have ended up with these essential questions (of law):
a. Neither party is identified directly on the face of the written instrument (in schedule 2), as a beneficiary of CTSAT. Only SCT UK. Can it nevertheless be categorised as a PNS and one or other of them as a beneficiary of that trust, merely because CTSAT, as a fully discretionary trust, is capable of being amended or adjusted (by adding trustees or terms) to make them such?
b. If not should CTSAT nevertheless be regarded as having become a PNS if there is, anyway by the time of the application to vary, an existing intention to benefit one or both of them which is evidenced by past receipts from the trust?
c. If the parties have not to date received such benefits is the mere intention (established by other evidence) to benefit one of the spouses in an unspecified way and at some unspecified time in the future sufficient of itself to constitute a PNS ?
69 My answers to the questions of law are as follows ;
a. (66a) NO. This is mostly agreed and straightforward. The mere fact that a trust is a conventional fully discretionary trust capable of being varied to add other beneficiaries including the parties does not of itself render it a PNS.
b. (66b) YES. If there has been a regular flow of receipts paid from CTSAT to the parties (in their capacity as spousal beneficiaries) for their benefit that could be evidence of a pre existing intention to benefit them whatever the instrument said on its face. It would evidence an existing disposition and render the trust a PNS
c. (66c) NO. In my judgment if all that is established is a vague, unspecified intention at some time in the future, depending on the circumstances then prevailing, to benefit the parties possibly by way of amending the trust deed or in other ways, that is not enough to turn a non nuptial settlement into a PNS. That cannot amount to an existing disposition.
"[T]he principal settlement, in order to be 'ante-nuptial' within the meaning of s. 192 of the 1925 Act, must be made in contemplation of or because of a second marriage, although the settlor at the time when the settlement was made was already married. 1 do not think that s. 192 was intended to cover such a case as this. In order to bring the section into operation, there must be a marriage which is the subject of the decree of divorce, and it is in contemplation of this marriage and because of this marriage that the settlement must be made. I do not think that the Legislature intended a spouse of an existing marriage to contemplate a second marriage so as to be able to execute a settlement which is 'ante-nuptial' as regards such contemplated marriage, although at the time being he or she is married and, therefore, incapable of entering into a second marriage at that time. [My emphasis]
A second point taken on behalf of the wife on this petition to vary was that the appointment under settlement No. 3 by the settlor on his second wife under the powers confirmed by the original settlement No. 1 was clearly an ante-nuptial settlement within s.192. I think that this is so, but in my view the Court has no jurisdiction under s.192 of the Judicature Act, 1925, to vary an appointment in such a way that in the result the principal settlement is also varied although that settlement is not within s.192."
Did any property since acquired by NHT import a nuptial element?
Is (or was ever) the Car Portfolio owned by H?
• Although described at various stages of these proceedings as numbering 35, their total has fluctuated over the years since about 2009 when H says the process of acquisition seriously commenced.
• For present purposes neither the Bentley nor some more modest vehicles which H identified as personally owned either by him or by W are included in the generic description.
• No distinction is taken for present purposes between the earlier days when ownership may have been attributable to NHT, the middle period when cars purchased may have been attributed to the ownership of LCAL, and the more recent period since the incorporation of Anthology which is said to be the current beneficial owner of the entire Car Portfolio.
• Much time and energy was expended before and during the hearing in an attempt to establish more precisely the details and whereabouts of cars within the collection, but in light of what will be my findings I need say no more than that on that topic.
MR. LEECH: You accept, do you, that what is owned by the New Huerto Trust via companies is in reality yours?
A It was up until I moved to France, my Lord.
Q Okay. So for tax reasons ----
SIR PETER SINGER: "It was until I moved to France"?
A That is correct, my Lord. Until just prior to moving to France.
MR. LEECH: You will explain in a minute what you did when you got to France, but up until that point they were your assets?
A That is correct, my Lord.
… you own a huge car collection, do you not?
A I would not say "huge". I do have a car collection.
Q In terms of value it is huge.
A I do have a car collection, yes.
Q How many cars?
A About 35.
Q They are owned through companies that are owned in turn by the [New] Huerto Trust?
A That is correct. Yes, my Lord.
MR. BATES: And this particular Alfa Romeo, whilst we are on it, was a very special car for you, was it not?
A Not particularly. It was a very pretty car. It's one of the best cars to own. But it wasn't owned very long, so, if it was very particular, it would have stayed in the collection.
A You don't get rid of things if you're collector, if you love them. They would still be in there, which it seems it's not - been sold.
and he seemed not too downcast, just sour, at the effective expropriation and sale by RFG of his 1928 Bentley, remarking sanguinely in the course of his final recall for cross-examination on 2 December that although he was disappointed to lose it, he knew that TB and others at RFG had been looking to acquire a rather better and more authentic Bentley for some time, and indeed had in June 2014 purchased a 1930 model for £1.25m. He had not been aware of that until he saw documentation produced in the course of the proceedings, it was not of interest to him, it had nothing to do with him, and it would be wrong to suggest that when things between him and TB were patched up he might be able to use it as a replacement for his own.
• A typed schedule dated 16 January 2010 headed "Car Collection-Progress List" and bearing annotations H accepts he made. As well as 20 Classics the list shows vehicles said to be on order which include two shown as on order for the parties, and a range of what are described as utility vehicles which H confirmed belonged personally to the family and not to the trust, including a quad bike in Bequia.
• From the same period in early 2010, a typed and unannotated list spreading over two pages entitled "World Wide Property." It includes properties both owned and rented and their contents, vehicles, the sloop already referred to and its dinghy, without distinction between trust and personal property. It shows a total "value" of €23.3m
• An email in March 2010 from a private banking assistant at EFG addressed to Clive. She thanks him for sending photos of the most recent acquisition but warns him that he should be careful as "it does bear an uncanny resemblance to Mr Toad's car." She sets out balances on current accounts, deposits and loans at EFG in Guernsey and in London which H has (in his notes on the document) broadly converted to US dollars and then totalled to show the credit balances exceeding the debits by US$1.5m, "so US$1.5m still available." The lady at EFG ended her email with the question "Would you like the NHT and [GPH Ltd] as well?"
• Dating from December 2010 is an insurance schedule addressed to H at his Swiss residence. It lists 34 vehicles of which most but not all are within the Car Portfolio, the few others being those which H accepts belong to the family, including the Bentley. The insured value of all these vehicles together comes to some CHF24m. There is no reference to the trust or to any company on the document. H is described as the "Besitzer"of the vehicles, which I take in this context to signify no more than that he has an insurable interest in them. On the assumption that this document was issued on renewal of the insurance in October 2010 one would have expected some differentiation at least in the attribution as between H and NHT of the premium, bearing in mind that at this point neither he nor the children were entitled to benefit from the trust. This would be so whether or not the premium was paid from the EFG facility standing to H's credit. The amount due from H in respect of family vehicles would not have been inconsiderable, totalling roughly CHF1500.
• A similar insurance schedule, but dated 1 March 2011, bears H's annotations. The differences between this and the earlier version are immaterial for present purposes: the indiscriminate blending of trust and non-trust assets is repeated.
Q There is apparently no distinction between cars or property which you say you own personally, as against those which you say are owned by LCAL Anthology or LCAL.
A Yes, not specifically on this document, but they're covered with an oral agreement that I had.
Q The very obvious inference is that it is all yours, with the possible exception of item 6 where Orchard Inc. is said to be the owner [of the sloop].
A That's not correct. That's not the reason this document was set up. This document was prepared to study what would be our exposure to maximum damage when we moved to France, so what could the French Fisc determine to be possibly our maximum damage and that's why it was prepared and it was prepared in conjunction with the insurance. …
SIR PETER SINGER: … This is not a list of what is in the trust, is it?
A It's not.
Q No, it is not a list of what is in LCAL. It is not a list of what is in LCAL Anthology. It is a list of what is in the Joy family, is it not?
A No, it's a list of all items that would have had my name attached to it because, remember, I was the registered keeper of quite a lot of these vehicles and, therefore, they were to be included as part of the risk. Funds held by the trust in America would not be here because the French Fisc wouldn't have visibility on them, but this is what I was asked to prepare for that task, my Lord.
• What are described as Special Agency Agreements, dated 31 August 2010 and 8 April 2013
• Purchase Confirmation documents for completion and signature by H, and addressed to LCAL/Anthology
• Sale Confirmation documents to be completed and signed by H, similarly addressed to LCAL/Anthology.
"In accordance with my agency Appointment I hereby confirm that all legal and beneficial interests in and to the above car are held for and on behalf of LCAL Inc [or Anthology, or NHT] and that I am a nominee and bare trustee in respect thereof. Furthermore I hereby confirm that I will henceforth only deal with the above car as requested or directed by […], and in the interim I do hereby formally pledge covenant and guarantee the foregoing."
"The Company shall act as the funder and financier of all Purchases and of any commissions or fees relating thereto. It is acknowledged and agreed that from time to time and depending upon the circumstances it will be expedient for [H] to use his own resources (including his personal banking facilities outside France) to make any deposits, down payments or other payments and expenses, but strictly on the basis that his counter-indemnity dated 30 August 2010 shall not apply to those funds."
(The counter-indemnity there referred to is the one relied upon by NHT as the basis for the claim made in the Swiss arbitration proceedings, and is referred to at paragraph 51 above. That document, it will be recalled, on its face makes H liable for all losses sustained by the trust, namely the whole of the US$18.9m.)
"the trustees [were] obliged to pay up under the guarantee: so that, it was said, H personally benefited to the sum of approximately $7m. It is understood that this has been calculated from the following assets:
£1,700,000 for the land in Zermatt
£2,550,000 for the purchase of Château T
£472,000 in respect of the Bentley
£185,000 for the Piper Archer aircraft."
If this is an attempt to demonstrate US$7.06m as the value of the personal assets acquired by H's use of the facility, then it fails. The list totals £4,907,000. In November 2013 the monthly spot rate for the dollar was 1.6383, so that sum then amounted to just short of US$8.04m.
H's "Day of Reckoning"
MR. BATES: Your understanding, Mr. Joy: was the borrowing ever going to be repaid at any stage?
Q How and when?
A When we moved out of France and I was in a position to earn money and start working again.
Q And so what was your plan which was going to enable you to pay around about $25 million?
A Well, I wouldn't need to pay the $25 million; that would be the offset as to the value of the cars. If ten cars were sold, the debt outstanding to EFG may be less.
SIR PETER SINGER: Let us just assume, for present purposes, that seven million, or thereabouts, bearing in mind that you might need to draw down, had it continued, for your own personal use between now and the end of the seven-year period or however long before you left France, how were you going to pay off seven million?
A There was $2 million set aside for living in France; that was the living amount. I would go into business and start making money again. I've done it quite a few times before.
Q Making money for whom?
A For myself, my Lord, through salary and through bonuses - part of a job. And the family, of course.
MR. BATES: Is not the situation actually, Mr. Joy, that, as you know perfectly well, it is quite common to borrow from trusts? You know that, do you not?
A I have never borrowed [from] trusts for personal gain. I mean, I've used, as you say, the credit facilities for business, predominantly. This day of reckoning came and caught us out. It was never supposed to happen, it was never supposed to happen.
Q You are very keen on the presentation that you have not had a capital distribution from the trust; that I understand. But what you have had is the benefit of a very large loan facility, have you not?
A I have a $7-million bill to show for that.
Q And there was no firm plan in place by which you were going to be able to repay that sort of figure, was there?
A It was never considered a problem. We've come out of a business that's made many millions of dollars, hundreds of millions of dollars. It was not conceived as a problem in the short, or even long-ish, term.
"SDM asked the trustees why they were so exercised by the loss to the trust fund and whether it had always been in their contemplation that the facility would be repaid, one way or another, through the trust assets. The trustees responded that this was not within their foreseeable contemplation and was certainly not their intention at any stage. The trustees operate on the basis of full understanding of the concept of leverage in business finance and were well used to securing the borrowing facilities, this being a standard clause in most trust deeds."
MR. LEECH: Would you like to tell us the truth now?
A Yes, I saw AC at my sister's flat yesterday. I saw him also at the birthday party of my niece.
SIR PETER SINGER: That was not the question you were asked. The question you were asked, quite specifically, was when did you last see him. So may I take it you lied?
A It seems that way, my Lord, yes.
Q Why does it only seem that way?
A Well, it is.
Q Why does it have to seem?
A Yes, I did.
Q All right. I think this is probably an appropriate moment to break for an early lunch. I would just like you to understand that, as I understand it, the concession having been made and so far no attempt to withdraw it, that you are domiciled … [sc: your domicile of origin is]… England.
Q You have to persuade me on clear cogent evidence that your case is accurate.
A Yes, my Lord.
Q I would like you to be thinking over lunch how at the moment, subject to whatever may yet emerge and the submissions that will be made to me, I would like you to think, if you were in my place, how I can begin to find your case … as things are at the moment, given that you apparently are incapable of maintaining the same story, accurately and truthfully, on a number of other issues.
A Yes, my Lord.
SIR PETER SINGER: So shall we say 2 o'clock?
MR. LEECH (to the witness): Mr. Joy, the reason you lied about when you last saw your friend Mr AC was because you did not want to admit to the court that you had spoken to him about your will and the date on it. Is that not right?
A That is not correct, my Lord.
Q It is the only reason you would have lied, is it not?
A (No audible reply).
Q Mr. Leech … asks you whether or not you saw one another the night before the hearing, that is you and AC. Do you see that at line 30?
A. Yes, I do, my Lord.
Q. And the answer that you gave at line 31 was: "No, we did not."
A. That's correct, my Lord.
Q. But that was not true, was it?
A. Actually, it was.
SIR PETER SINGER: "It was true we had not seen each other the previous night." Line 10: "I saw AC at my sister's flat yesterday." Those two statements seem to be in flat contradiction.
A. They are, my Lord.
Q. Is there an explanation?
A. Yes. I did not see AC on that Monday night and I don't know, I was so shocked at what he said, I have no explanation as to why I said that.
Q. We do not actually have his evidence but my recollection of it is very straightforward.
A. Mine too.
Q. Yours too. So tell me if you think I have got this wrong. "When did you last see the husband? Last night at dinner. Did you discuss the case? Of course."
Is that about it?
A. That was not AC's complete evidence, my Lord.
Q. And he had also seen you the previous Saturday at the birthday.
A. That's correct.
Q. But we are concentrating on last night at the moment. …Was he telling an untruth?
A. He was, my Lord.
Q. He was telling an untruth.
A. And I spoke to him about it after the event.
Q. He was telling an untruth when he said (A) he had seen me last night; (B) had dinner together.
A. I don't think he said we had dinner because he said he went off with his wife for dinner.
Q. And that we had discussed the case.
A. I don't know if he said that either. That's what I can't remember. But the gist of it's there, my Lord.
SIR PETER SINGER: (To the witness) So you are saying that in any event, whatever was the detail, you had not seen him the previous night and he was lying when he said he had.
A. That's correct, my Lord, and I can go further to say that. Mr Leech asked him does he know where my sister lives and what address, and AC had difficulty remembering which, had he been there that previous night, he would have remembered because he knows my sister fairly well. He's a man in his 70s and he was confused. He had not seen me on the Monday night; he had seen me on the Saturday night. That's the truth. In the absence of AC I can't ----
"The unwelcome developments of the recent past mean that the Trustees have no option but to consider whether to take measures to protect the trust assets from further losses which might result as a result of the matrimonial proceedings."
"[RFG] have determined that you should now be permanently and irrevocably excluded from benefit under the Trust. The minimal detriment that this may cause to you is outweighed by the benefit to the other beneficiaries under the Trust from your own exclusion." [Letter dated 26 November 2013]
"The Trustees were confident that the [jurisdiction] issue would be determined in favour of H as they were aware that H was not domiciled in the UK, so the UK courts would therefore not have jurisdiction to hear the financial matters. The Trustees were relaxed about the outcome. However, at the hearings on 1 May 2013 the jurisdiction case collapsed, and full English Matrimonial Proceedings commenced. The Trustees went into 'panic mode.'"
"The Trustees … considered the factual position very carefully, and in reaching the decision that they reached, did take the following additional matters into account:
a) H is currently excluded from benefit for tax reasons, and (on the present understanding of the Trustees) those tax reasons are likely to continue for the foreseeable future because H appears likely to continue to reside in France;
b) H has few other assets but is likely to take up a remunerated role in the Trust's car-related businesses…
c) On this basis it was not considered likely that H will have any significant capital or income needs;
i) …v) Although the future is never certain, the Trustees do not consider that H is likely to have the need of benefit under the Trust due to the intended offer of employment within the Trust's business interests…"
"… The Trustees' expectation was that H would be able to begin work once again soon, which would assist the various projects held by the Trust to grow, yield capital appreciation and add overall value to the Trust Fund."
"The Trustees are willing to make an offer of employment to H in respect of the car businesses. The Trustee's position is that they are not hostile to H or to his position. The Trustees recognise that H needs an income. H has skills which are of huge benefit to the Trust and its various car-related ventures, and the Trust would like to retain the benefit of those skills."
"No specific employment offer can be made at this time." [Meeting notes of 3 December 2013]
"We call upon you to make immediate transfers and assignments to us (or to a designated nominee) of all of the above assets [10% of Château T SCI, the Bentley, Piper Archer, Zermatt land]. We will be instructing Lawyers in both France and in Switzerland to seek immediate saisie conservatoire and commence formal recovery ('poursuite') proceedings." [Letter of 6 December 2013]
"The Trustees well recognise that [permanent Exclusion] is a drastic step taken by them. However the trustees do not accept that it would be open to them to reinstate H after the conclusion of the divorce proceedings.… The permanent Exclusion is not a device. … The permanent Exclusion has been executed and there is no power to reinstate H. This needs to be fully understood by all the parties and by the Courts. The Trustees believe they are acting in the best interests of the beneficiaries. No amount of judicial persuasion will result in the Trustees making distributions in breach of trust for the benefit of a non-beneficiary (namely W)."
"SDM asked if the LCAL car businesses were yet in a position to make H a formal job offer. TB noted that, to date, the Trustees have been unwilling to make H a firm job offer in relation to the car businesses, as they have been informed by the Protector that H's time is not his freely to dispose of, and that H is distracted by the seemingly never-ending rounds or matrimonial proceedings and the requirements to fly to London several times a month, often on very short notice. This inability to focus and to be available on a fixed full-time basis is crucial to the business plan. The executive position that the Trustees wish to offer H is full-time and is high-profile, and the Trust/LCAL expect to derive maximum value."
"SDM also informed the Trustees that the Bentley was already charged to Beckmans by way of a chattel mortgage against legal fees since November 2013." [Meeting notes of 10 April 2014]
Conclusion on the primary factual issue
"It is in the light of this very unsatisfactory history that W invites me at this stage to take the most jaundiced view possible of H's and the Trust's and possibly also EFG's presentation. She invites me to conclude that what has been produced and presented is a stage-managed and crafted but fictional drama which has the underlying and collusive sub-text that H will when the dust settles return to a position where he has access, direct or indirect, to trust assets and to their value to meet his income and capital needs. She points to the hint in the 3 December meeting notes which suggest that when the time is ripe H may be taken on as an employee of the Trust or one of its businesses and paid a salary. She may have been surprised at the suggestion in those notes that were the children to be educated in England the embargo on their benefits from the Trust might be lifted so that funds could flow in their direction free from the ravages of at least French taxation. She might wonder what scope there may be, at a convenient time, for resettling this Trust in another which might more easily be able to meet H's needs. And she might remember that this "New" Trust itself replaced an earlier one to meet contingencies not yet fully made clear, but which prevailed at about the time of H's divorce and financial separation from his first wife.
At the final hearing it may be asserted that the gloom and doom now attending H are mere theatrical devices which some time after the curtain on these proceedings comes down will be confirmed as the improbable constructs which (W maintains) they are. But at this stage I must proceed with caution, bearing in mind that the evidence in the case is not yet complete and in particular that I have heard no oral evidence specifically directed to many of the issues now raised. It remains not beyond the realms of probability to imagine that the contrary case might be made out, that RFG has throughout acted as a trustee should in balanced protection of its potential beneficiaries' interests."
Later: Decisions concerning the form of the order
The appropriate costs regimes
(i) ancillary relief costs strictly so-called, in relation to applications for financial remedies comprising also the First Appointment and subsequent directions hearings, two FDRs before Mostyn J, the PTR and indeed the main final [sic] and subsequent hearings: here the "no order principle" for proceedings within FPR 28 such as these is the general rule;
(ii) interim injunctions, including applications for freezing orders and applications under MCA section 37 to avoid dispositions, which are subject to a modified version of CPR Part 44 (as well as other CPR provisions not currently germane), where there is no presumption either that there be no order or that costs should follow the event so that the court's starting point is "a clean sheet";
(a) maintenance pending suit and the application for A v A costs allowances (at the time of the orders in this case, forming part of the maintenance pending suit evaluation) which are not subject to the "no order principle"; except that:
(b) that statement of principle is complicated by the fact that in relation to the first such hearing, on 1 May 2013, I ordered that the costs should be "in the financial remedy application";
(iii) on 15 April 2015 I made no order, as between H and W, in relation to the costs of W's unsuccessful application to set aside H's charge of the Bentley to Beckmans as security for their costs.
(5) Subject to paragraph (6), the general rule in financial remedy proceeding is that the court will not make an order requiring one party to pay the costs of another party.
(6) The court may make an order requiring one party to pay the costs of another party at any stage of the proceedings where it considers it appropriate to do so because of the conduct of a party in relation to the proceedings (whether before or during them).
(7) In deciding what order (if any) to make under paragraph (6), the court must have regard to -
(a) any failure by a party to comply with these rules, any order of the court or any practice direction which the court considers relevant;
(b) any open offer to settle made by a party;
(c) whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue;
(d) the manner in which a party has pursued or responded to the application or a particular allegation or issue;
(e) any other aspect of a party's conduct in relation to proceedings which the court considers relevant; and
(f) the financial effect on the parties of any costs order.
(4) In deciding what order (if any) to make about costs, the court will have regard to all the circumstances, including—
(a) the conduct of all the parties;
(b) whether a party has succeeded on part of its case, even if that party has not been wholly successful; and
(c) any admissible offer to settle made by a party which is drawn to the court's attention, and which is not an offer to which costs consequences under Part 36 apply.
(5) The conduct of the parties includes—
(a) conduct before, as well as during, the proceedings and in particular the extent to which the parties followed the Practice Direction – Pre-Action Conduct or any relevant pre-action protocol;
(b) whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue;
(c) the manner in which a party has pursued or defended its case or a particular allegation or issue; and
(d) whether a claimant who has succeeded in the claim, in whole or in part, exaggerated its claim.
"… costs do not follow the event. The judge making the costs order has, therefore, a wide discretion. He could not properly ignore the fact that one side had won and the other had lost but that is not determinative nor even his starting point. It is simply a fact to weigh but in the circumstances of this case it is a fact of overwhelming weight."
whereas in the view of Ryder LJ:
"The judge correctly stated the general rule did not relate to the interim applications he had decided. Costs were then in the discretion of the court, and the principles set out in CPR Part 44 applied. The starting point for what are described as 'clean sheet' cases is that costs follow the event. To find that principle one need look no further than Gojkovic v Gojkovich (No 2)  2 FLR 233 (CA) where Butler-Sloss LJ (as she then was) said:
'there still remains the necessity for some starting-point. That starting-point, in my judgment, is that costs prime facie follow the event … but may be displaced much more easily than, and in circumstances which would not apply, in other Divisions of the High Court.' "
8.1 Advocates will in future be required to state, in respect of each authority that they wish to cite, the proposition of law that the authority demonstrates, and the parts of the judgment that support that proposition. If it is sought to cite more than one authority in support of a given proposition, advocates must state the reason for taking that course.
8.2 The demonstration referred to in paragraph 8.1 will be required to be contained in any skeleton argument and in any appellant's or respondent's notice in respect of each authority referred to in that skeleton or notice.
8.3 Any bundle or list of authorities prepared for the use of any court must in future bear a certification by the advocate responsible for arguing the case that the requirements of this paragraph have been complied with in respect of each authority included.
8.4 The statements referred to in paragraph 8.1 should not materially add to the length of submissions or of skeleton arguments, but should be sufficient to demonstrate, in the context of the advocate's argument, the relevance of the authority or authorities to that argument and that the citation is necessary for a proper presentation of that argument.
"Naturally, we accept the findings made by the court that in a number of respects H's evidence was unsatisfactory. (We accepted in closing that H was a poor witness, at least in the sense of not properly addressing the questions that were put to him, in a way that is frustrating for judge and advocate alike.) But the critical question is as to his actual carriage of the proceedings. Thus:
(a) It cannot be said that H has been guilty of a failure to disclose assets.
(b) H has been vindicated in his case as to his ability to have access to the funds within the trust. That was always true up to 2017; and became true because of his permanent exclusion from the trust in the course of the case.
(c) It has not been demonstrated nor found that H failed to disclose documentation that was available to him. Of course it was the case that the trustees were reluctant to provide documentation to H (as they said, pursuant to the judgment of Bannister J) or to the court. However, when they were produced by the trustees to H, he made them available promptly."
Nor has it been asserted by W nor found by the court that arrangements between H and the trustees are fake or a sham. [If the reference in para 170 to an elaborate charade is meant to suggest or imply that the trust arrangements are invalid then it cannot stand against that concession by W]1. The validity of the trust arrangements stands unimpugned at the end of this trial and the court is referred to the skeleton argument provided by H that addressed the duties of the trustees in relation to disclosure; a position that was rightly adopted by the trustees so as not to breach their fiduciary duty; and as such not something that H can be criticised for.
The issue where the court has found against H in this respect is as to Mr Bennett's true underlying motivation; and thus as to H's own expectation that he may benefit from the value of the trusts in due course in some fashion.
1 The F & BPs from W as to the exclusion of H as beneficiary state:
W has given careful consideration to the question as to whether the NHT was in and of itself a sham. W does not pursue this argument and does not intend to do so at this hearing.
Although W then purported to cast doubt on the subsequent trust transactions, we pointed out that (a) they are in accordance with the advice of counsel (b) valid under BVI law and that (c) in any case a trust was like the curate's egg: and could not be partly good and partly bad.
The issues: success or failure?
Costs: a principled approach
In this case my present inclination would be to regard the sale of the Bentley in appropriate circumstances as desirable quickly if, for instance, that sale would provide W with some urgent relief from the parlous risk she runs of finding herself unrepresented in these proceedings because of H's asserted inability to comply even in part with past orders without recourse to those proceeds.
In the April 2014 judgment at  and  I observed:
"The elements of H's evidence and of the way in which he has deployed his case, from first to last (within which I include the ill-fated domicile débâcle), have not thus far helped him to begin to persuade me that he is not driven by hostility towards W and does not harbour amongst his motives a desire to vanquish her financially. Nor am I yet prepared to conclude that many of the sharp and stark inconsistencies (I believe I am justified in referring to them as lies) in his evidence, and the shifts and twists in his position, are all down to vagueness, imprecision and the pressure of being subjected to questioning. …
H's evidence on the two days I heard from him last week was again, in my view at this juncture, replete with further examples [of lies]. So I remain to be persuaded that he is the victim of permanent exclusion at the instance of RFG, led by his long-term confidant and adviser Mr Bennett, and truly and validly divorced from access to any of the benefits of the £70 million or thereabouts which are the fruits of his business endeavours, now held within the New Huerto Trust. Nor do I yet accept as genuine RFG's expressed intention (now indeed set in train) to pursue H in every relevant jurisdiction to recover the equity standing to his name in the Bentley, the Piper aircraft, land in Zermatt and the loan due to him from the SCI which owns the château where he continues to live, unless it be to remove those assets at least for the time being from the risk of depredation by court order."
"Indemnity costs are no longer limited to cases where the court wishes to express disapproval of the way in which litigation has been conducted. An order for indemnity costs can be made even when conduct could not properly be regarded as lacking in moral probity or deserving of moral condemnation: see Reid Minty v Taylor  1 WLR 2800. However such conduct must be unreasonable 'to a high degree. "Unreasonable" in this context does not mean merely wrong or misguided in hindsight': see Simon Brown LJ (as he then was) in Kiam v MGN Limited No 2  1WLR 2810.
In any dispute about the appropriate basis for the assessment of costs, the court must consider each case on its own facts. If indemnity costs are sought, the court must decide whether there is something in the conduct of the action, or the circumstances of the case in question, which takes it out of the in a way which justifies an order for indemnity costs: see Waller LJ in Excelsior Commercial and Industrial Holdings Limited v Salisbury Hammer Aspden and Johnson  EWCA (Civ) 879."
(4)(b) whether a party has succeeded on part of its case, even if that party has not been wholly successful; and
(5)(b) whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue;
(5)(c) the manner in which a party has pursued or defended its case or a particular allegation or issue; and
(5)(d) whether a claimant who has succeeded in the claim, in whole or in part, exaggerated its claim.
"Where the court orders a party to pay costs subject to detailed assessment, it will order that party to pay a reasonable sum on account of costs, unless there is good reason not to do so."
The application for permission to appeal