Jersey Unreported Judgments

Matrimonial - application for disclosure of documents.

[2013]JRC015

Royal Court

(Samedi)

23 January 2013

Advocate M. E. Whittaker for the Petitioner.

The Respondent appeared in person.

judgment

the deputy bailiff:

1.        The Respondent made an application for disclosure of documents relating to the K Trust and the B Settlement on 27^th September 2012.  This application was heard and dismissed on 28^th September with reasons to be given later.  I had intended at the time to include the reasons in the substantive judgment on the ancillary matters relating to the divorce of the two parties, but I regret that this was overlooked at the time that judgment was prepared.  The reasons for the decision on 28^th September are as follows. 

2.        As regards to the K Trust, the application was for disclosure of the following documents:-

(i)        Any supplemental trust documentation.

(ii)       All current and previous letters of wishes in relation to the K Trust. 

(iii)      All licence/rental agreements since the date of the marriage of the Petitioner and the Respondent in relation to Q, including proof of account any licence payment was made to. 

(iv)      All copies of loan agreements and/or otherwise evidence of loans made to and currently outstanding to the Petitioner including any amounts repaid during the marriage of the Petitioner and the Respondent. 

(v)       Evidence of all loans, distributions made to the Petitioner during the marriage.      

3.        This Trust contains what it contains.  Up to date figures had been produced both in relation to the Trust and in relation to its wholly owned company Z Limited.  The Petitioner realistically agreed that the Trust was a resource available to her.  I considered that with the limited assets known to be available to the parties - no decision having been made at that time on the B Settlement - the balance lay clearly against an expensive historical analysis of monies into and out of the K Trust over a long period.  Furthermore, on 11^th September 2012, Advocate Dessain, on behalf of the Trustees, wrote to the Petitioner setting out the terms of the licence arrangement in relation to the property and the rental charge which had been made for a four month period in 2008, when the rental had been paid directly into the Petitioner's Lloyds TSB bank account.  The letter confirmed that no loans, dividends or distributions had been made to the Petitioner by Z Limited since the company was incorporated on 20^th March 1993.  The letter gave an update as to the value of the investment portfolio and cash held in the Trust, and confirmed that there had been no variations or changes made to the terms of the Trust since an earlier disclosure.  The letter confirmed that the Trust had no current or past Letter of Wishes. 

4.        In the circumstances it seemed clear to me that there was no advantage in making an order as the Respondent requested in relation to the K Trust.  Furthermore, the making of such an order would almost certainly have resulted in an application for an adjournment of the substantive hearing in relation to ancillary matters, which was listed to commence on 8^th October.  To grant the application would be to cause expense which did not seem to me to be justified, and a delay which was contrary to the interests of the parties and indeed to that extent also contrary to the interests of the children.

5.        As regards to the B Settlement the application was for the following disclosure:-

(i)        The Trust Deed including any supplemental trust documentation including but not limited to any deeds of addition of beneficiaries;

(ii)       All current and previous Letters of Wishes in relation to the B Trust;

(iii)      Copies of all trust accounts in existence during the marriage of the Petitioner and Respondent;

(iv)      Current market value of O. 

6.        This Trust fell into a different category from the K Trust because although the Petitioner was a discretionary beneficiary of the Trust, there was no agreement that it was a resource available to her, and indeed the evidence at that time suggested it was not.  By letter dated 10^th September 2012, one of the directors of Investec Trust (Jersey) Limited, the Trustee of the B Settlement, wrote to the Petitioner pursuant to her letter of 5^th September which was sent to her as directed by the Court at an earlier directions hearing.  In the Investec letter of 10^th September, Investec enclosed the last set of accounts of the B Settlement, to 31^st December 2009, which identified the only asset in the Trust as the shares in a wholly owned Jersey company called L Limited.  The Trustees advised that they had resolved not to continue preparing trust accounts, because the position remained the same.  They prepared accounts for L Limited, and enclosed the accounts for the year ended 31^st December 2011, which clearly identified the only assets of the company as those which had been disclosed in an earlier letter. 

7.        Investec confirmed that neither the Trustees nor the directors of L Limited had made any arrangements to permit Mr I to use O in whole or in part as his residence.  They confirmed that the property was made available to the Petitioner's mother for her occupation and use and she had the option to employ live-in staff and/or have guests of her choice to stay.  Mr I's occupation of part of the property had been one of the Respondent's main reasons for further enquiry given at an earlier hearing.   

8.        In an earlier letter Investec had confirmed that the Petitioner was a discretionary beneficiary of the B Trust.  The Trustee had not previously advised her that she was such a beneficiary because it did not expect to be making any payments to her.  The matter is dealt with at some length at paragraphs 33 to 36 and 51 to 55 of the detailed judgment dated 16^th November 2012 on the prayers for ancillary relief. 

9.        The situation which faced me on 28^th September was one where, on the face of it, the Trustee was indicating that the Petitioner was not expected to benefit from the Trust during her mother's lifetime; her mother was in her 60s and there was no evidence than she was other than in good health; by far and away the main asset of the Trust was the home in which the Petitioner's mother lived; and I accepted the view that unless there was some other evidence which might be produced, the Petitioner's mother was entitled to some privacy in relation to her financial affairs, which seemed to me at that time prima facie to be the focus of the B Settlement. 

10.      This of course did not prevent some enquiry at the time of the ancillary hearing as to whether it could reasonably be said that the B Settlement was a resource which was available to the Petitioner, and indeed there was such an enquiry, in the sense that Mr Dale McNutt from Investec (Jersey) Limited was called by the Respondent to give evidence. 

11.      Having regard to the documents requested, it had been confirmed that the Petitioner was a discretionary object of the Trust.  The advantages, if any, of provision of a detailed Trust Deed, given that admission, were slim compared with the disadvantage that an order for production of this and any other documents might provide by way of excuse for an adjournment application.  As far as the trust accounts were concerned, the letter from Mr McNutt already made it plain that no trust accounts had been produced since 2009 because there had been no change in the underlying position, the sole asset of the Trust being the shares in L Limited. 

12.      Similar considerations led to a refusal of the application for copies of the current and previous Letters of Wishes, and the current market value of O.  There was in my judgment a threshold which had to be passed before one could realistically assert that the assets within the B Settlement were resources available to the Petitioner.  On the information available as at 27^th September, there was no basis for asserting that threshold had been passed, and to make the orders requested would merely have been to run into a potential quicksand of dispute between the Petitioner and the Trustees and/or her mother as to whether information which might be regarded by the mother as confidential to her should be provided to her daughter for the purposes of her daughter's divorce proceedings.  There was nothing, of course, to prevent the application being renewed at a later stage if on further enquiry it became apparent that the assets of the B Trust were available to the Petitioner, and had the Court had any doubt as to whether or not that was so, an adjournment might have taken place after hearing the evidence from Mr McNutt of the Trustee company.  As it happened, nothing that was said by Mr McNutt came close to changing the preliminary view which had been formed from reading the letter which he had sent to the Petitioner pursuant to her correspondence.  The Court was entirely satisfied that it would not have been right to make any order for payment of a cash sum which might have required either further litigation or the Petitioner's mother to move out of her home in order to provide funds for her former son-in-law.  This potential scenario seemed remote and unlikely and everything we heard in the course of evidence justified that position.  Had there ever been a distribution from the B Trust in favour of the Petitioner, things might have been different - but the evidence was that there never had been, and while her mother was alive, no such payment was contemplated.  Again that statement was corroborated in the course of the ancillary proceedings themselves. 

13.      For these reasons the Respondent's summons was dismissed.    

No Authorities