This case (in which Diane Parker and Sue Medder acted for the
trustees) addressed the vexed issue of disclosure of Jersey trust
documentation to a non-beneficiary settlor involved in English
On 6 July 2011, the Jersey Royal Court ordered the production of
trust and company accounts of companies underlying a trust of which
the husband was the settlor and he and his wife were both excluded
from the beneficial class. The husband and the wife had been
engaged in divorce proceedings before the English High Court for
some three years. This firm was advising the Jersey trustee which
brought the application for directions following a request by the
wife's solicitors for the trust and company accounts.
The settlement is a discretionary settlement established by the
husband on 13 March 1989 with assets derived in substantial part
from wealth created by the husband's late father. The
settlement is governed by Jersey law and the principal
beneficiaries are the husband and the wife's three children and
their respective issue and the husband's three sisters and
their respective issue.
The husband and the wife are excluded from benefiting from the
settlement; there is provision in the settlement that no discretion
or power can be exercised in such manner as shall cause any part of
the income or capital of the trust fund to be paid or lent or
otherwise applied for the benefit of the husband and the wife.
The husband was in court and was given permission to address the
court. He submitted that since he was the director of the companies
underlying the trust, he had been compelled by the English court to
give evidence on the information contained in the trust and company
accounts. In addition, disclosure would assist with achieving a
speedy resolution to the divorce proceedings (the lack of
disclosure being a stumbling block to negotiations), which was in
the interests of all the children and wider family who were
beneficiaries of the trust. In particular, the husband had informed
the trustee that if the accounts were not made available there was
a 'risk of a significant misunderstanding occurring as to
the nature and/or value of the trust'.
The court noted that the trustee was in a difficult position as
the husband and the wife could never be added as beneficiaries to
the trust and two of the husband's three siblings (who were
beneficiaries) opposed disclosure. Accordingly, this was an
appropriate case for the trustee to seek directions.
The court concluded that withholding this information would
impede the family proceedings in England and could lead to adverse
inferences being drawn against the husband, particularly as there
was information in the public domain which indicated that there
were assets of some Ł250 million in the trust. The
confidentiality of the information in the accounts was not an issue
due to the husband's extensive knowledge of the companies
underlying the trust which he would be required to produce to the
English court in any event. The divorce proceedings were
'distracting and impacting upon the business owned by the
settlement which was in turn damaging the value of those
Accordingly, the Jersey Royal Court ordered disclosure of the
trust and company accounts as well as payment of the trustee's
costs from the trust.
Although the decision may be surprising to trust practitioners,
it was a pragmatic decision based very much on the facts of the
case. The court cited Re H Trust  JLR 280, where it
was held that it was important that the Family Division had the
fullest information of the financial affairs of the Trust to allow
it to reach an informed decision.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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