In the recent high-profile case of Tchenguiz v Imerman (an
English divorce case in which the wife was seeking financial relief
by way of a variation of trusts), the English High Court ordered
disclosure of sensitive trust information against the express
request of the Jersey Royal Court that it not do so.
The trusts were governed by BVI law, but had a Jersey corporate
trustee. The trustee did not submit to the jurisdiction of the
English divorce court and applied to the Royal Court for
directions. The beneficiaries were convened, and sensitive trust
information disclosed to them in those private proceedings.
Certain English resident beneficiaries of the trusts also
participated in the English proceedings, and gave undertakings to
the English court to disclose documentation they had received in
the course of the trustee's Jersey court application. Risking
contempt if they refused, they sought and obtained the Jersey
court's permission to disclose if ordered to do so by the
Despite the Royal Court expressing the hope that, in the
interests of comity (that is, the principle that courts will
give effect to the judgement of other jurisdictions to the extent
possible and appropriate), the English court would
'consider very carefully' whether it needed to make any
disclosure order, the English Court ordered disclosure of the
sensitive material anyway, fundamentally disagreeing with the
Jersey court's stance that material showing the reasoning and
decision-making process of the trustee and other parties should not
be disclosed. It found that the trustee's ability to decide on
the availability of wealth to the parties made the trustee's
reasoning highly relevant to determination of the divorce
Before this decision, the Royal Court had already suggested that
the Jersey court may have to reconsider its approach to disclosure
to the English courts if the Family Division began routinely to
make orders requiring disclosure of supporting material used on
applications by trustees brought in private. No doubt we have not
heard the end of this issue.
Many people are baffled by trusts, the purpose of which they don't fully comprehend. Some even regard them with suspicion, as tools of of opaque tax evasion strategies of a type favoured by wealthy individuals.
We were recently instructed by a Bank in relation to a regulatory matter. The Bank had made a suspicious activity report to the Financial Investigation Unit ("FIU") due to their concerns about the potential source of funds in an account.
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