We are seeing a growing number of financial cases where the
dispute potentially affects third parties such as beneficiaries,
trustees, parents, or commercial partners. The Family Procedure
Rules in England make provision for third parties to be joined to
the proceedings if their joinder will assist with resolving the
issues in dispute.
Joinder of trustees is relevant either to an application that the
trust is a resource of either party which can be taken into account
or, more usually, in the context of an application to vary the
terms of the trust to make provision for one or both of the
spouses. The purpose of joining the trustees is often to assist
with disclosure or, potentially, to assist with enforcement.
However, there is an important distinction between joinder to the
proceedings and submission to the English court's jurisdiction.
By being joined to the proceedings, offshore trustees are not bound
by any decision of the English court unless they submit to its
jurisdiction by participating in the proceedings, or confirming
that they will be bound by the court's decision.
Offshore trustees may find themselves in a quandary when faced with
an application that they be joined to proceedings as they have to
balance the interests of at least one of the two spouses against
their duties to the other beneficiaries. This may become
particularly difficult in the context of requests for disclosure of
information about the trust which need to be balanced with the
trustee's duty of confidentiality to the other beneficiaries.
Often it may be sensible for the trustees to seek directions from
their local court about joinder and/or submission, as well as
specific issues such as disclosure of information. This inevitably
incurs costs and delay.
The issue of joinder of trustees has been addressed in a number of
judgments with the most recent being TM v AH  EWHC
572 (Fam) which concerned two trusts, one based in the BVI and the
other in Switzerland. Both were settled by the husband. Although
both the husband and wife were beneficiaries in the past, they had
subsequently been excluded irrevocably. The wife applied to vary
both trusts on the basis that they were 'nuptial
The court concluded that the matter could not be resolved without
the trustees being able to participate in the proceedings and so
they should be joined. The court's decision disagrees with that
of Mr Justice Mostyn in DR v GR  EWHC 1196 in which he held
that joinder of overseas trustees was 'not required' and
that the rules only require that 'notice of the application be
In TM v AH the court said that, in line with Article 6 of the
European Convention of Human Rights (i.e. the right to a fair
trial) trustees should be joined before a court varies a trust, so
that the trustees can have their say.
The court also referred to Mr Justice Munby's decision in A
v A  EWHC 1810 (Fam) where he had said in argument,
though not in the published judgment, that trustees had to be
joined for any orders to be binding upon them.
This judgment may put more pressure on trustees to make decisions
at an early stage of a case on whether or not they will
participate. Withers have had extensive experience in dealing with
these issues and have represented parties in BJ v MJ (Financial
Remedy: Overseas Trusts)  EWHC 2708 (Fam) and
Tchenguiz v Imerman  EWHC 4277 (Fam) where the
issues of joinder and disclosure by third parties were addressed.
The questions of joinder, submission and/or participation are key
tactical decisions that should be made in a way that balances the
potentially competing interests of the beneficiaries and in the
context of the issues in the case. There is no uniform approach
which applies. We are mindful that a strategy needs to be
formulated by assessing immediate issues that may arise whilst not
losing sight of the big picture.
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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The well documented case of Heather Ilott and her attempt to overturn her Mother's will appears to have come to an end with the Supreme Court ruling that, whilst she may have be granted some money from her Mother's estate, it is a far smaller sum than the Court of Appeal awarded.
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