Elizabeth Tchenquiz-Imerman v Vivian Saul Imerman
| Jurisdiction | England & Wales |
| Judge | The Hon. Mr Justice Moylan |
| Judgment Date | 22 November 2013 |
| Neutral Citation | [2013] EWHC 3627 (Fam) |
| Docket Number | Case No: FD09D00047 |
| Court | Family Division |
| Date | 22 November 2013 |
[2013] EWHC 3627 (Fam)
IN THE HIGH COURT OF JUSTICE
FAMILY DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
The Hon. Mr Justice Moylan
Case No: FD09D00047
Mr R Harrison QC and Mr D Hagen (instructed by Withers LLP) for the Applicant
Mr C Howard QC and Mr H Oliver and Mr J Hilliard (instructed by Hughes Fowler Carruthers) for the Respondent
Mr C Pocock QC and Ms L Moys (instructed by Mills and Reeve) for the Adult children
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
This judgment is being handed down in private on 22 nd November 2013. It consists of 16 pages and has been signed and dated by the judge. The judge hereby gives leave for it to be reported.
During the course of contested financial remedy proceedings adult beneficiaries of a number of offshore discretionary trusts were joined as parties on their application: see my judgment [2012] EWHC 4277 (Fam). Subsequently, I made an order that these beneficiaries, as parties, should disclose copies of documents which had been provided to them for the purposes of an application which had been made to the Royal Court of Jersey by the trustee of some of those trusts. The Royal Court had given the beneficiaries permission to make such disclosure, if they were ordered to do so by this court. But, in doing so, the Royal Court expressed a number of concerns (as referred to later in this judgment) and invited this court not to require such disclosure. The financial remedy proceedings have been resolved by a consent order but I have been requested by the parties to give a judgment dealing with my order for disclosure. I also need to explain my decision to order disclosure given the terms of the Royal Court's judgment, now reported at [2012] (2) JLR 51.
The background to this case is set out in my judgment referred to above. It is sufficient for the purposes of this judgment to give the following summary.
The parties were married in 2001 and separated in 2008. They have one child. The husband was previously married. He has three adult children by that marriage who are the beneficiaries joined as parties to the proceeding pursuant to my earlier order ("the adult beneficiaries").
The husband's admitted wealth consisted of approximately £7 million of assets in his own name and approximately £20 million of assets held within nuptial settlements of which the husband is the principal beneficiary. The wife's financial position is set out in my earlier judgment.
The focus of the wife's claim, in reliance on the sharing principle, was the wealth held within what have been termed the 'Category 3 Trusts' ("the Trusts") — at one point worth £360 million but said to have reduced to £130 million. These Trusts hold significant assets located within this jurisdiction, albeit a relatively small percentage of the total within the Trusts. The Trusts were settled by the husband's father in 2008, the assets deriving from previous settlements which had been distributed to the husband's father. These assets included, in particular, very substantial funds generated during the course of the marriage and previously held within a discretionary trust settled by the husband some years prior to the marriage, the original beneficiaries of which had been the husband, his spouse or widow and his children and remoter issue. In 2005 changes had been effected to this earlier trust (and other trusts) by which the husband and his spouse had been excluded as beneficiaries, the former exclusion being revocable while the latter was irrevocable. The reasoning behind these changes was one of the factual issues in the case.
As referred to above, in 2008 the Trusts were settled by the husband's father. It was the husband's case that this restructuring of the trust structure was undertaken principally for tax reasons. The wife's case was that, even if there were tax reasons, in addition the husband sought to try to appear further to distance himself from wealth which he had generated and which had been held in the trust (referred to above) of which he and, following the marriage, the wife had until 2005 been expressly within the class of beneficiaries. It was her case that this wealth is or could be made available to the husband.
In addition to the adult beneficiaries, the class of discretionary beneficiaries of the Trusts comprise the husband's parents, the parties' child and a child of one of the husband's adult children, a charity and such other persons as may be added as beneficiaries with the consent of the protector. Neither the husband nor the wife is named as beneficiaries but each of them could be added to the class of beneficiaries. If the husband was added as a beneficiary, the wife could not under the terms of all but one of the trusts be made a beneficiary; and vice-versa.
Two of the key issues in the financial remedy proceedings were: (a) whether the Trusts were nuptial settlements for the purposes of section 24 of the Matrimonial Causes Act 1973 and, accordingly, directly subject to the powers given to the English court under that statutory provision (the wife having applied for the variation of all the Trusts on the basis that they were post-nuptial settlements); and (b) whether the assets of the Trusts were financial resources available to the husband within the meaning of section 25(2)(a) of the MCA 1973.
The trustees, none of whom are resident in England and Wales, were joined as parties but none participated in the proceedings following applications made to the Royal Court and the Eastern Caribbean Supreme Court, High Court of Justice British Virgin Islands. In respect of the former, the Jersey trustee applied to the Royal Court for approval of its decisions (a) not to submit to the jurisdiction of the English court and (b) to disclose information about the Trusts' assets to the husband's father in the knowledge that he was likely to disclose it to the husband. These decisions were approved by the court at a hearing in private on 15 th July 2011. The court's judgment of 19 th August 2011 is not public.
The trustee's applications to the Royal Court and the BVI High Court were supported by the adult beneficiaries. This and the adult beneficiaries' application to be joined as parties to the English proceedings may have been part of the "global strategy" referred to in a letter from a BVI lawyer acting for the adult beneficiaries to the Trusts' BVI lawyer.
During the course of my previous judgment I expressed the view that the trustees were in the best position to assist the court in the exercise of its powers under the Matrimonial Causes Act 1973 ("the MCA 1973"). This was in respect of both the issues referred to in paragraph 8 above but in particular the latter, as the critical question for the court to determine would be whether the trustees were likely immediately or in the foreseeable future to exercise their powers in favour of or in some way for the benefit of the husband.
The trustees provided some information about the Trusts but declined to provide a considerable part of the information and documents sought by the wife and, it appeared, were not willing or were unlikely to be willing to provide evidence as witnesses. It was, therefore, submitted on behalf of the wife that "the court's, now more difficult task, is inferential and it must look at all the circumstances". In support of the wife's more general submissions, the wife referred to Charman v Charman [2007] 1 FLR 1246 in which the Court of Appeal referred to Coleridge J's conclusion, at [45]:
"(c) the husband had conducted a 'Herculean struggle' to prevent [the trustee] from giving evidence in circumstances in which, had [the trust] been dynastic, it would be likely to have been able to produce evidence from its files to that effect".
Given that the trustees were not participating, I acceded to the application made by the adult beneficiaries to be joined as parties. I did so in part because in my view it would "clearly assist with the investigation and resolution of the issues in the case", in particular those referred to above. The court would be in a better position to deal with the case justly in accordance with the overriding objective and in accordance with its statutory obligations under the MCA 1973. As parties, the adult beneficiaries would be subject to direct disclosure obligations while also being entitled to participate fully in the proceedings.
During the course of the English proceedings, and prior to them being joined as parties, the adult beneficiaries sought and were given permission to attend a Financial Dispute Resolution hearing. As a condition of obtaining permission, they gave the following undertaking:
"D. AND UPON the above-named "Applicants to Intervene" [the adult beneficiaries] each undertaking to the Court and agreeing with the petitioner [the wife] that:-
(i) They will not, until further order destroy or dispose of (or permit any other person to destroy or dispose of) any of the documents in their possession, custody or power as have been served upon them, or which they (or any person acting on their behalf) may have received other than by way of service, in relation to any and all applications in connection with the proceedings herein that have been made by the Trustees in overseas courts in their capacity as trustees of the trusts … including all pleadings (including the Jersey 'Representation' document), orders (including Jersey 'Acts of Court'), transcripts of hearings, skeleton arguments and other advocates documents, statements of position and...
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Trust Applications In Jersey - Confidentiality Under Threat: English Divorce Court Denies Royal Courts Request For Restraint In The Interests Of Comity
...the high-profile matrimonial proceedings of Tchenguiz v Imerman, the Family Division of the English High Court ([2013] EWHC 3627 (Fam)) recently refused the request of Jersey's Royal Court to refrain from ordering disclosure in the English proceedings of sensitive trust information received......
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Essential Practice Guidance
...read the judgment itself – see further below. See also the subsequent judgment in this case reported as Tchenguiz-Imerman v Imerman [2013] EWHC 3627 (Fam) in respect of orders for disclosure against third-party beneficiaries, joined as parties to the proceedings. Adverse inferences must be ......