N v N and F Trust
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE COLERIDGE,Mr Justice Coleridge |
| Judgment Date | 16 December 2005 |
| Neutral Citation | [2005] EWHC 2908 (Fam) |
| Court | Family Division |
| Docket Number | Case No: S004D000644 |
| Date | 16 December 2005 |
[2005] EWHC 2908 (Fam)
The Hon. Mr Justice Coleridge
Case No: S004D000644
IN THE HIGH COURT OF JUSTICE
FAMILY DIVISION
SOUTHAMPTON DISTRICT REGISTRY
(Sitting at Bournemouth Combined Court Centre)
Valentine Le Grice QC (instructed by Bell Pope) for the Petitioner
Miss Kate Branigan (instructed by Parker Bullen) for the Respondent Husband
Dominic Brazil (instructed by Howes Percival) for the Respondent Trust
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.
Hearing dates: 23 November 2005
This judgment is being handed down in private on 16 th December 2005 in Bristol. It consists of 10 pages and has been signed and dated by the judge. The judge hereby gives leave for it to be reported.
The judgment is being distributed on the strict understanding that in any report no person other than the advocates or the solicitors instructing them (and other persons identified by name in the judgment itself) may be identified by name or location and that in particular the anonymity of the children and the adult members of their family must be strictly preserved.
MR JUSTICE COLERIDGE Nicolle v. Nicolle v. Fermain Trust
ADproved Judgment
Mr Justice Coleridge:
Hannah Nicolle ("the Wife") and Adrian Nicolle ("the Husband") married on 30 September 2001. They had become engaged the previous year, in April 2000, and during the Summer of that year they looked for a property to become their future matrimonial home. In July 2000 they discovered Brooklands Farm, Newbridge, Southampton ("Brooklands"). They viewed it and decided they wanted to live there as their home. The property was purchased by a company called Woodmere Properties Ltd, a Bahamian company, all the shares in which are owned by a Guernsey trust called the Fermain Trust.
2. The purchase was completed by the Company in September 2000 and the Husband and Wife lived together in the property before and during their marriage. Alexander, their one son, was born on 13 November 2003. Sadly the marriage became unhappy and the Wife presented a petition on 20 May 2004. Her Form A is dated 5 July 2004. It seeks a property adjustment order but not in respect of the matrimonial home, The Wife vacated Brooklands on 19 December 2004.
3. During the interlocutory stages of the Wife's ancillary relief application the point was taken that Brooklands was and is subject to an anti-nuptial settlement and as such that the court would have power to vary the terms of the settlement under section 24(1)(c) of the Matrimonial Causes Act 1973.
4. That is an assertion which if correct, has potentially far reaching implications both for the determination of this case and, I suspect many others. So, the point having been raised, the Deputy District Judge, quite rightly, determined that such an issue should be discreetly resolved in the High Court prior to the application to vary proceeding further. Accordingly by order of 2 June 2005:
"The issue of whether the purchase of the former matrimonial home known as 'Brooklands', Newbridge, Southampton is an anti—or post-nuptial settlement capable of variation pursuant to section 24(1)(c) of the Matrimonial Causes Act 1973, as amended, be transferred to the High court pursuant to the Practice Direction of 5 June 1992.".
5. The Deputy District Judge also joined the Trustees of the Fermain Trust and gave them permission to file and serve evidence.
6. Accordingly on 23 November 2005 the issue came on before me for preliminary determination. The Wife, the Husband and the Trustees all filed statements dealing with their knowledge of and the circumstances leading to the purchase of 'Brooklands'. The Trustees also provided documents and information relating to the creation of a short-hold tenancy between the Husband, the Wife and the Trustees. I have not heard any oral evidence. Apart from one file of documents containing the statements and documents to which I have referred, the hearing was confined to argument by counsel who had each filed skeleton arguments on behalf of their respective clients.
7. The Wife maintains that looking at all the circumstances surrounding the purchase of Brooklands the property is held by the Trustees of the Fermain settlement on the
MR JUSTICE COLERiDGE Nicolle v. Nicolle v. Fermain Trust
Approved Judgment
terms of an anti-nuptial settlement capable of variation by the court. Both the Husband and the Trustees resist that interpretation. Whilst they accept that the purchase of a matrimonial home might in some circumstances constitute an anti nuptial or post nuptial settlement, in this case, they maintain, the terms under or by which the Husband and Wife occupied 'Brooklands' were no more than as tenants of the Trustees pursuant to an assured short-hold tenancy. That tenancy agreement was eventually reduced to writing and signed on 25 March 2004, some 2 months before the Wife presented a petition for divorce. That is, essentially, the issue between the parties.
8. I turn to consider the facts and chronology in a little more detail.
Chronology
9. As I have indicated there is no significant dispute between the parties as to the facts which underlie this issue. They are set out at length in the statements to which I have referred. I have, of course read them with care.
10. 'Brooklands' was bought for £725,000 with the aid of a £500,000 interest only mortgage from a bank. The balance of the purchase price was provided by the Fermain Trust. The origin of that equity balance was monies generated by the Husband through business dealings and deposited in the trust.
11. As I have already indicated the property is itself owned by Woodmere Property Holdings Ltd., a Bahamian corporation.
12. During the time the parties lived together about £28,000 was also provided by the Trust to build a horse arena at 'Brooklands' because the Wife, in particular, was intent upon running 'Brooklands' as an equestrian centre.
13. It is apparent from the statement of Richard McIntosh, sworn on 23 November 2005, that from about March 2001 the professional trustees were in correspondence with the Husband about the terms of a tenancy which was to be put in place between the company and the Husband and Wife. From paragraph 28 onwards of that statement it can be seen that for the following 3 years discussions took place about the terms of the tenancy and the rent which should be payable. It was a painfully slow process which culminated finally, in two tenancy agreements being signed on 25 March 2004.
14. In fact not very much rent was paid as can be seen from the exhibit to the Trustees' affidavit (ACN1). That exhibit shows that throughout the entire period of the alleged tenancy some £50,926 was apparently paid as rent leaving arrears, at the time when possession proceedings were begun in June 2005, of some £63,599 i.e. rather more than half the rent was outstanding.
15. As I suggested to counsel in argument neither the speed of negotiation of the terms nor the collection of rent shows the Trustees exhibiting the kind of urgency associated with a true commercial arrangement. However, that it is not in any way to be critical of the Trustees. The main purpose of establishing the tenancy was to provide, as I understand it, comfort to the mortgagees who required a proper legal arrangement to ensure that the interest on the bank loan was met in a secure and timely way. In fact the trustees, until comparatively recently, had sufficient other resources (also
MR JUSTICE COLERIDGE Nicolle v. Nicolle v. Fermain Trust
Approved Judgment
originating from the Husband) to defray the mortgage repayments so one way or another there was no special urgency so far as the trustees position was concerned.
16. On 20 August 2004 the Trustees served a formal notice to vacate by 15 September
2004 and on 19 December the Wife left the property. The Husband remained in occupation until the middle of this year when, unable to sell the property, the Trustees re-let it for a period of 12 months to third parties.
The Fermain Trust
17. Mr McIntosh deals with background to the Fermain Trust in his statement. I quote from paragraph 2
"The Fermain Trust was created by a trust deed dated 19 January 1989 and executed by Mr Leonard Finan of… Sark as its settlor. Mr Finan acted as a 'straw man' in creating the settlement on behalf of either Mr Rooker or Mrs Ivy Constance Rooker and a life tenancy was created in favour of Mrs Rooker. On the death of Mrs Rooker in July 1998 small payments (£2000 each) were made to Mrs Rooker's two daughters… in satisfaction of their entitlements as beneficiaries. The remaining beneficiaries were Mrs Wetherall' s children and Mrs Lovelace's son, Adrian Christopher Nicolle. The Wetherall children decided that they would like to receive benefit immediately by way of distribution of part of the trust fund, and each was paid one third of the remainder (approximately £30,500 each) in September 1998. The Trustee of the Fermain Trust wrote to Adrian Nicolle on 30 July 1998 to explain to him the financial consequences of his grandmother's death and also the options of receiving immediate benefit or of retaining the trust structure. The Wetheralls were Guernsey resident and for them the continuation of an interest in the Trust would have conveyed no tax advantage but would have incurred on going management costs. In Adrian Nicolle's case he was UK resident for tax purposes but...
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