C v C

A settlement remains capable of variation under Matrimonial Causes Act 1973, s 24(1)(c), if it exists when the variation order is made and was ante-nuptial or post-nuptial when created. Removal of features which made it nuptial does not automatically remove jurisdiction, although it may affect whether the court exercises its discretion. A trust may remain nuptial through features such as powers of control, appointment and indirect benefit, even after the spouses are removed as beneficiaries. Mandatory English matrimonial-relief provisions prevail over the trust’s proper law under article 15 of the Hague Convention as implemented by the Recognition of Trusts Act 1987. An exclusive foreign jurisdiction clause cannot oust the statutory jurisdiction, although the court may exceptionally decline to exercise it.

The wife sought ancillary relief following divorce, including variation under s 24(1)(c) of the Matrimonial Causes Act 1973 of The Hickory Trust, a discretionary trust governed by Jersey law and containing an exclusive Jersey jurisdiction clause. The husband argued that a 2001 deed removing both spouses as beneficiaries had eliminated the trust’s nuptial character. He also argued that jurisdiction lay exclusively with the Jersey courts, or that Jersey law governed the application.

The preliminary issues were whether the trust remained capable of variation and whether the English court could entertain and determine the claim.

1. Jurisdiction under s 24(1)(c). The court had jurisdiction where the settlement existed at the date of the order and had been ante-nuptial or post-nuptial when made. The statutory language looked to a settlement made on the parties and contained no requirement that the nuptial features should survive until the order. Any unfairness arising from later removal of those features was properly addressed in the discretionary exercise of jurisdiction.
2. Continuing nuptial features. The 2001 exclusion deed had not removed the trust’s nuptial features. The parties remained joint protectors; the husband retained power to appoint trustees; the spouses could be restored as beneficiaries; and the trust could lend to them or fund companies operated for their indirect benefit. The court followed Compton v Compton and Hussey [1960] P. 201 in recognising that a settlement may confer powers over the disposal of property, as well as interests in the property itself.
3. Recognition of Trusts Act 1987. Articles 6 and 8 of the Convention ordinarily directed the application of the trust’s chosen law to its variation. Article 15, however, preserved mandatory forum provisions relating to the personal and proprietary effects of marriage. Section 1(3) made that exception operative. English ancillary-relief provisions were mandatory and could not be displaced by voluntary agreement; they therefore remained applicable.
4. Foreign jurisdiction clause. The exclusive Jersey jurisdiction clause could not derogate from the English court’s statutory jurisdiction. Although the court might decline to exercise jurisdiction where the foreign forum was clearly more appropriate, that possibility did not apply because the trust no longer had Jersey trustees or identified Jersey assets, while the principal trust asset was in England.

The husband’s two jurisdictional contentions were rejected. The wife’s claim could proceed in the English court under English law.