Tchenguiz -Imerman v Imerman (Rev 1)

In financial remedy proceedings involving offshore discretionary trusts, the court must determine realistically whether trust assets are resources likely to be available to a spouse immediately or in the foreseeable future. Evidence of the trustee’s reasoning and likely exercise of discretion may be highly relevant, particularly where the trustee declines to participate. The court must give substantial weight to comity and the confidentiality of trust-direction proceedings in another jurisdiction. Nevertheless, disclosure may be ordered where the material is potentially significant and necessary and proportionate to resolve the financial issues fairly.

The parties’ financial remedy proceedings concerned substantial assets held in offshore discretionary trusts. Adult beneficiaries were joined as parties after the trustees declined to participate fully in the English proceedings. The Royal Court of Jersey permitted disclosure of material from private trust proceedings if ordered by the Family Division, but expressed strong concerns about confidentiality, comity and the material’s likely relevance.

The financial remedy proceedings later settled. The court was nevertheless asked to explain and justify its earlier order requiring the adult beneficiaries to disclose sensitive and other material from the Jersey proceedings. The central issue was whether that material was sufficiently relevant and important to justify disclosure despite the Royal Court’s concerns.

1. The disclosure order was justified. The court ordered the adult beneficiaries to disclose the sensitive and other material because its potential relevance and importance were sufficient to make disclosure necessary and proportionate. The court’s decision was made notwithstanding the strong view expressed by the Royal Court of Jersey.
2. The English court had to determine whether the offshore trusts were nuptial settlements capable of variation under section 24(1) (c) of the Matrimonial Causes Act 1973, and whether trust assets were financial resources for the purposes of section 25(2) (a). The latter question was whether the trustee would be likely to advance capital or otherwise provide benefits to the husband immediately or in the foreseeable future.
3. That question was factual and had to be assessed realistically by reference to all available evidence, including the circumstances of the trust, its beneficiaries, the trustees’ duties and the manner in which it had been administered. The trustee’s internal reasoning and assessment of the beneficiaries’ interests could therefore be directly relevant.
4. Where direct evidence from trustees was unavailable, the court might have to draw inferences and make assumptions. That was materially less satisfactory than deciding the case on direct evidence. The absence of trustee participation did not make potentially illuminating evidence irrelevant.
5. The court gave considerable weight to comity and recognised the public interest in trustees being able to apply privately for directions under Article 51 of the Trusts (Jersey) Law 1984. Those considerations did not create an absolute bar to disclosure. In the circumstances, disclosure was required to assist the fair determination of issues that were pivotal to the financial remedy proceedings.

The judgment concerned a disclosure order made during first-instance financial remedy proceedings. The proceedings settled before any further substantive hearing, but the court gave reasons for the order at the parties’ request.