Disclosure of Trust Documents in Ancillary Relief

In both Young v. Young and Thursfield v. Thursfield, businessman husbands have been given prison sentences for failing to comply with disclosure orders in claims for ancillary relief. The order against Mr Young related to suspected offshore assets that had been ‘hidden’, while the latest order against Mr Thursfield relates to a known family trust administered in the Bahamas. These cases are just two of many in recent years which raise the question: what powers are available to the court to obtain disclosure of trust documentation?

Order for Disclosure against a Party

The most obvious power is for the court to make an order for disclosure against a party to proceedings by way of a mandatory injunction to provide information and disclosure, under s.37 Senior Courts Act 1981. The court will need to be satisfied that the party can provide disclosure or will be able to do so, but need not consider notions of control under CPR 31.8 [Thursfield v. Thursfield [2012] EWHC 3742 Ch]. In relation to trust documents, this is often on the basis set out in Schmidt v. Rosewood Trust Ltd [2003] 2 AC 709 that a beneficiary has a right to seek such disclosure from the trustees. In Re Rabiotti 1989 Settlement [2000] JLR 173, where an order for disclosure was made by the High Court against a party who was a beneficiary of trusts in Jersey, the Royal Court ordered the Jersey trustees to disclose both the ‘accounting documents’ and all letters of wishes sought by the order. Where the party is not a beneficiary, or the trustees are not made aware of the order, such an order may have limited effect.

Order for Disclosure against a Third-Party

An order for disclosure by the trustees (or any other third party) where they are within, or come within, the jurisdiction may be made pursuant to FPR 21.2. Disclosure must be necessary in order to dispose fairly of the proceedings, and while particular documents or documents relevant to a particularised allegation should be specified in the application there is no requirement for the applicant to prove that the documents exist [see judgment of Wilson LJ in Charman v. Charman [2005] All ER (D) 298]. This method was used in Charman to order the husband’s English accountant to disclose trust documents.

Letter of Request

Where trustees reside outside the jurisdiction the court can issue letters of request under the Hague Convention on the Taking of Evidence Abroad in Civil or Commercial Matters 1970, given effect in England by the Evidence (Proceedings in Other Jurisdictions) Act 1975. Again the request should be for disclosure of particular documents, or documents relevant to a particularised allegation, to avoid any allegation of ‘fishing’. This was employed successfully in Minwalla v. Minwalla [2004] 7 ITELR 457 to obtain information and disclosure from the Jersey trustee of the Fountain Trust, and approved by the Royal Court in Re the H Trust [2006] JRC 057 where it observed that the provision of trust information by its offshore trustee to a court in England charged with adjudicating a claim for ancillary relief is in principle desirable and does not represent submission on the part of the trustee to its jurisdiction. In Charman v. Charman a letter of request was unsuccessful in obtaining disclosure from the Bermudian trustees, but the Bermudian court has subsequently acknowledged that it erred [Jennings v. Jennings [2009] SC (Bda) 62 Civ].

Observations

These powers have potentially wide application but it is worth noting from the recent cases that disclosure orders may have greater effect against an independent professional (e.g. accountant, financial adviser or professional trustee) than against a party to proceedings.

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