The High Court has ordered a husband in judicial separation proceedings to provide updated disclosure about two trusts linked to him, finding that his earlier disclosure was inadequate. Mr Justice Abbott’s ruling concerned information needed for the ongoing case; it did not determine what provision should ultimately be made or whether any trust assets would be available to the court.
The judgment, delivered on 18 April 2008, dealt with motions brought by both spouses seeking disclosure about trusts. The husband’s separate motion to join trustees of a trust referred to as the M. Trust was not pursued at the hearing. The judge said it could be adjourned with liberty to re-enter.
The couple married in 1988 and have three children. The wife began judicial separation proceedings in 2005. The judgment records competing accounts and submissions about family trusts, including a trust established by the husband, now called the K. Trust, and the C. Trust. The husband disputed the wife’s contention that documents showed he could readily access funds connected with the K. Trust. The judge treated that material as neutral at this stage.
Mr Justice Abbott found that the children were likely to be beneficiaries or potential beneficiaries of the K. and C. trusts. He said there was an arguable case that the trusts could be treated as post-nuptial settlements to which statutory variation powers might apply. Those observations were part of the disclosure analysis, not a final determination of the trusts’ status or of the children’s entitlements.
The judge found that, despite the husband having disclosed a wide range of documents, his disclosure remained inadequate. He ordered full, up-to-date disclosure from him in relation to each of three possible ways trust assets might be relevant to the proceedings. He considered it more cost-effective to seek that information from the husband first than from trustees, given the limits that may apply to trustees’ disclosure duties. He rejected the argument that the wife’s request was a fishing expedition.
The wife’s motion succeeded to the extent of the relief in paragraphs (a) and (b) of her notice of motion dated 4 May 2006. The judgment does not reproduce those paragraphs, so their precise terms cannot be stated from this source. The judge made no order on paragraph (c), leaving the parties free to return to him for case management.
On the husband’s request for equivalent disclosure from the wife concerning the M. Trust, the judge said different considerations applied because she was not its settlor and was not fully acquainted with its details. He ordered that the in camera rule be lifted only as needed to notify people involved in the M. Trust if the husband chose to pursue third-party discovery. He stressed that he was not directing him to do so and was not prejudging any such application. The trustees’ joinder motion was adjourned generally with liberty to re-enter, and costs were reserved.