Analysis
The applicant (Mr AH) sought the disclosure of trust instruments and trust accounts for the Blue Settlement and the Overseas Distributors Benefit Trust (ODBT), having been ordered to procure and disclose the same to Mrs AH in separate divorce proceedings being heard by the Family Court in England. The trustees of the Blue Settlement (Greyco) gave evidence that Mr AH was the settlor of the Blue Settlement, though both he and his family members were excluded as beneficiaries. The trustees of the ODBT (ABC) gave evidence that neither Mr AH nor his family members were within the class of beneficiaries, but that Mr AH and his son had received loans on a commercial basis from the ODBT and that Mr AH had been engaged by ABC to maintain properties it owned in the Cape Verde islands, being allowed in return to occupy one of the properties. Both trustees offered to make the trust documents for the Blue Settlement and the ODBT available to an independent Manx advocate for the purposes of a report confirming Mr AH’s interests in the trusts. This offer was refused by Mrs AH.
Held:
- (1) The jurisdictional basis of the application was the court’s jurisdiction to supervise the administration of trusts. It was doubted that the court’s power to order pre-action disclosure had any relevance.
- (2) While applications for disclosure of trust documents are normally envisaged to be made by a beneficiary or someone within the class of potential beneficiaries, it is not necessary that the applicant be a beneficiary, following U Ltd v B [2011]. Whether the applicant is a beneficiary or not goes to the merits of the application and not the court’s jurisdiction. Further, this application could equally have been one for directions by the trustees.
- (3) The central issue before the court was whether the disclosure sought was beneficial to the beneficiaries of the subject trusts. In these circumstances, there was no measurable benefit to the beneficiaries in disclosure, but there was an obvious detriment in confidential financial information being put in the hands of strangers to the trusts.
- (4) There was no precedent to support this application. U Ltd v B was distinguished as in that case the beneficiaries were the children of the divorcing parties and here Mr AH was further removed from the Blue Settlement and the ODBT.
- (5) As the divorce proceedings were being heard in England, the principle of comity weighed heavily with the court. However, the expectation of confidentiality outweighed any considerations of judicial comity. The English court had the benefit of the trustees’ evidence and the trustees had made a reasonable offer of having the documents reviewed. To hold that the evidence of the trustees was insufficient would amount to an accusation of conspiracy between the trustees and Mr AH, which was most unlikely.
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