In 2000 Li Quan (the wife) created a charity called Save China’s Tigers. In 2002 her husband Stuart Bray (the husband) established a fully discretionary trust in Mauritius called the Chinese Tigers South Africa Trust (CTSAT) – the sole beneficiary of which was the charity.
In July 2012 the wife was removed as a director of the charity and in August 2012 she filed for divorce and made no mention of the trust. On 17 July 2013 she filed an application by way of amendment to her form A seeking a variation of the post nuptial settlement. The core of her case being that CTSAT was established not only to assist the tigers but also to provide financial benefit and support for the husband and wife over the long term.
CTSAT has assets of approximately £25m but the husband and wife have minimal assets.
The wife asserted that the CTSAT arrangement is a nuptial settlement with the ability to add the parties as beneficiaries, create sub-entities which the parties could then benefit from, give direct benefit to the parties and hold matrimonial assets. She also argued that even if it was not created with the intention to benefit the parties the trust acquired such character by the husband deciding that he would use the trust to benefit the parties. The wife argued that the husband had created a very complex structure with no paper trail to make his actions untraceable. Therefore her case was based on oral evidence.
The husband urged the court to focus on the big picture rather than the detail.
SCT UK argued that the wife was well aware that the trust had been created solely for the purpose of furthering the Chinese tiger project.
Mr David Leibowitz was a director CTSAT for many years and said that both the husband and wife had stated many times that the sole purpose was to benefit the tigers and that he did not believe that it was possible for it to have a secondary purpose that he was unaware of.
After the judgment was delivered in draft the wife submitted a Barrell application inviting the court to exercise its Barrell jurisdiction to rewrite the judgment.
Held (the wife’s application that it was a post nuptial settlement dismissed):
- 1) The essential features of a post nuptial settlement seem to be an existing disposition in favour to one or both parties to the marriage in their capacity as husband or wife and for their present or future benefit.
- 2) A settlement which is non nuptial at its creation can be ‘nuptialised’ if there is a flow of benefit to the parties from the trust.
- 3) Where the husband and wife differ in their recall his recollection is to be preferred and relied on.
- 4) Mr Leibowitz was a very compelling witness and I have no hesitation in accepting his evidence.
- 5) The fact that beneficiaries can be added to the trust does not make it a post nuptial settlement.
- 6) There is no evidence of past, present or future benefit to the parties from CTSAT.
- 7) When CTSAT was established it was only with one intention and that was to further the tiger project via the charity. There have never been any conversations which establish an intention to benefit either party and the secondary purpose as suggested by the wife is a late invention by her.
- 8) Some of the wife’s evidence was wildly inaccurate. She changed her stance completely during the course of the divorce to attack the trust. She has been blinded by her desire for revenge and this led her to fabricate where she thinks it will assist her case.
- 9) CTSAT’s assets cannot properly be regarded as a resource of the husband in the s25 sense. Accordingly it would be wrong for a court to make a lump sum order against the husband in the hope and expectation that funds would be provided by CTSAT to fulfil it.
10) The use of the Barrell jurisdiction in these circumstances is wrong. The process is to be used when some evidence has been admitted, overlooked or has changed since the hearing. The process does not afford a party the right to invite the court to start again and ‘have another go’ at finding for them.Judgment This judgment is being handed down in private on 27 October 2014. It consists of 28 pages (plus two annexures of 18 pages) and has been signed and dated by the judge. The judge hereby gives leave for it to be reported from 27 October 2014. COLERIDGE J/SIR PAUL COLERIDGE  Tigers are an …