Elizabeth Tchenguiz-Imerman v Vivian Saul Imerman

22 November 2013

[2013] EWHC 3627 (Fam)

Family Division (Moylan J)

In contested financial remedy proceedings in a high-profile divorce, the applicant wife applied for disclosure of certain documents relating to Jersey and BVI discretionary trusts. The trusts had been settled by the husband’s father but included very substantial funds generated by the husband during the course of the marriage. In 2005, the discretionary trusts had been amended to exclude the husband and wife as beneficiaries albeit that the husband’s exclusion was revocable. The wife contended that the wealth in the discretionary trusts were resources that were or could be made available to the husband.

The husband’s adult children from a previous marriage (who were beneficiaries of the discretionary trusts) were joined to the proceedings for the purposes of disclosure. They sought directions from the Jersey Royal Court. The Jersey Court voiced concerns about permitting such disclosures, envisaging that it might inhibit trustees from making full and frank disclosure if there was a risk that information provided to the beneficiaries might become available to those hostile to the trust, and said that it would not normally permit such disclosure. However, in the very unusual circumstances of this case, it gave permission for disclosure by the beneficiaries if the English Court made such an order.

The English court made such an order. The issue before it was a factual one of whether the husband would have access to the trust funds on which there was very little evidence from the trustees and the Court would have to rely on assumptions and inferences, which was unsatisfactory. The material’s potential relevance and importance justified its disclosure and it was unlikely to be forthcoming from any source other than the adult beneficiaries. The Court took account of the concerns of the Jersey Court in the interests of comity and it recognised that it needed co-operation from the Jersey Court, but nevertheless justified disclosure here.

The decision illustrates that, despite very strong concerns from the Jersey Royal Court about disclosure of sensitive and confidential trusts material, the English court can and will order such disclosure where it would assist in the just resolution of the proceedings.