A High Net Worth Divorce & Family Trust Saga (Part 3)

The husband and the wife were the principal parties to the Family Proceedings. The trustee (now a Jersey PTC) of the Trust was convened as a third party, which was uncontested.

The husband’s eldest two children (ie his children from his previous marriage) were joined to the Family Proceedings, following a contested application by them to intervene. The application to intervene by the husband’s eldest two children was said to be put forward on the basis that as beneficiaries of the Trust they had their own interests to protect and in addition the husband’s eldest child asserted a separate interest or contribution in assets of the Trust.

The husband and the trustee supported the husband’s eldest two children intervening in the proceedings, whereas the wife objected to it.

As the Family Court noted, “it is unusual for beneficiaries of a trust to be joined in matrimonial proceedings” but in the circumstances it was decided that it was appropriate to have all potential parties before the Family Court at the earliest opportunity and to bind the parties to any eventual decision of the Family Court.

This recognised the fact that at some point the trustee would have to approach the Trust Court for a blessing of any decision that involved them making assets available to the husband so that he may satisfy any financial order that the Family Court may make in the wife’s favour. Further, at any blessing application by the trustee (who, by this stage and after much debate, accepted that it would surrender its discretion to the Court in relation to any blessing application), those entitled to be convened and heard would include the beneficiaries of the Trust, which included the husband’s eldest children. Accordingly, if the husband’s eldest children were parties to the Family Proceedings when a final financial award was made, they would be bound by that decision and could not raise matters afresh with the Trust Court in a trustee’s blessing application.

The parties, at times, were able to agree issues. This included the husband’s eldest child’s separate claims to an interest or contribution in assets of the Trust. The husband’s eldest child’s claims were distinct and separate enough that they were to be dealt with as a preliminary issue. Shortly before the trial of the preliminary issue the parties reached agreement on the matter thereby avoiding the need for that trial.

Following resolution of the preliminary issue, the wife sought the removal of the husband’s eldest children from the Family Proceedings. The Family Court expressed sympathy with the wife’s position but took the view that it would be wrong to deviate from an earlier decision from a different judge, even where it was likely that a different decision would have been reached by the judge had he been sitting at the time.

The Family Court also cited its main reasons for allowing the husband’s eldest children to remain included the fact that the trustee would be expected to seek the blessing of the Trust Court in relation to any decision that involved the trustee making assets available to the husband to satisfy any financial order of the Family Court, and that if the husband’s eldest children ceased to be a party to the Family Proceedings then any objections they had regarding any financial award would likely be raised before the Trust Court, where they would be convened in their capacity as beneficiaries to the Trust. This, in turn, could add more delay and costs, and give rise to more complicated litigation.

Should they remain parties to the Family Proceedings, the issues would be vented before the Family Court and all the parties to the Family Proceedings would be bound by the outcome of the Family Court’s decision.

On the basis that the husband’s eldest children had legal representation and that the same legal representative also acted for the husband’s eldest children’s adult children, and the husband and wife’s child of the marriage, and that there was no objection by any of them to being joined to the Family Proceedings, the Family Court joined the husband’s eldest children’s adult children, and the husband and wife’s child of the marriage, who, in turn, would also represent their minor and unborn issue. Accordingly, this meant that all the beneficiaries of the Trust were represented in the Family Proceedings.