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High Court includes Jersey trust assets in ancillary relief award

31 August 2010

The England & Wales High Court has decided to include a discretionary trust in its assessment of a wife's entitlement to ancillary relief, even though the trust assets were provided by the husband's father before the marriage.

The case, B v B [2010] EWHC 3422, resembles the Charman case, in that the husband argued that the trust's discretionary nature meant that the funds were not immediately available to him and thus should not be considered as part of the matrimonial assets.

However - unlike Charman - the trust assets in B v B came entirely from outside the marriage, being the proceeds of  businesses owned by Mr. B's father (who is a Swedish philanthropist).

These assets amounted to GBP14.5 million held in two Jersey trusts, with Mr. B and his sister named as beneficiaries along with his parents and the charitable family foundation.

At the ancillary relief proceedings, Mr. B offered a settlement of GBP3 million, being half of the immediately available matrimonial assets. Mrs B demanded GBP6.5 million, arguing that some of Mr. B's family's trust should be included in the assets.

The judge (Moylan J) considered the "central question" of whether the trustee would have been willing to advance the trust's capital to Mr. B on request.

He invited the trustees (a professional Jersey company) to produce documentary evidence, but they supplied only limited documents and did not participate as witnesses.

In the end the court allowed Mrs B an award of GBP4.5 million, and ordered Mr. B to make a substantial contribution to her costs (she had a litigation loan of GBP217,000 plus unpaid costs of GBP120,000).

The costs award was to mark the judge's disapproval of the manner in which Mr. B had litigated the case.

 

Sources

Family Law Week


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