A High Net Worth Divorce & Family Trust Saga (Part 8)

Multi-jurisdictional ending

Throughout the litigation, there have been proceedings and applications before the Family Court and the Trust Court. The Family Court dealing with the Family Proceedings, which ultimately concerns how the family’s finances should be divided. The Trust Court dealing with matters that concern the Trust and decisions by the trustee regarding the administration of the Trust.

They are separate matters, where the Courts have “a very different role under each jurisdiction, as explained by Sir Michael Birt in the case of Re the H Trust [2006] JLR 280 where he said at paragraph 14:

“In this respect it is important to note that the roles of the two courts are very different. The Family Division is concerned to do justice between the two spouses before it. It is sitting in a matrimonial context and its objective is to achieve a fair allocation of assets between the spouses. It has no mandate to consider the interests of the other beneficiaries of any trust involved. Conversely, this Court is sitting in its supervisory role in respect of trusts, as is regularly done in the Chancery Division of the High Court. This court’s primary consideration is to make or approve decisions in the interest of the beneficiaries. It is therefore a very different focus from the Family Division.””

Further, it was the view of the Court in 2020 that “these different roles would dictate that in practice it would be very difficult, if not impossible, for one court to exercise both jurisdictions at the same time.”

Fast forward a few years, and the Court in 2023 considered whether it could sit as one Court exercising jurisdictions of three divisions and decided that it could.

“The first jurisdiction was as a matrimonial court to give its consent to the agreement which the parties have reached [in relation to the division of the family’s finances]. That consent was indeed given. The second jurisdiction was that of the capacity court under the Law, where it was looking at the decision of the delegate to settle the proceedings. The Court has approved that decision as well. Thirdly, the Court has been asked to bless the arrangement proposed by the Trustee; and acting as a trust court has given that sanction.”

The Court acknowledged the convenience of sitting as one Court to exercise all the jurisdictions; this included avoiding the possibility that different Courts may reach different and inconsistent conclusions, and that it was cost effective and, in the present circumstances, without difficulty where the parties were aligned.

If you need more information about this article or any legal advice, please call Advocate Catia Tavares on +44 (0)1534 620500 or email her at catia.tavares@sinels.com.