Jersey trusts and foreign divorce proceedings: The H Trust (2007) JRC 187

Abstract

This is a second and important judgment in the H Trust litigation, which was first before the Royal Court in April 2006. At that hearing, the Royal Court directed the Jersey resident trustee of the H Trust not to take any part in English divorce proceedings between a husband and wife, both of whom were beneficiaries under the H Trust, but to provide full information to the parties for use in the English High Court. The husband was the settlor of the H Trust. The Royal Court also encouraged the trustee to assist in giving effect to any reasonable arrangement reached by the husband and wife in relation to their financial affairs. The English High Court subsequently made certain orders against the husband, requiring him inter alia to pay a lump sum to the wife, making it clear that the lump sum was to be paid out of the H Trust. The husband was also to procure the transfer of certain UK properties owned by the H Trust to the wife. The wife's solicitors wrote to the Jersey trustee asking them to ensure the order was complied with. The Jersey trustee subsequently proposed a different and less generous solution, which would have required the wife to remain a beneficiary under the H Trust, saying that if agreement could not be reached on this proposal within a short-time frame then it would refer the matter to the Royal Court for directions (the trustee's first decision). The wife rejected the proposal.