MN v OP & Others – In what circumstances will the court grant an anonymity order to maintain parties’ privacy?

In March 2017, the High Court considered whether the insertion of a new perpetuity constituted a variation of trust or a resettlement and the circumstances in which an anonymity order is to be granted in trust cases.

The claimant sought an extension of the perpetuity period of a 1961 trust to 125 years together with an increased accumulation period of said trust. By way of background, the claimant also applied for the anonymity of the parties concerned, as the class of beneficiaries (in this case the defendants) included young members of the claimant’s family, and the claimant submitted that there could be harmful consequences to those minors if details about their beneficial interests became public.

In relation to the first issue, Mr Justice Rose referred to the Wyndham v Egremont (2009) EWHC 2076 case and the Variation of Trusts Ac 1958 and he held that an extension of perpetuity and accumulation period and any enlargement of the beneficiary class constituted a variation, with no formal resettlement required.

The Court also ruled on the execution of deeds of release by the trustees. There were potentially several hundred beneficiaries who had not consented to the new settlement terms, and it was accepted that it was impractical to obtain the consent of all. The Court removed all potential beneficiaries before the arrangement took effect and then reinstated them after the revisions, so that this consent would not be required. In this context, the Court held that the deeds of release were simply a mechanism used to ensure that the court had jurisdiction to approve the variation. The variation of the trust was thereby approved through this means.

As regards to the second issue, the Court considered V v T (2014) EWHC 3423 case which held that the derogation from open justice required exceptional circumstances, that general privacy was not sufficient, and that the burden was on the Claimant to show necessity. It also considered the X (A Child) v Dartford and Gravesham NHS Trust (2015) EHWC Civ 96 case which stated that the need to come to court only arose due to the involvement of children, in regard to the anonymity order.

The Court held that unlike the aforementioned case, the children had been intentionally involved in the legal process by the claimant, meaning that there was no prior assumption of anonymity. Further, the Court found that there was insufficient cogent evidence for a derogation from open justice, and that the information to be released about the estate was predominantly financial and therefore unlikely to impact the children. The Court added that there was already a wealth of available information on the claimant’s estate, and subsequently rejected the anonymity order albeit with interim time for an appeal.

This case is an interesting one which demonstrated one court’s uncompromising attitude with regard to personal privacy, even with the involvement of minors, and professional trustees should be mindful of this when considering court proceedings.

Representation of Y Trust and Z Trust [2017] JRC 100 – balancing the benefit when varying a trust

In August 2017, the Jersey Court considered an application under Article 47 of (Jersey) Trust Law (“The Act”) to vary two family trusts to widen the beneficial class in order to include children from same-sex relationships and children born out of wedlock. This was the first time the Jersey Court had considered the interplay between the trusts’ settlors wishes and the concept of “benefit” under the Act.

By way of background, the original settlements prohibited the inclusion of children from same-sex marriages or those born out of wedlock in the beneficial class. Whilst the family respected the settlor’s views, they wished to update the trust to reflect more egalitarian views and broaden the definition of potential beneficiaries to include said children. They also wished to establish a family council to consider those who may fall outside the definition but who would still be considered family.

The Act provides the Court with jurisdiction to approve an arrangement on behalf of minors, unborns and unascertained beneficiaries provided the Court is satisfied that the arrangement is for the benefit of those beneficiaries. The Court therefore considered the interplay between the settlor’s wishes and the assessment of “benefit.”

The Court held that when deciding whether an arrangement is to someone’s benefit, it would look at the matter as a whole and the “benefit” was not to be narrowly interpreted or restricted to financial benefit.

The Court also considered how the English courts had assessed “benefit” when dealing with variation applications under their similar law, and found that the English variation applications will have some regard to the settlor’s wishes but will not necessarily follow them.

In this case, the Jersey Court concluded that where it is satisfied that the proposed arrangement is beneficial to those on whose behalf the Court is sanctioning the variation, the fact that the variation might be against the settlor’s wishes is not material.

In this case, the Court granted the order varying the respective definitions of the beneficial class in the trusts as it considered that this would benefit the minor, unborn and unascertained beneficiaries. It should also be noted that the Court praised the family for their desire for unity and harmony.

As part of its judgement, the Jersey Court also considered the extent to which public policy issues should factor into the Court’s consideration of section 47 applications and the Court held that public policy can indeed be considered by the Court in these applications.

This case provides helpful guidance as to how the Jersey Court will deal with the question of “benefit” and the factors it considers when determining a vacation application under the Act. It also reflects that the Court is willing to move with the times.