Determination of a preliminary issue concerning alleged sham trusts in financial remedy proceedings.
- H and W were involved in financial remedy proceedings. As a preliminary issue, Roberts J was required to determine whether or not a number of formal trust structures were in fact a sham.
- H argued that, with W’s consent, he had settled the lion’s share of the parties’ wealth on trust for himself and for the benefit of their children. On his case, the matrimonial property amounted to c.£5m.
- W claimed that these were sham trusts or, alternatively, they should be should be set aside by the court. On W’s case, therefore, matrimonial assets amounted to c.£50m.
- Central to the decision was whether, in the first place, W had held a 50% beneficial interest in shares which H had purportedly settled on trust.
- The transfer of all the relevant shares and declaration of trust naming H as sole beneficiary was a sham and had no legal effect.
- At all relevant times, W retained a beneficial interest in 50% of the shares in question and was entitled to declaratory relief.
- H had validly settled his 50% interest in the relevant shares (amongst further assets then owned by him) on trust for the parties’ children during the life of the marriage, but this did not amount to a reviewable disposition.