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You are here: BAILII >> Databases >> High Court of Ireland Decisions >> T.-M. (F.J.W.) v. T.-M. (C.N.R.) [2004] IEHC 114 (22 June 2004) URL: http://www.bailii.org/ie/cases/IEHC/2004/114.html Cite as: [2005] 1 IR 321, [2004] IEHC 114

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THE HIGH COURT

HC 247/04

[2000 No. 28M]

FAMILY LAW

IN THE MATTER OF THE JUDICIAL SEPARATION AND FAMILY LAW REFORM ACT, 1989 AND IN THE MATTER OF THE FAMILY LAW ACT, 1995

BETWEEN

F.J.W.T.-M.

APPLICANT

AND

C.N.R.T.-M.

RESPONDENT

AND BY ORDER OF THE COURT

TRUSTCORP SERVICES LIMITED BEING THE TRUSTEE FOR THE TIME BEING OF THE "REPUS TRUST"

NOTICE PARTY

JUDGMENT of Mr. Justice William M.McKechnie delivered the 22^nd day of June, 2004.

1. The applicant and the respondent in these proceedings were lawfully married to one another on 21^st October, 1970 at the Royal Hospital Chapel in London. Of that marriage there were born two children. A.L.T.-M. whose date of birth was the 21^st July, 1977 and their son R.C.R.T.-M. who was born on 27^th October, 1978. For reasons not immediately relevant to this application, the marriage of Mr. and Mrs. T.-M. has irretrievably broken down with the result that the applicant wife on 6^th March, 2000 issued the within proceedings against the respondent. In that she claims a decree of judicial separation pursuant to the Judicial Separation and Family Law Reform Act, 1989 and also several other reliefs including a variety of what may conveniently be termed "Property Adjustment Orders", all under the Family Law Act of 1995. The seeking of these reliefs has, of course, brought into play the assets of both the applicant and the respondent. One of these assets, indeed by far the most significant, is Barne House and its estate of approximately 750 acres of land together with the agricultural machinery, equipment and stock which is used for the farming and cultivation of the said lands. The accommodation consists of a period house which was first occupied by the applicant and the respondent in 1976/1977 and, according to the applicant, has been their family home since then. There is also a house on the estate which is let to a tenant as well as other household items and objects of considerable value. However, because of the legal structure by which this property is held, it became evident during the course of the pleadings that, in the judicial separation proceedings, an issue might arise, as to whether the court of trial could have regard to the Barne estate when considering what proper provision should be made for each spouse under the relevant provisions of the 1995 Act.
2. In short, this estate is the subject matter of a discretionary trust, "The Repus Trust", established many years ago against the background and in the circumstances hereinafter more fully set forth. As a result of concerns about its availability to the court of trial, a notice of motion was issued on behalf of the applicant dated 21^st December, 2001. In that, orders in the following terms were sought:-

"1. An order pursuant to the provisions of s. 40 of the Family Law Act, 1995 directing that the trustees for the time being of the repus trust be given notice of the within proceedings and be joined as a notice party to these proceedings.

2. An order allowing the applicant to amend the special summons dated 6^th March, 2000 to include a claim pursuant to the provisions of s. 9(1)(c) of the Family Law Act 1995, varying for the benefit of the applicant and the dependent members of the family the terms of the settlement made by the respondent".

Following the filing of affidavits in support and in opposition to the relief sought, Abbott J. on 13^th June, 2002 ordered that the trustees of the said trust "be joined as a notice party herein for the purposes of determining as a preliminary issue whether or not the repus trust comes within the provisions of s. 9(1)(c) of the Family Law Act, 1995 and if so whether or not the trustees should be joined further herein." As part of an ancillary order a statement of claim was served by the applicant and a defence filed on behalf of the respondent. Moreover, the notice party now joined for the purposes of this issue, had on its behalf an affidavit sworn by one William Henry Kenneth Simpson. At the hearing of this issue, all parties were represented by solicitor and counsel and all made submissions in respect thereof.

This judgment, therefore, is concerned solely with the point which Abbott J. ordered should be preliminarily determined pursuant to his said direction of the 13^th June, 2002. It does not, as a result, purport to deal with the substance itself of the said judicial separation proceedings.

3. The Barne Estate, with its accommodation comprising six living rooms, nine bedrooms, five bathrooms and sixteen other rooms, can be, according to the respondent, traced back to his family for at least 350 years. In more recent times, it would appear that one R.K.M. owned this property at the date of his death in 1918. Under the terms of his will the respondent's father inherited the estate on the death of R.K.M's widow which occurred in 1953. Following the barring of the entail, the respondent became the remainder man. That seems to have been the position up to the mid 1970s. Commencing in 1976, the following acts and events took place, which accumulatively constitute the factual circumstances in which the aforesaid preliminary issue must be determined.
4. From the documentation it would appear that what is hereinafter set forth is a brief and distilled version of these said acts and events.

(a) Barne Estate Limited is a company limited by shares and was registered in Jersey on 22^nd January, 1976.

(b) By agreement in writing made on 5^th July, 1976, between the parents of the respondent of the first and second parts, and this company of the third part, it was agreed that the said parents would sell to the company various heridatments incorporating the house and the 750 acres of land, which are known and referred to as the Barne Estate. On 12^th November, 1980 this agreement was implemented by way of an Indenture of Conveyance and Transfer giving full effect to the terms and conditions thereof.

(c) The purchase of the estate by the company was facilitated by the respondent, granting to it a loan in the sum of IR £553,284. In consideration, the company issued to the respondent £533,000, 0.15 per cent convertible unsecured loan stock in itself.

(d) This loan stock was in turn the subject matter of an original settlement made on or about the 4^th April, 1977, which settlement is sometimes referred to as the "Jersey Settlement". These said notes were held on trust for the benefit and enjoyment of a company called Redshank Investments Limited until either one or other of particular events occurred and thereafter in respect of both capital and income were held for the benefit of Repus Investments Limited, a company registered in March 1977.

(e) Redshanks Investment Limited executed a disclaimer dated 30^th September, 1987 under which all of its interest in the "Jersey Settlement" was disclaimed. As a result Repus Investment Limited became the sole beneficiary under the settlement.

(f) On 30^th December, 1987 the Repus Trust was executed, following which the loan stock was transferred to its then trustees. In a Deed of Release and Indemnity dated 9^th December, 1998, the trustees of the Repus Trust released and discharged the trustees of the "Jersey Settlement" and indemnified them in relation to the transfer of the trust assets.

(g) Repus Investments Limited then assigned its interest under the Jersey Settlement to the trustees of the Repus Trust to hold same upon the terms of the said trust.

(h) On 22^nd June, 2000 the notice party was appointed sole trustee of this trust with the retiring trustee, by way of written transfer made on 27^th June, 2000 assigning to the said notice party the said trust fund.

(i) By letter dated 7^th September, 2001 Trustcorp Services Limited confirmed to Messrs McCann Fitzgerald solicitors on behalf of the applicant that Trustcorp Limited was the sole trustee of the Repus Trust.

(j) By "notice of conversion" given on 9^th May, 2002 the sole trustee, under para. 1 of the Schedule of Conditions to the loan stock, gave one month's notice of its intention to convert its entire holding of this loan note into 533,000 £1 ordinary shares in Barne Estate Limited.

(k) The result of the conversion last mentioned is that the respondent holds 9 shares of £1 each in Barne Estates Limited with the notice party now holding 533,000 ordinary shares in the said company. There are no other shares authorised or issued other than those just mentioned.

(l) The trust property, therefore, is represented by this majority shareholding in Barne Estates Limited which in turn owns the property known as the Barne Estate.

(m) Under the instrument creating the Repus Trust the settlor was the respondent with the original beneficiaries being those as set forth in part 2 of the Second Schedule. There were the daughter and son of the parties hereto, their spouses, their issue and the spouses of such issue. In addition, at indent 1.03 of that part of the Schedule the following is also stated as a beneficiary namely "the widow …" of the respondent, and

(n) By an Instrument of addition made 28^th August, 2001, the notice party, as the sole trustee, added to the class of beneficiaries the respondent and the respondent's sister, one RS.

5. Under the trust instrument, it is accepted by all parties that the trustee for the time being of this trust has full discretion to nominate persons or classes of persons to be beneficiaries for the purposes of the trust and also that it has full discretion over any advancement made in exercise of its powers therein contained. The term discretionary trust has not been disputed by the applicant as being an appropriate description of the aforementioned instrument of trust.

The said trust, in para. 3 under the heading "Renunciation by/and Nomination of Beneficiaries" states the following:-

"3.01 Notwithstanding anything hereinafter contained any of the beneficiaries shall have the power from time to time by instrument delivered to the trustees to declare that he is no longer to be included amongst the beneficiaries and whether in respect of the whole or any parts of the trust fund and as and from the date of any such declaration the trustees shall be absolutely prohibited from exercising in favour or for the benefit of the person making such declaration or his estate any power or discretion conferred on them either as regards payment, appropriation or application of income or capital of the trust fund or of the parts thereof to which such declaration may relate provided always that:- …

'And finally, the trust which is stated to be irrevocable, has a trust period from the date of its execution until whichever the following dates shall occur the sooner, namely'

the day on which shall expire the period of one hundred years from date thereof or such earlier date as the trustees may declare to be the date of expiration of the trust period as is hereinafter provided."

6. The arrangements above described, by which Barne Estate is held, were conceived, established and implemented by the respondent in order to deal, from a tax and inheritance point of view, with the situation which he found himself in, in the mid 1970s. At that time and thereafter he sought and obtained both property and taxation advice and, based on the resulting recommendations, entered into the above arrangements. At all times, I am satisfied, that he acted genuinely and in a bona fide manner and was simply endeavouring to achieve the most tax efficient manner of succeeding to this estate. At no stage, nor is there any question of this, was the aforesaid scheme devised so as to diminish the assets of the family or otherwise to disadvantage his wife or children. It is clear from the uncontested evidence, at least for the purposes of this issue, that he was adhering to a process which it was felt would deliver to him this inheritance in the most financially beneficial way possible. It has not been suggested by the applicant that this was done secretly or in a manner concealed from her. In fact, I am satisfied in all probability that she was, at least in general terms, aware of this structure. Accordingly, given the view of the situation and given the absence of any challenge under s. 35 of the Family Law Act, 1995, (under which the court has power to deal with dispositions intended to prevent or reduce relief), it seems to me that I must approach this case on the basis that these entire transactions were legitimately entered into.
7. This assessment of the evidence, however, also carries with it a strong belief on my part that it was never the intention of the parties, that as a consequence of these arrangements the major asset of either the applicant or the respondent or in part both of them, would be excluded from consideration in the event of their marriage not ultimately succeeding. In truth, of course, it is almost certainly the position that neither of them had, at any of the relevant times, in their contemplation a marriage failure and thus had not even thought, let alone addressed the issue of what assets might be amenable to a court if that unfortunate event in fact occurred. If, however, that issue, however remote at the time, was raised between them I am equally satisfied that neither would have asserted a position which, if the respondent's contention in this case is correct, is now the inadvertent result of a legal situation which at least potentially, may have significant adverse consequences for the applicant. However, as to what extent these considerations and those referred to in the paragraph immediately proceeding, are or might be relevant, remains to be seen.
8. The granting or the refusal to grant a decree of judicial separation will be considered in this case by the court under ss. 2 and 3 of the Judicial Separation and Family Law Reform Act, 1989. The granting or withholding of property adjustment orders, however, must be determined in accordance with the relevant provisions of the Family Law Act, 1995. In particular, ss. 9 and 16 of that Act are most relevant for the purpose of these proceedings. Insofar as is material s. 9 reads as follows:-

"9-(1) On granting a decree of judicial separation, the court, on application to it in that behalf by either of the spouses concerned or by a person on behalf of a dependent member of the family, may, during the lifetime of the other spouse, or, as the case may be, the spouse concerned, make a property adjustment order, that is to say, an order providing for one or more of the following matters:

(a) …

(b) …

(c) the variation for the benefit of either of the spouses and of any dependent member of the family or of any or all of those persons of any ante-nuptial or post-nuptial settlement (including such a settlement made by will or codicil made on the spouses;

(d) the extinguishment or reduction of the interest of either of the spouses under any such settlement.

(2) …

(3) …

(4) …

(5) …

(6) …

(7) …"

9. When considering the making of an order under this s. 9, or indeed for that matter under any one or more of, several other sections which in one form or another could be classified as containing property adjustment measures, one must also apply the provisions of s. 16 of the same Act. In sub-s. (1) of that section the court of trial must, in deciding what final orders should be made, endeavour to ensure that proper provision is made for each spouse and any dependent member of the family having regard to all of the circumstances. In sub-s. (2) there are then listed several different factors regard to which must be had in fulfilling or implementing this mandate. One such provision is specified in subpara. (a) and reads

"16-(2)(a) the income, earning capacity, property and other financial resources which each of the spouses concerned has or is likely to have in the foreseeable future. [emphasis added]."

In addition, under sub-s. (5) the court cannot make an order under s. 16 "unless it would be in the interests of justice to so do". Accordingly, it can be seen from a close examination of not only ss. 9 and 16 of the 1995 Act but also from the other statutory provisions under which a court is entitled or obliged to operate, that on or after the granting of a decree of judicial separation, when it is called upon to make such proper provision for the spouses and the dependent children, it has wide ranging and extensive statutory powers in order to achieve or attain the result which by statute it must endeavour to so achieve.

10. On behalf of the applicant wife, Mr. David Hegarty SC made the following submissions:-

(a) That the instrument of trust above mentioned, namely the Repus Trust is "a post-nuptial settlement" within the meaning of s. 9(1)(c) of the 1995 Act. He says that this phrase should be given, not a narrow construction but a broad and robust one so as to fulfil the true intentions of the Oireachtas, which underline the 1995 Act. He relies upon the judgment of McGuinness J. in N.(C) v. N. (R) (Unreported Circuit Court, 9^th February, 1995) where the learned judge, on this point, and in the absence of Irish case law accepted as persuasive the English authorities on its comparable provision to s. 15(1)(c) of the 1989 Act.

(b) By far his most important authority, however, was the decision in Brooks v. Brooks, a case in respect of which he opened judgments from all three courts involved, namely the High Court, the Court of Appeal and the House of Lords. This case is reported respectively at [1993] 4 All ER 917 (High Court), [1994] 4 All ER 1065 (Court of Appeal) and [1995] 3 All ER 257.

(c) He asked this court to follow all such judgments and indeed also to have regard, to many of the other authorities cited and approved of therein. In this regard he highlighted in particular the case Lort-Williams v. Lort-Williams [1951] 2 All ER 241. Continuing, he said that if this court should find the principles therein enunciated acceptable this should, in his opinion, lead inevitably to the conclusion that his primary submission, namely that the trust is within s. 9(1)(c) of the 1995 Act, was well justified.

(d) He, therefore, claimed that the trust was a settlement because it involved a disposable property, and since it was created after the parties were married but still during the currency of that marriage, it was "post" nuptial. It was "nuptial" in that the settlor was the respondent and one of the beneficiaries originally nominated by him was "his widow" which description, admittedly subject to a contingency, could not possibly fit any individual other than his wife. Lastly, counsel said that it was not relevant that the property was legally held by trustees.

11. Mr. Richard Nesbitt SC replied on behalf of the notice party, namely the trustee. His submissions can, I think, be thus summarised:-

(a) As a matter of general law the rights of beneficiaries in principle have been correctly described as La Spes, that is having a hope of being the objects of appointment. Kenny J., in Chaine Nickson v. Bank of Ireland [1976] I.R. 393, at p. 396 stated that "in the case of a discretionary trust, none of the potential beneficiaries have any right to be paid capital or income". In Gartside and Another v. Inland Revenue Commissioners [1968] AC 553, the House of Lords held that the only right of an object of a discretionary trust (of income), is to require the trustees to consider from time to time whether or not to apply the whole part or some of the income for his benefit and was not an interest in the whole fund or any part of it within the meaning of the Finance Act, 1940. Counsel claimed that notwithstanding its particular legislative context, the case nonetheless was still an authority for the proposition that persons with contingent interests do not have "an interest in possession": see in particular Lord Wilberforce at p. 622 of the report.

(b) On the wording of the section itself, this instrument did not come within its provisions as it was not "made on the spouses". The applicant in this context was not identified as a beneficiary. A potential beneficiary was the respondent's widow but, that phrase could not be definitely identified with his wife and, in any event, was incapable of true ascertainment until his death.

(c) In addition, the trust was not made on the respondent, at least not until the execution of the Instrument of Addition dated the 28^th August, 2001. Therefore, the trust itself could not be said to be "made on the spouses" and was, accordingly, outside the clear and unambiguous wording of s. 9(1)(d) of the 1995 Act. In any event, none of the beneficiaries either those originally named or those added by the trustee, which after the initial nomination was the only individual with such power, had any interest in the trust or any anticipation of receiving a benefit thereunder as these were matters which were entirely subject to the absolute discretionary power of the said trustee.

(d) Mr. Nesbitt SC felt that the analysis of the relevant section by the author of Shatter's on Family Law 4^th Ed. (Dublin, 1997) at paras. 17.33 was incorrect, in that the Author's view was mistaken when he suggested that a settlement even if only made on one spouse may still nevertheless come within the section

(e) Counsel also claimed that since these arrangements were put in place for the purposes of tax efficiency there was no "nuptial" element and, therefore, for this reason alone the same should be excluded from the provision of the relevant section.

(f) A further argument was that since the Repus Trust predated the enactment of both s. 9 of the 1995 Act and its predecessor s. 15 of the 1989 Act, these provisions should not be applied to such an instrument as to do so, would in effect be the same as retrospectively applying legislation which by its terms was not justified. See O'H. v. O'H. [1990] 2 I.R. 558 and Chestvale Properties Ltd. v. Glackin [1992] I.L.R.M. 221.

(g) And finally, on this aspect of the case, Mr. Nesbitt S.C. relied upon the decision of McGuinness J., in J.D. v D.D. [1997] 3 I.R. 64, which from his client's point of view was a very significant judgment indeed. In that case when considering both section 15 (1)(c) of the 1989 Act and s. 9 (1) (c) of the 1995 Act, the learned Judge is said to have effectively decided, following Howard v. Howard [1945] 1 All E.R. 91, that for an instrument to come within the ambit of these provisions the interest in question must be one in possession or reversion but not further remote than either.

(h) In conclusion, therefore, it was submitted on behalf of the trustee of the Repus Trust, that the scheme in question did not come within the relevant statutory provision and accordingly, on a point of principle, s. 9 (1)(c) was not available for this courts consideration even when exercising its power under s. 16 of the said 1995 Act.

12. Mr. Hayden SC, who appeared on behalf of the respondent, adopted the submissions made on behalf of the trustee and whilst independently adding to those, his views and opinions are, I feel, reasonably reflected in the summary above given.
13. To a trust lawyer a "settlement" has a narrow meaning referring to conveyance of real or personal property to trustees to hold subject to either general or express limitation. To the tax lawyer it may go wider, and may include "any disposition, trust, covenant, agreement, arrangement or transfer of assets" providing there is some element of bounty. See I.R.C. v. Plummer [1979] 3 All ER 775. To a family lawyer, however, the word, in the context of an anti-nuptial or post-nuptial instrument, has an entirely different meaning, a meaning derived from a broad and purposeful approach, rather than one which is exclusively obtained from a literal interpretation. This is founded at least partly upon the aims and objectives of, and the social purpose which underlies the category of family legislation where, in this context, the relevant phrase is used. This method of construction has, almost without exception, for several years been the guiding force by which the courts have interpreted this phrase in family law legislation. Equally so, this method of attention has also found very considerable support in all of the major text books dealing with this topic.
14. In her decision, N. (C.) v. N (R), supra McGuinness J. traced the statutory development in English law of the power to vary ante and post-nuptial settlements. This power, though in a more general way, first appeared in s. 45 of the Matrimonial Causes Act, 1857 and was then followed by s. 5 of the Matrimonial Causes Act, 1859. This section read:-

"(v) The court after a final decree of nullity of marriage or dissolution of marriage may inquire into the existence of anti-nuptial or post-nuptial settlements made on the parties whose marriage is the subject of the decree, and may make such orders with reference to the application of the whole or a portion of the property settled either for the benefit of the children of the marriage or of their respective parents as the court shall deem fit".

This section was in turn replaced by s. 192 of the Supreme Court of Judicature Act, 1925 which for all practical purposes made no change to the wording of the section and neither did it further re-enactment in the Matrimonial Causes Act, 1950. The most recent statutory basis for this provision appears to be s. 24 of the Matrimonial Causes Act, 1973 where at sub-s. (1)(c) it is provided, that the court can make "an order varying for the benefit of the parties to the marriage … or either … of them any anti-nuptial or post-nuptial settlement … made on the parties to the marriage. …".

The jurisdiction to make this type of order was grounded upon inter alia a decree of judicial separation in the 1857 Act but not so in the 1859, 1925 or 1950 Acts. This power was again extended to judicial separation in the 1973 Act but nothing turns on its absence in the intervening period. As can, therefore, be seen the court in England has power to vary for the benefit "of the parties" to the marriage any "post-nuptial settlement" which was made "on the parties" to the marriage.

15. The first such comparable provision in this jurisdiction appears to be s. 15(1)(c) of the 1989 Act, which apart from a minor amendment, was reproduced in its entirety by s. 9(1)(c) of the 1995 Act. This last mentioned section is quoted at para. 8 above, with the only difference between the sub-sections being the insertion of the words "either of" immediately after the phrase "for the benefit of" in the first sentence of s. 9(1)(c). Therefore, the only material difference between the English statutory regime and that pertaining domestically is the use in this jurisdiction of the phrase "the spouses" instead of "the parties" which is contained in the 1973 Act. Apart from that, the relevant sections appear virtually identical.
16. In Bromley's Family Law 9^th Ed., (Cardiff, 1998)pp. 798-799

"The terms 'ante-nuptial and post-nuptial settlements' are used in a sense much wider than that usually given to them by conveyancers, the essential condition being that the benefit must be conferred on either or both of the spouses in the character of spouse or spouses. It is immaterial whether the benefit comes from one of the spouses or from a third person, provided that this condition is satisfied … a separation agreement … Similarly a bond by which a wife undertakes to pay an annuity to her husband and a policy of life assurance taken out by a husband, for the benefit of his wife have been held to be post-nuptial settlements". In Jackson's Matrimonial Finance and Taxation (5^th ed. 1992) at pp. 258-259 the authors of that textbook have summarised the relevant authorities as stating that:-

"The words 'ante-nuptial settlement' and 'post-nuptial settlement' are to be given a liberal construction wholly different from the more restricted meaning that would be given to them in a conveyancing instrument or in other contexts. The form of the settlement does not matter: it may be a settelment in the strictest sense of the term, it may be a covenant to pay by one spouse to the other, or by a third person to a spouse. One has to ask the question: Is the settlement upon the husband in the character of husband or upon the wife in the character of wife, or upon both in the character of husband and wife? What matters is that the settlement should provide for the financial benefit of one or other or both of the spouses as spouses and with reference to their married state …"

These quotations from both Bromley and Jackson have attracted judicial approval.

17. In this jurisdiction Duncan and Scully "Marriage Breakdown in Ireland" (Dublin, 1990) at p. 335 says as follows:-

"If English authority is followed regarding an order to vary an anti or post-nuptial settlement the concept of such a settlement is likely to be broadly defined. Per Hill J. in Prinsep v. Prinsep [1927] P. 225:

"The particular form of it does not matter. It may be a settlement in the strictest sense of the term, it may be a covenant to pay by one spouse to the other, or by a third person to a spouse. What does matter is that it should provide for the financial benefit of one or other or both of the spouses as spouses and with reference to their married state. "

Shatter's, Family Law 4^th Ed. , (Dublin, 1997) at paras. 17.33 and 17.34 very much echoes these views and when discussing the courts power under both s. 15 of the 1989 Act and s. 9 of the 1995 Act, goes much further and suggests that the same is very extensive indeed.

It would, therefore, appear to be the case that provided the benefit is conferred on either spouse in the character of spouse and with reference to their married status, then the instrument in question may very well be a post-nuptial settlement.

17. The English case law is, I think, even more conclusive. In Bosworthick v. Bosworthick [1926] All E.R. 198 Romer J. as he then was, having first heard Lord Hanworth's MR view as to how s. 192 of the Supreme Court of Judicature Act, 1925 should be construed, namely "liberally and widely" and not narrowly, went on to say:-

"I do not think we get any assistance from the Settled Land Act or Bankruptcy Act …

What we have to do is to consider the meaning of the word in these particular sections. We have had numerous authorities cited to us … and in my judgment these authorities establish that where a husband has made a provision for his wife, or a wife for her husband, in the nature of periodical payments, that amounts to a settlement within the meaning of the sections. That may appear to be a very liberal construction of the sections, but I think that it is no more liberal a construction than should be given to them having regard to the obvious purposes for which they were enacted by the Legislature."

Two years later in Prinsep v. Prinsep [1927] P. 225 Hill J. expanded somewhat upon this view when he said:-

"Is it upon the husband in the character of husband or in the wife in the character of wife, or upon both in the character of husband and wife? If it is, it is a settlement on the parties within the meaning of the section. The particular form of it does not matter".

Several other cases, all largely supportive of the above approach, intervened between Prinsep v. Prinsep and Lort-Williams v. Lort-Williams, supra.

18. In that case two individuals had taken out a single premium insurance policy on the life of Sir John Rolleston Lort-Williams. The benefits were payable to these trustees as "moneys payable under this policy, effected for the benefit of the widow or children or any of them of the assured in such shares and proportions and interest, and generally in such manner as the assured shall by will or deed revocable or irrevocable appoint or have so appointed". It should be noted that the policy was for the benefit "of the widow …" of the assured in such amounts as he should decide by will or deed. Whilst it is undoubtedly true that this policy can be distinguished from the trust in this case, principally on the basis that the parties felt that the same came within the provisions of the Married Women's Property Act, 1882, nevertheless the specific views of Somervell L.J. on s. 25 of the Matrimonial Causes Act, 1950 and the general views of Denning L.J. are worthy of recall. At p. 244 of the report Sommervell L.J. said:-

"Counsel for the husband admits that the words of s. 25 of the Act of 1950 have been given a wide meaning, but he relies that the interest of the wife was contingent in that (i) she has to survive the husband (ii) she has to survive him as his widow, and (iii) if there were children (the position might be obscure if there were not), she might take no interest at all if he appointed the whole fund to the children. I do not think that is sufficient to take the policy out of the meaning of 'settlement' in this section." Denning L.J. continued:-

"The word 'settlement' in s. 25 … is not used in the conveyancing sense. It includes any provision made by a husband for the future benefit of his wife, if it proceeds on the footing of the then existing marriage. It does not cease to be a settlement on her because the provision is, not absolute, but only contingent, nor does it cease to be a settlement on her because it may in its terms also be applicable for the benefit of a wife by a subsequent marriage."

19. Distinction apart, these observations are quite pertinent in the instant case in a number of respects. Firstly, the petitioning wife was not identified in the trust as a wife or by name but rather the closest reference was by the description of "the widow". Secondly, this meant that she had to survive her husband before even potentially being available for distribution consideration. Thirdly, it meant that some individual, other than the petitioner, could at the relevant time qualify as "the widow" of the assured. Fourthly, even if this event did not occur and even if the wife did survive the assured, nevertheless she may not have benefited at all as the assured could have, as he was perfectly entitled to so do under the trust, allocate the entire fund to his children or any of them. The conclusion, notwithstanding these consequences as was pointed out by Denning L.J., was that an arrangement could still be a settlement even if the interest of the claimant was not absolute but only contingent. See also Young v. Young [1962] 3 All ER 695 where once more Ormerod L.J. at pp. 31-33 of the report adopted a broadly similar approach and confirmed that a nuptial element is present where any provision is made for the future benefit of either spouse if it proceeds on the footing of the then existing marriage.
20. The most recent case referred to and relied upon was Brooks v. Brooks, the citation of which is referred to at para. 10 above. In that case the issue was whether or not a pension fund was a post-nuptial settlement. This fund was set up in 1980 and according to r. 1(e) of the establishing document the husband "will be entitled to elect at the date of your retirement to surrender a portion of the pension to which you would otherwise be entitled in order to provide a non-commutable and non-assignable deferred pension for any one or more of your spouse or any other person whom the employer may consider to be in any way financially dependent on you, such pension to be payable to such spouse or other dependent for life from the date of your death." Ewbank J., in the High Court, held that there were two aspects to consider. The first was the nuptial element and, secondly, did the fund comprise a settlement? Having no difficulty whatsoever with the first point, he then considered at length the second issue. He quoted many of the authorities above mentioned and concluded that "this is a post-nuptial settlement and that it is amenable to variation by the court". On appeal, the Court of Appeal upheld the decision of the trial judge. At pp. 1076-1077 of the report Waite L.J., when dealing with s. 24(1)(c) of the 1973 Act, said under the heading "the range of the jurisdiction":, that:-

"The authorities show that the court treated the jurisdiction from the outset as a wide one. It was not restricted to interests that had vested in possession: contingent, as well as purely discretionary, interests were included … Nor was the power limited to variation of the rights of the respondent spouse: third party rights could be interfered with".

He accepted the principles set out in Lort-Williams and dealt with the points of distinction as follows:-

He said at p. 1075 of the report:-

"There are acknowledged differences between that case and the present. The policy with which the court was there concerned was effected under s. 11 of the Act of 1882 and was therefore by definition a policy whose whole raison d'etre was to benefit a wife and/or children. Here the primary intention of the insurance is to benefit the husband, to which the rule 1(e) option of part surrender in favour of a wife is very much subsidiary. There the transaction was one of conventional life insurance. Here it is complicated by the fact that although the husband is the assured – in the sense that the benefits of the policy are related to his death or retirement – the policy itself is vested in trustees who have powers of their own to define beneficial entitlement, for example in regard to determining who is to be treated as a 'financial dependent' for the purposes of the rule 1(e) option. There the whole proceeds of the policy devolved on the beneficiaries. Here the surplus benefits of the policy in excess of the Inland Revenue maxima belong, in the first instance at least, to a separate entity in the form of the company.

None of these, however, are differences which, in my judgment, affect the principle. It is the husband who is entitled to the benefits of the policy up to the ceiling of the Inland Revenue maxima, and it is he alone who within those limits have the power to surrender part of those benefits in favour of the spouse and/or other financial dependent. It is that power which gives the scheme to the character of a settlement, and it is the inclusion of a spouse within the objects which gives the settlement its nuptial element. It makes no difference under the rule 1(e) option the spouse has a contingent interest only. I would hold, in agreement with the judge and district judge, that the principle of Lort-Williams v. Lort-Williams [1951] P. 395 applies to this case by analogy. The scheme amounted to a post nuptial settlement".

On further appeal, their lordships in the House upheld the decisions of the lower court and found that the pension fund in question was a settlement within the meaning of s. 24(1)(c) of the 1973 Act. See the speech of Lord Nicholls, commencing at the " The present State of the Law" which appears at p. 262 of the report.

21. In my view, therefore, these cases over a lengthy period of time demonstrate the courts approach to statutory provisions almost identical, for present purposes to s. 9(1)(c) of the 1995 Act. That approach leads to a result that once arrangements confer a benefit on the spouses or either of them in their capacity as husband or wife and was provided for, with and by reference to their marriage status, then same should be treated as a settlement within the said statutory provisions.
22. Such a conclusion is in general sought to be challenged by the respondent and notice party, by virtue of the authority of a decision of McGuinness J. in J.D. v. D.D. supra. In that case the learned trial judge was dealing with what was described as the D Family Trust and the L Family Trust, the former being referable to the husband's family and the latter to the wife's family. From the report of the case the wife did not seek any order affecting the D trust and therefore no authority on her behalf was open to the trial judge on s. 9(1)(c). Equally so counsel on behalf of the husband, whilst asserting that the trust could play no part in the court's decision, likewise did not open any case law. McGuinness J. referred to Milne v. Milne [1871] [LR] 2 P & D 295 but of much more significance was her reliance on Howard v. Howard [1945] 1 2 All ER 91. Having quoted from the decision of Greene MR she then referred to what McKinnon L.J. said at p. 96 of the report which is reproduced [1997] 3 I.R. 84. The learned Lord Justice said:-

"The power of the court … was replaced by the Supreme Court of Judicature (Consolidation) Act, 1925, s. 192. That refers in terms to nuptial settlements 'on the parties'. I am inclined to think that this refers to settlements under which late spouses – or one of them are cestui que trustent and, therefore, entitled to call upon the trustees to account to them or him or her. A settlement by the terms of which the trustees may at their discretion use the capital or income for the benefit of persons they may select would not seem to be such a settlement merely because the spouse or spouses is or are within the class of possible beneficiaries whom the trustees in their discretion are entitled to select".

Largely, if not completely, based on this quotation McGuinness J. then concluded:

"In the present case neither the D. trust, with its variety of beneficiaries, nor the L. Trust, which gives the wife's mother a power of appointment among an even wider variety of beneficiaries, would, it seems to me, fall to be dealt with under s. 9 sub-s. (1)(c) of the Family Law Act, 1995, and an order should not be made either directly affecting either trust or putting pressure on the trustees in the exercise of their discretion".

It is this Irish authority which is heavily relied upon in argument against s. 9(1)(c) capturing the Repus Trust.

23. In my humble view, the opinion of Lord Justice McKinnon, if it was intended to cover the point at issue, is no longer consistent with or reflective of what is new in the long line of authority of the point, examples of which I have quoted earlier in this judgment. His opinion seems to run counter to the stream of reasoning which emerges from an examination of this case law. If the question arose as to which line of authority should be followed, I would unreservedly adopt the general position as outlined by the judgments above mentioned. However, the view of Lord Justice McKinnon in Howard v. Howard is not in the same situation as the judgment of McGuinness J. Recognising the pre-eminence of Mrs. Justice McGuinness in the area of family law, I would be most hesitant to differ from any considered views expressed by her on matters which were directly on point. To that end I have, therefore, carefully checked the reported judgment and also have examined the original unreported version thereof. It seems to me, from a consideration of both, that none of the major authorities, cited above, were opened to the learned trial judge and neither were submissions of significance made to her on the point. This perhaps was understandable given that the parties did not seek to vary either the D. or the L. Trust. The consequence, however, is that McGuinness J. had no opportunity of considering Bosworthick, Prinsep, Lort-Williams v. Lort-Williams, Brooks v. Brooks or any of the other authorities previously created. Given this position and noting her declared view, as expressed in N(C) v. N(R), that in the absence of Irish authority she was prepared to accept as persuasive the views expressed in Bromley's Family Law, see para. 14 above, I have some doubt that her end conclusion in J.D. v. D.D. would have been the same if the relevant authorities had been open to her. In such circumstances, I believe that I can still uphold the deference which the learned judge commands, even by coming to a conclusion different from that arrived at by her in J.D. v. D.D.
24. In my view, therefore, this instrument of trust is a "settlement" within s. 9(1)(c) of the 1995 Act. In my opinion, it was entered into after contracting, but during the currency of, a valid marriage between the applicant and the respondent and the fact that the wife is not named or so referred to, but instead can only possibly have a contingent interest within the enlarged class of beneficiaries, does not interfere with this conclusion. Before any person could become a widow of the respondent, she would have to have been his wife firstly, and therefore, I think it can be said that this trust created in 1987 was referring to the wife, admittedly subject to contingency, as wife and at a time within the continuance of their marriage. Simply because the scheme was designed for tax efficiency is not relevant. In addition, there is, in my view, equally no difficulty with the phrase "made on the spouses" because the respondent was the settlor but, more particularly, because on the 28^th August, 2001, which evidently was prior to the granting of any judicial separation, not even a relief yet considered by the court, the husband was also a potential beneficiary under the trust. In my view, the correct date for applying the statutory provision is not the date of the original trust, or the date of the institution of the proceedings, noting the powers of the trustee, but rather the date upon which the court must decide in favour of or against the grant of a decree of judicial separation. It is only on the grant of such relief that s. 9 comes into play. Since the husband has been a potential beneficiary since 20^th August 2001, I see no difficulty in complying with that part of s. 9(1)(c). Even however if he had never become a potential beneficiary I would still conclude that such a situation would not be fatal to a conclusion that the trust is within the phrase "post-nuptial settlement". Consequently, in my opinion, the answer to the preliminary point is in the affirmative.
25. In the event of my reaching this conclusion an alternative submission was made on behalf of the notice party which was to the effect that notwithstanding the view that s. 9 (1)(c) covered the trust in question, a Court of Trial, nevertheless could not, in principle, have any regard to the instrument by virtue of its discretionary nature. Authorities were cited in support and in opposition to this submission. Some of these included Thomas v. Thomas, [1995] 2 FLR 668, T v. T and Others (Joinder of third parties) [1996] FLR 357 and E v. E (Financial Provision) [1990] 2 FLR 233. Apart altogether from the fact that such an issue was not directed to be tried as a preliminary issue, I would independently hold the view that it would be quite inappropriate for me to decide such an issue by way of a preliminary hearing. Needless to say, this court is not the court of trial and, therefore, is not discharging the duties and obligations imposed on such a court, by way of the mandatory statutory provisions above referred to. Those provisions, it will be recalled, only apply if and when a decree of judicial separation is granted and, as of today, no such decree has been obtained. Even proceeding on the assumption that such a decree existed, the court of trial must then make "proper provision" in accordance with s. 16 of the 1995 Act which refers back inter alia to s. 9. Such a court, undoubtedly, has a very substantial discretion as to how the obligated result can best be achieved. It has multiple options and variations open to it. It can make very significant adjustments and cross adjustments as the case may be. It is, in my view, impossible for this court, limited to deciding the preliminary issue, to be in a position to meaningfully contribute to what the ultimate trial judge might do, and at the same time not to trespass on his domain or restrict or fetter the duties or power upon him. Unless therefore, I could be completely satisfied that in principle this Repus Trust, by virtue of this discretionary nature, could play no part whatsoever in the court's evaluation of what proper provision might ultimately be made I should not, I feel in any way, embark upon the inquiry underlying this second submission. Being satisfied, that, the trust in principle should not be eliminated, I think it would be quite wrong to conclude that a discretionary instrument, like the subject one, is of no potential value or benefit to a trial judge in implementing s. 16. Whilst in no way wishing to anticipate his views or when the full facts and financial circumstances of the parties are outlined to the court as to what an appropriate order in relation to this trust might be, I would nevertheless say that the trial judge in this case could be significantly handicapped if at this preliminary stage I was to entirely exclude from his consideration this trust. He, the trial judge, might for example find the views of Lord Justice Waite in Thomas v. Thomas supra of interest or indeed of persuasive authority. He might conclude that "judicious encouragement" to the trustees was within his capability and was one which was appropriate to give in the circumstances. On the other hand, he may entirely disregard such views but do so against other provisions of an order which he was satisfied could independently amount to proper provision of the applicant wife. He may consider whether to issue a direction upon clause 3.01 in respect of either one of the spouses. Perhaps the approach of McGuinness J. in J.D. v. D.D. supra, would appeal to him. Notwithstanding her views on what fell to be considered under s. 9(1)(c) of the 1995 Act, she went on to say in that case at p.85:-

"However, it seems to me that I should not entirely ignore the existence of these trusts and the comparative likelihood of either spouse to benefit from them. Section 16 sub-s. (2)(a) of the Family Law Act, 1995 directs the court, in deciding whether to make a periodical or lump sum maintenance order, to have regard to 'other financial resources which each of the spouses concerned has or is likely to have for the foreseeable future'. In looking at this 'foreseeable future' I feel that I should bear in mind that the husband is a beneficiary of a very considerable family trust and one which has in the past made sizeable capital payments to his only sister to enable her to acquire property."

In other words, apart from any order which the trial judge may directly make under s. 9(1)(c) in relation to this trust, the same nevertheless may be relevant under s. 16(2)(a) of the 1995 Act. Or apart from any of these suggestions, he may have an entirely different approach to the trust in question. See for example how O'Sullivan J., dealt with the 22 acre site in C.F. v. J.D.F. (Unreported, High Court, O'Sullivan J., 16^th May, 2002). Whatever he might do, I am quite satisfied that I should not exclude in principle this trust by virtue of its discretionary nature and given my view on the applicability of s. 9(1)(c), I should not at this preliminary stage exclude from the trial judge's consideration of the assets and material available, this said trust.

26. For the reasons above stated and given the scope, extent and nature of the enquiry which the trial judge in this case must conduct in order to comply with the statutory requirements imposed upon him, I feel that it is imperative in the interests of complying with those provisions that the joinder of the notice party, namely the trustee of the Repus Fund should continue for the duration of these proceedings.