Analysis
In a claim for the approval of an arrangement varying a trust under the Variation of Trusts Act 1958 (the 1958 Act), an application was made for an anonymity order restricting the naming of the parties and access to the court file relating to the claim and the publication of certain information. The judge dismissed the application but gave permission for an appeal. The appellant, who brought the claim, was settlor of a settlement (the settlement), which comprised very valuable assets divided into several funds, some of which were held on discretionary trusts and others on income trusts. The defendants to the claim were the beneficiaries in existence – the appellant’s three children and their spouses or former spouses and his seven grandchildren, three of whom were minors, acting through litigation friends (although one of them obtained her majority after the hearing before the judge but before the hearing of the appeal) – and the trustees of the settlement, representing the interests of the unborn and unascertained beneficiaries. The three minor children were not principal beneficiaries and were interested only in secondary remainder interests in sub-funds whose values were tiny in relation to the value of the trust fund as a whole; they were also unaware of their interests in the trusts. The proposed variation of the settlement was to extend the permissible duration of the settlement by ending the perpetuity period 125 years after the date of the order making the variation and to extend the permitted accumulation period, variations made possible by the Perpetuities and Accumulations Act 2009. The proceedings were not adversarial and the arrangement was approved by the judge.
Before the claim was commenced, an interim anonymisation order was made, for anonymised listing; pursuant to CPR 5.4C(4) (6) and CPR 5.4D(2) the order restricted access by non-parties to documents on the court file; and, pursuant to CPR 39.2, limited disclosure of the parties’ names and addresses. At the hearing before the judge, the appellant, with the support of the other parties, applied for a continuation of the interim order, on the basis that, although much of the information about the trust fund was in the public domain, information about individual beneficiaries’ interests under the settlement was not. In the context of the family’s approach to the upbringing of their children, there was concern that the publicity as a result of the proceedings could be inaccurate and inform the grandchildren about their interests before it would be appropriate, having regard to their personal development and undermine their families’ approach to their upbringing; it might distract and upset them and affect other people’s attitude to them in an adverse way, including an increased risk that they would be the targets of crime.
The application was refused on the ground that there was then a legitimate public interest and considerable public debate about arrangements made by companies and individuals to obtain a fiscal advantage, even when there was nothing improper in those arrangements. On the facts, the evidence did not demonstrate the necessity for the protection the parties were seeking; it was implausible that publicity from the proceedings could affect the position of the children or the grandchildren, or that the (premature) disclosure of their interests could affect their future life prospects, other people’s views of them or the motivation of those who might wish to form friendships with them. The family were already known to be wealthy or to have expectations of considerable wealth by most people’s standards.
The appellant appealed and the prohibition on the identification of the parties was extended pending the appeal.
Held
Appeal allowed to a limited extent.
It was common ground that there might be applications under the 1958 Act where anonymisation was necessary in the interests of justice in order to protect the rights of minor beneficiaries. This raised two questions for the court:
- (1) Should anonymisation be the norm, or default position, or should it be decided on a case by case basis?
- (2) If such a presumption did not apply, was the judge wrong not to make an order on the facts?
The default position
The starting point was the principle of open justice, long considered to be of the utmost importance (CPR 39.2(1)) and this includes the availability of the identities of the parties. A hearing could be in private if certain factors, set out in CPR 39.2(3), including where it was ‘necessary to protect the interests of any child or protected party,’ applied (CPR 39.2(3)(d)). Dictum of Lord Neuberger M.R. in JIH v News Group Newspapers Ltd, at para [21] adopted:
‘(i) an order for anonymity should not be made simply because the parties consent to it; (ii) the court should consider carefully whether some restriction on publication is necessary at all, and, if it is, whether adequate protection can be provided by a less extensive order than that which is sought; (iii) if the application is made on the basis that publication would infringe the rights of the party himself or members of his family under art 8 of the Convention, it must consider whether there is sufficient general, public interest in publishing a report of the proceedings which identifies the party concerned to justify any resulting curtailment of his right and his family’s right to respect for their private and family life.’
The court drew a distinction between an application under the 1958 Act and an application to the court under CPR 21.10 for the approval of any compromise of a claim by or on behalf of a child or protected party. In the latter case, the court was exercising a function that was essentially different from that involved in determining disputed causes; it was dependent on the principle that the jurisdiction over wards and lunatics was exercised by judges as representing the Crown as parens patriae, in relation to truly private affairs, where the transactions were ‘intra familiam’. Even in such areas of judicial activity, however, the principle of open justice was not excluded: X v Dartford and Gravesham NHS Trust followed.
Although in a 1958 Act application the court’s jurisdiction was, in substance, also a protective and enabling jurisdiction, the position should not be overstated. They were ordinary civil proceedings but the position of minor beneficiaries, rather than the family’s financial affairs, could in appropriate cases be a good reason for anonymity: V v T and A followed (see also Practice Note (Variation of Trusts: Confidentiality Orders Pending the Hearing of Application), 9 February 2017).
The court determined that the default position followed the principle of open justice and applications for anonymity should be determined on a case by case basis.
The judge’s order
The court accepted that the judge correctly identified the legal principles to be applied in determining whether an order should be made that derogated from the principle of open justice by granting anonymity in a particular case, conducting a balancing exercise between the competing rights under arts 8 and 10 of the European Convention on Human Rights by considering the proportionality of the potential interference with each right, considered independently. The judge had, however, focused too narrowly on the issue of demonstrable harm to the minor beneficiaries and, rather than refuse any relief outright, she should have struck a proper and proportionate balance between the different rights that were engaged by making a less extensive order than the one that was asked for.
Decision
The court was satisfied that it was necessary to provide a measured degree of protection to the rights of the minor beneficiaries until their majority, but no further, ensuring that the restriction on publication was the minimum encroachment necessary in the circumstances. An order was made under s39(1)(a) and (b) of the Children and Young Persons Act 1933, preventing the publication of certain specified information relating to the child.
JUDGMENT SHARP LJ: Introduction [1] This an appeal against the order of Rose J on 2 March 2017, with her permission, by which she dismissed the claimant’s application for what amounted to an anonymity order, restricting the naming of the parties and access to the court file relating to the claim, and restricting the publication …Continue reading "MN v OP & ors [2019] WTLR 941"