Analysis
The claimant was the settlor of three trusts and applied, under the Variation of Trusts Act 1958, for approval of similar arrangements for the benefit of minor beneficiaries under the trust and for future, yet unborn, beneficiaries under the trust.
The principal defendants were the trustees, the adult beneficiaries (who consented to the proposed arrangements) and the minor beneficiaries, acting through their litigation friend.
Before the hearing the parties had contact Chancery Listing and obtained agreement that the cases would be listed for hearing with initials being used in place of the names of the parties. At the beginning of the hearing counsel for the claimant (with the support of the other counsel) applied for the case to be heard in private.
The parties stated that the trusts owned shares in a private company and there was a risk that a hearing in open court would lead to the company’s customers becoming aware of the profit levels of the company and this could ultimately damage the value of the trust assets. There was also a risk that disclosure of the high value of the trust assets and the identity of the beneficiaries would lead to a risk to the personal security of these beneficiaries.
The parents of the minor beneficiaries had gone to great lengths to protect their children from knowing the extent of the family’s wealth so that they continued with their education. They tried to lead a modest lifestyle. They did not want the children to have a sense of entitlement and wanted them to make their own way in life. They worried about false friends and that people might try to take advantage of the children’s wealth. They also worried about social media could be used to disseminate information about the wealth of the children.
Mr Justice Morgan directed that the court would sit private to hear the application for an order that the substantive cases be heard in private.
Held (the cases should be heard in open court, reporting restrictions would be imposed and the judgment anonymised):
- 1) The general rule is that a court hearing is to be in public. Open justice is a fundamental principle so that derogation from it can only be justified in exceptional circumstances.
- 2) There is no general exception to the principles of open justice where privacy or confidentiality is in issue.
- 3) The evidence that the company would be damaged by a hearing in open court was not particularly strong and came nowhere near satisfying the need for clear and cogent evidence to justify a derogation from the open justice principle. If the evidence submitted had been sufficient there would be few cases in the Companies Court.
- 4) The evidence of the risk to personal security was very slender and does not reach the standard needed to order a private hearing.
- 5) The evidence about the children is sufficient to persuade me that the court should be prepared to take appropriate steps to protect the children from the adverse effect on their upbringing and personal development which might result from an open hearing generating publicity.
- 6) The evidence in support of reporting restrictions and anonymity is very strong. Therefore reporting restrictions are imposed and the judgment should be anonymised.
- 7) It is not necessary to hear the cases in private to protect the interests of the children.
- 8) A non-party may not apply for a transcript of the hearing without the permission of the court and any application for such permission should be on notice.
- 9) Comment on future listings – given with the authority of the Chancellor of the High Court. If parties intend to apply for an order that an application should be heard in private, or that there be reporting restrictions or that any judgment should be anonymised and they wish that the substantive hearing be listed only with random initials then it to be expected that Chancery Listing will accede with that request. The listing will not state that the hearing is in private.
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