In December 2017, I wrote about Privacy and the Princess, a case involving the divorce of two members of the Luxembourg royal family, Prince Louis and Princess Tessy.
The hearing I discussed was about what could be reported about their financial positions given the competing rights to privacy and freedom of expression, especially given that Princess Tessy, who had married into the royal family, had been the subject of some rather nasty allegations of gold-digging which she wanted to rebut. You can read the report of that hearing here.
At that stage, the financial outcome of their divorce (‘financial remedy’) had not been decided. On 4 December 2018, however, the judgment on that was published. You can find the report on BAILII here.
There are a couple of interesting aspects to this case which deserve some comment.
The trust over the family home
Apart from the Princess and the Prince, there was another party to the case, L’Administration Des Biens De S.A.R. Le Grand Duc De Luxembourg (ADB). Not easily categorised, this organisation managed both the private funds of the Grand Duke and also the Luxembourg equivalent of the UK’s Crown Estate and Civil List (assets used by the royal family but not owned by them). This was relevant because the matrimonial home in London was bought using money provided by ADB. The London home was owned by Prince Louis and his father (the Grand Duke) as beneficial joint tenants.
This kind of tenancy is a form of ownership not rental, and it means that if one of them dies the survivor automatically inherits the property, and if they sell it they are each entitled to 50% of the value. There was an express declaration of trust – a written document – stating that. An express declaration, whether in the property transfer form (TR1) or a separate declaration of trust is determinative unless there is duress, mistake or fraud:
• ‘The court must give effect to it’ (Gissing v Gissing, 1971)
• ‘There is no room for the application of the doctrine of resulting implied or constructive trusts’ (Goodman v Gallant, 1986)
• ‘If the property in question is land there must be some … conveyance which shows how it was acquired. If that document declares … in whom the beneficial title is to vest that necessarily concludes the question of title as between the spouses for all time, and in the absence of fraud or mistake at the time of the transaction the parties cannot go behind it at any time thereafter.’ (Pettitt v Pettitt, 1970)
In this case, Prince Louis argued that while he and his father were the registered legal proprietors of the former matrimonial home, the declaration that they were joint tenants was wrong, because they never had the power to declare themselves joint tenants.
The Prince argued that because ADB funded the purchase out of the Crown monies not the royal family’s personal money, it was ADB who was entitled to the value of the property under the principles of a resulting trust. This occurs when someone (here, ADB) contributes money towards the purchase price of a property that is put in the legal name of someone else (here, Prince and Grand Duke). It means that the person contributing the money is entitled to a share in the house proportional to the money they contributed (there are some exceptions relating to people in specific family relationships where the contribution is assumed to be a gift, or where it is a loan of money).
In this case, as ADB contributed all of the money required to buy the property, then the Prince wasn’t entitled to any of the property and so it could not form part of the divorce settlement with Princess Tessy.
So, the court in this case looked behind an express declaration of how the property was held to say that the persons making that declaration didn’t have the ability to do so, and that it was ADB who really had the right to the value of the house. This makes logical sense but creates an additional element of uncertainty about the true beneficial owners of a property. Where a written declaration exists, people ought to be able to rely on it as being accurate.
The parties’ representation
Neither party was represented by solicitors at this hearing. Prince Louis instructed a leading barrister through Direct Access, a scheme whereby certain barristers (who have attended a training course on this) can receive their instructions directly from the party rather than through their solicitor. However, if you are an organised litigant in person who understands the issues that need to be resolved then it can be a good way forward. However, it can also be a false economy, simply shifting costs to the barrister rather than a solicitor who prepares the case for court (and most financial remedy cases are settled without going to court, through solicitor-led negotiation).
Princess Tessy represented herself with the assistance of a McKenzie Friend, Mr Holden. Mr Holden was not permitted to undertake cross-examination on her behalf, but he did assist her. The role of McKenzie friends deserves a post or ten to itself, but if you’re interested in reading what they can and cannot do, then the official guidance is here.
Both had previously used solicitors, and the barrister Prince Louis instructed directly had acted for him previously when he did have solicitors. There’s no indication from the judgment why the parties chose to manage their cases in this way. It could be an issue of cost (their personal assets are quite limited), or simply a matter of personal preference. When the court considered only the parties’ personal assets there was not a great deal of money to go around. The royal titles are simply a distraction from what is a modest asset case.
This is a highly simplified explanation, but we would be interested in hearing the views of any experts on the law of trusts of land about the implications of this case.
Featured image by Nicholas Copernicus on Flikr (creative commons) – thanks!