13.18The Family Courts Act 1980 established the Family Court as a division of the District Court. Section 11 of that Act gives the Family Court jurisdiction for a wide variety of matters affecting couples, families and children.
13.21These ancillary powers go some way to allowing the Family Court to deal with trust law components of cases properly before the Family Court, but do not allow the court to make many of the orders or give the types of directions necessary to effectively resolve all the issues before it. In some situations this means that the parties need to make subsequent applications to the High Court to address the trust matters that are intertwined with relationship property.
13.22Given our recommendation that the District Court should have jurisdiction under new trusts legislation, we think it is difficult to argue that the Family Court, which is a division of the District Court, should not also have those powers. We see no reason why the Family Court should not have the same powers under new trusts legislation to better deal with matters properly before it and reduce the need for parties to bring subsequent proceedings in the High Court. Again our approach is that the court should be provided with the tools necessary to exercise its jurisdiction.
13.23Although submitters responding to the Preferred Approach Paper did not generally favour the Family Court having jurisdiction, over the course of the project submissions have been quite evenly divided on this issue. We have taken the differing views of submitters into account in formulating our recommendations.
13.24We are recommending that the Family Court should be able to exercise the powers and make orders under new trusts legislation as an ancillary jurisdiction, to provide a remedy where a matter is already within its jurisdiction. The Family Court already has the ancillary jurisdiction of the District Court under section 41 of the District Courts Act to give equitable relief where a matter is within its jurisdiction, but not jurisdiction to hear a cause of action founded in equity. Our recommendation does not give the Family Court substantive equitable or civil jurisdiction. Submitters were concerned about this issue so we wish to make it clear that, subject to the recommendation concerning closely related matters in R41(2), the Family Court could only exercise powers and make orders where the proceedings in question are already within its jurisdiction.
13.25We recommend that the Family Court should be able to make orders under the new Act where these are necessary during the proceedings to protect or preserve any property or interest that is the subject of those proceedings until the issues are fully resolved by the court. Our recommendation would allow the Family Court to, for example, make an order removing one trustee and appointing (even on a temporary basis) a new independent trustee where this is necessary to manage serious deadlock, hostility between trustees, ascertain the nature of the trust assets, or to preserve those assets until the property claims of the parties can be properly resolved.
13.26In addition we consider that there would be merit in the Family Court also being able to make orders, with the consent of the parties, to resolve a closely related dispute or issue between the parties where this is necessary, or would better promote the resolution of the substantive proceedings between the parties. The intention here is to allow the parties to proceedings properly before the Family Court to consent to the court resolving closely related trust matters that may otherwise fall beyond its jurisdiction. Parties may wish to do this where those matters are so closely linked to the substantive proceedings that leaving them unsettled impedes the effective and fair resolution of the substantive proceedings. The recommendation would also allow the parties to avoid the need for a subsequent hearing to deal with closely related trusts matters that otherwise would fall beyond the Family Court’s jurisdiction.
13.27Where the parties do not consent, or a Family Court judge determines that there is not sufficient nexus between the related trusts matter and the substantive family proceedings, then the parties would need to have those matters resolved in either the District or High Court.
13.30However, making transfer more readily available does not dispense with the need for the Family Court to be able to make orders under the proposed new Trusts Act. In some cases, and for a range of good reasons, the Family Court remains the most appropriate forum. We consider it is still important for the Family Court to have jurisdiction to make any orders that are necessary to effectively deal with all issues properly before it.