COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM HIGH COURT OF JUSTICE FAMILY DIVISION
MR JUSTICE McFARLANE
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE LAWRENCE COLLINS
MR JUSTICE MUNBY
| JAMES BERNARD MOORE
|- and -
|KIM MARIE MOORE
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Mr L Marks QC & Mr S Leech (instructed by Charles Russell LLP) for the Respondent
Hearing date : 20 March 2007
Crown Copyright ©
Lord Justice Thorpe:
II The litigation
"Both litigants having similar economic circumstances as well as each enjoying a substantial economic capacity, neither of them would be entitled to receive any economic benefit payable by the other."
"In this case, [the husband] has not sought the recognition of any economic right vis-à-vis the wife and it has not been sought in the counterclaim, so the Court should declare unequivocally that neither of the spouses is entitled to any right of an economic nature vis-à-vis the other. … Rights of an economic nature: Both spouses agree that neither is entitled to any rights of an economic nature vis-à-vis the other. Although they could have sought such recognition, they have not done so."
"…[The husband] proposed to [the wife], in conformity with English law, the payment of six million pounds and her maintaining the real properties which are in her name. [The wife] expressed her agreement, except in respect of that which related to the new financial proposal, soliciting suspension of the hearing to enable her to study the same. … I did not allow the new proposal of [the husband] since it had neither been included in the petition nor in the counter-claim. …The parties are to be served with this resolution, they being informed that the same is not final since an appeal against it may be filed in this Court within a period of 5 days of its service."
III Judgment of McFarlane J and the appeal
A The application, the evidence of Spanish law, and the judgment of McFarlane J
B The husband's appeal
C The wife's response
Matrimonial property, maintenance and the Brussels régime
"The mutual rights of spouses arising from 'matrimonial régimes' correspond largely with what are best described in English as 'rights in property arising out of a matrimonial relationship'. Apart from maintenance matters property relations between spouses which are governed by the differing legal systems of the original Member States otherwise than as 'matrimonial régimes' only seldom give rise to court proceedings with international aspects.
Thus the following can be said in respect of the scope of point (1) of the second paragraph of Article 1 as far as 'matrimonial régimes' are concerned:
The Convention does not apply to the assumption of jurisdiction by United Kingdom and Irish courts, nor to the recognition and enforcement of foreign judgments by those courts, if the subject matter of the proceedings concerns issues which have arisen between spouses, or exceptionally between a spouse and a third party, during or after dissolution of their marriage, and which affect rights in property arising out of the matrimonial relationship. The expression 'rights in property' includes all rights of administration and disposal – whether by marriage contract or by statute – of property belonging to the spouses."
"in matters relating to maintenance, in the courts for the place where the maintenance creditor is domiciled or habitually resident or, if the matter is ancillary to proceedings concerning the status of a person, in the court which, according to its own law, has jurisdiction to entertain those proceedings, unless that jurisdiction is based solely on the nationality of one of the parties."
The meaning of maintenance
"73. Turning to the criteria for the categorisation of particular lump sum orders, it is clear that, at one end of the spectrum, where the recipient has no earning power and the lump sum is awarded in the context of a 'clean break' in lieu of periodical payments for the recipient spouse, at least part of that sum must be in the nature of maintenance. This is expressly recognised by Schlosser; indeed he goes further, and states, O.J. 1979 C. 59, p. 102, para. 93 … that the transfer of property on divorce may in certain circumstances be in the nature of maintenance. The Commission makes the same point, noting that a transfer of property is not automatically excluded as such from the scope of the Convention, but only to the extent that it is not in the nature of maintenance. The Commission refers to the view it expressed in its written observations in de Cavel (No. 2)  ECR 731, 736, to the effect that if
"a payment fixed in the course of divorce proceedings is intended to ensure the support of the spouse who is in need, this is a matter of a maintenance obligation within the meaning of the 1968 Convention."
The Commission rightly concludes that a lump sum payment or a transfer of property will, if it has that objective, be in the nature of maintenance notwithstanding its form ...
The lump sum as a division of property
80. At the other end of the spectrum, where both parties are earning well, an order awarding a lump sum will frequently be intended as a division of assets rather than maintenance in any sense; at that extreme … it will concern 'rights in property arising out of a matrimonial relationship' and hence be unenforceable under the Convention."
"20. ...[D]ivorce courts in England and Wales have a wide discretion to make financial provision. They may, in particular, order periodical payments or lump sum payments to be made and ownership in property belonging to one spouse to be transferred to the former spouse. Thus, they have the task of regulating, in a single decision, the matrimonial relationships and maintenance obligations arising from dissolution of a marriage.
21. Owing precisely to the fact that on divorce an English court may, by the same decision, regulate both the matrimonial relationships of the parties and matters of maintenance, the court from which leave to enforce is sought must distinguish between those aspects of the decision which relate to rights in property arising out of a matrimonial relationship and those which relate to maintenance, having regard in each particular case to the specific aim of the decision rendered.
22. It should be possible to deduce that aim from the reasoning of the decision in question. If this shows that a provision awarded is designed to enable one spouse to provide for himself or herself or if the needs and resources of each of the spouses are taken into consideration in the determination of its amount, the decision will be concerned with maintenance. On the other hand, where the provision awarded is solely concerned with dividing property between the spouses, the decision will be concerned with rights in property arising out of a matrimonial relationship and will not therefore be enforceable under the Brussels Convention. A decision which does both these things may, in accordance with article 42 of the Brussels Convention, be enforced in part if it clearly shows the aims to which the different parts of the judicial provision correspond.
23. It makes no difference in this regard that payment of maintenance is provided for in the form of a lump sum. This form of payment may also be in the nature of maintenance where the capital sum set is designed to ensure a predetermined level of income."
The 24 April 2006 application
"ADJUSTMENTS OF WEALTH OR ASSETS.- … in accordance with the provisions of English legislation, we now request that it be deemed appropriate to adjust the wealth of the spouses in such a way that the following wealth is transferred to [the wife] …"
Jurisdiction of the Spanish court, lis alibi pendens and effect of appeal
"1. Where proceedings involving the same cause of action and between the same parties are brought in the courts of different Member States, any court other than the court first seised shall of its own motion stay its proceedings until such time as the jurisdiction of the court first seised is established.
2. Where the jurisdiction of the court first seised is established, any court other than the court first seised shall decline jurisdiction in favour of that court."
Part III and the exercise of the judge's discretion
"Leave of the court required for applications for financial relief
(1) No application for an order for financial relief shall be made under this Part of this Act unless the leave of the court has been obtained in accordance with rules of court; and the court shall not grant leave unless it considers that there is substantial ground for the making of an application for such an order.
(2) The court may grant leave under this section notwithstanding that an order has been made by a court in a country outside England and Wales requiring the other party to the marriage to make any payment or transfer any property to the applicant or a child of the family.
(3) Leave under this section may be granted subject to such conditions as the court thinks fit."
"Duty of the court to consider whether England and Wales is appropriate venue for application
(1) Before making an order for financial relief the court shall consider whether in all the circumstances of the case it would be appropriate for such an order to be made by a court in England and Wales, and if the court is not satisfied that it would be appropriate, the court shall dismiss the application.
(2) The court shall in particular have regard to the following matters –
(a) the connection which the parties to the marriage have with England and Wales;
(b) the connection which those parties have with the country in which the marriage was dissolved or annulled or in which they were legally separated;
(c) the connection which those parties have with any other country outside England and Wales;
(d) any financial benefit which the applicant or a child of the family has received or is likely to receive, in consequence of the divorce, annulment or legal separation, by virtue of any agreement or the operation of the law of a country outside England and Wales;
(e) in a case where an order has been made by a court in a country outside England and Wales requiring the other party to the marriage to make any payment or transfer any property for the benefit of the applicant or a child of the family, the financial relief given by the order and the extent to which the order has been complied with or is likely to be complied with;
(f) any right which the applicant has, or has had, to apply for financial relief from the other party to the marriage under the law of any country outside England and Wales and if the applicant has omitted to exercise that right the reason for that omission;
(g) the availability in England and Wales of any property in respect of which an order under this Part of this Act in favour of the applicant could be made;
(h) the extent to which any order made under this Part of this Act is likely to be enforceable;
(i) the length of time which has elapsed since the date of the divorce, annulment or legal separation."
"as in every … application for leave under Part III, forum conveniens considerations come into play. de Dampierre v de Dampierre  AC 92 establishes the importance of fixing the primary jurisdiction before competitive litigation in more than one jurisdiction has unnecessarily depleted available assets. It is equally important to outlaw unnecessary competitive litigation after the primary jurisdiction identified by common consent has performed its essential function to divide assets and income."
"At this stage the wife has to establish that there is 'substantial ground for making the application'. The nexus between this case and England is so strong that a substantial ground based on the connection with the jurisdiction and the lack of any connection with Spain is well and truly established. If the sub-section (f) factor were such that it was plain or even likely that the court at the s. 16 stage would nevertheless refuse to grant the wife any relief, then that would be a powerful reason for dismissing her application for leave notwithstanding the Englishness of the claim and the arguments for connection that Mr Moylan relies upon. Whilst for the purpose of this exercise I have adopted Mr Singleton's interpretation of the wife's cynical and tactical manoeuvring in order to bring proceedings in the forum of her choice, I do not consider that that point, even on that basis, is such as to prevent the court holding that there are substantial grounds for allowing her to make her Part III application, and, weighing all the circumstances into account, I consider that it is justified that she should, as it is, continue to have leave to bring a Part III claim in this jurisdiction."
"In this regard, however, I should be clear in relation to one matter that arose during submissions. Whilst understanding that if the proceedings are dealt with in Spain the Spanish court would apply English law, albeit using Spanish procedure, I regard it as impermissible for the English court to take that factor into account when determining what is in this case a choice of jurisdiction issue prior to the proceedings getting properly off the ground in any other country. The superficially attractive argument that, as it is English law that is to be applied, the English court and English procedure are best suited to resolve the dispute is, in my view, to be ignored in this context. Mr Singleton was right to counsel the court not to go down that route, which would be wholly contrary to the ordinary rules of comity."