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Cite as: 20 ITELR 47, [2017] Fam 327, [2017] BPIR 472, [2016] WLR(D) 677, [2016] EWCA Civ 1292, [2017] WTLR 245, [2017] 3 WLR 41, [2018] 1 FLR 1131

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		Neutral Citation Number: [2016] EWCA Civ 1292
		Case No: B6/2015/2390

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE FAMILY DIVISION
MR JUSTICE BODEY
FD14F00345

Royal Courts of Justice
Strand, London, WC2A 2LL

15/12/2016

B e f o r e :

LADY JUSTICE BLACK
LORD JUSTICE SALES
and
LORD JUSTICE IRWIN
____________________

Between:

	EDWARD JAN MAGIERA	Appellant
	- and -
	EVE TERESE MAGIERA	Respondent

____________________

Mr Michael Horton & Mr Alexander Laing (instructed by Dawson Cornwell) for the Appellant
Mr Tim Amos QC & Ms Saima Younis (instructed by Howard Kennedy) for the Respondent

Hearing date: 1st November 2016
____________________

HTML VERSION OF JUDGMENT APPROVED
____________________

Lady Justice Black:

This appeal concerns the jurisdiction provisions of the Council Regulation (EC) No 44/2001 on jurisdiction and the recognition of judgments in civil and commercial matters ("Brussels I"). It is against an order made by Bodey J, on 6 July 2015, refusing to dismiss or stay proceedings brought in relation to a London house under the Trusts of Land and Appointment of Trustees Act 1996 ("TLATA 1996" or simply "TLATA"). The appellant also appeals against an aspect of the judge's order in relation to the costs of his application for stay or dismissal of the TLATA proceedings. Bodey J not only ordered the appellant to pay the respondent's costs of the application but also provided that the outstanding costs may be charged on the appellant's share of the house. There is no appeal against the costs order as such but the appellant appeals against the charging provision.

The TLATA application and Bodey J's decision on jurisdiction

The parties were once husband and wife and, although they are now divorced, in an endeavour to make this judgment easier to understand, I will refer to them as such hereafter, with apologies to them for this inaccuracy. They acquired a London house in their joint names during the course of their marriage. In late April/early May 2014, the respondent wife issued an application under TLATA 1996 seeking an order for sale of the house, together with an order that the proceeds, after redemption of the mortgage, be distributed between herself and the appellant husband in equal shares.

The husband contested the jurisdiction of the English court to entertain the wife's proceedings and applied for them to be dismissed or stayed. The wife argued that the courts of England and Wales had jurisdiction on the basis of several of the jurisdictional grounds set out in Brussels I. Bodey J held that it had not been established that the husband was domiciled here, so Article 2 did not assist the wife. However, he held that two other jurisdictional grounds were made out.

First, and foremost, the judge held that there was jurisdiction under Article 22 on the basis that the TLATA proceedings had as their object rights in rem in immovable property situated here.

Secondly, as an alternative basis of jurisdiction, Bodey J held that Article 5(6) applied because the husband was being sued "as settlor, trustee or beneficiary of a trust created by the operation of statute" and "the trust is domiciled" here. Unlike jurisdiction under Article 22, jurisdiction under Article 5(6) is not exclusive and can be displaced. The judge therefore went on to consider the husband's argument that there had been prorogation of jurisdiction, in accordance with Article 23, in favour of the courts of Poland, reaching the conclusion that there had not. He also considered the husband's argument that there were "related actions" in Poland and England and that, under Article 28, he should stay the English proceedings. He held that Article 28 did not apply, not least because, in his judgment, there were not related actions pending in the two jurisdictions. Furthermore, he took the view that the English court, not the Polish court, was first seised so Article 28 did not entitle him to stay the English proceedings.

I will not seek to summarise Bodey J's judgment further here. It can be found on bailii.org identified as G v G [2015] EWHC 2101 (Fam) and is extremely clear, dealing with the various arguments that were advanced before the judge and also with the factual background to the case. Before turning to the legal issues that arise, I will refer very briefly to the history, but this appeal can be resolved without going into it in any detail.

History

The TLATA proceedings were preceded by an extensive history of litigation between the parties.

The marriage appears to have broken down years ago. The wife began matrimonial proceedings in France as long ago as 2001 and formal divorce proceedings there in 2002. Much litigation in France followed, prior to the divorce becoming effective in July 2013. Meanwhile, proceedings had been begun in Poland by the husband, in relation to the division of the parties' assets. There have been various moves in those proceedings but there has been no final resolution as yet.

During the marriage, the parties acquired property in France, Poland and England which they still own. I have already referred to the acquisition of the London house in their joint names. This was in 1990. It was recorded in the transfer that the survivor could give a valid receipt for capital money arising on a disposition of the land. The joint tenancy was later severed by the wife, on 26 October 2011.

The wife's particulars of claim in the TLATA proceedings give the following information about the house. The purpose of the purchase is said to have been "as a joint investment or as a family home in the event that the parties were to live in London". However, it is said that they never occupied it as a family home because they moved to Poland in 1991. For 10 years, having been subdivided into two flats, the property was rented out but, according to the particulars of claim, at some point after the parties separated in 2001, the husband converted it into a single dwelling and, for the 18 months prior to the issue of the proceedings, it had been occupied by two of the parties' children.

The appeal in relation to jurisdiction: ground 1: Article 22

With the exception of the judge's finding as to domicile, which was in accordance with the husband's case, the husband's grounds of appeal challenged each one of the judge's conclusions. For the present, I will concentrate upon his challenge to the judge's decision that the English court has jurisdiction under Article 22. I do so because, in the event that the husband's argument in this respect fails, that will be determinative of the appeal. As Article 22 provides for exclusive jurisdiction, if the English court does have jurisdiction under it, there is no room for arguments about prorogation under Article 23, or staying the English proceedings under Article 28 so as to allow the Polish courts to proceed with a related action. Similarly, with jurisdiction established under Article 22, there would be no need to consider the points raised in the wife's Respondent's Notice, by which she sought to argue that the judge should have found that the husband was domiciled in England and Wales at the material time.

The argument in front of Bodey J revolved around the case of Webb v Webb (Case C-294/92) [1994] QB 696, a decision of the (as it then was) Court of Justice of the European Communities ("CJEC"). Mr Horton, on behalf of the husband, argued that, properly applied to the facts of this case, it led to the conclusion that the wife's TLATA proceedings had as their object rights in personam, not rights in rem as required by Article 22. Bodey J distinguished Webb v Webb, his reasoning being as follows:

"31. In my judgment, the instant case is distinguishable from Webb v Webb. There the father was seeking to establish and acquire rights in immovable property by way of a Constructive or Resulting Trust, on the basis that the French flat in the son's name had been purchased with his (the father's) money. Here, by contrast, the existence (or not) of a trust is not in dispute. The wife already has proprietary rights in the London house as co-owner. What she is seeking to do is to enforce and give effect to those rights. It is fair comment that the order which she seeks would be as against the husband personally, requiring him to join with her in selling the property. To that extent it would be an in personam order; but the right which would lead to such an order is a right of ownership in the property 'available against the whole world'." [emphasis in the original]

Mr Horton's argument on appeal was that Bodey J was wrong to distinguish Webb v Webb in this way. In seeking to persuade us of this, he relied also on the English authorities of Re Hayward [1997] Ch 45 and Ashurst v Pollard [2001] Ch 595.

Immediately before the hearing of the appeal, a further decision of the Court of Justice of the European Union ("CJEU") came to light, namely Komu v Komu (Case C-605/14) [2016] 4 WLR 26. On the face of it, this presented Mr Horton with a considerable obstacle, but he endeavoured to surmount it in argument. Ultimately, I was not persuaded that it could be surmounted, for the reasons which I will now set out.

Article 22 and the case law

The starting point is Article 22 itself ^[1] which, so far as material, reads:

"The following courts shall have exclusive jurisdiction, regardless of domicile:

1. in proceedings which have as their object rights in rem in immovable property or tenancies of immovable property, the courts of the Member State in which the property is situated;"

In surveying the European and domestic authorities which may assist in interpreting Article 22, it is important to recognise that it is the European authorities and not the domestic ones which ultimately govern the interpretation of Article 22. This is because, as the CJEU has made clear, in order to ensure that the rights and obligations arising from the Regulation for Member States and for individuals are as equal and as uniform as possible, an independent definition must be given in EU law to the wording of Article 22 (for recent statements of this principle, see Weber v Weber (Case C-438/12) EU:C:2014:212; [2015] Ch 140 at §40 and Komu v Komu at §23, and also see Ashurst v Pollard (supra) at §34 where it was acknowledged, in relation to the predecessor of Article 22, by the English Court of Appeal).

I will therefore start with the European decisions. Webb v Webb forms part of a chain of authorities starting considerably earlier in time. For present purposes, it may be sufficient to commence with Reichert v Dresdner Bank A.G. (Case C-115/88) [1990] ECR I-27 ("Reichert"). In that case, the provision in question was Article 16(1) of the Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters 1968 (hereafter "Article 16(1) of the Convention") which, in all material respects, is in identical terms to Article 22(1) of Brussels I. Mr and Mrs Reichert owned immovable property in France, the legal ownership of which they donated to their son. The Dresdner Bank was a creditor of Mr and Mrs Reichert and challenged the donation in the French court as being a transaction "in fraud of their rights". It sought, by means of what was known in French law as an "action paulienne", to have the donation set aside. The French court held that it had jurisdiction on the basis of Article 16(1). The Reicherts appealed and the French appeal court sought a preliminary ruling from the European Court.

The Court held that the action did not come within Article 16(1). It made a number of observations about the interpretation of the provision which recur in the later jurisprudence, including the following:

i) Article 16 was not to be given a wider interpretation than was required "by its objective", since its effect was to deprive people of a choice of forum and, in certain cases, it could result "in their being brought before a court which is not that of any of them" (§9).

ii) The objective, or as the Court put it in §10, "the essential reason for conferring exclusive jurisdiction on the courts of the Contracting State in which the property is situated", is:

"that the courts of the locus rei sitae are the best placed, for reasons of proximity, to ascertain the facts satisfactorily and to apply the rules and practices which are generally those of the State in which the property is situated (judgments of 14 December 1977 in Sanders v Van der Putte [(1977) ECR 2383] and of 15 January 1985 in Case 241/83 Roesler v Rottwinkel ((1985) ECR 99)."

iii) Article 16(1) does not encompass all actions concerning rights in rem in immovable property but only those which both come within the scope of the Brussels Convention and are "actions which seek to determine the extent, content, ownership or possession of immovable property or the existence of other rights in rem therein and to provide the holders of those rights with the protection of the powers which attach to their interest." (§11)

In the view of the Court, an action paulienne was based on the creditor's personal claim against the debtor, seeking to protect whatever security he may have over the debtor's estate. If successful, its effect was to render the impugned transaction ineffective as against the creditor alone. Moreover, the Court considered (§12) that such an action did not "involve the assessment of facts or the application of rules and practices of the locus rei sitae in such a way as to justify conferring jurisdiction on a court of the State in which the property is situated."

Webb v Webb involved a flat in France, which was purchased in 1971 with funds provided by a father, the legal title being conveyed to his son. In 1990, the father brought proceedings in the English court for a declaration that the son held the property as trustee for him and for an order requiring the son to execute the documents necessary to vest the legal title in him. The son defended the claim on the basis of the presumption of advancement, but also challenged the jurisdiction of the English court on the ground that the action related to a right in rem in immovable property and that the French courts therefore had exclusive jurisdiction by virtue of Article 16(1) of the Convention. At first instance, the judge held that the father's claim did not relate to rights in rem and dismissed the son's objection to jurisdiction, going on to find that he held the property on resulting trust for the father. On the son's appeal to the Court of Appeal, the court made a reference to the CJEC, seeking a preliminary ruling on the question of jurisdiction.

The CJEC held that the father's proceedings did not relate to rights in rem. The judgment is quite short, but we were taken to passages from the Advocate General's opinion as well. The son had argued that, as the father's ultimate purpose was to secure ownership of the flat, the proceedings had as their object rights in rem. The CJEC did not accept that. It said, in the light of the judgment in Reichert, that it was (§14):

"not sufficient … that a right in rem in immovable property be involved in the action or that the action have a link with immovable property; the action must be based on a right in rem and not on a right in personam…"

At §15 the Court examined the nature of the proceedings. I will set the paragraph out in full, but I think the essence of it is that, in the view of the Court, the father was not claiming that he already enjoyed rights directly relating to the property which were enforceable against the whole world, but was proceeding against the son personally, seeking to have him execute the documents that would transfer the flat into his ownership. What the Court said was:

"15. The aim of the proceedings before the national court is to obtain a declaration that the son holds the flat for the exclusive benefit of the father and that in that capacity he is under a duty to execute the documents necessary to convey ownership of the flat to the father. The father does not claim that he already enjoys rights directly relating to the property which are enforceable against the whole world, but seeks only to assert rights as against the son. Consequently, his action is not an action in rem within the meaning of article 16(1) of the Convention but an action in personam."

The Court was reinforced in its view by the fact that it did not think that "considerations relating to the proper administration of justice underlying Article 16(1)" were applicable to the case. It went on, at §17, to refer to those considerations in terms which are already familiar from the Reichert case:

"17. As the court has held, the conferring of exclusive jurisdiction in the matter of rights in rem in immovable property on the courts of the state in which the property is situated is justified because actions concerning rights in rem in immovable property often involve disputes frequently necessitating checks, inquiries and expert assessments which must be carried out on the spot: see Sanders v van der Putte (Case 73/77) [1977] ECR 2383, 2390-2391, para.13."

In the Court's view (§18):

"the immovable nature of the property held in trust and its location are irrelevant to the issues to be determined in the main proceedings which would have been the same if the dispute had concerned a flat situated in the United Kingdom or a yacht"

It therefore concluded:

"19. The answer to be given to the question submitted to the court must therefore be that an action for a declaration that a person holds immovable property as a trustee and for an order requiring that person to execute such documents as should be required to vest the legal ownership in the plaintiff does not constitute an action in rem within the meaning of article 16(1) of the Convention."

I mention next Weber v Weber (supra). By the time of this decision in 2014, Article 16 of the Convention had been replaced by Article 22 of the Regulation. The action was between two sisters who were co-owners of a German property. A number of questions were referred to the Court, one of which related to Article 22. In response, the Court drew upon the jurisprudence in relation to Article 16 and its theme was very much a continuation of that which I have extracted from the two earlier decisions referred to above.

That takes me to the important decision in Komu v Komu (supra). There, the three claimants and the two defendants co-owned a house in Spain, three having a 25% share and the other two a 12.5% share. Four of the parties also co-owned a Spanish apartment in unequal shares. One of the claimants had, in addition, a right of use, registered in the Spanish Land Register, over shares held by the other two claimants in both properties. The claimants wished to realise their interests in both properties and, in the absence of agreement on the termination of the relationship of co-ownership, they brought an action before the Finnish court for an order appointing a lawyer to sell the properties and fixing a minimum price for each of them. Jurisdiction was contested but the Finnish court held that it had jurisdiction and allowed the claim. The case made its way up through the appeal courts in Finland, and the Finnish Supreme Court referred to the CJEU for a preliminary ruling the question whether such an action was within Article 22(1).

Finnish law provided that a co-owner was entitled to receive his share of the property held in common by way of partition or, if partition was impossible or would give rise to disproportionately high costs or substantially reduce the value of the property, the court had power to order the sale of the property in lieu of partition in order to terminate the relationship of co-ownership. Finnish law provided also that, where appropriate, the court was to appoint a person to have the conduct of the sale and distribute the proceeds. The Finnish action was categorised by the CJEU as an action "between co-owners of immovable property situated in Spain concerning the termination, by way of sale, of the co-ownership in undivided shares in that property" (§2), the sale being by an appointed agent (§ 21).

The Court (§23) recalled its previous case law requiring an independent definition to be given in EU law to the phrase "in proceedings which have as their object rights in rem in immovable property" and that, being an exception to Article 2(1) of the Regulation, "the provisions of Article 22(1) … must not be given an interpretation broader than is required by their objective" (§24). It reiterated the essential reason for conferring exclusive jurisdiction on the courts of the state in which the property is situated, in terms reflecting §10 of Reichert (supra at §18). It also reiterated its statement (see §11 of Reichert, supra) that not all actions concerning rights in rem in immovable property come within the Article, but only those:

"which seek to determine the extent, content, ownership or possession of immovable property or the existence of other rights in rem therein and to provide the holders of those rights with protection for the powers which attach to their interest" (§26)

Drawing on settled case law of the Court, the Court then identified the difference between a right in rem and a right in personam as being that the former, existing in corporeal property, has effect erga omnes, whereas the latter can be claimed only against the debtor (§27). From §28 onwards, the Court applied these principles to the facts of the case before it and, in light of the central importance of the case for this appeal, it may be worth quoting the rest of the judgment on the substance of the dispute:

"28. In the present case, as the Member States that submitted written observations correctly claim, an action for termination of the co-ownership of immovable property, such as that at issue in the main proceedings, constitutes proceedings which have as their object rights in rem in immovable property falling within the exclusive jurisdiction of the courts of the Member State in which the property is situated.

29. In that regard, clearly such an action, designed to bring about the transfer of a right of ownership in immovable property, concerns rights in rem which have effect erga omnes and is intended to ensure that the holders of those rights can protect the powers attached to their interest.

30. Similarly, it must be stated that the considerations of sound administration of justice which underlie the first paragraph of Article 22(1) of Regulation No 44/2001 also support such exclusive jurisdiction in the case of an action intended to terminate the co-ownership of immovable property, as that in the main proceedings.

31. The transfer of the right of ownership in the properties at issue in the main proceedings will entail the taking into account of situations of fact and law relating to the linking factor as laid down in the first paragraph of Article 22(1) of Regulation No 44/2001, namely the place where those properties are situated. The same applies, in particular, to the fact that the rights of ownership in the properties and the rights of use encumbering those rights are the subject of entries in the Spanish Land Register in accordance with Spanish law, the fact that rules governing the sale, by auction where appropriate, of those properties are those of the Member State in which they are situated, and the fact that, in the case of disagreement, the obtaining of evidence will be facilitated by proximity to the locus rei sitae. The Court has already held that disputes concerning rights in rem in immovable property, in particular, must generally be decided by applying the rules of the State in which the property is situated, and the disputes which frequently arise require checks, inquiries and expert assessments which have to be carried out there (judgment in ČEZ, C-343/04, EU:C:2006:330, paragraph 29 and the case-law cited).

32. That case-law can be applied to the case in the main proceedings where, unlike the case which gave rise to the judgment in Lieber (C-292/93, EU:C:1994:241, paragraph 21) relating to compensation for the use of a dwelling, the determination of the extent of the legal conditions relating to the termination of the relationship of co-ownership, capable of having effect erga omnes, falls within the jurisdiction of the courts of the Member State in which the properties in the main proceedings are situated, as is clear from the case-law cited in paragraph 26 above^[2]. Consequently, in a case where the rules of substantive law applicable to the case in the main proceedings would involve an assessment of whether physical partition of the properties is feasible when terminating the relationship of co-ownership, such an assessment would also be capable of giving rise to checks, by means of expert reports, which the courts of the Member State in which those properties are situated would be best placed to order.

33. Having regard to the above considerations, the answer to the question referred is that the first paragraph of Article 22(1) of Regulation No 44/2001 must be interpreted as meaning that an action for the termination of co-ownership in undivided shares of immovable property by way of sale, by an appointed agent, falls within the category of proceedings 'which have as their object rights in rem in immovable property' within the meaning of that provision."

The parties' written submissions concentrated upon Webb v Webb and did not deal with Komu v Komu as it did not come to light until later. It will be immediately apparent, however, from my resumé of the facts of Komu v Komu, that it has many similarities to the present case. It is not possible to resolve the appeal without paying very careful attention to it. I will return to it in due course in the context of the parties' submissions, but first I need to deal with the English authorities upon which Mr Horton placed reliance. I do so relatively shortly, however, because he conceded that if there were to be a clash between those authorities and the later decision in Komu, the European jurisprudence would prevail. That was an inevitable concession, in my view, given that Article 22 has to be given an "independent definition", see Weber and the other authorities cited at §16 supra.

Re Hayward [1997] 1 Ch 45 concerned a villa in Minorca, owned jointly by Mr Hayward and another man. Mr Hayward was made bankrupt and, after his death, his widow transferred her husband's half interest in the villa to the other joint owner, who became the sole registered proprietor in the Minorcan property register. The trustee in bankruptcy applied in the English court for a declaration that Mr Hayward's interest formed part of his bankruptcy estate and vested in the trustee, leaving Mr Hayward with nothing to pass to his widow on his death. He sought to have the purported transfer of Mr Hayward's half share to the other owner declared void, and sought an order that the other owner and the widow take steps to rectify the property register accordingly. He also sought an order for sale and division of the proceeds. Rattee J, in the Chancery Division, held that the trustee's claim was made in proceedings which had as their object a right in rem in immovable property and that, by virtue of Article 16 of the Convention, the Spanish courts had exclusive jurisdiction. The trustee's claim was, in his view, a claim to the right of legal ownership of one half of the villa. The object of the proceedings was accordingly a right in rem in immovable property.

Ashurst v Pollard was also a case involving bankruptcy. A husband and wife jointly owned a villa in Portugal. A bankruptcy order was made against the husband in England. His interest in the villa vested in the trustee in bankruptcy and the trustee obtained an order for the sale of the villa with vacant possession. The husband and wife appealed against that, eventually reaching the Court of Appeal. They argued that the Portuguese court had exclusive jurisdiction under Article 16(1) of the Convention. The Court of Appeal, rejected that argument, holding that the issues raised in the proceedings were personal issues between the trustee and the spouses as to the beneficial interests in the villa and did not have as their object rights in rem. The court was not persuaded by the argument, advanced by counsel for the bankrupt and his wife, that Webb v Webb should be distinguished on the basis that, in contrast to the father in Webb, the trustee in bankruptcy already enjoyed rights directly relating to the property which were enforceable against the whole world as he had an indisputable beneficial interest in the property by virtue of the operation of the Insolvency Act 1986,. Important features which led to the court's conclusion seem to have included that "the proceedings do not seek to assert any property right against third parties/strangers" (§55), and that, in the court's view, the rationale underlying Article 16 had no application on the facts, "since no issue arises as to the factual situation in Portugal, nor do the proceedings involve any question of Portuguese law or practice" (§54).

Re Hayward was distinguished in Ashurst v Pollard (§59) on the basis that the principal subject matter in the Re Hayward proceedings was the ownership of the Minorcan property or, as Rattee J put it, "an attempt by the trustee to establish and protect, and indeed perfect, what he alleged was his entitlement as trustee in the bankruptcy of Mr Hayward to what had been Mr Hayward's half share in the villa." The Court of Appeal considered that Rattee J had been correct, in those circumstances, to hold that Article 16(1) applied but, in contrast, the proceedings before them did not raise any issue as to title to land and, in the court's view (§60), the trustee was "not seeking to establish or protect, let alone perfect, his title to Mr Pollard's interest in the Portuguese property."

Finally, in terms of domestic authorities, I turn to Prazic v Prazic [2006] EWCA Civ 497, [2006] 2 FLR 1128. TLATA proceedings were commenced in England, by a wife against a husband, in relation to English property. The remedy sought by the wife in the proceedings was a declaration that she was an equal owner in equity of some London flats, which appear to have been in the husband's sole name, and a tracing order in relation to the proceeds of sale of another property which had already been sold. There is little to be gained from the decision for present purposes, firstly because the Court of Appeal simply applied Webb v Webb, with little discussion, holding that the proceedings did not fall within Article 22 of Brussels I, and secondly because the facts are significantly different from our case.

The submissions

Mr Horton took us carefully through the European and the domestic authorities, seeking to persuade us that Webb dictated the answer in this case, and that Komu did not change that. Komu, he pointed out, was concerned with an entirely different legal system from the English system and so, in his submission, not of assistance to us. In particular, it was material that the Finnish system permitted land to be held in undivided shares without the imposition of a trust. In contrast, in this case, a trust arises and, Mr Horton would argue, the wife's TLATA application is made under section 14 of the Act and is for orders relating to the exercise by the trustees of their functions, one of those being to sell. Her claim is therefore, in his submission, a trust claim and the proceedings accordingly have as their object rights in personam not rights in rem. Drawing on the terms used in the Schlosser Report (of 1978) on the Convention, he would, I think, characterise the dispute in this case as being in connection with the "internal relationships of a trust" rather than in connection with "external relationships".

Mr Horton invited us to take the view that the wife's action does not involve, and nor is it based upon, the legal title to the London property; it is based upon her alleged beneficial entitlement and does not involve the assertion of any rights against the world or against any third parties. Nor, he submitted, are there any considerations relating to the proper administration of justice which would dictate that jurisdiction should be in the country where the property is sited, such as the need for on the spot checks, inquiries and assessments.

Webb establishes, Mr Horton submitted, that a dispute between parties as to whether the defendant holds land in trust for the claimant is outside Article 22. However, in his submission Webb goes further than that, as the father's object in the proceedings was to gain legal ownership of the property and he was seeking an order directing the son to execute documents vesting title in him, but his proceedings still did not have as their object rights in rem. That is also the case here, Mr Horton said. In his submission, the distinction perceived by Bodey J between the instant case and Webb, at §31 of his judgment, namely that the father was seeking to establish and acquire rights in Webb whereas here existence of the trust was not in dispute, was not a tenable one. In particular, it was not a distinction accepted in Ashurst v Pollard, where the trustee in bankruptcy already had an indisputable beneficial interest in the property and sought an order for sale with vacant possession, but that did not bring his action within Article 16 of the Convention.

In dealing with Komu, as well as relying on his submission that it was of central importance that the CJEU was dealing with a different system of property law, Mr Horton invited particular attention to a number of the features which appear to have influenced the Court in its reasoning and which are absent, he submitted, in the present case. He relied particularly upon the fact that partition was a possibility in Komu. Initially, he submitted that actions for partition were not known in the English system, but subsequently corrected this. Under TLATA, the trustees of land normally have power to partition all or part of the land (section 7(1) ibid). It is a power which can be exercised only with the prior consent of each of the beneficiaries (section 7(3)). If a dispute arises, an application can be made to the court and an order can be made under section 14 of the Act. But, Mr Horton submitted, an action for partition under the Act is, in fact, an application for an order requiring a trustee to exercise one of his functions as a trustee. I infer that he would argue that, in these circumstances, it too is an action having as its object rights in personam not rights in rem. But his point was also that it was very unlikely that either party would be seeking partition in this case. Accordingly, the considerations that were taken into account in §32 of Komu as to the need for an assessment of whether physical partition would be possible, were not consideration in the present case. In the same way, because the focus is on the trust, there would be no need to get involved with entries on the property register (contrast §31 of Komu).

In so far as Komu might be thought to represent a move away from Webb by the CJEU, such a change would need to be spelled out expressly, in Mr Horton's submission, so Webb remains good law.

Not surprisingly, Mr Amos QC for the wife submitted that Komu is a complete answer to the appeal, dictating that the Article 22 question must be decided in her favour. It matters not, in his submission, that the system of land law in question in Komu was not precisely the same as the English system, because the decision was not "system specific" and nor could it be, given that the instrument has to deal with many different land law systems in the different Member States. Like the three claimants in Komu, the wife here is a co-owner seeking to sell jointly owned property. Her action is designed to secure "protection of the powers which attach to" her interest, and thus within the ambit of those actions classified in §11 of Reichert as being within Article 22. Furthermore, Mr Amos submitted, as in Komu, there are practical matters which might arise on the sale and are better addressed in the place where the property is situated.

In Mr Amos's submission, Bodey J was right to distinguish Webb for the reasons that he did, his reasoning anticipating Komu, which would be decided six months later, in December 2015.

Discussion

I must attempt now to set out what I make of the parties' rival submissions. It has to be said immediately that it is not entirely easy to apply the European jurisprudence to the English system of co-ownership of real property with its heavy reliance upon trusts. On the face of it, ignoring the trust issues for a moment, the proceedings in Komu and the proceedings in the present case are strikingly similar. It is important, I think, to look at how the CJEU itself characterised the Komu proceedings. They were introduced, at §2 of the decision, as "proceedings between co-owners of immovable property… concerning the termination, by way of sale, of the co-ownership in undivided shares of that property". The wife's action here could also be described in precisely that way. Similarly, the Court described the action in Komu as being "designed to bring about the transfer of a right of ownership in immovable property" (§28). The wife aims to achieve the transfer of a right of ownership in this case too. It might also be said, perhaps stretching the language a little, that the wife's action resembles that in Komu in being "intended to ensure that [she] can protect the powers attached to [her] interest" (§29) as one of two joint owners of the property in law and in equity. In the light of these similarities, the natural inclination would therefore be to characterise her proceedings in the same way as those in Komu, namely as having as their object rights in rem.

Are there, however, features of the English property system or of this particular action which dictate that it should be categorised differently? In particular, does the fact that a forced sale of the property would be achieved in English law by means of an order relating to the exercise by the trustees of their functions dictate a different result?

In considering those questions, it has to be remembered that, as an exception to the general rule and as a provision which removes choice of forum, Article 22 must be narrowly construed. The interpretation must not be broader than is required by the objective of the provisions. It is imperative, therefore, to return to examine that objective once more. Given that the provisions of Brussels I (and now, although not at the material time, Brussels I recast) must be readily applicable in all Member States, it seems to me helpful to do this anyway, in an attempt to guard against approaching the question with an unduly domestic slant.

The essential reason for giving exclusive jurisdiction to the courts of the state where the property is situated is that those courts are best placed to ascertain the facts satisfactorily and to apply the "rules and practices ... of the state in which the property is situated" where they are apposite, see for example §10 of Reichert and §25 of Komu.

The wife's claim in this case is expressed to be for, inter alia, an "order for sale of the property" but it seems to me that, in attempting to categorise it for the purposes of Article 22, it would be wrong to concentrate overly upon the exact wording used in the claim. It might equally have been expressed as, for example, a claim for an order that the husband, as the other trustee of the property, join with the wife in selling the property or, in the alternative, the property be sold by order of the court, together with an application for all necessary directions.

We were not referred to the provisions of CPR Rules 40.15 to 40.19 but it would not be unlikely that a court, faced with such a claim, would have to have recourse to them and it is helpful, in my view, to look at them in considering the extent to which, if at all, it can be said that local rules and practices may need to be applied in the course of resolving the wife's TLATA application.

CPR Rule 40.15 is an introductory provision and defines "land" as including any interest in, or right over, land. Rule 40.16 provides that in any proceedings relating to land, the court may order the land, or part of it, to be sold, mortgaged, exchanged or partitioned. Rule 40.17 provides that where the court has made an order under Rule 40.16, it may order any party to deliver up to the purchaser, or any other person: (i) possession of the land, (ii) receipt of rents or profits relating to it, or (iii) both. Practice Direction 40D contains more detailed provisions as to the directions that may be given about a sale. They include, for example, directions as to the manner of the sale, obtaining evidence of the value of the land, fixing a minimum or reserve price, and appointing a person to conduct the sale. Should the parties find themselves unable to co-operate in any sale that might be ordered of the property in this case, these are the provisions to which recourse might be had in order to bring the sale about. It seems to me that this would take the court firmly into the target territory of Article 22(1). Take the question of the price at which the property should be sold, should the parties be unable to agree upon that. Evidence from local valuers would be likely to be required and, to put it as it was put in Komu at §31, "the obtaining of evidence will be facilitated by proximity to the locus rei sitae". And, should there be disagreement as to the price at which the property should be offered for sale/sold following valuation evidence being obtained, that too would be better addressed in the country where the property is situated, by a court with local knowledge. Similarly, local knowledge would be vital in considering the manner of sale of the property as, again reverting to the language of §31 of Komu, the "rules governing the sale, by auction where appropriate, of [the property] are those of the Member State where [it is] situated".

It seems to me that it is also informative to consider section 39 of the Senior Courts Act 1981, which is part of the armoury that can be deployed in cases of this kind, in support of an order for sale. It provides that where the High Court or a family court has given or made a judgment or order directing a person to execute any conveyance, contract or other document, and the person neglects or refuses to comply, the court may order that the document be executed by a person nominated by the court. The person nominated can be a master or district judge. There are alternative procedures that can be considered instead, but this serves to illustrate the sort of process which might need to be carried out following an order for sale, and which the local courts would be best placed to put into operation.

Putting it shortly, when it comes to an order for the sale of a property, as sought by the wife, I have little doubt that the "courts of the Member State in which [the] properties are situated would be best placed" to deal with matters (see not only Komu itself but also other case law of the court, including ČEZ, C-343/04 EU:C:2006:330, referred to at §31 of Komu).

What then of Webb? As the Court of Appeal noted in Ashurst v Pollard (§54), the Advocate General in Webb gave the opinion (§11) that the expression "which have as their object" in Article 16(1) was synonymous with "which have as their principal subject matter". This led the Court of Appeal in Ashurst v Pollard to look to see what the subject matter of the proceedings there was, concluding that the fact that the resolution of the dispute in that case as to personal rights may impact upon property rights enforceable against third parties/strangers did not lead to the conclusion that the subject matter of the proceedings for the purposes of Article 16 was rights in rem (§56).

Although not repeating the words of the Advocate General, it may be that the CJEC in Webb had them in mind nonetheless, in that it rejected the argument that "the test for applying Article 16(1) is the plaintiff's ultimate purpose" (§§12 and 13). Accordingly, it was not persuaded that, as the father's ultimate purpose was to secure ownership of the flat, Article 16 applied. Instead, it concentrated upon what it considered to be the aim of the proceedings, namely to obtain a declaration that the son held the flat for the exclusive benefit of the father and in that capacity was under a duty to execute the documents necessary to convey ownership to the father (§15). It noted specifically, and must therefore have attached some significance to, the fact that the father did not claim that "he already enjoyed rights directly relating to the property which are enforceable against the whole world", but sought only to assert rights against the son. And it did not consider that the considerations relating to the proper administration of justice which underlay Article 16(1) were applicable (§§16 and 17).

Fortified by the decision in Komu, I agree with Bodey J that the present case should be distinguished from Webb. The wife is already a joint owner of the property here, whereas the father in Webb was not. If it is appropriate to analyse what the "principal subject matter" of the claim is here, it is to achieve a sale of the property, as it was in Komu. It would be wrong, in my view, to put too much weight on the fact that the application is technically under section 14 of TLATA for an order relating to the exercise by a trustee of his functions, when such an application is conventionally coupled with, or followed swiftly by, an application for an order for sale by order of the court. The action could be said to involve the external relations of the trust, rather than (or at the very least, as well as) the internal relations of the trust. Reflecting the language of §29 of Komu, I think it would be fair to describe the wife, as one of the two joint owners of the property both in law and in equity, as having "rights in rem which have effect erga omnes". She is seeking to "protect the powers attached to [her] interest" by "bring[ing] about a transfer of a right of ownership" in the house by a sale of it. Moreover, viewing the matter as a whole, it is clear that "the considerations which underlie the first paragraph of Article 22(1)" apply here, as they did in Komu.

In reaching this view of matters, I have by no means ignored Ashurst v Pollard. However, I am not convinced that much is to be gained by a close analysis designed to see whether or not it can be distinguished from the present case. The Court of Appeal in Ashurst v Pollard did not have the advantage of the more recent decision in Komu, which has added to the understanding of how the CJEU approaches Article 22(1). We have no way of knowing whether it would have decided Ashurst v Pollard in the same way, had it had that advantage. Given that Mr Horton properly agreed that if there is a clash between Ashurst v Pollard and Komu, this court would have to follow Komu, I do not propose to go further than to say that, applying the European jurisprudence and relying particularly upon Komu, I have concluded that the wife's proceedings in the present case have as their object rights in rem in immovable property and that Article 22(1) therefore confers exclusive jurisdiction upon the courts of this country. I would accordingly uphold the decision of Bodey J in this respect and dismiss the husband's appeal against his dismissal of his application to dismiss or stay the wife's English proceedings.

Having reached that determination, as I explained in §11 supra, it is unnecessary for me to deal with Mr Horton's challenge to the judge's conclusion that jurisdiction was alternatively conferred under Article 5(6) or with the associated questions of whether there was an operative agreement that the Polish courts were to have jurisdiction under Article 23, and whether there should be a stay under Article 28.

The appeal in relation to Bodey J's costs order

Bodey J's order provided that the husband pay the wife's costs of his failed application to dismiss or stay the TLATA application, those costs to be subject to a detailed assessment if not agreed. In §3 of the order, he provided for payment on account of costs in the sum of £37,500. He also ordered:

"4. At the Wife's election, the outstanding costs due to her at any time, whether under paragraph 3 above, or following the detailed assessment, may be charged on the Husband's share of the property…."

The husband appealed against §4 of the order, on the basis that it was, in effect, a charging order and that there was no power to make a charging order in respect of a sum not yet due/an unliquidated sum. He also complained that there had been no compliance with the procedural formalities which CPR Rule 73 prescribes for an application for a charging order.

The costs which Bodey J ordered to be paid on account have been paid by the husband. As to the balance of costs, presently awaiting detailed assessment, Mr Amos conceded that the charging order made by the judge should not have been made, as demonstrated by the decision of Floyd J (as he then was) in Monte Developments Ltd (in administration) v Court Management Consultants Ltd and others [2010] EWHC 3071 (Ch). Mr Amos did not seek to distinguish that case, or to persuade this court to take a different view of matters from Floyd J's, and nor did he seek to defend the charging order on any other grounds. He accepted on the wife's behalf that the appeal against it should be allowed and the charging order discharged.

The wife's position was realistic. In my view, the Monte Developments case is precisely in point. Although chapter and verse was not given, the charging order made by Bodey J must have been made under the Charging Order Act 1979. Section 1(1) of the Act provides:

"(1) Where, under a judgment or order of the High Court or the family court or the county court, a person (the "debtor") is required to pay a sum of money to another person (the "creditor") then, for the purpose of enforcing that judgment or order, the appropriate court may make an order in accordance with the provisions of this Act imposing on any such property of the debtor as may be specified in the order a charge for securing the payment of any money due or to become due under the judgment or order."

In Monte Developments, an order was made in the claimants' favour against the defendant company for costs which were to be assessed if not agreed. The claimants obtained a final charging order in relation to the unassessed costs. On an application for the discharge of the final charging order, it was held that the sum for costs which had not been assessed was not within section 1(1) of the Charging Orders Act 1979. It was neither money which the company was "required to pay" under an order, nor money "due or to become due" under an order, and nor could it be equated with future instalments which would inevitably become due at a later date under an order. The charging order was accordingly discharged. The same must happen in this case. I would therefore, allow the appeal and discharge §4 of Bodey J's order.

Lord Justice Sales:

I agree.

Lord Justice Irwin:

I also agree.

Note 1 Article 22(1) is replaced by Article 24(1) of Regulation (EU) 1215/2012, the recast Brussels I Regulation, in relation to proceedings instituted on or after January 10 2015; the substance of the new provision is the same. [Back]

Note 2 §42 of Weber v Weber and the case law cited. [Back]