Strand, London, WC2A 2LL
B e f o r e :
|- and -
Mr C Wood (instructed by William Sturges Solicitors) for the Respondent
Hearing dates: 10 May 2010
Crown Copyright ©
Mr Justice Mostyn :
12. Applications for financial relief after overseas divorce etc—
(a) a marriage has been dissolved or annulled, or the parties to a marriage have been legally separated, by means of judicial or other proceedings in an overseas country, and
(b) the divorce, annulment or legal separation is entitled to be recognised as valid in England and Wales,
either party to the marriage may apply to the court in the manner prescribed by rules of court for an order for financial relief under this Part of this Act.
13. 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.
FPR 3.17(1) provides:
An application for leave to apply for an order for financial relief under Part III of the Act of 1984 shall be made ex parte by originating summons issued in Form M25 out of the Principal Registry and shall be supported by an affidavit by the applicant stating the facts relied on in support of the application with particular reference to the matters set out in section 16(2) of that Act.
15. Jurisdiction of the court—
(1) Subject to subsection (2) below, the court shall have jurisdiction to entertain an application for an order for financial relief if any of the following jurisdictional requirements are satisfied, that is to say—
(a) either of the parties to the marriage was domiciled in England and Wales on the date of the application for leave under section 13 above or was so domiciled on the date on which the divorce, annulment or legal separation obtained in the overseas country took effect in that country; or
(b) either of the parties to the marriage was habitually resident in England and Wales throughout the period of one year ending with the date of the application for leave or was so resident throughout the period of one year ending with the date on which the divorce, annulment or legal separation obtained in the overseas country took effect in that country; or
(c) either or both of the parties to the marriage had at the date of the application for leave a beneficial interest in possession in a dwelling-house situated in England or Wales which was at some time during the marriage a matrimonial home of the parties to the marriage.
(2) Where the jurisdiction of the court to entertain proceedings under this Part of this Act would fall to be determined by reference to the jurisdictional requirements imposed by virtue of Part I of the Civil Jurisdiction and Judgments Act 1982 (implementation of certain European conventions) or by virtue of Council Regulation (EC) No 44/2001 of 22nd December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters or then—
(a) satisfaction of the requirements of subsection (1) above shall not obviate the need to satisfy the requirements imposed by virtue of that Regulation or Part I of that Act; and
(b) satisfaction of the requirements imposed by virtue of that Regulation or Part I of that Act shall obviate the need to satisfy the requirements of subsection (1) above;
and the court shall entertain or not entertain the proceedings accordingly.
i) The jurisdiction of the court has been established, at least prima facie; and
ii) there is a "substantial ground" for the making of the application.
I shall turn to the question of jurisdiction later. There is a considerable complication in this regard.
32. It is clear that something must be done to prevent the waste of costs and court time, and prejudice to the applicant, caused by applications to set aside which have only questionable chances of success. That must of course be balanced by a proper application of the threshold of "substantial ground." But as Deane J said in the Federal Court of Australia in an entirely different context, "the word 'substantial' is not only susceptible of ambiguity: it is a word calculated to conceal a lack of precision": Tillmanns Butcheries Pty Ltd v Australasian Meat Industry Employees' Union (1979) 42 FLR 331, 348.
33. In the present context the principal object of the filter mechanism is to prevent wholly unmeritorious claims being pursued to oppress or blackmail a former spouse. The threshold is not high, but is higher than "serious issue to be tried" or "good arguable case" found in other contexts. It is perhaps best expressed by saying that in this context "substantial" means "solid." Once a judge has given reasons for deciding at the ex parte stage that the threshold has been crossed, the approach to setting aside leave should be the same as the approach to setting aside permission to appeal in the Civil Procedure Rules, where (by contrast with the Family Proceedings Rules) there is an express power to set aside, but which may only be exercised where there is a compelling reason to do so: CPR r 52.9(2). In practice in the Court of Appeal the power is only exercised where some decisive authority has been overlooked so that the appeal is bound to fail, or where the court has been misled: Barings Bank plc v Coopers & Lybrand  EWCA Civ 1155; Nathan v Smilovitch  EWCA Civ 759. In an application under section 13, unless it is clear that the respondent can deliver a knock-out blow, the court should use its case management powers to adjourn an application to set aside to be heard with the substantive application.
The differences between the various tests referred to by Lord Collins are very subtle and highly nuanced. We now all know that a substantial/solid ground is a stiffer test than a "serious issue to be tried" or a "good arguable case", albeit, as Lord Collins points out, the word "substantial" is calculated to give rise to ambiguity. In my opinion a solid/substantial ground will be shown where the court can confidently say that the probability is greater than or equal to 50% that the applicant will achieve a substantive order were the matter to be tried.
As indicated above, the filter mechanism for leave in section 13 was recommended by the Law Commission. The Working Paper suggested that the ground for leave be that in all the circumstances the case was a proper one to be heard, but it added (para 53, n 195) that the court would have an inherent power to deal with individual cases in the most convenient way, e.g. by adjourning an application for leave to enable evidence to be filed by the other side; and by dealing with applications for leave inter partes and (if leave is given) with the substantive matters at the same hearing. The Law Commission Report recommended that the filter should require the applicant to establish "a substantial ground" for the making of the application, and if necessary Rules of Court could specify the circumstances in which the respondent could object: para 2.3.
"This was on the strict understanding that for the time being, the flat would remain our daughters home and that I was not conceding my share in the property to my ex-wife. I felt there was no detriment to me, but that was giving my ex-wife peace of mind that was valuable to her. I continued to contribute to the mortgage and other bills as I had always done from the joint account."
"We talked about the property. I asked [H] to sign the property over to E but he insisted on transferring the ownership to me rather than to E. I agreed to tell neither H's mistress or his father (who was quite ill and held [H] in high esteem) about how [H] had behaved."
"Your proposed Transfer of Equity of [address of property]
This letter explains the basis on which our firm will carry out all the work necessary in respect of your proposed Transfer of Equity from [H] and [W] to [W]"
"Transfer of Equity in relation to [address of property]
Further to previous correspondence in this matter we enclose herewith the following documentation:-
1. Deed of consent and charge …….
We are at liberty to advise you that you may wish to take separate independent legal advice before signing this document
2. Engrossment of the transfer……"
1. The husband and wife jointly request that the District Court Untertoggenburg dissolve their marriage concluded in Southend-on-Sea (England) on 15th December 1979 based on Art. 111 of the Civil Code.
2. Since we both have earned income of our own and each spouse can support himself/herself, we are mutually dispensing with the payment of maintenance contributions.
3. With regard to property rights the husband and wife declare and agree the following:
3.1 Each party is to retain the bank accounts and bank deposits currently in his or her name.
3.2 Likewise each spouse is to retain the other assets in his or her name and the items in his or her possession.
3.3 The husband and wife expressly declare to the District Court Untertoggenburg-Gossau that with regard to their property rights their mutual claims are settled.
4. Since both spouses have a pension fund of their own, they mutually waive any pension rights adjustment.
5. The husband and wife shall each bear half of the court fees. Each spouse shall pay for any legal advice himself/herself.
"The parties have requested a joint hearing from the outset. I would first confirm the personal particulars. The forename and the maiden name of the wife's mother is: SK. The forename and the maiden name of the husband's mother was: HJ. The husband was born at the place of the marriage, i.e. in Southend-on-Sea in the county of Essex in England. The solicitor Michael Hüppi has assisted the spouses in drawing up the divorce settlement. The spouses are at present still living together, but see each other rarely, as the husband is a cameraman and is generally away during the week. As from August 2007, he expects to obtain permanent employment, from which he will earn between SFr. 60,000 and SFr. 70,000 per annum. Both spouses have a pension within the meaning of the AHV [Old Age Pensions Regulation], the wife in Germany and in Switzerland, the husband in England. The husband also has a company pension in England and the wife has a small company pension in Switzerland. As the various systems are scarcely compatible, both spouses have waived the right to a pension rights adjustment. I discussed the settlement with the spouses and there were no amendments. The wife is happy for her maiden name Z not to be mentioned if possible, including in the final decree. She apparently has bad memories in that regard, as when I asked her about it, she broke down in tears. Having discussed the matter in full, I imposed a 2-month period for reflection for the spouses and provided them with the prepared declaration of confirmation."
The Brussels and Lugano Conventions and the Brussels I Regulation
55. But, although the point does not arise on this appeal, a warning note must be struck about the position with regard to States to which Council Regulation (EC) 44/2001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters ("the Brussels I Regulation") applies. The effect of sections 15(2) and 28(4) of the 1984 Act is that the jurisdictional provisions of Part III and Part IV respectively are subject to the Brussels I Regulation (and the Lugano Convention). Those sections do not address the question whether a judgment in a Brussels I Regulation State making financial provision on divorce (or refusing to make such provision) would be entitled to recognition so as to prevent an award under Part III or Part IV.
56. For the purposes of the Brussels I Regulation and the Lugano Convention there is a distinction between "maintenance" which is within the scope of the Regulation (Article 5(2), which confers jurisdiction on the courts of the maintenance creditor's domicile, in addition to that of the debtor's domicile under Article 2); and "rights in property arising out of a matrimonial relationship" ("régimes matrimoniaux") which are expressly excluded from the scope of the Regulation. These are autonomous concepts: Case 143/78 de Cavel v de Cavel (No 1)  ECR 1055; Case 120/79 de Cavel v de Cavel (No 2)  ECR 731. The Brussels II Revised Regulation (Council Regulation (EC) 2201/2003 on jurisdiction and the recognition of judgments in matrimonial matters and matters of parental responsibility) does not apply to the "property consequences of the marriage or any other ancillary measures" (Recital (8)), or to "maintenance obligations" (Recital (11)).
57. It is only necessary to mention that if an award of maintenance had been made in another Member State, the question might arise as to whether the application in England under Part III would be precluded on the basis that the issue of maintenance had been determined in the other jurisdiction and that that determination was entitled to recognition. That would depend, at least in part, on whether the application was to be characterised as relating to maintenance or to rights in property arising out of a matrimonial relationship. Case C-220/95 Van den Boogaard v Laumen  ECR I-1147,  QB 759 shows that a transfer of property may be in the nature of maintenance if it is intended to ensure the support of a spouse; but a transfer of property which serves only the purpose of a division of property is not in the nature of maintenance, and concerns rights in property arising out of a matrimonial relationship. See also Schlosser Report on the Accession Convention to the Brussels Convention ( OJ C59), para 50; Moore v Moore  2 FLR 339 (CA). This is an area which involves difficult questions which do not arise for decision on this appeal.
(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 Art 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.
(24) In the present case, as the Advocate General points out in para 59 of his Opinion, the court of origin was under an obligation to consider whether it had to impose a clean break between the spouses and to order payment of a lump sum instead of periodical payments. It is clear that the choice of method of payment made by the court of origin cannot alter the nature of the aim pursued by the decision.
(25) Likewise, the fact that the decision of which enforcement is sought also orders ownership in certain property to be transferred between the former spouses cannot call in question the nature of that decision as an order for the provision of maintenance. The aim is still to make provision, by means of a capital sum, for the maintenance of one of the former spouses.
 The ruling by the European Court was that a lump sum payment was to be regarded as maintenance if its purpose was to ensure the former spouse's maintenance. Although its formulation differs slightly from that of Jacobs AG (who spoke of the 'essential object' of the order for payment), the European Court expressly approved much of Jacobs AG's opinion. The following propositions may be derived from this decision: first, whether a claim is for maintenance depends upon an autonomous interpretation of the term, and the label given to the claim by national law is not decisive; secondly, payment of a lump sum or transfer of property may be in the nature of maintenance if it is intended to ensure the support of a spouse; thirdly, payment of a lump sum or transfer of property which serves only the purpose of a division of property or compensation for non-material damage is not in the nature of maintenance; fourthly, a payment or transfer of property intended as a division of assets will concern 'rights in property arising out of a matrimonial relationship'; fifthly, whether a claim relates to maintenance will depend on its purpose, and in particular whether it 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, or where the capital sum set is designed to ensure a predetermined level of income; sixthly, where the provision 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 Brussels I.
111. These are expressions of the rationale to be applied to achieve the objective of a fair result. Fairness is the overarching objective or principle and the principles of need, compensation and sharing identify bases of reasoning to be applied to achieve it.
112. It follows that they should not be given a free standing life, interpretation or application as if they were themselves part of the statute rather than descriptions of the approach to the reasoning to be used in applying the statute to achieve a fair result (see for example C v C  1 FLR 8 at paras  to ).
There are, of course, cases where a concise analysis of the identified concepts of 'needs, contributions and sharing' is a necessary and helpful intellectual tool in written or verbal or argument, provided these concepts are not elevated to the status of heads of claim. However (because ancillary relief cases tend to be fact-specific and depend essentially on the exercise of a broad discretion in the pursuit of fairness) there are also many cases where a lengthy over-sophisticated approach of this type is an unnecessary diversion, which burdens rather than assists the court.
With a very demanding job, it would be absurd to give away the London flat, my principal security not only for my old age but, if I am unlucky, for the near future too.