How & When to obtain a Financial Settlement in England after a Foreign Divorce

How & When to obtain a Financial Settlement in England after a Foreign Divorce

There are many reasons as to why I receive enquiries from clients as to the ability of the English Court to make financial orders over assets, money or property in England or elsewhere. The English courts are, in the main, helpful, structured and principled, and also have the advantage of worldwide jurisdiction over property and assets wherever they are situate. This means that judges in this country will have no qualms about ordering the sale of a house, for example, in Bahrain. The enforcement of that order in Bahrain later on is of course an entirely separate matter.

Part III of the Matrimonial & Family Proceedings Act 1984 (MFPA 1984) provides the English court with a discretion to step in provided certain jurisdictional requirements are met, and make the same orders as if the divorce had been granted in England. That is, orders can be made for maintenance claims (including interim maintenance), capital, lump sum and property adjustment and the various permutations involving pensions.

This is a tricky area of law, as the English courts do not wish to be seen to be stepping on the toes of the orders made by judges in another, sovereign state. Judges have refused to deal with what may be perceived to be meritorious cases, because to do so would be to disrespect the countries making the original determinations. Therefore the English court is careful to establish that it has a proper jurisdictional basis to entertain an application. This is not a matter of an Applicant being dissatisfied with the foreign order, and deciding that he or she wants another bite of the cherry. That is not the function of the courts in this country.

Here are some examples of when the English court’s assistance might be required where a divorce has taken place in a different country:

• No Jurisdiction

Where that country has no jurisdiction over foreign property. For example, I had a recent case where the divorce court in Hungary simply had no power to make any orders in respect of a house owned by the couple in England, but was able to make maintenance orders and judgments over assets within its borders. In that case we were able to obtain an order in England transferring the house to the wife, for whom I acted. She had taken part in the foreign proceedings as much as she reasonably could, and had used remedies available to her in that jurisdiction.

• Connection with England

Sometimes the foreign court recognises that the couple has a strong connection with England, because one or both parties originate from here or for other reasons. That court will then transfer the financial aspect of the divorce to England. This was the outcome in the case of Schofield v Schofield ((2011) 1 FLR 2129), where a German court made clear that it had no jurisdiction over the husband’s English Army pension and that that was a matter for our courts.

• Practicality

There may be good solid reasons why the English court needs to intervene, and this is particularly the case, I have found, in relation to the enforcement and implementation of orders against English pensions made in other countries. I have had many cases where, for example, both parties to a marriage are English, but have been living in another country for many years, which means it is natural for them to seek advice in that country when their marriage breaks down. On divorce, a financial settlement is reached, part of which includes a sharing of the English pension which was built up when both parties were resident & working in England. That foreign order is, in general, not recognised by the trustees administering that pension. Here the English court can help by converting that foreign order into an English one.

• Enforcement

To a limited extent, the English court’s assistance may be forthcoming here. This is only available however where the foreign order is incapable of being enforced by the original court which made it. That is either because the Applicant has exhausted all avenues of redress in that court, or because the enforcement measures do not exist. Again the English judge would not wish to alienate the other country.

What are the Jurisdictional Requirements?

1. The parties to the marriage must have been divorced/annulled/judicially  separated through a proper judicial or other process which would mean that the divorce is recognised as being valid under English law.

2. The Applicant must be able to show one of the following:

a)      Either of the parties was domiciled in England & Wales at the date when the divorce (etc) took effect in the other country, or at the date of the application for a Part III order,

or:

b)      Either of the parties was habitually resident for one year in England & Wales ending with the date when the divorce (etc) took effect in the other country, or ending with the date of the application for a Part III order,

or:

c)       Either or both parties had at the date of the Part III application an interest of a house in England & Wales which was a matrimonial home at some point during the marriage.

3. Either or both parties had at the date of the Part III application a beneficial    interest in a property which was at some point during the marriage matrimonial  home.

There are a number of points to note here:

• Remarriage bars the Applicant from bringing the matter to court. It does not matter that the Respondent has remarried. The same adheres to Civil Partnership.
• If 3. is the sole basis upon which the application is brought, ie the existence of a property which was at some time a matrimonial home (or agreed to be treated as such), then the court’s powers are limited to orders affecting the Applicant’s interest in the home, or a capital lump sum up to the value of that interest and no more. No maintenance orders can be made and therefore care must be taken. It may well be not an issue, as in my instant case, The Hungarian court had dealt with the other claims satisfactorily.

• To be capable of being recognised, the divorce/annulment/legal separation must have been obtained by means of judicial or other proceedings in any country outside the United Kingdom; and it is valid in that country; and either spouse was habitually resident in, or was a national of, that country (Recognition of Divorces and Legal Separations Act 1971). What this means is that something like a ‘Bare Talaq’, where the words “I divorce you” are spoken three times, without more, is not a valid divorce so far as English law is concerned.

• Specialist and appropriate legal advice needs to be taken due to the introduction of the European Union (EU) Maintenance Regulation. This states that if there has been some maintenance determination in another EU State, then that State must decide whether an application under Part III may be brought. Similarly, there are several Conventions including but not limited to the Lugano Convention, and other Acts which deal with maintenance and which mean that Part III is not available. There has been a whole run of case law about this, and again, expert advice needs to be taken to avoid expenditure of costs unnecessarily.

• The Applicant must have had their financial applications dealt with in the foreign court. However this does not appear to be a rule universally followed where the parties agree that the English Court can deal with the case. I had a matter where the divorce was in Australia, but some assets, including pensions, were in England. The husband & wife agreed to deal with financial claims here, and the court had no issue with this.

How is the Application Made?

The Applicant must prepare the Application, which is now a standard form. A sworn Statement is also required setting out a detailed explanation as to why the Applicant considers it appropriate for the English court to make an order. The Applicant must deal with the following points, as set out in s16(2):

• The particulars of the proceedings which annulled or dissolved the marriage;
• The names of the parties, their ages and dates of birth, and the date of the marriage;
• The parties’ occupations and where they live;
• Details of any children of the family;
• Whether either of the parties has remarried;
• The capital resources and income of the parties and their children who have not yet attained majority;
• The facts of the case and the grounds upon which it is said the court has the power under Part III to entertain the case.

What is the Procedure?

The application is a two stage process and this has been emphasised recently in case law.

1.       Application for Leave

These applications are generally made in the High Court, as a District Judge in the County Court is not permitted to hear the case at this stage, unless everything has been agreed and the parties are simply submitting a Consent Order to the court for approval. They can be listed in the County Court if a Circuit Judge or Deputy High Court judge sits there.

Firstly the Applicant must ask the court for permission to make the application. This is called an ‘Application for Leave’. This must be made without giving notice to the other party. There is no provision in the Act to inform the former spouse of the court date, just ‘in case’ they want to attend. In fact this practice, which became quite popular among solicitors for a time, was deprecated by the Appeal Court in the case of Traversa v Freddi ((2011) 2 FLR 272), as having no basis in law.

What does the Court Take into Account when Granting Leave?

The factors that the judge must consider are set out in s16(2):

• the parties’ connection England & Wales, with the country which granted the annulment or dissolved the marriage, and with any other countries;
• details of any benefit the Applicant or any child of the family has or will receive consequent on the foreign divorce;
• details of the financial orders made by the foreign state and whether they have been or are likely to be complied with by the Respondent;
• any rights that the Applicant has to pursue financial proceedings in any other country and if this has been done, including an explanation as to reasons for not doing so, if appropriate;
• the existence of any property or assets in England against which an English order could be made, including pensions;
• the enforceability of any Part III English order;
• the length of time since the foreign divorce/annulment.

In terms of obtaining leave, the applicant must show that they have a ‘substantial ground’ and this is set out in s13 of the Act. They must also be able to demonstrate that they have more than just ‘a good arguable case’ (Holmes v Holmes (1989) 2 FLR 364 & Agbaje (2010) 1FLR 1813) in terms of taking the case forward to the next stage.

The Supreme Court in Agbaje produced a very considered and most importantly, understandable judgment, which has unequivocally set the scene for future Part III claims. In particular, the court did away with the Applicant having to prove ‘hardship’ or ‘exceptional circumstances’, which had been previously applied by the judiciary.

The possible result of the application is extremely important to the judge deciding on whether or not to give leave. However there is no gloss on this. In my case of CG v IF ((2010) 2 FLR 1790), Mr Justice Mostyn, newly elevated to the High Court, tried to expound the theory that my client’s case needed to be ‘solid’ and this meant that he would have to have a greater than 50% probability of succeeding in the main application. He also disallowed my client’s claim on the basis that the Lugano Convention prevented it. Unfortunately my client did not have the funds to appeal that appalling decision, which was subsequently lambasted on both counts by the court in Traversa v Freddi

The Applicant must serve copies of his or her Application, Statement in Support and Order upon the other party, called the Respondent. This is regardless of whether the leave was granted. The Respondent then has seven days to apply to set aside or vary the decision, and the Supreme Court in Agbaje stated that this set aside/variation application must be heard at the same time as the main application, except in limited circumstances. This is to save the costs, both in terms of legal fees and court time, of having two long hearings.

2.       The Main Application

Once leave is granted, the case can be transferred to the County Court and dealt with in the same way as a normal application for a financial remedy, with parties preparing Form E, and the matter listed for a First Appointment. Rarely a judge giving leave will restrict the claims capable of being pursued by the Applicant.

This is a complicated and involved area of law and I have tried to give you some background and detail. If you would like to discuss this, please contact me at Blanchards Law at pd@blanchardslaw.co.uk

 

©Punam Denley

 

March 2012