Lady Justice King :
- This is an appeal against an order made by Mrs Justice Parker on 8 July 2016. The order required the appellant, Charles Villiers ("the husband"), to pay the wife, Emma Villiers ("the wife"), £2,500 per month by way of interim periodical payments until further order and to pay directly to her solicitors, £3,000 per month by way of a legal fees allowance order.
- The case concerns the application of Council Regulation (EC) No 4/2009 ("the EU Regulation") to jurisdictional disputes within the United Kingdom having regard to the Civil Jurisdiction and Judgments (Maintenance) Regulations 2011 ("the 2011 Maintenance Regulations").
- The issue as simply put by the judge (at [1]), was "whether England or Scotland has jurisdiction in respect of maintenance". In more technical jurisdictional terms the court had to consider whether:
i) In circumstances where divorce proceedings are ongoing in Scotland, but neither party has made a claim for financial provision (whether for capital or maintenance) within those Scottish proceeding, is the wife, as she asserts, entitled to bring proceedings in England under section 27 Matrimonial Causes Act 1973 (s.27 MCA 1973) seeking an order for maintenance for herself on the basis that the husband has failed to provide her with reasonable maintenance.
Or rather, as the husband asserts:
ii) Should the court have declined to exercise its jurisdiction to make an order for maintenance under s.27 MCA 1973 because either:
a) The proceedings in Scotland and England are "related actions" for the purposes of EU Regulation Article 13 as applied by Schedule 6 of the 2011 Maintenance Regulations. That being so, the court should thereafter (as the second seised court) have exercised its discretion under the Regulation to stay or dismiss the MCA 1973 proceedings or
b) Even if the two sets of proceedings are not "related actions", for the purposes of the Regulation, the court retains a residuary power to stay the English maintenance proceedings on the grounds of forum non conveniens, which power should have been used, Scotland being the first seised and more convenient jurisdiction.
- Whenever I refer to an Article of the EU Regulation in this judgment, it is as applied by Schedule 6 to the 2011 Maintenance Regulations. A reference to "Article 13" will therefore mean that that provision, found as it is in the EU Regulation, will apply to the determination of jurisdiction disputes under the 2011 Maintenance Regulations which (subject only to minor textual variations) govern jurisdictional disputes within the UK ("intra UK").
Background
- The parties married in 1994. They moved to Scotland the following year and lived there throughout their married life. Their only child, C (aged 22 years), was born and raised there.
- The couple separated in August/September 2012 when the wife and C left the former matrimonial home and moved to England staying initially with her brother before moving in November 2013 to live in rented accommodation in London, where she remains together with C. In July 2013 the wife issued a divorce petition in England on the basis of her habitual residence for 12 months preceding the presentation of the petition.
- Later in 2013 the husband was the subject of bankruptcy proceedings in Scotland and he was made bankrupt on 23 January 2014. He was discharged from bankruptcy in November 2014.
- On 22 October 2014 the husband (who was unrepresented throughout) filed an acknowledgment of service in response to the wife's petition, contesting jurisdiction. On the same day, he issued a writ of divorce in the Dumbarton Sheriff Court. The writ seeks a grant of decree of divorce on the basis of two years separation and an order for costs. It contains no prayer or "crave" for any financial order. In particular, there was no claim for aliment or periodic allowance (maintenance).
- Some days later, on 7 November 2014, DJ Aitken stayed the wife's English divorce petition. That divorce petition was subsequently dismissed by consent on 16 January 2015. It would appear that the wife in doing so accepted that this was the inevitable outcome given that under the Domestic and Matrimonial Proceedings Act 1973 Schedule 1 paragraph 8(1)(c), where there are competing jurisdictions within the UK, the country within the UK where the parties last lived together is the proper jurisdiction for the suit.
- On 13 January 2015, as English divorce proceedings were reaching their conclusion, the wife made an application under s27 MCA 1973 relying on her habitual residence to found jurisdiction. By that application, the wife sought interim maintenance for herself to include a costs allowance towards her ongoing legal fees.
- The husband's subsequent jurisdictional challenge to the s27 MCA 1973 application was listed to be heard together with the wife's application for interim maintenance before Parker J on 22 and 24 July 2015.
The Scottish and English proceedings:
- Much time was spent, both during the trial and subsequent to it, in relation to the status of the evidence the wife had put before the judge as to Scottish law together with the husband's (ultimately unsuccessful) application to file his own expert evidence.
- Insofar as it is relevant it seems to be common ground that:
1. In Scotland, divorce is a single process leading to one final decree; there is no equivalent of the English decree nisi prior to a decree absolute.
2. A financial claim needs to be made in the Scottish writ or in a separate claim governed by the writ, in order to engage financial jurisdiction.
3. If such a claim is made then the decree cannot be granted until it is resolved.
4. Where no application is made, the divorce decree may be granted and, unless a financial claim is made prior to the grant of the divorce, the opportunity to make such a claim is lost (subject to minor exceptions which do not apply to the present case).
5. An order for a periodical allowance can be made for a definite or an indefinite period or until the happening of a specified event, but the making of such orders is subject to the principles governing orders for financial provision found in section 9 of the Family Law (Scotland) Act 1985, in particular:
a) Section 9(1)(d) provides that a party who has been dependent to a substantial degree on the financial support of the other party should be awarded such financial provision as is reasonable to enable him to adjust, over a period of not more than three years from the date of the decree of divorce, to the loss of that support on divorce; and
b) Section 9(1)(e) provides that a party who at the time of the divorce seems likely to suffer financial hardship as a result of the divorce should be awarded such financial provision as is reasonable to relieve him of hardship over a reasonable period.
- The wife has not filed an application for financial provision within the active Scottish proceedings (active, although now stayed for in excess of two years upon the application of the wife, whilst this issue is resolved) but rather, she made an application for maintenance for herself only in this jurisdiction under s27 MCA 1973. S27 in so far as is relevant, provides:
Section 27
(1) Either party to a marriage may apply to the court for an order under this section on the ground that the other party to the marriage (in this section referred to as the respondent) -
(a) has failed to provide reasonable maintenance for the applicant, or
(b) has failed to provide, or to make a proper contribution towards, reasonable maintenance for any child of the family.
(2) The court may not entertain an application under this section unless it has jurisdiction to do so by virtue of the Maintenance Regulation and Schedule 6 to the Civil Jurisdiction and Judgments (Maintenance) Regulations 2011.
(3) ……
(3A) ……
(3B) …..
(5) Where on an application under this section it appears to the court that the applicant or any child of the family to whom the application relates is in immediate need of financial assistance, but it is not yet possible to determine what order, if any, should be made on the application, the court may make an interim order for maintenance, that is to say, an order requiring the respondent to make to the applicant until the determination of the application such periodical payments as the court thinks reasonable.
(6) Where on an application under this section the applicant satisfies the court of any ground mentioned in subsection (1) above, the court may make any one or more of the following orders, that is to say—
(a) an order that the respondent shall make to the applicant such periodical payments, for such term, as may be specified in the order;
…
(c) an order that the respondent shall pay to the applicant such lump sum as may be so specified;"
- It can be seen therefore that an order under s27 MCA 1973 is potentially significantly more financially advantageous to the wife than an application under Scottish law given that it provides for the payment of periodical payments "for such term as may be specified in the order".
- The husband's application for a stay of the s27 MCA 1973 proceedings rests upon the proper interpretation of Article 12 and Article 13 of the EU Regulation as applied to intra UK disputes by Sch 6 to the 2011 Maintenance Regulations upon which jurisdiction under s27 MCA 1973 is dependent (see s27(2) MCA 1973 above).
- The relevant articles under the 2011 Maintenance Regulations provide:
"Article 12
Lis Pendens
1. Where proceedings involving the same cause of action and between the same parties are brought in the courts of different Member States or different parts of the United Kingdom, 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.
Article 13
Related Actions
1. Where related actions are pending in the courts of different Member States or different parts of the United Kingdom, any court other than the court first seised may stay its proceedings.
2. Where these actions are pending at first instance, any court other than the court first seised may also, on the application of one of the parties, decline jurisdiction if the court first seised has jurisdiction over the actions in question and its law permits the consolidation thereof.
3. For the purposes of this Article, actions are deemed to be related where they are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings."
The Judgment
- The judge's judgment turned on Article 12 Lis Pendens. Unfortunately, Article 13 Related Actions does not appear to have been argued below and does not therefore feature in Parker J's judgment. The judge refused the husband's application to stay the wife's application in favour of the Scottish courts solely in reliance upon the provisions of Article 12. The judge held as follows:
"[87] I am satisfied that the issue of the writ in Scotland does not constitute an application or include an application for aliment (maintenance). It was insufficient to engage the court's jurisdiction for W to be given notice of her right to apply. A separate application required to be made, as is demonstrated by the fact that Ms McKeown advised H not to make an application within the divorce writ but to await W's application for financial provision."
- Subsequently, when considering the husband's application for permission to appeal from the judge's refusal to decline jurisdiction on the basis of Article 12, Black LJ (as she then was) said:
"I do not see any mileage in argument that the opportunity presented by the commencement of the Scottish divorce proceedings for the making of a financial claim was tantamount to the court being seised of such a claim. Nor any mileage in any argument raised on the fact that financial relief cannot be claimed in Scotland after the divorce decree."
- Black LJ concluded that, notwithstanding the fact that Article 13 had not been argued before the judge, given that it was a matter of pure law and relevant to a proper consideration of the application for a stay, she would nevertheless grant permission to appeal in respect of Article 13.
Grounds of Appeal
- The court has been considerably assisted by Mr Horton together with Mr Laing who have together appeared before Black LJ and on the full appeal through the Bar Pro Bono Unit. The husband has cause to be grateful to each of them. They have not only represented him at the hearings, but also having put in many hours of preparation, all without payment. The wife continues to be represented by Mr Scott QC together with Ms Campbell.
- Black LJ, having refused permission to appeal in relation to Article 12, granted permission on the following revised grounds of appeal:
1. The learned judge was wrong not to stay the wife's application for maintenance, as the husband's prior writ of divorce involved:
(1)…
(2) … a related action, allowing a discretionary stay under Article 13(1) or (2) of [the 2011 Maintenance Regulations].
2. Further and/or in the alternative, the learned judge was wrong to construe the relevant secondary legislation as excluding the court's power to stay the English maintenance proceedings on the grounds of forum non conveniens.
3. Further and/or in the alternative, the learned judge ought to have limited the duration of any order for periodical payments so as to end on the dissolution of the parties' marriage and was wrong not to have done so.
4. On the basis that the English court does have jurisdiction:
(a) The learned judge was wrong not to have regard to the higher test for an interim order in failure to maintain proceedings under section 27 (5) of the 1973 Act;
(b) The learned judge was wrong to find that the trustees of the trusts of which the husband is a discretionary beneficiary would advance him funds so as to allow him to pay maintenance to the wife in the absence of any regular or significant such advances prior to the determination of the application;
(c) The learned judge was wrong to make an order for £3,000 per calendar month costs where:
a. The wife had provided no costs budget;
b. There was no evidence that the wife's brother would not continue to pay her fees or lend her (sic).
The Appeal
- The issues for this court to decide in relation to Ground 1(2) and Ground 2 is simply identified, namely:
i) Is the application made by the wife in England for an order for maintenance under s27 MCA 1973 a 'related action' under Article 13 and, if so, should the English proceedings have been stayed in favour of the 'first seised' Scottish proceedings?
ii) If not, has the English court a residual discretionary power to stay the proceedings on the principles of forum conveniens?
- In making good their respective cases in answer to these two questions, each of the parties have delved into the European jurisdictional history with considerable erudition and at some length. With respect to both Counsel, whilst there are undoubtedly important 'pointers' which assist the court, in my judgment an extensive exegesis into the development of the European law is not altogether helpful; it serves to add complexity to a relatively straightforward construction issue and risks putting all concerned in danger of losing sight of the "wood for the trees" when addressing the two questions set out above. The two issues intertwine and although presented as separate grounds of appeal, I intend to deal with them together.
- In summary the regulatory backdrop in relation to maintenance disputes is as follows:
i) The Brussels IIa Regulation (EC) No. 2201/2003 ("BIIa"), although covering jurisdiction and the recognition and enforcement of judgments in matrimonial matters including divorce, legal separation or marriage annulment, does not extend to cover maintenance obligations;
ii) The EU Regulation [see definition in paragraph 2] determines matters of jurisdiction, applicable law and enforcement of judgments between EU Member States in relation to maintenance obligations;
iii) Prior to the EU Regulation, maintenance other than in disputes between the constituent parts of the United Kingdom, came within the scope of the Brussels I Regulation (EC) No. 44/2001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters ("Brussels I") and before that, the Brussels Convention 1968 within the provisions on "special jurisdiction";
iv) Article 12 (Lis Pendens) and Article 13 (Related actions) of the EU Regulation derive from Articles 27 and 28 of Brussels I (since it replaced Brussels I in relation to maintenance obligations) and prior to that, from Articles 21 and 22 of the 1968 Brussels Convention. In all three instruments, the articles are in identical terms.
v) The 2011 Maintenance Regulations are the UK secondary legislation which now operates to determine the allocation of jurisdiction between the constituent parts of the UK in relation to maintenance obligations, in place of Schedule 4 to the Civil Jurisdiction & Judgments Act 1982 ("the 1982 Act"). They largely replicate the provisions of Chapter II of the EU Regulation and must be read in conjunction with that instrument. Article 12 (Lis Pendens) and Article 13 (Related actions) are in identical terms save that the words "or different parts of the United Kingdom" are inserted after the words "Member States" in each Article.
- In order properly to consider the various submissions of Mr Horton and Mr Scott, it nevertheless remains necessary to look, in broad outline, at the policy behind and development and structure of the 2011 Maintenance Regulations and their historic relationship to the 1982 Act which was the precursor to the current regulations so far as disputes within the United Kingdom are concerned.
- As noted above, maintenance as a free-standing application has been provided for since the early days of the European Union and the relevant provisions were originally found in the 1968 Brussels Convention. Mr Scott says that it is important to have in mind that the six signatories to the 1968 Brussels Convention each came from a civil law tradition where forum conveniens was an unknown concept. Any discretion which has worked its way into European jurisprudence over the next 50 years has been largely due, he submits, to the influence of the United Kingdom; of which the power to stay in Article 13 is one such example. The use of the word 'may' in that article does not however, he says, give rise to the court having an overarching power to apply forum conveniens to an application for a stay in the sense recognised in the United Kingdom.
- Article 2 of the 1968 Convention provided the basic rule that a person must be sued in the Member State in which he was domiciled. Article 5 (replicated subsequently in Brussels I and now recast and found at Article 7) set out a number of exceptions to the general jurisdictional rule of domicile including, at Article 5(2), a provision which allowed a 'maintenance creditor' inter alia to bring proceedings in the courts of the Member State in which she was domiciled or habitually resident. Articles 27 and 28 of Brussels I contained similar lis pendens and related action provisions to those now found in Articles 12 and 13.
- The policy underlying the exception in Article 5(2), Mr Scott submits, is that identified in Farrell v Long (ECJ) [1997] QB 242 in which, in the judgment of the court, it was said:
"[19] In particular the derogation provided for in article 5(2) is intended to offer the maintenance applicant, who is regarded as the weaker party in such proceedings, an alternative basis of jurisdiction. In adopting that approach, the drafters of the Convention considered that that specific objective had to prevail over the objective of the rule contained in the first paragraph of article 2, which is to protect the defendant as the party who, being the person sued, is generally in the weaker position."
- This policy, Mr Scott says, was rolled over into the EU Regulation and the 2011 Maintenance Regulations which, Mr Horton accepts, specifically permit and indeed, anticipated, bifurcation of proceedings. In particular, Article 3 gives the parties a choice of four jurisdictions within which to make an application, including where the 'creditor' is habitually resident (Article 3(b)). Article 4 gives the parties the opportunity to "agree which court shall have the jurisdiction to settle any disputes or matters".
- Building upon this, Mr Scott submits that whilst bifurcation of proceedings may be counter intuitive to an English court steeped in a culture of forum conveniens, it is a fact of life within the European model and the domestic courts cannot seek to circumnavigate the consequences by importing a redundant concept of forum conveniens.
- Mr Scott submits therefore that it is a matter of policy to give the creditor a choice of jurisdiction within a range of alternative jurisdictions in which to proceed subject only to limitations found in Article 12 and 13.
- Mr Horton, whilst recognising that bifurcation exists in certain circumstances, submits that the courts should not "encourage it" and says that it produces "sub-optimal" outcomes. Where a court has a choice of interpretation, he says, bifurcation is "contra indicated".
- Mr Horton submits that the approach advocated by Mr Scott does not stand up to scrutiny when the evolution of Article 13 as a whole is taken into account; it was in order to support this contention that Mr Horton examined the development of European law in relation to maintenance disputes.
Evolution of European law in relation to maintenance disputes:
- The general rule in relation to the allocation of jurisdiction within the UK was found in Schedule 4 to the 1982 Act as amended in 2002 to provide at Schedule 4, para 1, that: "persons domiciled in a part of the United Kingdom shall be sued in courts of that part". Schedule 4, para 3, however, provided for "special jurisdiction" in respect of three categories of case: (a) contract; (b) maintenance; and (c) tort. In each of those cases, "a person domiciled in a part of the United Kingdom could be sued in another part of the United Kingdom."
- Part II of the 1982 Act relates to the "jurisdiction and recognition and enforcement of judgments within the UK". Section 16(3) provides:
"In determining any question as to the meaning or effect of any provision contained in Schedule 4 -
(a) regard shall be had to any relevant principles laid down by the European Court in connection with Title II of the 1968 Convention [or Chapter II of the Regulation] and to any relevant decision of that court as to the meaning or effect of any provision of that Title [or that Chapter]; and
(b) without prejudice to the generality of paragraph (a), the reports mentioned in section 3(3) may be considered and shall, so far as relevant, be given such weight as is appropriate in the circumstances."
- It follows therefore, that in considering the effect or meaning in relation to those cases within Schedule 4 of the 1982 Act, a court has to have regard to judgments of the European Court within section 16(3)(a).
- Section 16(3) complements the provisions of section 49 of the 1982 Act:
49. Saving for powers to stay, sist, strike out or dismiss proceedings.
Nothing in this Act shall prevent any court in the United Kingdom from staying, sisting, striking out or dismissing any proceedings before it, on the ground of forum non conveniens or otherwise, where to do so is not inconsistent with the 1968 Convention [or, as the case may be, the Lugano Convention].
- Mr Horton emphasises that, because of s16(3) of the 1982 Act, European decisions are not binding as such and that s49 of the 1982 Act anticipates that there may be occasions where a court will stay proceedings on the ground of forum non conveniens.
- I agree. I would however add to Mr Horton's central proposition that s16(3) and s49 of the 1982 Act apply, by saying that that can only be the case in relation to those matters of jurisdiction which continue to be covered by the 1982 Act.
- Brussels I came into force on 1 March 2002. Brussels I transferred jurisdiction in relation to those maintenance disputes not exclusively within the United Kingdom ("extra UK") from the 1982 Act to Brussels I and introduced Article 27 (lis pendens) and Article 28 (related actions). Maintenance disputes intra UK remained however within the 1982 Act and therefore continued to be subject to the provisions found in s16(3) and s49 of the 1982 Act.
- For a period of time therefore, a significantly different approach applied to jurisdictional disputes in relation to maintenance depending upon whether a dispute was:
i) Intra UK in which case the court 'had regard' to European law and forum conveniens retained a role (s16 and s49 of the 1982 Act) or
ii) Extra UK which was now governed by the principles of lis pendens and related actions (Brussels I and Articles 27 and 28).
- Brussels I was followed by Brussels I Recast. Subject to some minor amendments, Schedule 4 to the 1982 Act remained in place in relation to the allocation of jurisdiction within the UK of civil proceedings. The 1982 Act therefore continues to dictate the allocation within the UK of jurisdiction in civil proceedings.
- In due course the disparity between the jurisdictional approach as between intra UK and extra UK maintenance disputes was eliminated. Intra UK disputes were brought into line with extra UK disputes; this was done by intra UK maintenance disputes being removed from the scope of the 1982 Act (see [47 – 48] below) and a new home being found for them within their own bespoke Regulations.
i) The EU Regulation came into force (18 June 2011). This new Regulation was in the same terms in every material particular as Brussels I and sees the old Articles 27 and 28 now replicated as Articles 12 and 13;
ii) The EU Regulation was incorporated in virtually identical terms on the same date into domestic law by virtue of Schedule 6 to the 2011 Maintenance Regulations. It is these Regulations, and specifically Article 13 as applied by them, which are the subject of this appeal.
- Mr Horton submits that even though intra UK disputes have now been brought into line with the EU Regulation, there remains a role for s16(3) and s49 of the 1982 Act which, he says, would allow this ( or any domestic) court to put its own gloss on its interpretation of Article 13. In the light of this submission it is necessary briefly to consider whether support for that contention can be found in the 1982 Act in its current form.
The 1982 Act as amended:
- The removal of maintenance from the umbrella of the 1982 Act was reflected in a number of consequential amendments:
i) Maintenance was deleted from the "special jurisdiction" provision in Schedule 4, para 3(b) which had provided:
"A person domiciled in a part of the United Kingdom may, in another part of the United Kingdom be sued –
(b) in matters of maintenance".
(Paragraph 3(a) (contract) and 3(c) (tort) are unaffected and therefore continue to be covered by the 1982 Act including section 49 (forum non conveniens) and s16(3) (regard to be had to decisions of the European Court)).
ii) The deletion of maintenance from the modified Schedule 4 was reflected in section 16(1) which provides:
"16(1) The provisions as set out in Schedule 4 (which contain a modified version of Chapter II of the Regulations shall have effect for determining for each part of the United Kingdom, whether the courts of law of that part… have or has jurisdiction"
And at section 16(4):
"16(4) The provisions of this section and Schedule 4 shall have effect subject to the Regulation, Schedule 6 to the Civil Jurisdiction and Judgments (Maintenance) Regulations 2011, the 1968 Convention, the Lugano Convention and the 2005 Hague Convention and the provisions of section 17."
- Far from supporting Mr Horton's submission that there remains a residual role for s16(3) and s49 of the 1982 Act, in my judgment, the amendments set out above wholly undermine such an argument.
- Pausing there to summarise the position as I see it: the 2011 Maintenance Regulations incorporated into domestic law the EU Regulations as regards (inter alia) issues of jurisdiction and enforcement in relation to intra UK maintenance claims. Following the consequential amendments to the 1982 Act, maintenance claims have no residual connection with the 1982 Act, whether in relation to section 16(3), section 49 or otherwise. The structure of the 2011 Maintenance Regulations governs intra UK maintenance issues and, in doing so, legislates for bifurcation (given, for example, Article 3 and Article 4). The 2011 Maintenance Regulations further adopt the Brussels I approach by incorporating:
i) Lis Pendens (Article 12) which, if satisfied, results in a mandatory stay on the part of a second (or subsequently) seised court; and
ii) Related Actions (Article 13) which, if satisfied by reference to Article 13(3), gives the court discretion to either stay or decline jurisdiction.
- Mr Horton submits (and it is common ground) that Schedule 6 to the 2011 Maintenance Regulations are purely domestic law (see Kleinwort Benson v Glasgow City Council [1999] 1 AC 153). Mr Horton goes on to submit that once the 2011 Maintenance Regulations had been adopted (via Schedule 6) to apply in intra UK disputes, the court should, notwithstanding the amendments to the 1982 Act, apply domestic law by analogy to the 1982 Act and, in particular, s16 and s49 of the 1982 Act.
- Mr Horton argues that Schedule 6 and the 2011 Maintenance Regulations are a simple successor to Schedule 4 and that the same approach should be applied so that s16(3) is, in effect, carried across, continuing to limit the court's requirement to 'have regard to' EU law. He further submits that in respect of the preservation of forum non conveniens found in s49 of the 1982 Act, the court should "read in" to the last line of s49 (see [38] above), in addition to the reference to "Lugano Convention", also "the 2011 Maintenance Regulations".
- Mr Horton's global submission is that the omission of an equivalent of s16(3) and s49 of the 1982 Act in the 2011 Maintenance Regulations is the result of an accidental lacuna in the drafting of Schedule 6 and the 2011 Maintenance Regulations by the draftsmen. He submits that the UK domestic courts can, and should, have a 'free hand' as to how to interpret Schedule 6, which will include the continued application of the approach found in s16(3) and s49 of the 1982 Act.
- Mr Scott submits in response, that such an argument cannot begin to stand up to scrutiny. It is, he says, unarguable to say that jurisdiction in relation to maintenance in intra UK disputes was other than deliberately removed from the 1982 Act. Not only do the consequential amendments to the 1982 Act show that to be the case but, in doing so, it properly brought the intra UK disputes into line with the EU Regulation and therefore with extra UK disputes with the application of lis pendens and "related action" provisions in place of s16(3) and s49 of the 1982 Act.
Matrimonial and Family Proceedings Act 1984
- Mr Scott referred the court to Part III of the Matrimonial and Family Proceedings Act 1984 as amended in 2011 ("MFPA 1984") in support of his submission that the clear intention, post 2011, was that the jurisdiction in relation to applications for maintenance both intra UK and extra UK would be determined by reference only to Articles 12 and Article 13. Although Part III does not apply to Scottish divorces (as a claim can only be entertained following a divorce in an 'overseas country' which is defined by s27 MFPA 1984 as a "country or territory outside the British Islands") it is nevertheless, he said, a clear example of the legislative intention that Articles 12 and 13 would provide the determining jurisdictional factors in relation to maintenance for the future.
- Part III of that Act is headed "Financial Relief in England and Wales after Overseas Divorce". The Act gives the court a wide discretion both as to jurisdiction and orders.
- As Mr Scott pointed out, the MFPA 1984 was specifically amended to take into account the changes brought about by the 2011 Maintenance Regulations. Section 15 MFPA 1984 is headed "Jurisdiction of the Court" and sets out the jurisdictional requirements necessary before the court can entertain an application under the Act; this was amended by Sch.7 Reg 10(2)(b) 2011 Maintenance Regulations in order to insert a new s.15 (1A) which provides:
"(1A) If an application or part of an application relates to a matter where jurisdiction falls to be determined by reference to the jurisdictional requirements of the Maintenance Regulation and Schedule 6 to the Civil Jurisdiction and Judgments (Maintenance) Regulations 2011, those requirements are to determine whether the court has jurisdiction to entertain the application or that part of it.
- S.16 MFPA 1984 is headed "Duty of the court to consider whether England and Wales is appropriate venue for application". Prior to the introduction of the 2011 Maintenance Regulations S.1 MFPA provided:
"16. 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."
- In Agbaje v Agbaje [2010] UKSC 13, [2010] Lord Collins said
"49…... Section 16 does not impose a statutory forum non conveniens test. It does not require the court to determine the only appropriate forum where the case may be tried more suitably for the interests of the parties and the ends of justice. No choice between jurisdictions is involved. The whole basis of Part III is that it may be appropriate for two jurisdictions to be involved, one for the divorce and one for ancillary relief."
50. Many of the factors in section 16(2) have much in common with those which would be relevant in a forum non conveniens enquiry, but they are not directed to the question of which of two jurisdictions is appropriate. They are directed to the question whether it would be appropriate (which is the meaning of the word conveniens in forum conveniens) for an order to be made by a court in England and Wales when ex hypothesi there have already been proceedings in a foreign country (including proceedings in which financial provision has been made)…... The task for the judge under Part III is to determine whether it would be appropriate for an order to be made in England, taking account in particular of the factors in section 16(2), notwithstanding that the divorce proceedings were in a foreign country which may well have been the more appropriate forum for the divorce.
- Schedule 7, para 10(3)(b) of the 2011 Maintenance Regulations, amended s.16 MFPA 1984 by amending sub- section 1 and adding a new sub-section 3 and 4:
"(1). Subject to subsection (3), 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." (italics added)
(2) …
(3) If the court has jurisdiction in relation to the application or part of it by virtue of the Maintenance Regulation and Schedule 6 to the Civil Jurisdiction and Judgments (Maintenance) Regulations 2011, the court may not dismiss the application or that part of it on the ground mentioned in subsection (1) if to do so would be inconsistent with the jurisdictional requirements of that Regulation and that Schedule.
(4)In this section, "the Maintenance Regulation" means Council Regulation (EC) No 4/2009 including as applied in relation to Denmark by virtue of the Agreement made on 19th October 2005 between the European Community and the Kingdom of Denmark.]
- It follows therefore, that the statutory discretion in s.16 MFPA 1984 permitting a court in England and Wales to make an order for financial relief, notwithstanding that divorce proceedings were "in a foreign country which may well have been the more appropriate forum for divorce", (per Lord Collins) has been constrained by the amendments of 2011 so that the discretion to dismiss an application under s.16 (1) MFPA 1984 is now subject to the provisions of Article 12 and Article 13.
- Mr Horton submits that the MFPA 1984 is wholly irrelevant to his submissions, but, if it has any relevance, it would be only to support his argument that forum conveniens lives on. The difference, he submits, is that by s16(3) MFPA 1984, in respect of jurisdiction under Part 3, what the EU Regulation or 2011 Maintenance Regulations "give, the court may not take away on forum non conveniens or other grounds". This he says in "marked contrast" to s27(2) MCA 1973 which (it will be recollected) says:
"The court may not entertain an application under this section unless it has jurisdiction to do so by virtue of the Maintenance Regulation and Schedule 6 to the Civil Jurisdiction and Judgments (Maintenance) Regulations 2011"
Mr Horton submits that there is nothing in the wording of s 27(2) MCA 1973 which, in itself, prevents the court from exercising jurisdiction on the basis of forum conveniens.
- I do not agree with that submission. What I see is a consistent approach whereby all relevant statutes under which a party could apply for maintenance, whether intra UK or extra UK, were amended in 2011 to bring the court's jurisdiction into line with the new Regulations. To my mind s27 (2) MCA 1973 could not be clearer and no amount of ingenious interpretation can read it other than as saying that a court may only countenance an application under s27 MCA 1973 if there is jurisdiction under the 2011 Maintenance Regulations subject only to Article 12 or Article 13.
Conclusion as to continuing role of s16(3) and s49 of the 1982 Act:
- In my judgment the clear intention has been to move to a position whereby disputes in relation to maintenance are to be subject to their own discrete regulation, uniform in its application in relation to both intra UK and extra UK disputes. The 2011 Maintenance Regulations are domestic law, but domestic law which has chosen to import the EU Regulation in respect of the same.
- In my judgment the approach to the wife's application under s27 MCA 1973 is therefore governed exclusively by the 2011 Maintenance Regulations and the court retains no residual discretion of the type historically found in s16 and s49 of the 1982 Act.
Related Actions
- What then, is a related action, and in the context of this case, are the divorce proceedings in Scotland when set against the English s27 MCA 1973 proceedings:
"13(3) …..so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate hearings"?
- Mr Scott submits that the Court of Appeal decision in Moore v Moore [2007] 2 FLR 339; [2007] EWCA Civ 361 provides a complete answer to the question.
- Moore was a case to which Brussels I applied and the court was concerned with Articles 27 and 28 (now Article 12 and Article 13 in the 2011 Maintenance Regulations).
- The procedural history of the case is complex and somewhat chaotic; stripped down to its essentials, the husband made an application in Spain for 'ordinary judgment concerning settlement of financial aspects arising from the divorce procedure' (the 24 April 2006 application). The wife subsequently made an application in England under section 13 of Part III of the MFPA 1984 for financial relief after a foreign divorce. The Spanish court held that it had no jurisdiction to hear the husband's application. Even so, it was decided that as there was an outstanding appeal from that decision, the United Kingdom courts would treat the Spanish proceedings as a 'pending action' which potentially engaged Articles 27 and 28 of Brussels I.
- At first instance McFarlane J (as he then was) decided that the husband's application was not a claim for "maintenance". The essential object of the husband's Spanish application was, he said, the division of the wealth to which the couple had a claim. The 'essential object' was to divide the capital assets. In reality, he held, there was no element of maintenance in the Spanish court proceedings.
- The husband appealed the decision of McFarlane J on a number of grounds including that the judge had been wrong to hold that the husband's application to the Spanish court was not characterised as maintenance [35] and that even if the husband's appeal from the rejection at first instance by the Spanish Court did not fall within Article 27 or Article 28 of Brussels I, McFarlane J should nevertheless have exercised the court's discretionary powers to stay its own process.
- The Court of Appeal considered the nature of the husband's 24 April 2006 application:
"81. The Spanish law experts agreed that under Spanish law a claim for financial relief must be made in the course of divorce proceedings and not afterwards. Once a divorce decree has been made it is not possible to claim financial relief if (as in this case) the claim has not been made in the divorce proceedings. In the present case it would have been open to either of the parties to amend the pleadings to raise financial issues but neither did so"
Thorpe LJ went on:
"86. The effect of the decisions of the European Court in Case 143/78 de Cavel v de Cavel (No 1) [1979] ECR 1055; Case 120/79 de Cavel v de Cavel (No 2) [1980] ECR 731; and Case C-220/95 Van den Boogaard v Laumen [1997] ECR I-1147, [1997] QB 759 is that whether the application is to be regarded as a matter relating to maintenance depends not on Spanish law, nor on English law, but on the autonomous concept to be derived from those decisions. But in determining whether the application relates to maintenance it is necessary to consider the terms of the application in so far as it sheds light on the purpose of the application.
87. On that basis, in our judgment it is plainly not related to maintenance, but is, as the judge rightly said, an application by the husband for the division of the wealth or assets to which this couple have a claim.
And finally, in relation to the applicability of Article 27 or Article 28:
"94. The essential object of the application by the husband was to achieve sharing of the property on his terms rather than an order based on financial needs: cf Miller v Miller, McFarlane v McFarlane [2006] UKHL 24, [2006] 2 AC 618, paras 16, 141.
95. Consequently we are satisfied that the 24 April 2006 application was not a matter relating to maintenance for the purposes of Article 5.2, and therefore that there would be no basis for the application of Articles 27 or 28 even if those proceedings were still pending.
- When considering the terms of the relevant application in order to see if it "sheds light on the purpose" of the application (per [86] of Moore), Mr Scott submits that [95] of that judgment provides the court with a clear statement of principle. Application of that principle, Mr Scott says, makes it abundantly clear that the Scottish application was not "related" to maintenance and there is therefore no basis for the application of Article 13 on the facts of this case. That being so, Mr Scott says, there is no need for the court to consider either the degree of "relatedness" to see if it fits within Article 13(3), or to consider whether the court should exercise its discretion to stay the proceedings. The Spanish proceedings in Moore were ruled out as a threshold issue and the court did not need therefore to go any further; the same, Mr Scott submits, applies in relation to this wife's application under s27 MCA 1973.
- Mr Horton sought valiantly to find a response to what looks to be a complete answer to his appeal on this point; he did so by pointing out that Moore did not say that there could never be a related action if the facts allowed for such a finding, and further, that the judgment makes no independent reference to Article 28 (and therefore by analogy, to Article 13). As the court made no specific findings on this point, Mr Horton suggests that the court can, and should, express its own independent view.
- Mr Horton further argues that Article 13 was not the issue in Moore. He says the court should therefore look not to Moore but to N v N [2012] EWHC 4282 (Fam); [2014] 1 FLR 1399 for the proper approach to the interpretation of Article 13. N v N, whilst a decision of the High Court, is, Mr Horton says, to be preferred as being directly on point.
- In N v N Mr Justice Moor considered whether the court should order a stay pursuant to Article 13(1) on the basis of related actions, a Swedish divorce having been first seised. Although N v N was an extra UK case (England and Sweden) and therefore under the mirror provision of the EU Regulation, the facts bear a resemblance to the facts of the present appeal. Moor J was not referred to the case of Moore.
- Moor J found the relevant actions in N v N to be related and ordered the English section 27 MCA 1973 proceedings to be dismissed. Moor J held that insofar as is relevant to Article 13:
i) (In that case) the Swedish divorce proceedings and the wife's s27 applications were "related actions" within Article 13;
"[25] The application here arises out of the marriage. There would be no jurisdiction to make an order if the parties were not married. The proceedings in Sweden relate to the dissolution of the very same marriage. They are undoubtedly related";
ii) The wife's section 27 application was "merely a device to attempt to get round that automatic stay" and, "the only reason why W had not pursued any application for maintenance in Sweden was "tactical"."
- The judge dismissed the application for seven reasons which he set out as follows:
"[28] I am quite satisfied that I should not entertain this application for the following main reasons:
(a) If I were to do so, I would, in effect, be overturning the decision in Wermuth v Wermuth (No 2) [2003] EWCA Civ 50, [2003] 1 WLR 942, [2003] 1 FLR 1029.
(b) I would not be espousing the spirit of BIIR. I would be usurping the function of the judge in the other Member State.
(c) There would be a quite unnecessary proliferation of proceedings in two jurisdictions. This is exactly what BIIR was designed to avoid.
(d) The husband's finances are predominantly based in Sweden, which is clearly a more appropriate forum to investigate the situation and adjudicate the dispute between these parties as to the true financial position of the husband.
(e) There is no prejudice to the wife as she can make her application in Sweden notwithstanding her appeal. I am quite satisfied that the only reason she has not done so to date is tactical.
(f) It is undoubtedly expedient to hear and determine the issues between these parties together in the same jurisdiction. Separate proceedings are never satisfactory. I do not know whether the husband can apply for an order against himself in Sweden. If he is able to do so, there would be a risk of irreconcilable judgments resulting from these separate proceedings. Moreover, if the wife's appeal in Sweden is unsuccessful, there will undoubtedly have to be financial orders made in Sweden which certainly could be irreconcilable with an order made here.
(g) It is very relevant that the wife's ancillary applications in the divorce suit for financial provision (including maintenance pending suit) have been automatically stayed as a result of BIIR. The s 27 application is merely a devise [sic] to attempt to get round that automatic stay.
[29] The second question I must answer is whether or not to stay the proceedings pursuant to Art 13(1) of the Maintenance Regulation or to decline jurisdiction pursuant to Art 13(2).
[30] I have decided that I should decline jurisdiction pursuant to Art 13(2) of the Maintenance Regulation and dismiss the application. I have already indicated that these proceedings are, in my view, a device.
- In Wermuth v Wermuth [2003] EWCA Civ 50; [2003] 1 WLR 942 upon which Moor J relied in N v N, the court was concerned with competing proceedings as between Germany and England. Germany was first seised. (The English court in Wermuth stayed (rather than dismissed) the English petition as (rather like in Moore), the wife had indicated an intention to appeal the German court's determination to that effect). The wife made an application for maintenance pending suit under Article 12 of Council Regulation (EC) No 1347/2000, Brussels II (BII), which provided:
"In urgent cases, the provisions of this Regulation shall not prevent the courts of a member state from taking such provisional, including protective, measures in respect of persons or assets in that state as may be available under the law of that member state, even if, under this Regulation, the court of another member state has jurisdiction as to the substance of the matter"
- Lord Justice Thorpe held that maintenance pending suit does not fall within Article 12. He said that such an order could not be classified as 'provisional', 'protective' or 'urgent' [31]. In the early part of his judgment (given just 18 months after Brussels II came into force) Thorpe LJ identified the "profound reservations" the United Kingdom had held at the prospect of resolving jurisdictional conflicts by the rule of lis albi pendens rather than the doctrine of forum conveniens [2]. He went on to say that "early experience" had, however, been reassuring [3] and in the rest of his judgment Thorpe LJ emphasised the importance of the "honest implementation" of the Regulations to which the United Kingdom had become a party. He said:
"[34] If this last point be finely balanced then the balance should in my judgment be settled by a strict construction of Article 12 for policy reasons. First we must espouse the Regulation and apply it wholeheartedly. We must not take or be seen to take opportunities for usurping the function of the judge in the other member state. Once another jurisdiction is demonstrated to be apparently first seised, this jurisdiction must defer, by holding itself in waiting in case that apparent priority should be disproved or declined….."
- In my judgment, even at this very early stage of BII, Thorpe LJ was accepting that where the European Regulation in question provided for a lis albi pendens approach, the English courts must 'let go' of their common law forum conveniens instincts and apply the Regulation in question. In Wermuth, the principal reason for rejecting the application was because, upon a strict application of the wording of Article 12, the wife's application for maintenance pending suit fell outside its precise terms, not being 'provisional' 'protective' or 'urgent'. Thorpe LJ undoubtedly, in his interpretation of Article 12, "espouse(d) the Regulation and appl(ied) it wholeheartedly".
- Thorpe LJ was also, with respect, right to say that "we must not take or be seen to take opportunities for usurping the function of the judge in the other member state." In my judgment this observation by Thorpe LJ must relate to the proper application of the Regulation by reference to its wording. The wife's application for maintenance pending suit under Article 12 was not dismissed because the court deprecated forum shopping (although it did), but because, upon a strict construction of the regulation, the application for interim maintenance simply did not fit within the terms of Article 12. In the case the subject to this appeal, that must, in my judgment, mean that the question of whether or not an application is properly made by the wife for an order under s27 MCA 1973 must be considered against the backdrop of Articles 12 and 13.
- Sometime before Wermuth, the House of Lords heard Sarrio SA v Kuwait Investment Authority [1999] 1 AC 32, a case more directly on point, involving English and Spanish actions where the regulation in question was in identical terms to those with which this court is concerned. The court had to consider whether, in relation to Article 22 of the 1968 Brussels Convention, (now Article 13(3)) the actions were "related" in that they were "so closely connected" that it would be expedient to hear and determine them together to avoid the risk of irreconcilable judgments.
- In his speech, Lord Saville said at 40C:
"The actions, to be related, must be "so closely connected that it is expedient to hear and determine them together" to avoid the risk of irreconcilable judgments resulting from separate proceedings. To my mind these wide words are designed to cover a range of circumstances, from cases where the matters before the courts are virtually identical (though not falling within the provisions of article 21) to cases where although this is not the position, the connection is close enough to make it expedient for them to be heard and determined together to avoid the risk in question."
And at 41F:
"For these reasons, I am of the view that there should be a broad commonsense approach to the question whether the actions in question are related, bearing in mind the objective of the article, applying the simple wide test set out in article 22 and refraining from an over-sophisticated analysis of the matter. It seems to me that this was the approach adopted by Mance J. [1996] 1 Lloyd's Rep. 650, who concluded that the allegations (common to both proceedings) in relation to whether the negotiations leading to the sale were conducted by or on behalf of the defendant, as well as the circumstances of the Grupo Torras group in Spain and the defendant's relationship with it, raised a risk of irreconcilable judgments in circumstances where the two actions were so closely related that it was expedient that they should be heard and determined together to avoid that risk."
- More recently in Nomura International plc v Banca Monte Dei Paschi Di Siena SpA [2013] EWHC 3187 (Comm); [2014] 1 WLR 1584 Eder J was considering the same issues in the context of an application to stay proceedings pursuant to Article 28(3) of Brussels I (which is, as noted above, in identical terms to Article 13(3)). It was common ground that:
"68(i) In order for actions to be deemed related, the court must be satisfied not only that there is a risk of irreconcilable judgments, but that the risk is sufficiently great, and/or the connection between the two sets of proceedings is sufficiently close to make it expedient to hear and determine the actions together."
- Having cited the relevant passages from the speech of Lord Saville, Eder J went on in his judgment to "adopt the broad common sense approach" endorsed in Sarrio [1607D]. Having done so, Eder J concluded on the facts of that case, that the actions were indeed 'related', but he nevertheless, in the exercise of his discretion, rejected the application for a stay of the other proceedings.
- Mr Scott notes that whilst the judge in N v N was referred to both Sarrio and Wermuth, crucially, Moore was not cited to him nor were any of the cases cited in Nomura, which although heard after N v N, relied heavily on a number of authorities which predated it. In addition, Mr Scott reminds the court, Moor J did not have the advantage that this court has had over the course of a two-day hearing, of being taken through the evolution of the European legislation which puts Article 13 in context and allows the court to have a clear understanding of the legislative intention.
- Moor J is a specialist judge with considerable expertise and experience and one can feel sympathy for him (and the husband) when faced with what appears to be a device designed to frustrate the policy and approach of the first seised court, in that case Sweden. Had Moore been put before him it seems likely that Moor J would have concluded that, unpalatable though he may have found the outcome, the wife's application was in fact a proper application unaffected by the provisions of Article 12 or Article 13 of the EU Regulation. Having accepted jurisdiction it would then have been a matter for the judge to decide what, if any, order to make.
Discussion in relation to Article 13
- In my judgment, N v N was wrongly decided and this court has jurisdiction to hear an application for maintenance pursuant to s27 MCA 1973 on the facts of this case:
i) Contrary to the submissions of Mr Horton, I am satisfied that s16(3) and s49 of the 1982 have been superseded by the lis pendens and related action provisions found in Article 12 and 13 and that the court faced with such an application must (per Wermuth) apply the strict terms of the Regulation. Contrary to the submissions of Mr Horton, there is no residual forum conveniens jurisdiction. Looking at Moor J's seven reasons for refusing to entertain the wife's application, they are, for understandable reasons, based largely on the policy of BIIa which on the facts of that particular case tie in neatly with forum conveniens, upon which he relies heavily.
ii) 'Forum shopping' is often regarded as being unattractive in family proceedings. Thorpe LJ deprecated such jurisdictional manoeuvres in the bluntest of terms in Wermuth [32]. Mr Scott, however, rightly reminds the court that if, within the terms of the Regulation, a party is able to choose between two jurisdictions, then he or she is perfectly entitled to choose that which is more beneficial to him or her. Mr Scott is, of course, correct. The court has to look at the strict interpretation of the Regulation in question which, in itself, reflects and implements the policy of BIIa. That a party has conducted the litigation in such a way specifically in order to take a case/application outside Article 12 or 13 does not allow the court to exercise a discretion under forum conveniens as a means to thwart what Moor J has characterised as a 'device'.
- The question is whether the Scottish and English actions are nevertheless 'related actions', or whether, pursuant to Article 13(3) they should be deemed to be "so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from the separate proceedings".
- In my judgment the answer to the present appeal is, as submitted by Mr Scott, to be found in the judgment of Thorpe LJ in Moore, given by him four years after his Wermuth judgment, not only as Mr Scott submits, after BIIa had had time to 'bed down' but in relation to the identical provisions to those with which this court is concerned. In Moore it must be remembered that there was a live application for financial relief in Spain. Notwithstanding that being the case, it was held that that was not a matter relating to maintenance but was an application to achieve a division of wealth and a sharing of property.
- In the present case the divorce proceedings in Scotland relate only to the status of the parties: the parties are currently married, and the action is intended to result in a divorce and the accompanying change of status. There is no application for aliment/maintenance or any other form of financial relief made by either party. The fact that there could be does not lead to actions which are otherwise unrelated becoming related.
- In my view, the potential for the wife to make an application for maintenance in the Scottish divorce proceedings sometime in the future (albeit prior to the granting of a Scottish decree) cannot be sufficient to seise the Scottish court of the question of maintenance. In contrast, a s27 MCA 1973 application plainly and directly engages the courts' maintenance jurisdiction and provides a free standing power for the court to order one spouse to pay maintenance to the other, even absent proceedings relating to divorce, nullity or judicial separation. In the light of Moore, it is hard to see how separate applications respectively in relation to status and for maintenance can be related, when in Moore the Court of Appeal held that a general application for financial relief and a discrete application for maintenance were not.
- In those circumstances I accept the submission of Mr Scott that that is, (as it was in Moore), the end of the matter and that as was held at [95] of Moore "there would be no basis for the application of Article 27 or 28", (or, in the present case, of Article 12 or 13).
- Even if it were appropriate to move on to consider whether, nevertheless, the two actions should be 'deemed to be related' by virtue of Article 13(3), in my judgment where, as here, one action deals with status and the other with an ancillary application for maintenance, there can be no question of irreconcilable judgments. Even on the most generous application of the test in Sorrio (and applied in Nomura) of a 'broad common sense approach' to related actions and to an interpretation of 'closely connected' which covers a wide range of circumstances, the divorce proceedings in Scotland and the application for maintenance in England cannot be regarded as related actions.
- In reaching that decision I should note that the court has not heard full argument on, and it has been unnecessary to decide, whether there is a requirement for each of the relevant actions relied upon to be made under the same regulation before they can be "related actions".
Ground 3: Duration of a s27 MCA 1973 order
- Mr Horton sensibly and pragmatically, did not pursue ground 3., In doing so he accepted that whilst the order made by the judge contained the conventional "until further order" in relation to the duration of the interim orders for maintenance, nevertheless the proper time to argue whether or not in circumstances such as these it would be appropriate for a court to make an order which extended beyond the granting of decree in Scotland was at the substantive hearing of the wife's application.
Ground 4: Thomas v Thomas
- The order made by the judge of 8 July 2016 was intended, in every sense, to be an interim order. Mr Horton accepts this to have been the case and further accepts that this court is most reluctant to entertain appeals against interim orders, even more so when a full hearing with additional evidence is anticipated and in relation to which directions have already been given.
- Mr Scott for his part accepts that, if the English courts retain jurisdiction under section 27 MCA 1973, there will be a full hearing in relation to both the husband's resources and the appropriateness or otherwise of orders for periodical payments being awarded. Mr Scott accepted without hesitation that such an enquiry may result in different findings from the preliminary ones reached by the judge and upon which she founded the order and, further, that the judge will have the power to remit all, or any, of the arrears.
- It should be noted that no payments have been made by the husband to the wife pursuant to the order. Notwithstanding this and the interim nature of the order, Mr Horton on behalf of the husband seeks to pursue the appeal in three respects:
(i) That the judge was wrong in the application of the test in relation to section 27 (5) of the 1973 Act.
Section 27(5) provides:
"(5) Where on an application under this section it appears to the court that the applicant or any child of the family to whom the application relates is in immediate need of financial assistance, but it is not yet possible to determine what order, if any, should be made on the application, the court may make an interim order for maintenance, that is to say, an order requiring the respondent to make to the applicant until the determination of the application such periodical payments as the court thinks reasonable."
- Mr Horton submits that the phrase "immediate need" should be interpreted as meaning "urgently requires". In the present case, he said, the judge erred in making the order as the wife had no urgent need given that her brother had been maintaining her for a considerable period prior to the hearing of the application.
- In making good his submission Mr Horton submits that this court should overturn the decision that I made when sitting as a High Court judge in M v M (Financial Provision) [2011] 1 FLR 1773. On that occasion Mr Scott (then on the other side of the argument) was urging me to adopt the interpretation of section 27 (5) now sought by Mr Horton. I said:
"43. The question therefore, as posed by Mr. Scott, is whether s14 of Part III imports a higher hurdle than that found in s22 MCA 1973: put another way does the word 'immediate' have connotations of urgency and is 'need' limited in its scope given that it, unlike s22 MCA 1973, is not balanced by the various considerations found in s25 MCA 1973.
44. The Oxford English Dictionary includes in the definition of 'immediate' the following: Of time: Present or next adjacent; of things: Pertaining to the time current or instant. Co-incidentally, given the issue before me, the example given in the OED is: 1748 SMOLLETT Rod. Rand. viii, Some loose silver for our immediate expenses.
45. Whilst the word 'immediate' can of course mean 'urgent', in my judgment having read the Law Commission report and bearing in mind also the Inheritance (Provision for Family and Dependants) Act I have no doubt that the word 'immediate' should be construed to mean 'current' as opposed to 'urgent'; (although it could be both).
46. Section 14 of Part III requires the court once it is satisfied that a party is in "immediate need", to make such order as is reasonable. I accept the argument of Mr. Dyer that the approach described in the authorities in relation to applications for interim maintenance under MCA 1973 applies also to s14. Mr Dyer drew my attention to a recent judgment of Charles J in an unreported case: A v M of 6 September 2010 where Charles J took just such a view in a similar application."
- Having considered the matter afresh in the light of Mr Horton's careful submissions, I remain of the view that the conclusion I reached in M v M is the correct one. By reference back to section 27(1), the court makes the order in circumstances where the husband has "failed to provide reasonable maintenance for the applicant". In my judgment, that undoubtedly having been the case, the wife is in current and continuing need of maintenance and the husband's obligation to maintain the wife cannot be discharged on the basis that his (soon to be) former brother-in-law should continue to provide the safety net which has become necessary due to his own continued failure to support his wife.
(ii) That the judge was wrong to find that the trust would advance funds so as to allow him to meet any order maintenance payments to the wife.
- The second submission in relation to the merits of the order, is that the judge had been wrong to find that the husband has resources with which to satisfy the order and that the trustees of the trusts, of which the husband is a beneficiary, would advance funds to him so as to allow him to pay maintenance to the wife even in the absence of any regular or significant advances having been made to the husband prior to the determination of the application.
- This then is the appellant's submission that the judge had erred in making a so-called Thomas order (Thomas v Thomas [1995] 2 FLR 668). Mr Horton submits that, even on an interim basis, the proper test is whether the "trustees would be likely to advance the funds in question immediately or in the foreseeable future", a reference to Whaley v Whaley [2007] EWCA Civ 617; [2012] FLR 735 at paragraph 40. The husband submits that there was no evidence that he would be likely to receive such an advance.
- The principles which are to apply in determining whether resources should be treated as part of a party's resources for the purposes of s25(2) MCA 1973 were restated by Black LJ (as she then was) in Whaley. Important to note for the purposes of this interim application, is that Black LJ regarded a test that suggested that what was required was something approaching "certainty" that the trustees would advance funds to be putting the matter too high. She said:
"40. At times, it seemed that Mr Howard was submitting that what the law required was something close to a certainty that the trustees would come up with funds so that unless a judge finds that the trustees will provide, the trust is irrelevant. However, I think he did concede in argument that this was putting it too high. Such an approach would not be consistent with s 25(2)(a) Matrimonial Causes Act 1973 which refers to the property and other financial resources which each of the parties to the marriage "is likely to have in the foreseeable future" and it is not in line with the authorities which contemplate a finding (which will obviously be made on the balance of probability) that the trustees are likely to comply with what is requested of them. That can be seen, for example, in what Wilson LJ said in Charman v Charman [2005] EWCA Civ 1606 at §12 and §13 which culminated in the following:
"In principle, however, in the light of s. 25(2)(a) of the 1973 Act, the question is surely whether the trustee would be likely to advance the capital immediately or in the foreseeable future."
…
- The judge undoubtedly dealt with the matter briefly. It was however accepted by all parties that the emphasis of the hearing, and indeed of the judgment, had been the difficult jurisdictional issues and that, as a consequence, little time was spent in relation to the substantive order.
- The judge said at paragraph 111:
"111. The material relied on by W satisfies me that H has access through the Trustees to substantial funds from his late grandmother's and mother's estate, and outright to his mother's estate which appears to have liquidity. H relies on the fact that he has met his share of the joint debts. He is to be expected to approach the trustees to access these funds: see Thomas v Thomas (supra). H has already persuaded the trustees to provide a trust fund of over £324,000 to the parties' daughter. In 2010 H wrote to W's brother thanking him for his loan of £100,000 stating that he hoped to repay it within 2 years not less than £100,000 from his grandmother's estate. I do not have direct evidence, but am informed that W's brother, a creditor in H's insolvency, has been told by Mr Bain the administrator that H is seeking a capital advance from the trustees to pay the debt. I record that H denies that he has access to any such sums. I also accept that H was adjudged bankrupt in 2013. He states that he paid his share of the joint debts from his mother's estate."
- Mr Scott, for his part, drew the court's attention to the evidence which had been available to the court that is to say, the 'material relied upon by the wife' referred to by the judge at [111] above. That material included the husband's Form E1, a singularly unimpressive document. In it the husband failed to provide the disclosure required in relation to the family trusts as, in response to the requirement to give details of any trust interests (including interests under a discretionary trust), he said only that he had "no capital interest in any trust nor do I currently receive any income from any existing trust of whatever nature". He therefore failed not only to provide details of the trust themselves but also omitted to make it clear that the trustees have a power to advance capital. Mr Scott showed this court his closing submissions on the trust issue. Mr Scott submitted that the evidence summarised in his closing document, together with some correspondence to which we were referred, entitled the judge, on the interim basis upon which she was proceeding, to reach the conclusion that she did.
- Mr Horton submits that the judge failed adequately to analyse the evidence put before her in relation to the trust. Had she done so, he says, she would have concluded that the appropriate order was for there to be no order for interim maintenance. In my judgment, the judge having seen the information provided to the court about the trust, and having taken into account that the husband had previously requested (and the trustee had agreed) that funds be diverted from the husband's interest in the trust and made available for C's use, was entitled to come to the view that the trustees were 'likely' to agree to the provision of funds (on an interim basis) for the wife, the mother of that child (and with whom she was living).
- Whilst a counsel of perfection may have resulted in a more detailed analysis of the evidence before her, I am satisfied that the judge was entitled to draw the conclusion she did on the evidence available. In saying as she did that 'in the event that the sum is "over-generous" it could be "revisited at a further hearing and readjusted" she appreciated the importance of the fact that this was an interim order which would require fuller consideration in due course. In anticipation of the same, the judge made case management orders whereby the trustees of the family trust were asked to provide additional information.
iii) The making of the costs allowance order
- That therefore leaves the issue of the costs allowance of £3,000 pcm expressed to be "until further order". Mr Scott frankly accepted that the procedure adopted at first instance fell far short of that expected in such applications; there was no costs budget, no detailed evidence and the order did not make the usual provision whereby the order would be reconsidered at the FDR stage.
- I would wish to make it abundantly clear that in dismissing the appeal in relation also to the cost allowance, I should not, on any basis, be regarded as in some way condoning any 'dumbing down' of the now accepted procedural requirements in the making of such an application. However this was a discretionary exercise in an interim application. The judge had the same information in relation to this application as she had for the interim maintenance application in relation to the family trusts upon which to found her view that the husband was likely to meet with success in the event that he approached the trustees to fund the wife's legal costs.
- Further, as the judge knew from her Form E, the wife not only had no money but was heavily in debt and was, absent support from her brother, destitute. In my judgment the judge was entitled to take a preliminary view on a common-sense and realistic approach (given the background of the proceedings, the husband's bankruptcy and that the only potential source of a settlement being from within a family trust) that no commercial lender would underwrite her legal costs. Having been satisfied on the Thomas principles that the husband had access to funds via the trust, the judge took the view that there was no reason why the wife's brother, who has no obligation towards her, should have to continue to pay the wife's costs.
- I would therefore, albeit with considerable hesitation given the significant procedural defects, dismiss the appeal in relation to the interim costs allowance.
Conclusion
- It follows that for the reasons set out that I would dismiss the appeal on each of the grounds of appeal upon which permission was given and it follows that the English court retains jurisdiction in respect of the wife's s27 MCA 1973 application for maintenance for herself.
Lord Justice David Richards
- I agree.
Lord Justice Moylan
- I also agree.
