Moore v Moore

This is the judgment of the court. The principal architect of the judgment has been Lawrence Collins LJ. He has also drafted the section of the judgment dealing with the EC Council Regulations and the conflict of laws. Munby J has dealt with the judge’s exercise of discretion. Thorpe LJ has drafted the parts on the course of the litigation and the context in which McFarlane J conducted a four day hearing in the Family Division in January 2007.

The parties are in their mid-forties and seemingly very rich. Their relationship lasted over some 15 years although they only married on 22 October 1998. They have three children aged respectively 16, 10 and 7. In September 2003 the family emigrated to Spain, apparently to avoid United Kingdom tax. The marriage did not long survive the move. They separated in December 2003. We were told that the financial consequences of their separation were the subject of long negotiations and that there came a point at which the husband believed that an agreement had been reached, a belief apparently not shared by the wife.

The husband obtained a divorce in Spain and the proceedings in England have been concerned to date largely with the question of whether it is the Spanish court or the English court which should exercise jurisdiction to deal with the financial consequences.

By his judgment of 1 February 2007 McFarlane J confirmed the permission to the wife, granted by Baron J at a hearing without notice on 11 July 2006, to apply for orders for financial relief pursuant to Part III of the Matrimonial and Family Proceedings Act 1984 (“the 1984 Act”). McFarlane J also dismissed the husband’s application to set aside the permission granted to the wife by Baron J.

McFarlane J himself granted permission to appeal. In so doing he observed that the litigation was complex, it gave rise to novel points of law and that the wife had succeeded despite his provisional conclusion that she was a blatant forum shopper.

An extraordinary feature of the present case is the parties have spent about £1.5 million in legal fees, most of it in proceedings concerning the question whether the financial consequences of the divorce should be determined in Spain (as the husband contends) or in England (as the wife contends). Yet (as Mr Lewis Marks QC, counsel for the wife, emphasises) it is common ground between the parties, their Spanish lawyers and their eminent Spanish experts that, if the Spanish court were to take jurisdiction to determine these issues, it would apply English law. We do not know whether this lamentable and grotesque waste of family resources is the result of the intransigence of one or other of the parties or because the husband hopes, or has been advised, that the Spanish court, if seised, will misapply English law to his benefit. We asked Mr Barry Singleton QC, counsel for the husband, what advantage the husband might gain from litigating in Spain, but he was unable to give any positive answer.

There is another feature of this case which is disturbing and not, it would seem, uncommon, since something similar occurred in Bentinck v Bentinck [2007] EWCA Civ 175, another case in which enormous resources were going to be devoted to a sterile jurisdictional issue had this court not intervened. Despite the enormous financial and human resources put into the present litigation, the English lawyers (as we point out below) were not able to give the court an up-to-date assessment of the likely progress in the foreign proceedings. We think that it is elementary that in cases involving overlapping proceedings in different jurisdictions there should be someone on each team who is co-ordinating the proceedings and understands what is going on, and is able to inform both courts of the progress in the other jurisdiction.

On 22 June 2004 the husband filed his divorce petition in Marbella. The final matrimonial home lies within the jurisdiction of that court. It is not in dispute that if the financial consequences of divorce were not to be agreed, then the wife would prefer to have the decision of a London judge and the husband would prefer the decision of a Spanish judge. In those circumstances it is surprising that in his petition the husband did not invoke the financial jurisdiction of the Marbella court. He asserted:

When, at the hearing before us, Mr Singleton was asked to explain the strategy underlying that pleading he said that he could only speculate that the Spanish lawyer must bear responsibility for what were to prove serious consequences.

On 24 June 2004 the wife issued her petition in London. The provisions of Council Regulation (EC) 1347/2000 on jurisdiction and the recognition and enforcement of judgments in matrimonial matters etc (“Brussels II”) were then applicable since Council Regulation (EC) 2201/2203 (“Brussels IIbis” sometimes also called Brussels II Revised) came into force only on 1 March 2005. Brussels II of course gave primacy to the husband’s petition since it was first in time. Accordingly on 14 July 2004 Dame Elizabeth Butler-Sloss P stayed the wife’s petition, and ordered that it be dismissed on the grant of a divorce in Marbella.

On 29 October 2004 the wife filed her answer to the husband’s Spanish petition. She did not seek financial relief, although asserting that the husband “should pay the money that corresponds to his situation. We shall deal with this point later on.” Of course it was both predictable and understandable that the wife would not invoke the jurisdiction of the Spanish court since her preference was for a London judge.

On 2 December 2004 the husband filed his reply in Spain and pleaded:

The husband’s petition was listed for hearing in Marbella on 9 March 2006. We were told that both parties attended, as did their lawyers. The court documents in the Spanish proceedings record that during the proceedings the husband proposed to pay the wife £6 million in addition to such properties as were registered in her ownership. This was apparently the essence of the husband’s final offer in negotiation which he believed had at some stage been agreed. The wife’s lawyer requested the judge to suspend the hearing in order to enable her to consider the proposal fully. The application was coupled with a request for the continuation of the proceedings by consent. Article 770, in the section of the Spanish Law of Civil Procedure dealing with matrimonial proceedings, is the appropriate provision for cases that are contested, and Article 777 deals with matters proceeding by consent.

This request was refused on 15 March 2006. To family specialists in this jurisdiction, that seems surprising given the obligation on judges in the family jurisdiction to support wherever possible mediation and negotiation designed to achieve the prize of consensual disposal. The judgment was:

It is difficult to understand the husband’s reaction to the order of 15 March 2006. Instead of appealing the judge’s refusal to become involved in the financial consequences of divorce, on 17 March 2006 he issued an application for a declaration that neither party was entitled to any economic settlement from the other as neither had requested a financial settlement in the pleading.

The wife’s response of 24 March 2006 was the submission that the husband’s application was incompatible with his financial offer during the hearing. She asserted that the question of assets remained open and should be dealt with in new proceedings. That plea demonstrates a degree of ambivalence as to her preferred jurisdiction.

On 24 April 2006 the husband at last came out unequivocally for the Spanish jurisdiction. He issued an application for “ordinary judgment concerning settlement of financial aspects arising from the divorce procedure”. He asserted that Spain was the only country having jurisdiction in relation to any matter concerning the divorce and its financial consequences, but he pleaded that “the law applicable for the purposes of the marriage, including the financial aspects arising from its break-up by divorce, is English law, since that is the nationality of both parties.”

On 23 May 2006 the court in Marbella rejected the submissions of both parties dated respectively 17 and 24 March 2006. It held that it had no jurisdiction in relation to financial claims unless pleaded in either the petition or the answer. The judge also extended the opportunity to appeal against the decision of 15 March 2006 until 5 days after notification of the 23 May decision, but the husband did not appeal.

On the following day, 24 May 2006, the wife issued her application in this jurisdiction under Section 13 of the 1984 Act to apply for financial relief after an overseas divorce.

On 9 June 2006 directions were given in Spain in relation to the husband’s application of 24 April 2006, and on 28 June 2006 the husband filed a further pleading asserting the competence of the Spanish court to deal with financial aspects notwithstanding the absence of prayer in petition or answer.

The order of Baron J of 11 July 2006 has already been recorded. On 24 July 2006 the husband applied here to set aside the permission and on 27 July Baron J gave directions, which culminated in a hearing to commence on 22 January 2007.

On 11 August 2006 the Spanish Prosecutor’s Office filed its report supporting the husband’s submission that Spain had jurisdiction in relation to finance, and on 18 September 2006 the judge in Marbella reversed her decision of 23 May, and decided that the court had jurisdiction to deal with the financial claims made in the husband’s application of 24 April 2006.

That prompted a challenge on 31 October 2006 from the wife (a declinatoria) to the Spanish court’s financial jurisdiction, asserting that the English court was proceeding. On 9 November 2006 the husband filed his response to the declinatoria and on 4 December 2006 the court in Spain once again reversed its position upholding the wife’s declinatoria.

The husband appealed on 12 December 2006 leading to directions on the appeal dated 10 January 2007. Thus matters stood in Spain when McFarlane J commenced the hearing on 22 January 2007.

Subsequent to McFarlane J’s decision of 1 February 2007 a pleading on behalf of the husband was filed in support of his Spanish appeal and a pleading in response on behalf of the wife was filed. During the course of argument we enquired as to the likely date of hearing of the appeal in Spain. Despite the large number of lawyers present in our court none was prepared to offer even a speculation.

What is the nature of the husband’s appeal? Professor Broto, the expert who gave evidence on the husband’s behalf, has expressed the opinion that, whilst the rejection of jurisdiction on the grounds that neither party had invoked jurisdiction in the pleading may be hard to impugn, the judge on 9 March 2006 plainly acted unreasonably in refusing the adjournment and the transfer into the consent procedure. Accordingly, in his opinion (not shared by Professor Vendrell, for the wife) the likely outcome of the husband’s appeal of 13 December will be to upset the order of 15 March. That opinion may or may not be correct but it hardly seems persuasive given that the order of 15 March produced not an appeal but the application of 17 March for a negative declaration. Furthermore the order of 23 May re-opened for the parties a five day window of opportunity to lodge an appeal against the order of 15 March. Neither took advantage of that re-opening.

That is the conclusion of the convoluted history of the litigation. McFarlane J condemned the wife’s litigation strategy. In our judgment the husband is equally deserving of condemnation. It was when we asked for an account of the costs so far incurred on the litigation in both jurisdictions that the shocking figure of approximately £1.5 million, to which we have already referred, emerged for the total spent by the parties in the two jurisdictions.

The application by the husband to set aside the wife’s leave to apply for an order for financial relief pursuant to Part III of the 1984 Act was made on the basis that (a) the husband’s application in Spain of 24 April 2006 and the wife’s application in England of 11 July 2006 were both claims for maintenance within the meaning of Council Regulation (EC) 44/2001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (“Brussels I”); (b) the Spanish court had jurisdiction under Article 5.2 of Brussels I; (c) the Spanish proceedings were first in time, and the English proceedings should be stayed under Article 27 (or Article 28) of Brussels I; (d) the Spanish proceedings were still pending, notwithstanding the decision of 4 December 2006, because an appeal was pending; and (e) in any event, leave should not have been granted under section 13 of the 1984 Act.

Written reports on the applicable Spanish law were provided on behalf of the wife by Professor Alegría Borrás, Professor of Private International Law at the University of Barcelona, and the author of the Explanatory Report (the Borrás Report) on the Brussels II Convention on Jurisdiction and the Recognition and Enforcement of Judgments in Matrimonial Matters, which was the basis for Brussels II and Brussels IIbis; and by Professor Eudald Vendrell, Associate Professor of Civil Law at the University of Barcelona. Written reports were provided on behalf of the husband by Professor Ferre Marti, Professor of Matrimonial Law at the University of Barcelona, and also (after Professor Marti fell ill) by Professor Eulogi Broto, previously Professor of Matrimonial Law at the University of Barcelona, and now Professor at the Institut Superior de Ciències Religioses (Iscreb), Barcelona, and who also has judicial and professional experience. Professor Vendrell and Professor Broto gave oral evidence also.

The judge decided that the husband’s application was not a claim for maintenance. The “essential object” of the husband’s Spanish application was the division of wealth to which the couple had a claim: Case C-220/95 Van den Boogaard v Laumen [1997] ECR I-1147, [1997] QB 759. It was not a claim by a wife for maintenance but an application by the husband. The only reference to maintenance related to the standard of living and the fact that the package would enable her to meet her reasonable needs. The essential object was to divide the capital assets. In reality there was no element of maintenance in the husband’s case before the Spanish court.

Article 5.2 of Brussels I was not engaged by the Spanish proceedings because the husband’s application was not “ancillary” to proceedings concerning status in Spain, namely the divorce proceedings in Spain. The intention behind the amended Article 5.2 was to extend the ordinary Brussels I jurisdiction with regard to maintenance to cases where the maintenance proceedings were combined with proceedings for the dissolution of marriage. There were no longer, and could not be in the future, combined proceedings in Spain which would bring together issues of dissolution of the marriage and maintenance.

Notwithstanding the appeal against the decision of 4 December 2006, there were no proceedings pending before the Spanish court for the purposes of the lis pendens provisions. The judge added that if he were wrong in his view that Brussels I did not apply, he would have exercised a discretion to stay the English proceedings pending the outcome of the appeal in Spain.

The wife’s application for leave under Part III of the 1984 Act was confirmed. The connection with England was overwhelming. The section 16(2) factors to which the court must have regard included the right of the applicant to have made an application elsewhere and her reasons for not doing so (section 16(2)(f)). This was not the only or automatically determinative factor. The nexus between this case and England was so strong that a substantial ground based on the connection with England and the lack of any connection with Spain was well and truly established. It was impossible for the husband to establish that Spain was a more appropriate or natural forum for this litigation.

The husband’s appeal made five main points.

First, the judge was wrong to hold that the husband’s application to the Spanish court dated 24 April 2006 was not to be characterised as relating to maintenance for the purpose of Brussels I. The judge was wrong to hold (i) that the essential object of the husband’s application of 24 April 2006 was to divide capital assets; (ii) that there was no element of maintenance in the husband’s case before the Spanish court; and (iii) that the husband’s application was not to be regarded as relating to maintenance within the scope of Brussels I.

The husband’s pleadings referred to the provision of £6 million as enabling the wife to be maintained for life at the standard enjoyed in marriage and as covering her reasonable needs, and met in full the definition of maintenance in Case C-220/95 Van den Boogaard v Laumen [1997] ECR I-1147, [1997] QB 759. Contrary to the judge’s finding, the Spanish documents did not show that the essential object was to divide capital, and were consistent with a characterisation of the claim as being (at least in part) one in respect of maintenance, and it was far removed from “rights of property arising out of a matrimonial relationship” excluded from the scope of Brussels I by Article 1.2.

The judge misread Miller v Miller, McFarlane v McFarlane [2006] UKHL 24, [2006] 2 AC 618 which makes plain that the three elements of needs, compensation and sharing are to be separately considered and that the order of their determination will vary from case to case. An award in the form of capital provision may meet needs in a big money case, but that is not to say that the matter is one of “rights in property arising out of a matrimonial relationship.”

Second, the judge erred in holding that the husband’s application to the Spanish court of 24 April 2006 was not ancillary to or incidental to or combined with the husband’s divorce proceedings in Spain within the meaning of Article 5.2 of Brussels I. The judge required too strict a nexus between the financial proceedings and the proceedings concerning status. Financial proceedings are “ancillary” to divorce in England when brought after concluded divorce proceedings.

The judge gave insufficient weight to the opinion of Professor Broto that the appeal process will result in the husband’s proceedings being permitted to proceed in order to remedy the fundamental procedural error that took place at the final hearing of the divorce and therefore that the April application is in reality a continuation of or incidental to the divorce proceedings.

Third, the judge should have held that, pending the exhaustion of the appellate process in Spain, the husband’s application of 24 April 2006 remains a proceeding brought within the court of another Member State and he should have stayed the proceedings in accordance with Articles 27 or 28 of Brussels I.

An appeal is pending and remains to be heard. Common sense and first principles strongly suggest that a proceeding should be regarded as pending until all available avenues of appeal have been exhausted. To do otherwise would risk the prospect of irreconcilable judgments in two Member States - the mischief which Brussels I is designed to avoid. Case C-351/89 Overseas Union Insurance Ltd v New Hampshire Insurance Co [1991] ECR I-3317, [1992] QB 434 emphasises the need to permit a challenge to the jurisdiction of the court first seised to be determined in that jurisdiction, and for the court second seised to stay its proceedings until that determination.

Fourth, in the alternative, even if the husband’s appeal from the rejection of the jurisdiction at first instance by the Spanish court does not fall within the scope of Articles 27 or 28 of Brussels I, the judge should nevertheless have exercised the court’s discretionary power to stay its own process.

The potential for unfairness and lack of balance in two sets of proceedings running side by side in two different European jurisdictions makes it apt for the English court to exercise its inherent jurisdiction to stay its own proceedings in favour of those in Spain, in the first instance until the resolution of the appeal in Spain. This power exists independently of any power to stay which is conferred by statute, Regulation or Convention: de Dampierre v de Dampierre [1988] AC 92; D v P (Forum Conveniens) [1998] 2 FLR 25; Krenge v Krenge [1999] 1 FLR 969.

Fifth, the judge erred in the exercise of his discretion as to whether to grant leave to the wife under section 13 of the 1984 Act to apply for an order for financial relief in England after the divorce in Spain by (a) failing to give proper weight to provisions of section 16(2)(f) given the judge’s assessment of the evidence before him; (b) permitting the wife to pursue her application under Part III of the 1984 Act in a context in which it was premature for the court to determine whether or not there was a substantial ground for the making of the application within the meaning of section 13(1), the proceedings in another Member State not having yet been concluded and it being impossible for the English court to make the determination required by the statute at this point in time; and (c) generally in granting leave to the wife to pursue her Part III application notwithstanding the acknowledgment that the husband will pursue his appeal in Spain; thereby permitting the continuation of parallel proceedings in two Member States and thus risking conflicting judgments.

Either by consent or by virtue of the husband’s domicile in Spain the wife could bring proceedings in Spain. The wife has chosen not to bring her own proceedings for equal division of assets in Spain.

The judge failed to address in the context of the wife’s application for leave under Part III the real underlying purpose of the wife’s English proceedings. This is not really a “maintenance claim” by the wife. She is seeking an equal division of assets. This is in keeping with the wife’s Spanish lawyers assertion on 24 March 2006 that the question of assets remained open and should be dealt with in new proceedings.

The mischief at which Part III is aimed is not present when the wife can bring proceedings in another jurisdiction that are broadly similar in nature to those available in England. If a spouse is able to achieve a substantial redistribution or division of assets in the other jurisdiction there should be little or no prospect that the English court would grant leave and/or make an order under Part III.

The wife does not have a right to litigate. She has to establish that there is unfairness if leave is not granted. The judge attached excessive importance to the English aspects of the case and insufficient importance to the wife’s blatant forum-shopping and the continued availability to her of proceedings in Spain.

The grant to the wife of leave under section 13 is at this stage premature. An appeal is pending in Spain. The English court is in no position to decide whether or not the wife has substantial ground for making an application under the 1984 Act. Since the husband is appealing in Spain, the judge erred in exercising his discretion so as to permit parallel proceedings to continue, given the obvious risk of conflicting judgments.

The judge could (and should) have accepted the Spanish court’s findings on whether Brussels I applied to the husband’s application.

The judge could (and should) have accepted that the decision of the Spanish court of 4 December 2006, declining jurisdiction, was decisive of these issues: Articles 33.1, 35.3 and 36, Brussels I. It was therefore not necessary for the judge to have reconsidered those issues. Nor was it open to the judge to decide that the Spanish court does have jurisdiction when that is the very matter which it had already explicitly determined: cf Bentinck v Bentinck [2007] EWCA Civ 175.

Second, the husband’s application was not a “matter relating to maintenance.” The application sought only the approval of the scheme devised by the husband for the transfer of certain properties to the wife, and the payment to her of a lump sum determined by the husband. It did not amount to an application to the court for the determination of the appropriate provision according to Spanish, or English, law. This is confirmed by the terms of the Spanish judgment of 4 December 2006.

The Spanish court was first seised in relation to the divorce. It has dealt with the divorce. The Spanish court has never been seised with an application in relation to maintenance for the wife, whereas the English court was so seised on 24 May 2006 when the wife issued her application under Part III.

Third, the husband’s application is not “ancillary to” the husband’s divorce proceedings. Those divorce proceedings have been terminated by judgment - a judgment which in the unanimous opinion of the experts is res judicata and, time for appealing having long passed, irremediable. It is too late for any subsequent application to be “ancillary to” (within, part of, or combined with) those proceedings.

Fourth, the fact that the husband is appealing against the dismissal of his application in Spain does not mean that the proceedings there are still pending (within the meaning of Brussels I) and the English court cannot stay the wife’s application pending determination of the husband’s appeal: Articles 33, 35 and 36, Brussels I.

The wife’s application under Part III is covered, at least in part (i.e. insofar as it relates to maintenance) by Brussels I, and as there is no other court earlier seised of such an application, there is no power under Brussels I to stay her application (i.e. Articles 27 and 28 are not engaged).

If the husband’s application was within Brussels I (i.e. insofar as it related to maintenance and was incidental to the divorce, contrary to the decisions in Spain and the decision of the judge) there would be a discretion to stay the wife’s application pending the outcome of the appeal insofar as it related to maintenance: Article 37.1.

The jurisdiction under the inherent discretion to stay proceedings on forum non conveniens grounds does not apply to the wife’s application insofar as it relates to maintenance (because that is covered by Brussels I) and the first seised court does not have a discretion to defer to another Member State.

Insofar as the balance of the wife’s application is concerned, i.e. her substantive application for a share of the total family wealth not on maintenance grounds but on the basis of equitable sharing, there is an inherent jurisdiction to stay the proceedings on forum non conveniens grounds, but as the judge had determined that England is the more appropriate forum for resolution of those issues, he was right to decline to stay her proceedings on that basis.

Fifth, there are no grounds for interfering with the exercise by the judge of his discretion to grant leave under Part III.

Culpability in the failure to apply to the foreign court to resolve the issues may be a relevant factor under Part III (section 16), but (a) it applies to both parties and (b) it has been considered carefully by the judge in whom the discretion is vested, and his exercise of his discretion cannot be faulted.

The situation of the parties has been engineered, not by tactical considerations on the part of the wife, but by the tactics of the husband - including the emigration to Spain in September 2003, the establishment of trusts in October 2003 (into which shares owned by the wife, as well as by the husband, were settled) and the breakdown of the marriage in December 2003 in a country under the legal system of which trusts are an alien concept, and his decision not to seek financial provision in his petition, and his attempt to consolidate that position with two applications for declarations that it was too late for either party to make any application for ancillary relief.

The first three factors in section 16(2) are directed to the comparison of the connections of the parties with (a) England, (b) Spain and (c) any other country (an irrelevant consideration in this case). That balance is overwhelmingly, or at the very least clearly, that the parties’ English connections are the strongest and most relevant.

Section 16(2)(f) required the judge exercising the discretion under section 13 (and then again under section 15) to consider that factor as relevant to the exercise of his discretion without imposing on him any obligation to regard it as determinative.

This is not a case in which the wife could now (or at any time since the end of 2004) bring a claim for ancillary relief in Spain, or in which the Spanish courts retain any jurisdiction (under their own law) to deal with the full range of provision arising on divorce.

It is not denied that the wife’s decision to oppose the assumption of jurisdiction by the Spanish court in relation to the husband’s application of 24 April 2006 was motivated by a wish to have her ancillary relief proceedings determined in England. The law to be applied in the two courts is the same. The reality is that the husband wishes to litigate in the forum which he believes will misapply the law in a way that is favourable to him.

The experts on Spanish law were agreed that in the present case, under Spanish private international law, English law governs (a) matters relating to matrimonial property, and also (b) maintenance and compensation for “economic imbalance.” The effect of Article 9(1), (2) and Article 107(2) of the Spanish Civil Code is that the effects of marriage (including the dissolution of the matrimonial economic regime) are governed by the personal common law of the spouses at the time of marriage, namely their nationality (which appears to mean English law in the case of parties having British nationality). Spain is a party to the Hague Convention of 1973 on the Law Applicable to Maintenance Obligations. By Article 4 the law governing maintenance obligations is the law of the habitual residence of the maintenance creditor, and even though the United Kingdom is not a party, it applies in Spain by virtue of Article 3 irrespective of any requirement of reciprocity and whether or not it is the law of a Contracting State. Professor Borrás’ opinion also points out that, in accordance with general international practice, matters relating to title to property are governed by the law of the place where assets are situate: Article 10(1), Spanish Civil Code.

Article 5.2 in the original Brussels Convention of 1968 provided that jurisdiction in matters relating to maintenance could be assumed by the court where the maintenance creditor was domiciled or habitually resident. In Case 120/79 de Cavel v de Cavel (No 2) [1980] ECR 731 the European Court ruled that for the purposes of the Brussels Convention maintenance orders made in the context of divorce proceedings were within the scope of the Convention.

Prior to the Accession Convention of 1978 the European Court had held that whether a matter relates to “rights in property arising out of a matrimonial relationship” or to “maintenance” depends on an autonomous concept of the respective terms: 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.

“Régimes matrimoniaux” (now translated since the 1978 Accession Convention as “rights in property arising out of a matrimonial relationship”) were excluded from the 1968 Brussels Convention because of great differences in the substantive matrimonial property law between the original Member States, but maintenance was included because most of the original Member States were parties to the Hague Convention of 1958 on the recognition and enforcement of decisions relating to maintenance obligations in respect of children, and the New York Convention of 1956 on the recovery abroad of maintenance: Jenard Report, p 24; Case C-220/95 Van den Boogaard v Laumen [1997] ECR I-1147, [1997] QB 759, para 36, per Jacobs AG.

When the United Kingdom and Ireland acceded to the Brussels Convention, it was recognised that under their law there was no legal concept equivalent to “rights in property arising out of a matrimonial relationship” but that property rights between spouses were governed by the general law. The Brussels Convention was not amended to deal with this, but the Schlosser Report on the Accession Convention ([1979] OJ C59) states the position which was agreed in the negotiations (para 50):

Article 5.2 of the 1968 Convention was, however, amended to deal with the case where maintenance is awarded in divorce proceedings, and the amended Brussels Convention (and now Brussels I) gave jurisdiction in matters of maintenance to the Member State where there were proceedings concerning the status of a person.

Brussels I does not apply to “rights in property arising out of a matrimonial relationship” (Article 1.2(a)) but it does apply to “matters relating to maintenance” (Article 5.2).

Brussels II did not apply to “property consequences of the marriage, the maintenance obligation or any other ancillary measures” (Recital (10)). The recitals to Brussels IIbis exclude “property consequences of the marriage or any other ancillary measures” (Recital (8)), and state that “maintenance obligations are excluded from the scope” of Brussels IIbis as they are already covered by Brussels I, and the courts having jurisdiction under Brussels IIbis will generally have jurisdiction to rule on maintenance obligations by virtue of Article 5.2 of Brussels I (Recital (11)).

Article 5.2 of Brussels I provides (in language identical to the amended 1968 Brussels Convention) as grounds of jurisdiction over a defendant domiciled in a Member State (in addition to the primary rule of the jurisdiction at the defendant’s domicile):

The Schlosser Report (paras 93 et seq) makes it clear that the concept of maintenance does not require that the claim must be for periodic payments, and that the mere fact that the courts in the United Kingdom have power to order not only periodic payments but also the payment of a lump sum does not prevent the proceedings from being treated as a maintenance matter. But it is difficult to distinguish between claims for maintenance on the one hand and claims for damages and the division of property on the other. In continental Europe a motivating factor in assessing the amount of maintenance is to compensate an innocent spouse for the loss of matrimonial status. The Report points out that English law does not make a distinction as to whether payments ordered by the court are intended as damages or as maintenance. The maintenance nature of the payment is likely to predominate in relation to children. As between spouses, a division of property or damages may well be the underlying factor. Where both spouses are earning well, payment of a lump sum can only serve the purpose of a division of property or compensation for non-material damage. In that case the obligation to pay is not in the nature of maintenance. If payment is in pursuance of division of property, the Brussels Convention does not apply at all. If it is to compensate for non-material damage, there is also no scope for the application of Article 5.2.

In Case C-220/95 Van den Boogaard v Laumen [1997] ECR I-1147, [1997] QB 759 the European Court ruled, in the context of enforcement proceedings in the Netherlands, on the application of the Brussels Convention (as amended) to English lump sum orders.

After referring to the passages from the Schlosser Report, Jacobs AG expressed the opinion (para 43) that where both spouses are earning well, payment of a lump sum can only serve the purpose of a division of property or compensation for non-material damage, in which case the obligation to pay is not in the nature of maintenance. He said (at para 62) that it might be arbitrary to try to draw a clear distinction with regard to a given order between an equitable division of assets and maintenance, and consequently, in keeping with the European Court’s readiness to develop an autonomous interpretation of Convention terms, it might in some cases be necessary to look for the essential object of the order. Later in his opinion he said:

The European Court ruled:

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: second, 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; third, 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; fourth, a payment or transfer of property intended as a division of assets will concern “rights in property arising out of a matrimonial relationship”; fifth, 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; sixth, 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.

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.

Under Spanish law the Spanish court may deal with the “liquidation of the matrimonial economic regime” under Article 806 of the Law of Civil Procedure separately from the divorce proceedings, although there are differences between the experts as to whether either can apply in the present case, where English law has no matrimonial property regime. If there are divorce proceedings, the court seised with those proceedings has jurisdiction to deal with the liquidation of the matrimonial property regime: Article 807.

The Spanish law experts are agreed that to the extent that the application of 24 April 2006 relates to maintenance it is not admissible under Spanish law, and that the appeal against the decision of 4 December 2006 will fail.

Professor Vendrell described the 24 April 2006 application as including “compensation claims arising from a marriage crisis,” which (he said) were deemed to be compensation for damage or unjust enrichment, and went beyond the settlement and distribution of the marital assets, with the consequence that the application could only be dealt with as part of divorce proceedings. Professor Broto was asked whether he agreed with this characterisation of the proceedings, and his answer was that he did.

Professor Vendrell expressed the view in the witness box that the judge had not been very sensitive (by which he meant, perhaps, sensible) or reasonable but had not acted illegally. His opinion was that the appeal against the decision of 4 December 2006 relating to the 24 April 2006 application would not review the decision of 15 March 2006, which was not appealed within 5 days from 25 March 2006 and which was res judicata.

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.

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.

The application was a “PETITION FOR ORDINARY JUDGMENT concerning settlement of financial aspects arising from the divorce procedure against [the wife].” It went on:

There is then set out the proposed “wealth adjustment” amounting to a total of £7.55 million (50% of three properties and £6 million in cash), which is said to be “in keeping with the conditions stated in the sections of the Matrimonial Causes Act cited in the legal grounds of this petition.”

On its face the petition concerned “settlement of financial aspects arising from the divorce procedure”, and “adjustments of wealth or assets.” It was an application that the court should order “an adjustment to the wealth of the now litigants in such a way that Mrs Kim Moore becomes sole owner of the two properties situate in Great Britain … and that situated in Marbella (Spain), with the handing over to her also of the sum of GBP 6,000,000.”

That the application concerned a division of matrimonial property is confirmed by the way in which the husband invited the Spanish court to take jurisdiction. First, the application of 24 April 2006 was based on Brussels II (not Brussels IIbis, which was by then in force, presumably because the application was treated as being made as part of the original divorce proceedings) and Article 22.3 of the Judicial Power Consolidation Act (LOPJ) which gives jurisdiction to Spain “in matters of personal and wealth relationship between spouses” or (in a different translation) “personal and asset relations between spouses” if both parties are habitually resident in Spain at the time of the petition.

Second, those legal bases were developed in the husband’s pleading of 13 June 2006 in support of his claim that the Spanish court had jurisdiction. The pleading claimed that jurisdiction existed by virtue of Brussels IIbis. The pleading emphasised (in bold) that this was a “procedure concerning financial adjustments between spouses arising from the divorce procedure”, and “IT IS A MATTER OF ADJUSTING THE WEALTH OF THE SPOUSES AS A CONSEQUENCE OF THEIR DIVORCE.”

The Spanish court in its judgment of 4 December 2006, holding that it had no jurisdiction to determine the 24 April 2006 application, described the application as “the settlement of the property consequences deriving from the litigants’ marriage” and a petition “pertaining to the property consequences of the litigants’ marriage”. It said that the objective of the court on such an application would be “to adjust the assets and liabilities of the marital partnership to reflect the new divorce situation.”

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.

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.

Article 27 of Brussels I (previously Article 21 of the 1968 Brussels Convention) provides:

If the proceedings had related to maintenance, whether the Spanish court would have had jurisdiction under Article 5.2 would have been a matter for the Spanish court: Case C-351/89 Overseas Union Insurance Ltd v New Hampshire Insurance Co [1991] ECR I-3317, [1992] QB 434. But it is noteworthy that the husband did not base the jurisdiction of the Spanish court on Article 5.2. It is clear from Professor Broto’s opinion that in his view there was no basis for jurisdiction under Article 5.2. He was not asked about the first limb (domicile or habitual residence of maintenance creditor) because it could plainly not apply, but he was asked about the second limb (ancillary to proceedings concerning the status of a person, in the court which, according to its own law, has jurisdiction to entertain those proceedings) and his opinion was in the negative, because under Spanish law the Spanish court no longer had jurisdiction to deal with “compensation”. It was only after the judgment of McFarlane J that the husband’s appeal in Spain claimed that the second limb of Article 5.2 applied.

The court decided that it had no jurisdiction “in as much as authority to deal with the matter rests with the courts of another State” because (a) Brussels IIbis did not apply since the divorce proceedings were ended; and (b) Article 22.3 of the LOPJ did not apply because the wife was no longer resident in Spain.

The appeal from that judgment is grounded on the argument that (a) the application is a continuation of the divorce proceedings, and Brussels IIbis applies since Spain is the last place of habitual residence of the parties and the husband still resides there; (b) Article 22.3 of the LOPJ applies because at the date of the petition the wife was still resident in Spain; and (c) the case is within Article 5.2 because the proceedings are ancillary to the divorce proceedings and the claim is regarded as maintenance under English law. The Spanish law experts agree that the appeal is likely to fail.

In answer to a question in the witness box Professor Broto’s opinion was that it was unlikely that an appeal in respect of the decision declining jurisdiction in relation to the application of 24 April 2006 would succeed. But the husband was challenging (within the framework of that appeal) the validity of the decision of 15 March 2006, and he was confident that the Supreme Court would determine that the judgment of 15 March 2006 contained procedural errors. Professor Broto’s opinion was that the decision of 15 March 2006 was incorrect and should have been challenged. The parties should have insisted on a petition for proceedings to be stayed in order to reach an agreement since Spanish law states that the agreement may be reached at any procedural moment. If an agreement between the parties been reached it would have been binding on the judge and he should have allowed the parties the possibility of reaching an agreement.

Consequently the most which the husband can say is that Professor Broto considered that in the present case the husband’s application dated 24 April 2006 and his appeal from the dismissal of that application on 4 December 2006 would be used by the appeal court to address the procedural errors that had been made by the judge in the Marbella court on 15 March 2006 and thus to address the issues of compensation. But the experts agree that it is too late to appeal from the order of 15 March 2006, and consequently the divorce proceedings cannot be the relevant proceedings for the purposes of Articles 27 or 28.

In view of our decision that the claim in Spain is not within Article 5.2 and that Brussels I is not engaged, it is not necessary to decide whether Article 27 of Brussels I applies where the court first seised has declared that it is without jurisdiction, but an appeal is pending. There are decided cases on the situation where the decision of the court first seised that it has jurisdiction is itself under appeal, such as William Grant & Sons International Ltd v Marie-Brizard & Roger International SA, 1998 SC 536. In such a case it is clear that the court seised second should not exercise jurisdiction.

The effect of an appeal from a decision by the court first seised that it has no jurisdiction does not appear to be settled by authority: cf Dicey, Morris & Collins, Conflict of Laws, 14^th ed. 2006, paras 12-047, 12-062; Briggs and Rees, Civil Jurisdiction and Judgments, 4^th ed 2005, para 2.205. It is true that a judgment for the purposes of Brussels I is final even if an appeal is pending: e.g. Articles 37 and 46. But the object of Article 27 is to prevent irreconcilable judgments, and as a matter of policy it would be very odd if proceedings in the court second seised could continue even if on appeal the jurisdiction of the court first seised is established. Consequently, we consider (contrary to the view of the judge) that Article 27 applies until the proceedings in the court first seised are finally determined in relation to its jurisdiction. That would mean that the expression in Article 27.1 “until such time as the jurisdiction of the court first seised is established” should be interpreted to include the case where the court first seised has declared that it has no jurisdiction, but an appeal is pending against that decision. and that it would be unsatisfactory for the matter to be dealt with through a discretionary stay in the court seised second.

The remaining question for the judge was whether he should set aside Baron J’s order or give the wife leave to make an application under Part III of the 1984 Act. McFarlane J decided that the wife should have leave. There is no dispute that, Brussels I apart, the judge had jurisdiction to grant the wife relief under the 1984 Act. The question is whether, on well-settled principles, this Court should interfere with the exercise of his discretion. Mr Singleton says he was wrong. We do not agree. McFarlane J was entitled to decide as he did and essentially for the reasons he gave.

Section 13 of the 1984 Act provides as follows:

Section 16 is in the following terms:

There is no need to rehearse the case-law. For present purposes it suffices to make three points. First, sections 13 and 16 have to be taken in conjunction: Jordan v Jordan [2000] 1 WLR 210, 218, per Thorpe LJ. So although the ultimate question for the judge is whether there is “substantial ground” for the application, in addressing that question the judge has to have to regard to “all the circumstances of the case,” including, in particular, all the matters referred to in section 16(2), with a view to considering “whether England and Wales is appropriate venue.”

Secondly, since the ultimate test is whether there is “substantial ground” for the application, it is not necessary for the applicant to establish either hardship or injustice in order to obtain leave: Jordan v Jordan [2000] 1 WLR 210, 221, per Thorpe LJ.

Thirdly, given the various factors referred to in section 16(2), and indeed the heading to section 16 itself, it is plain that the judge considering an application for leave has to have regard to questions of comity and forum (non) conveniens. As Thorpe LJ said in Jordan v Jordan [2000] 1 WLR 210, 220:

McFarlane J carefully analysed both the 1984 Act and the relevant case-law. He was prepared to assume in the husband’s favour, though as he made clear without making any finding on the point, that the wife had, as part of a carefully calculated scheme, deliberately avoided litigating the financial issues in Spain. He was, he said, unimpressed by the wife’s expressed naivety in the witness box. He described this as the wife’s Achilles heel. But he found the connection with this jurisdiction to be “overwhelming.”

McFarlane J correctly treated section 16(2)(f) as being of “prominence” in this case but equally properly held that it “is not the only or the automatically determinative factor.” He set out his conclusion as follows:

We can detect no error either in the judge’s approach or in his conclusion, unless it be that in certain respects he was prepared to approach the facts on a basis which was perhaps unduly favourable to the husband.

McFarlane J was plainly entitled to treat the connection with this jurisdiction as “overwhelming.” First, both the husband and the wife are English. They married and spent most of their married life here. Indeed, their marital life in Spain, before they separated, was measured not in years but in months – and only a few months at that. The main bulk of the marital wealth is in England. The husband remains “resident” in Spain but does not claim to be domiciled there. Secondly, neither party sought initially to litigate the financial issues in Spain – the husband’s attempt to do so was late in the day – notwithstanding, as Mr Singleton conceded, that it would have been open to the husband to apply in Spain for an order against himself just as a husband can in this country: see Dart v Dart [1996] 2 FLR 286. Thirdly, and this is a most striking fact, it is common ground that the Spanish court will apply the substantive law of the parties’ nationality. In other words, it is common ground that were the Spanish court to adjudicate upon the wife’s financial claims it would so by applying the provisions of the Matrimonial Causes Act 1973 and the principles in White v White [2001] 1 AC 596 and Miller v Miller, McFarlane v McFarlane [2006] UKHL 24, [2006] 2 AC 618.

In relation to that latter point, McFarlane J said this:

We do not agree. That was an approach unduly favourable to the husband. If McFarlane J was correct, as he was, to treat section 16(2)(f) as being of prominence in this case, then sections 16(2)(a) and (b) were on the facts at least of equal significance. The judge was entirely correct when he referred to “the nexus between this marriage, its finances and England” and to the “Englishness” of the wife’s claim. But there was another factor which was also highly relevant for the purposes of sections 16(2)(a) and (b). The parties’ connections with, respectively, England and Spain, are such that the Spanish court treats the law of England and Wales, the law of the parties’ nationality, as being the relevant governing law. So in the particular circumstances of this case the parties’ nationality and their consequential connection with English law, as the law governing their dispute, are both relevant highly factors when it comes to applying sections 16(2)(a) and (b).

At the end of the day Mr Singleton summarised his complaint as being that McFarlane J should have accorded very considerable weight to section 16(2)(f) and should have concluded that that factor outweighed the others. We do not agree. The judge rightly treated section 16(2)(f) as significant but he was entitled, and in our view correct, to treat it as not determinative. There were other very powerful factors pulling in the opposite direction which more than justified the judge in concluding that the wife should be given leave.

After argument we indicated that the appeal would be dismissed with costs. We expect that the costs judge will take account of what we have said about the excessive level of costs.

The appeal will therefore be dismissed.