Ahmed & Anor v Mustafa

Where a party to a marriage has taken a full part in contested financial provision proceedings, which have resulted in a comprehensive determination of all financial issues between the parties, what jurisdiction, if any, does the court in England and Wales have to prevent that person from seeking to pursue a fresh application for financial provision with respect to the same marriage in a foreign jurisdiction?

The question posed in the preceding paragraph is at the centre of this appeal which is brought by Aliye Ahmed, who was the petitioner wife in divorce proceedings against her former husband, Mehmet Mustafa, which were conducted in the Principal Registry of the Family Division here in London. On 13^th December 2011 His Honour Judge Horowitz QC, following a fully contested hearing, made a final order seeking to apportion ownership of various properties in England and in the country of origin of both parties to the marriage, which is the Turkish Republic of Northern Cyprus (“TRNC”). By express words within paragraph 4 of the judge’s order, neither party was entitled to make any further application in relation to their marriage in this jurisdiction “or in any other jurisdiction”.

Following conclusion of the divorce proceedings the wife permanently re-located from England, which had been the family home for much of the forty four years of marriage, back to her home country of TRNC and it was there, on 3^rd April 2012, that she issued a petition for divorce and a claim for financial provision which sought a greater share for herself than had been determined by HHJ Horowitz.

At around the same time in this jurisdiction a number of steps were undertaken. Firstly the wife had sought to appeal the December 2011 order, but her application for permission to appeal was refused by the Court of Appeal on 25^th April 2012. Secondly, in May 2012 a decree absolute was granted on the husband’s application, the wife having failed to apply for that herself. Thirdly, under the judge’s order of December 2011 the husband was required to transfer the ownership of a property, 21 Quested Court, to the wife. That property had been inherited by the husband on his mother’s death. In accordance with the judge’s order the husband made the required transfer to the wife on 18^th July 2012. Within five weeks of that transfer the wife herself had transferred the property on to her daughter by way of “gift”. Whilst there are other elements in the financial distribution package determined by the judge, the only one of those elements that it is necessary to make reference to at this stage is a requirement for the husband to pay a modest lump sum to the wife which, after credit being given for costs awards in the husband’s favour, was valued at £31,000. That lump sum remains unpaid.

On 18^th February 2013 HHJ Horowitz heard the husband’s applications for a range of orders designed to maintain the integrity of the financial provision determined by the English court and prevent the wife from re-litigating these matters in TRNC; he also heard an application by the wife to enforce payment to her of the lump sum. Having heard argument, albeit that the wife was not present but was represented by the daughter to whom 21 Quested Court had been transferred, the judge effectively granted each of the orders that the husband had sought. These were:

Before this court the wife seeks to appeal each of the five orders made against her by HHJ Horowitz in February 2013. In the course of presenting her appeal Mr Jonathan Southgate QC, who did not appear below, has mounted a strong challenge which questions the judge’s jurisdiction to make these orders. The challenge has been robustly defended by Miss Sarah Lucy Cooper, who had the advantage of having appeared before the judge at first instance at each of the important hearings.

It is not necessary to rehearse any further detail of the background at this stage. Such additional detail as may be relevant will be dealt with as it arises as I now turn to look at each of the five elements of the judge’s order in turn.

The judge dealt with the anti-suit injunction at paragraphs 32-41 of his judgment. Having reviewed the legal context, to which I will turn in a moment, the judge focussed upon the question of whether the wife, by instituting divorce proceedings in TRNC, had acted in breach of an undertaking that she had previously given to the English court. The undertaking had been given on 24^th June 2011 and involved the wife giving a promise to the court in the following terms:

“1.

Not to take any further steps in proceedings number…[earlier proceedings in TRNC] without leave of the English court.

2.

Not to bring any further proceedings in North Cyprus in relation to the properties in North Cyprus owned in whole or in part by either of the parties save with the leave of the English court.

3.

Not to deal with, dispose of, sell, charge, or diminish the equity of property owned in Northern Cyprus whether in whole or in part, whether owned solely or jointly by her, until further order or final order in these proceedings [identified by the case number of the English divorce proceedings]”

The transcript of the hearing before the judge shows that there was limited discussion as to the date upon which that undertaking will have expired. The reference to “final order in these proceedings” referred either to the making of the financial provision order in December 2011 or the granting of decree absolute in May 2012. If it were the latter, then the wife’s institution of fresh divorce proceedings in TRNC on 3^rd April 2012 would be a breach of the undertaking.

In his judgment, at paragraph 39, the judge concludes that there had been a breach of the undertaking. Mr Southgate argues that the judge was in error on this point and that the undertaking expired with the making of the final order for financial relief on 13^th December 2011. On that point I am not with Mr Southgate. Whilst the undertaking was not in precise terms, the financial remedy order could not come into full effect until the granting of the decree absolute, and could not have been enforced until after decree absolute had been made.

It had been argued before the judge on behalf of the wife that she had given the undertaking as a result of duress. The judge was not impressed by that argument. He rejected it as a reason for the wife now seeking to re-litigate these matters in TRNC. The judge therefore expressed his conclusion at paragraph 41 in these terms:

“It seems to me that it would be manifestly unfair for parties who in good faith, both of them submit to the English jurisdiction, to allow these proceedings to grind on, insofar as I have any control over it, in another jurisdiction, whose acceptance of the case has never been spelt out clearly to me, to apply different principles, and it would be, it seems to me, a denial of justice not to grant the anti-suit order, and I do so.”

Before this court there was no controversy as between counsel concerning the law relating to anti-suit injunctions.

In South Carolina Insurance Co. v Assurantie Maatschappij “De Zeven Provincien” NV [1987] AC 24 the House of Lords held that, although the power of the High Court to grant injunctions under [Senior Courts] Act 1981, s 37(1) was very wide, it was, in effect, limited to two situations:

Relying upon the Court of Appeal decision in the case of Masri v Consolidated Contractors International (UK) Limited and ors (Number 3) [2009] QB 503 Mr Southgate submitted, and Miss Cooper agreed, that, in the context of anti-suit injunctions, the two situations described in South Carolina Insurance Company can be characterised as:

Mr Southgate submitted that this case fell within the second aspect of this characterisation. He accepted that a mere choice of England as the most appropriate forum was insufficient ground to establish a permanent anti-suit injunction (see Société Nationale Industrielle Aerospatiale v Lee Kui Jak [1987] AC 871 which established that the proceedings must have the character of being vexatious or oppressive in order to be held to be “unconscionable”).

Against the background of the law that I have described, Mr Southgate’s submission was that the circumstances of this case fall well short of being “unconscionable”. In seeking to make good that submission he argues that the principle of a party going through financial remedy proceedings following divorce in one jurisdiction, but then seeking additional financial provision in relation to the same marriage in another jurisdiction was, of itself, neither objectionable nor impermissible as a matter of international law. By way of example Mr Southgate points to part III of the Matrimonial and Family Proceedings Act 1984 [“MFPA 1984”] which permits the English court to entertain a further application for financial relief in circumstances where a court in a foreign jurisdiction has already purported to make such orders. The legality, in international terms, of the English court’s jurisdiction under part III of MFPA 1974 was considered by the Supreme Court in Agbaje v Agbaje [2010] UKSC 13, [2010] 1 AC 628. At paragraph 52 of the judgment of Lord Collins of Mapesbury, delivering the judgment of the court, the following is stated:

“There is nothing internationally objectionable in legislation which gives a court power to order financial provision notwithstanding a foreign decree of divorce, whether or not the foreign court has ordered financial provision, provided that the forum has an appropriate connection with the parties or their property.”

Mr Southgate argues that, by extrapolation, it is not internationally objectionable for a foreign country to revisit financial relief subsequent to the English court having made a substantive order. So, he argues, as a matter of international law, there is nothing inherently “unconscionable” for a party to act as his client has done in this case. He also argues that the express endorsement given by the Supreme Court to the jurisdiction under MFPA l984 part III is sufficient to distinguish financial remedy orders from other types of cases where the English court must recognise foreign judgments as being determinative of their subject matter on principles of res judicata (and this case is therefore distinguished from the general run of cases in the second category identified in Masri).

Turning from the general to the particular, Mr Southgate argues that this couple have a very strong connection with TRNC. It is their home country. And, although they have lived for many years in England, it remains their domicile. They have each maintained property there, and, according to the judge’s findings, it is where they each intend to live out their days. Mr Southgate asserts that the TRNC proceedings are principally concerned with the properties that are located in that jurisdiction, although it is the case that the wife’s proceedings seek to obtain orders in relation to all of the matrimonial assets, including those outside TRNC. Be that as it may, Mr Southgate claims that the TRNC proceedings are justified on the grounds of efficacy as the enforcement of the English order in relation to the TRNC properties is likely to be questionable in the absence of orders made by the court in TRNC.

Although Miss Cooper accepts the legal parameters as described by Mr Southgate, she stresses that, on the facts of this case, it is indeed unconscionable for this wife now to seek to re-litigate these matters in TRNC. It was the wife who initiated the English proceedings. She was the petitioner, she applied for financial remedy and she contested the process at first instance and attempted to re-open matters before the Court of Appeal. She gave an undertaking to the English court not to pursue matters in TRNC pending a final order and she gave no indication during the English hearings that she would issue fresh TRNC proceedings once the English case had concluded.

In the course of his oral submissions Mr Southgate criticised the judge for failing to analyse the nature of the jurisdiction to grant an anti-suit injunction, or to respect the rarity of its use. He also questioned the value of an injunction where there is currently no asset in the wife’s name in England and Wales (save for the Quested Court property if the transfer to the daughter is set aside) other than the lump sum payment. Finally, although the situation seems to be ambiguous, it is possible that the wife’s status as a divorced woman under the English order will not be recognised in TRNC without there being a decree of divorce pronounced by the TRNC court.

Although Mr Southgate makes out an attractive and strong case, I am not persuaded that the judge lacked jurisdiction to grant an anti-suit injunction in these proceedings. Plainly, as the case law establishes, the High Court does have jurisdiction to restrain a litigant, in personam, from re-litigating matters in a foreign jurisdiction where it is unconscionable to do so. Mr Southgate easily establishes that the subject matter of these proceedings does not, of itself, render an attempt at foreign re-litigation “unconscionable”. Indeed, Agbaje v Agbaje establishes that such a follow on jurisdiction as is represented by MFPA 1984, Part III is internationally acceptable. But that state of affairs does not rule out the existence of cases where, on the facts of the case, it is indeed unconscionable to contemplate either party seeking to have the very same issues re-determined before a different court.

When considering whether or not the wife’s actions, or proposed actions, in the courts of TRNC fell to be categorised as vexatious and oppressive, I consider that the judge was entitled to hold that her actions were prima facie of that quality, unless they could be justified. In the circumstances of the case no such justification was established.

Although the section of the judgment dealing with the anti-suit injunction gives some prominence to the question of whether or not the wife was in technical breach of her undertaking by issuing the Cyprus divorce proceedings, it does not appear that the judge regarded a finding of breach as being a necessary jurisdictional requirement before he could make an injunction or that the finding of a breach automatically led to the granting of an injunction. Looking at the judgment as a whole, the judge, by the various strategies that he endorsed, for example setting aside the transfer of property to the daughter and staying the enforcement proceedings on the lump sum, sought to use such measures as he contemplated were in his jurisdictional armoury to thwart the wife in, or persuade her to desist from, re-litigating these matters in a manner which he considered was “manifestly unfair” and “a denial of justice”. Both of those phrases plainly indicate a finding of unconscionability.

Notwithstanding the fact that there are limited capital assets in this jurisdiction on which any enforcement proceedings might bite, and notwithstanding the fact that the wife may not return to this jurisdiction so as to involve her personally in any contempt proceedings, I consider that the judge was justified in imposing the injunction in order to do what he could by such an order to dissuade her from continuing her proceedings in TRNC and also to send an important message to the court in TRNC to the effect that the English court took a serious and adverse view of the wife’s conduct in seeking to re-open these matters.

In short I consider that the anti-suit injunction granted by the judge was one that was within his jurisdiction, was proportionate and necessary when seen in the light of the wife’s conduct having given her one hundred per cent commitment to the English process and was a step that was well within the judge’s margin of discretion. I would therefore dismiss the wife’s appeal against the anti-suit injunction.

Having dealt with the generality of the anti-suit injunction, I deal briefly with the discrete point relating to the question of whether the injunction should be relaxed so as to permit the wife to take limited proceedings in TRNC for the purpose of obtaining a divorce that would be recognised in that jurisdiction. If there were clear evidence that the courts in TRNC do not recognise the existing English decree of divorce, then I would accept that grounds may exist for removing the injunction insofar as it prevents proceedings with respect to determination of that discrete and single issue. However, we have not been taken to sufficiently clear and cogent evidence on the point. It remains open to the wife, should she wish to do so, to produce such evidence to the English court on an application to vary the injunction which can be made at first instance, albeit to a judge other than HHJ Horowitz who has now retired.

Matrimonial Causes Act l973, s 37(1), (2) and (5) state as follows:

“(1)

For the purposes of this section “financial relief” means relief under any of the provisions of sections 22, 23, 24, 27, 31 (except subsection (6)) and 35 above, and any reference in this section to defeating a person’s claim for financial relief is a reference to preventing financial relief from being granted to that person, or to that person for the benefit of a child of the family, or reducing the amount of any financial relief which might be so granted, or frustrating or impeding the enforcement of any order which might be or has been made at his instance under any of those provisions.

(2)

Where proceedings for financial relief are brought by one person against another, the court may, on the application of the first-mentioned person—

(a)

if it is satisfied that the other party to the proceedings is, with the intention of defeating the claim for financial relief, about to make any disposition or to transfer out of the jurisdiction or otherwise deal with any property, make such order as it thinks fit for restraining the other party from so doing or otherwise for protecting the claim;

(b)

if it is satisfied that the other party has, with that intention, made a reviewable disposition and that if the disposition were set aside financial relief or different financial relief would be granted to the applicant, make an order setting aside the disposition;

(c)

if it is satisfied, in a case where an order has been obtained under any of the provisions mentioned in subsection (1) above by the applicant against the other party, that the other party has, with that intention, made a reviewable disposition, make an order setting aside the disposition;

and an application for the purposes of paragraph (b) above shall be made in the proceedings for the financial relief in question….

(5)

Where an application is made under this section with respect to a disposition which took place less than three years before the date of the application or with respect to a disposition or other dealing with property which is about to take place and the court is satisfied—

(a)

in a case falling within subsection (2)(a) or (b) above, that the disposition or other dealing would (apart from this section) have the consequence, or

(b)

in a case falling within subsection (2)(c) above, that the disposition has had the consequence,

of defeating the applicant’s claim for financial relief, it shall be presumed, unless the contrary is shown, that the person who disposed of or is about to dispose of or deal with the property did so or, as the case may be, is about to do so, with the intention of defeating the applicant’s claim for financial relief.”

The judge dealt with the application to set aside the transfer of Quested Court at paragraphs 43 and 44 of his judgment.

“It is also plain that the transfer of the Quested Court property is capable of being caught within s 37, because it may be that the parties will be faced in due course with some sort of fait accompli by proceedings in the TRNC requiring some adjustment of the English monies. The obvious candidate, it seems to me, is that transfer made within days as a gift, but [with] the presumption running that it was a device, which I have no hesitation as finding made out, and therefore within section 37 (2) (c). [The judge then gave a summary of s 37 (2) (c) and continued] I find that Quested Court is caught in that snare and I do direct, although there has not been full notice I think this matter has been before me for the second or third time on this issue, if not the fourth, I made an order setting aside that transaction forthwith.”

The judge did not deal separately in his judgment with the subsequent order made freezing the ownership of Quested Court in the wife’s hands pending resolution of the pending proceedings in TRNC, however, that step was entirely in tune with the overall thrust of his judgment which was to do what he could to maintain the control of such assets as remained in England pending the resolution of the TRNC proceedings and pending the need for the court to re-visit the issue of the matrimonial finances in the light of any substantive orders that the foreign court might make.

Mr Southgate makes a number of points in support of his submission that the judge was in error as a matter of procedural fairness in making any orders under section 37 at that hearing and in any event was prohibited, as a matter of law, from exercising the s 37 jurisdiction with respect to this property on the facts of this case. I propose to deal with the question of jurisdiction first, for, if Mr Southgate is right on this point, the question of procedural fairness falls away.

Mr Southgate’s central argument is that section s 37 is directed to extant applications for financial remedy, not, as here, applications for financial remedy which have been concluded.

In order to come within s 37(2)(c), which applies where an order has already been obtained for financial relief, the applicant must show that the other party has made a reviewable disposition with the intention “of defeating the claim for financial relief”. Section 37(5) provides that a disposition to which the subsection applies will be presumed, unless the contrary is shown, to have been for the purpose of defeating the applicant’s claim if “the disposition has had the consequence of defeating the applicant’s claim”. In short terms Mr Southgate’s submission is that these provisions simply cannot apply to circumstances where the court has made a final order in financial relief proceedings and, by that order, has provided for the transfer of the relevant property into the hands of the other party even where, as here, the other party has gone on then to make a disposition of the property. The disposition in this case was made in consequence of an order, rather than in some manner which would either defeat the enforcement of the order or defeat “the applicant’s claim” which had, by then, come to an end with the making of the final order.

In making her oral submissions to this court Miss Cooper was realistic as to the prospects of countering Mr Southgate’s argument. She told the court that, in reality, she, on behalf of the husband, had not actually made any application for the setting aside of the Quested Court transfer to the daughter. In terms she accepted that the circumstances of this case fell outside MCA 1973, s 37 and the judge’s purported exercise of the jurisdiction under s 37(2)(c) setting aside the disposition could not stand.

Miss Cooper’s concession is realistic and plainly right. With the conclusion of the financial remedy proceedings and the making of a final order, the wife’s transfer of the property given to her by that order to her daughter cannot come within the terms of section 37 and the judge’s order in that regard must therefore be set aside. It follows that the injunction against the wife in dealing further with that property, once it reverted to her under the section 37 order, falls away. Miss Cooper accepted that it would be difficult for the court to make a fresh freezing injunction against the daughter at this stage because it is not possible to identify any jurisdiction that a future court would have to set aside the transfer or in some other manner supplant the daughter as the legal owner of the property.

One of the applications before the judge was that of the wife seeking enforcement of the balance of the lump sum payment to her as provided in the final order. The judge dealt with the husband’s application for a stay on the wife’s ability to enforce the lump sum payment at two passages in his judgment, paragraph 36 and paragraph 42. At paragraph 36 he said this:

“The husband says he wants to restrain the wife, she should not have the fruits of the £31,000, she is in breach of her undertaking, and she is continuing in a way which is re-running the litigation to deprive him of his legitimate rights. On the Hadkinson principle, which was considered by Mr Justice Ryder in Mubarak [2004] 2 FLR 932, she cannot be heard raising her own claim to the £31,000 where she is in breach of law.”

At paragraph 42 of his judgment the judge described his approach in these terms:

“…I do not think it sits well in the mouth of the wife to complain, as she otherwise would be entitled to do, for the delay in the payment of the £31,000 odd owed to her while she is running a second front in a new war, with a new army, in a new military doctrine in the court in Kyrenia. Nobody knows when it is going to come on. On Hadkinson principles, as explained by Mr Justice Ryder in Mubarak, I hold justice requires that I order a stay.”

With respect to the stay Mr Southgate makes short submissions. Firstly, insofar as the judge found the wife had breached the undertaking and that this justified the granting of a stay, the judge was in error as the undertaking expired on the making of the financial remedy order on 13^th December 2011, rather than on the making of the decree absolute on 25^th May 2012.

As I have already indicated (paragraph 10) I would hold that the undertaking remained in force until the decree absolute was granted. Be that as it may, I do not read the judgment as being so narrowly based. The judge was seeking to hold the financial situation in England by whatever legitimate means were open to him because, as I have already observed, he regarded the wife’s conduct as “manifestly unfair” and “a denial of justice”.

In response Miss Cooper submits the court plainly had power not to accede to the wife’s application to enforce the lump sum payment in the circumstances that then existed.

On this point I consider that Miss Cooper is plainly right. Whether or not to enforce the lump sum order was a matter over which the judge could exercise his discretion, he was entirely justified in the adverse view that he took with respect to the wife’s conduct and on that basis his decision to refuse to enforce the lump sum payment, at least until there was clarity and resolution of any proceedings in TRNC, was within that discretion and does not fall to be set aside on appeal by this court.

Paragraph 5 of the judge’s order is in these terms:

“5)

The petitioner’s deemed application to re-open and/or set aside the order of 13^th December 2011 is refused on the basis of:

(a)

the dismissal of her application for permission

to appeal on 4^th April 2012;

(b)

the lapse of time; and

(c)

absence of any documentary or factual material to

support her assertions of financial irregularity”.

On this point Mr Southgate’s submissions, whilst again short, are nonetheless effective. They are:

a)

The wife was not present at the hearing on 18^th February 2013.”

b)

She had not issued an application to set aside the final order.

c)

It was not open to the judge to deem such an application as made, nor to proceed to determine and dismiss it in her absence without receiving any evidence.

In response Miss Cooper submitted that the wife had, at every hearing, asserted a lack of disclosure on the part of the husband, but had never put up any evidence in support of that assertion. She therefore submitted that the judge was entitled to treat these repeated assertions as “applications” and seek to put an end to them by the terms of paragraph 5 of the order.

On hearing that submission it seemed to me that, if that were the judge’s intention, a more appropriate means of dealing with the situation would have been to include a paragraph in the order along the following lines:

“Any application for relief based on an alleged failure of the respondent to make full and frank disclosure be made by notice under Family Procedure Rules 2010, Part 9 and supported by evidence.”

In circumstances where the wife had simply not made an application to re-open and/or set aside the order and where, as a matter of law, she could not do so in this context without establishing material non-disclosure it was, in my view, unnecessary for the judge to insert paragraph 5 into his order. Further, for the reasons given by Mr Southgate, this was not a proper process to adopt. I would therefore set aside paragraph 5 of the judge’s order. Although, as I have indicated, I consider that the matter might have been dealt with by way of a recital to the order, the reality is that should the wife wish to have the English order set aside for material non-disclosure she will have to issue a formal application which will have to be supported by evidence. In the circumstances, it is therefore otiose at this stage to insert any recital on this topic into the order.

Having now dealt with each of the issues raised in this appeal in turn, I will simply summarise the outcome:

Finally, pending the determination of the appeals with respect to the individual elements of the judge’s order, it was premature for this court to hear submissions as to the costs order made at first instance or, of course, the costs of the appeal. If my lord and my lady agree, I would propose that the parties should now make written submissions on the question of costs at first instance and pursuant to this appeal.

I agree

I also agree.