JKN v JCN

This matter concerns the application made by JCN (the Respondent husband) for a stay of the divorce proceedings issued in this jurisdiction by JKN (the Petitioner wife).

The wife issued her divorce petition here on 20^th May 2009, the husband filed an acknowledgement of service on 11^th June 2009 confirming that he did not intend to defend the proceedings here but stating that New York was the appropriate forum. On the 5^th June 2009 the husband issued a summons for divorce proceedings in New York and on 12^th June 2009 the husband issued his application to stay the divorce proceedings here to allow the New York proceedings to proceed.

At the same time as the wife issued her divorce petition here she sought, and obtained, a freezing order relating to the husband’s assets. She also issued her Form A seeking financial provision and an application for maintenance pending suit. In response to the husband’s divorce proceedings in New York and his application for a stay the wife issued an application for a Hemain injunction restraining the husband from taking any further steps in the New York proceedings.

This application potentially raises an important legal issue that I am asked to determine; namely, whether this court is prevented from exercising its discretionary jurisdiction to stay the English divorce proceedings issued by the wife by the operation of Article 3 of Council Regulation (EC) No 2201/2003 (hereafter “BllR”) and the case of Owusu v Jackson C-281/02 [2005] All ER (D) 47; [2005] ECR 1 - 1383 (hereafter “Owusu”).

This is an issue that has been the subject of some considerable academic debate and comment. I am told that whatever my decision there is likely to be an appeal and possibly a referral to the ECJ.

The case was listed before me on 15^th March 2010 with a 5 day time estimate (it was released to me by a Judge of the High Court for the purposes of avoiding it coming out of the list). The first day was a reading day. I heard the oral evidence of the parties and, by video link, their respective experts who are based in New York. The documentation in the case is voluminous, running to some 6 lever arch files with an additional 3 lever arch files of authorities. I have had the benefit of extremely full opening and closing documents, produced through the industry of both legal teams, for which I am very grateful. I have read the court bundles and considered the authorities and academic material I have been referred to. The court had the benefit of daily transcripts during the hearing of both the oral evidence and submissions.

It is a matter of some regret that the combined legal costs in this case have reached a staggering £900,000, even at this preliminary stage (this is the husband’s estimate and includes the stay application, the freezing order application and the application for maintenance pending suit). This is not a big money case; the assets are about £7m (less tax) and the husband’s net income in the region of £1m (including bonus). I would sincerely hope that, despite the interest in the legal issue I have outlined, once this jurisdiction issue has been determined serious attempts will be made to agree the financial aspects before there is any further damaging erosion of the relatively limited available assets through increased legal costs, which are already so alarmingly high.

Much of the essential background is not in dispute. Both the husband and wife are American by origin; both having been born and brought up in New York. The wife is 40 years and the husband 43 years. They married on 6^th July 1996. By that stage the husband had moved to London to take up a post with M Bank, which he started in May of that year. Following their marriage, the wife joined the husband in London and they lived here until 2008.

They have four children; two boys (9 and 8 years old respectively) and two girls (6 and 3 years old respectively). Prior to the birth of the children the wife worked for various news organizations. She did not return to work after the birth of her first child. The children were all born in London and, once of the relevant age, started attending school here.

The husband and wife applied for, and were granted, British citizenship and British passports in 2004. The children have dual UK and US nationality from birth.

During the whole of their time here the family lived in a number of rented properties in London. They considered purchasing a property here but, in fact, remained in rented accommodation.

The husband left M Bank in 2000/2001 and co-founded a mortgage intermediary based in London. In 2001 the husband joined D Bank as Commercial Real Estate Director for Europe. He continues to work for the Bank, albeit now in a different role.

The husband travelled extensively with his work. The pattern appears to have developed that the parties would return to New York each year during the school holidays, usually the summer holidays, rent holiday accommodation and visit family and friends, whom they sometimes stayed with. The wife’s parents live in a County in New York State, her brother lives in New York and her sister in Los Angeles. The husband’s parents and brother also live in New York State. At one stage they considered purchasing a property in New York as a holiday home to use during these holiday visits, but did not proceed with this plan.

It is clear from the evidence I read and heard that the marriage was in some difficulty by 2007. It transpired during the oral evidence that the parties (separately or together) had had marriage counselling and/or therapy for a number of years, either based here or by telephone or in person during holiday visits to New York. In her oral evidence the wife referred to marital therapy in 2005 in London and some that took place in 2003. As the wife said in her oral evidence, ‘I think [JCN] acknowledges in his affidavit that we went through rough patches, generally probably about the births of the babies, there is a lot of care involved, a lot of time. During none of these times did we ever up-stick at that point and leave London though.’

The husband states in his written evidence that the wife requested periods of separation in the latter part of 2007 and that she said she expected that separation to end in a divorce. The wife said this is taken out of context, it was a general discussion about separation that could end in divorce; it was not a discussion about their circumstances. It was suggested to the wife that at this time she was feeling ‘semi-detached’ from the marriage; she said she felt there was something wrong but she ‘could not put my finger on what.’ It was suggested to her that seeking to meet an old college friend without informing the husband was symptomatic of the poor state of the parties relationship, she denied that.

It was around this time (late 2007/early 2008) that the parties were considering whether to move to live in New York. There is a dispute as to who took the lead on this. It is the wife’s case that she was tricked by the husband into returning to live in New York. She says if she had known that the husband was continuing his relationship with MD she may have made a different decision. He told her the relationship was over. She said in evidence that she hoped the move back to New York would be with a view to them getting back together; she said the husband had told her that he would secure a job that would be based in New York by no later than February 2009. She said if she had known about the continuing relationship between the husband and MD the position may have been different; she may well have stayed here and not disrupted the children’s education. She did not accept that she would have moved back anyway, that the children were moving schools anyway and she sought the support of her family who lived in New York.

The husband’s case on the move back to New York was that it was the wife who was pressing to return to New York, she had never really settled here and they had lived, what he described as an expatriate life. According to him, his wife had pressed him to get a transfer within the bank, or another job, based in New York.

During this hearing Mr Scott QC, on behalf of the husband, sought to present a more moderate position regarding the move to New York. He referred to various emails (relating to proposed schooling for the children) where he said the husband demonstrates that he was equivocal about the move, was not pressing for it to happen and what the emails show in reality are two parents seeking to find the best solution for the education of their children.

In August 2007 it is common ground that the husband met MD in Moscow whilst on business, and soon thereafter began a relationship with her. The wife remained in ignorance of the existence of this relationship until January 2008 when she discovered some earrings and a large amount of cash under their bed at the family home in London. The husband admitted his relationship with MD and told the wife it was over.

As mentioned earlier, by the end of 2007 the parties were thinking seriously about a move to New York. The wife says the husband said that he would be getting a job in New York and that she should explore looking at New York schools. The wife said the ‘driving force’ was the husband saying he was going to be based in New York and she did not want to be left behind. In his affidavit sworn on 20^th January 2010 at paragraph 34 the husband said ‘I repeat that whilst I advocated the move to New York, it emerged over time in discussions between us.’ The wife accepted that there were other considerations including whether the American schools would be better for their eldest son. There were a number of emails around this time to various schools in New York, and the wife’s family provided some assistance in this search. The husband said in his affidavit sworn on the 6^th November 2009 at paragraph 18 ‘In early 2008, the Petitioner and I decided that it felt like the right time for us to go home; that it would be best for the children and for the sake of our marriage.’

After the discovery of the relationship between the husband and MD there were a number of emails written by the wife which illustrate the extent of her distress at the discovery of the relationship. As she said, she was ‘in extremis’ during that time. There is one email at this time that the husband places reliance upon as not only showing the volatility of the wife’s frame of mind and that she was, in part, the instigator of the move to New York. There was a suggestion on behalf of the wife that the husband had forged the email but that allegation was not pursued and was withdrawn. The wife does not recall sending the email.

The parties continued making enquiries about schools in New York and kept the schooling options open here. The parties travelled to New York in April 2008 to enable the boys to sit the ERB examination (to enable them to apply for schools in New York). In the early part of 2008 there was some uncertainty about the job in New York and the husband said he was reluctant to commit himself to anything until he knew that schools had been organised in New York. The wife said she feared being left behind; the husband told her he was going to get a job in September 2008, as time went by he said it was February 2009 at the latest. She said she believed the marriage was ‘intact’, they were in therapy and, according to the wife, the husband was telling her he was committed to the marriage.

There were a number of emails in the spring/summer 2008 when the parties expressed views about the various schooling options for the children here and in New York e.g. the husband liked the response from a school in London regarding provision for their eldest son (he had been accepted into that school and another London school from September 2008) and the wife said in her oral evidence her concerns about the proposed school in New York. In June 2008 their eldest daughter secured a place at a nursery school in New York which would help access other schools there. An indication of the uncertainty about the situation is illustrated by the fact that the wife took their eldest daughter to a Girls’ Prep school welcome tea in London in July 2008 in preparation for her starting classes there in August 2008.

In fact the wife and children flew to New York on 11^th July 2008 on return tickets having not reached a final decision on schooling for the children from September. The house in London had not been packed up and they were intending to return to London. Whilst the wife and children were en route to New York confirmation came through that the boys had places at a school in New York. The parties then decided to accept the places at that school. The wife said in evidence that she felt under some pressure about that, particularly as the deposit required to secure the places at that school was $10,000. By the end of July the wife was in contact with letting agents in New York making enquiries about suitable accommodation. The children started at their schools in New York in September and in fact the children have not returned to London since.

The wife returned to London for a few days in August to pack up the house in London. She said that the husband had promised that he was still committed to the marriage at a therapy session in London and his plans were to move to New York. In her affidavit sworn on 30^th November 2009 paragraph 100 she stated ‘At our marital therapy session with [the therapist] on 22^nd August 2008 [JCN] confirmed repeatedly that he was committed to our marriage. He specifically promised that he would be working in New York at the very latest by February 2009, that he was entirely committed to our marriage, that he was not involved with any other woman and that he would not commit any indiscretions. It was on the basis of [JCN’s] promises that I finally agreed to move to New York.’ The wife said it was after that session that the moving agents were instructed to carry out the international house move and the school places in London were cancelled. She returned for a short period in early September to pack up their London home.

The wife returned to New York and settled the children into their new schools. After a period living in serviced apartments they rented accommodation in Manhattan from December 2008. The husband rented serviced accommodation in London and stayed with the family when in New York until May 2009 when he moved out of the rented Manhattan apartment. He now has his own rented accommodation elsewhere in Manhattan and states ‘I am no longer habitually resident in England and Wales’ (paragraph 66 affidavit 20^th January 2010).

In fact the husband did not secure the move of job to New York until July 2009. Prior to that he was spending about half of his time in New York and the rest of the time away either in London or other locations.

On 11^th May 2009 the husband requested (at a joint counselling session in New York) a separation for four months; according to the wife, he requested a complete separation in that the parties would have no contact and this included the husband not having any contact with the wife. According to the wife the husband stated that neither party should have any intimate relationship with anyone else during this period. The husband denied they had discussed that sort of detail. However there was, as I understand the evidence, a separation and in fact the husband continued to see MD.

In May 2009 the wife discovered that, unbeknown to her, the husband had continued his relationship with MD. She had moved to London to start a course in February and stayed until June 2009. She went back to Russia for the summer and returned to London in September 2009 until December and then was back for a short period in February 2010. In reality during that time she was living with the husband in London when he was there. Their relationship continues and she was in fact in New York for about a month during this hearing. He said in evidence if there was going to be a long term relationship with her that would be in New York.

The wife issued divorce proceedings in the Principal Registry of the Family Division on 20^th May 2009. When asked in her evidence why she issued them here she replied ‘I was advised that I couldn’t issue proceedings in New York and at the time that I issued [JCN] was living here, [JCN] has conceded he was a resident, a habitual resident here. The almost entirety of my marriage was in London. I am a UK citizen. My children were all born here. They are all UK citizens. My children were all born here. They are all UK citizens as well, they have all been to British schools her and at that point it was to me the place to proceed.’ She said she had been advised she could not issue in New York as the residency requirements in New York had not been fulfilled. On the same day the wife sought a freezing order and issued ancillary applications, including her Form A. Freezing orders were made on the 21^st May and the husband was served with the proceedings on the 22^nd May at Nassau airport in the Bahamas where he had gone on holiday with MD. On the 4^th June the wife applied for maintenance pending suit and an A v A order, this application was listed on the return date of the freezing order, the 15^th June.

On 5^th June the husband issued a summons for divorce proceedings in New York. On the 11^th June he completed the acknowledgement of service within the divorce proceedings issued here stating that he accepted jurisdiction and indicating that he did not intend to defend the proceedings in this country. On 12^th June the husband issued his application to stay the proceedings in this jurisdiction. On the same day the wife issued a summons for a Hemain injunction to restrain the husband from taking any further proceedings in New York.

On 15^th and 16^th June the matter came before Mrs Justice Black. She made comprehensive directions, including:

On 25^th June the husband received a contract of employment in the US to begin in July 2009 in a senior management position (Americas). This required him to be based in New York. His job changed again in early 2010, when he was appointed to a more senior management position (Global) at D Bank. He said in evidence that in reality it made little difference as the bulk of his previous responsibility at D Bank was based in America.

The freezing order was discharged by Mrs Justice Eleanor King on 28^th July 2009 by consent, upon compliance with the terms of the agreement reached at the hearing before Mrs Justice Black on 15^th and 16^th June.

The current position is the wife remains in rented accommodation in New York with the children. The husband is in serviced accommodation in New York. The children are all in full time education in New York and neither party has any plans to move and, in particular, there are no plans for either the husband or the wife to return to live in this country.

The expert evidence was filed; Mr Sheresky on behalf of the wife and Mr Mantel on behalf of the husband. I heard both these experts given oral evidence during the hearing, by video link with New York. They both have impressive CVs setting out their expertise in matrimonial law in New York.

The focus of their evidence was on the validity of the action for divorce issued by the husband on the 5^th June in the Supreme Court, New York County seeking a divorce on the ground of cruel and inhuman treatment and ancillary relief including custody of the children, a declaration of separate property, title to his separate property, equitable distribution of marital property and counsel fees. No further judicial proceedings have been taken since the issue of the summons and the service of a ‘Notice of Appearance’ by the wife’s New York counsel on 6^th July. No complaint has been filed in those proceedings specifying the jurisdictional basis upon which the husband is relying or setting out the alleged cruel and inhuman treatment of him by the wife or setting out the basis on which he is seeking custody of the children. This is in accordance with the agreement reached by the parties that no further step should be taken in those proceedings until this application is determined. The husband’s draft complaint in the New York proceedings was made available to these experts (although only seen for the first time by the wife’s advisers and Mr Sheresky on receipt of Mr Mantels’ report on 15^th January 2010).

In summary, Mr Sheresky’s position was that the husband’s New York proceedings contravened section 230 of the Domestic Relations Law; to be granted a divorce in New York the husband must either demonstrate that New York’s residency requirements (12 months prior to the issue of proceedings, per s 230) have been met or prove the New York domicile of either party. He said when the husband commenced his action in June 2009, neither party had been resident for a year and he did not consider the domicile requirement was established. It was his view that the failure to meet these requirements dealt a fatal blow to the husband’s divorce action, although he accepted, in answer to a question I put to him, that the proceedings remained valid until a motion to strike out was determined.

Mr Mantel did not dispute the statutory provision referred to. He contended that any defect can be cured by subsequent amendment after the 12 month period had passed. He relied on a case called Lacks v Lacks 41 NY2d 71, 390 NYS 2d 875 (1976)7. I have a copy of the judgment of the Supreme Court of New York, Appellate Division, First Department decided in December 1975 and the Court of Appeals of New York decided in December 1976. The brief circumstances of that case was there had been extensive litigation over a number of years (the Defendant is recorded as having had 32 attorneys since the litigation began and there had been a number of previous appeals) with the Defendant seeking to vacate the grant of the judgment of divorce made in 1970. In this appeal the Defendant sought a late challenge to the judgment on the basis that the residency requirement in s 230 was not satisfied when the judgment was made 5 years previously. Section 230 had been amended during the course of the litigation; the amendment, as I understand it, introduced the 12 month residency requirement and permitted a grant of divorce upon proof of cruel and inhuman treatment; prior to that the law only permitted a judgment of separation in such circumstances. Mr Mantel relied on this case as being authority for the court to permit subsequent amendment of a complaint to cure any failures to meet the 12 month residency requirement at the time of issue. The end of the Opinion of the Appellate Decision First Department states ‘Under the circumstances, therefore, the continued residency, after the action was brought, and prior to entry of a decree, gave the court jurisdiction to permit amendment of the complaint. Indeed, to hold otherwise, would exalt form over substance since plaintiff could have instituted another action seeking to dissolve the marriage at any time after he completed the one year residency requirement, was improperly given retroactive effect herein, i.e. to the date of the original action for separation and that there was jurisdiction to grant the divorce.’

Mr Sheresky did not consider the case of Lacks overrode what he said was the plain language of s 230, which necessitated 12 month residency before divorce proceedings could be issued. He said Lacks was easily distinguished on its own facts and had not, to his knowledge, been relied on since 1976 for the proposition being advanced by Mr Mantel. Mr Sheresky relied on the concluding part of the opinion in the Court of Appeal which stated ‘In concluding the jurisdiction-competence issue it is not assumed that the courts in the action made any error of law or fact in determining the durational or initial residence requirements to maintain an action for a separation or divorce. Nor is it assumed that the same courts did not consider and determine the issues of residence, whether or not raised by the wife. On the contrary there was considerable evidence of residence by the husband, and the court obviously determined that the husband had some residence even if not of the duration to satisfy the matrimonial statutes. The point is that the litigation having gone to final judgment, the right to review by appeal having been exhausted, this is and should be the end of the matter.’

Mr Mantel’s oral evidence conceded, in relation to any motion to dismiss the husband’s action being made by the wife, that ‘it is critically important to focus on when the motion to dismiss would be made. Again if [the wife] moved to dismiss the New York action in June shortly after the summons was filed claiming that she or [the husband] did not then meet the 230 requirements she may have and probably would have prevailed.’ It is right to record, due to the Hemain order made in these proceedings, neither party has been able to take any steps in the New York proceedings.

During the course of his oral evidence it appeared Mr Mantel was reading from a document (draft complaint in the New York proceedings) which was different than that which appeared in the bundle in these proceedings. Upon further investigation it appeared that, unbeknown to the husband’s legal team here, there had been exchanges of emails between Mr Mantel and the husband’s New York lawyer Mr Wrubel. Those email exchanges were disclosed and it is apparent that Mr Mantel had twice drawn to the attention of Mr Wrubel ways in which the complaint in the husband’s divorce proceedings should be amended. There was no reference to this exchange in Mr Mantel’s report and as the London legal team had not known about this exchange they had attached to Mr Mantel’s report the first (and what they thought was the only) draft of the husband’s complaint.

Mr Marshall, on behalf of the wife, asked for Mr Mantel to be recalled to deal with these matters and he gave evidence again, via video link, the following day. He said he thought the husband’s London legal team had been copied into these exchanges and was not aware that only the first draft complaint had been attached to his report. Mr Marshall pressed Mr Mantel as to why there was no reference to this email exchange in his report or any reference to his proposed amendments to the complaint. Mr Marshall suggested that such behaviour compromised Mr Mantel’s evidence as he had clearly stepped out of the role of being an expert and stepped into the role of advising the husband of the steps he should take in relation to this complaint. Paragraph 2.2 of the Experts Practice Direction provides as follows ‘Experts should assist the court by providing objective, unbiased opinions on matters within their expertise, and should not assume the role of an advocate ‘ [emphasis added]

Even making all due allowances for the time of year (some of these email exchanges took place between Christmas and New Year) it is clear, in my judgment, that by taking the steps he did Mr Mantel left his role as being an expert in the case (with his consequent duties to the court) and advised the husband as to what steps he should take. Any comments he had on the draft complaint should have been set out in his report.

In fact the exchange of emails and the course taken by Mr Mantel do not directly impact on the judgment I have formed regarding the evidence of the legal position in New York relating to the husband’s divorce proceedings.

The move to New York

The husband is clearly very successful in his job. He gave his evidence with confidence and was candid in expressing feelings of remorse for his deception to his wife regarding his continued relationship with MD. He accepted he had told his wife in early 2008 that the relationship was over and maintained that position despite the reality being very different; he continued to still see MD and still does and has given her financial support. The wife, on the other hand, was more hesitant in the evidence she gave. The breakdown of the marriage had clearly taken its emotional toll on her; she found giving evidence about the details of the breakdown of the marriage very difficult.

Having had the benefit of seeing both parents give evidence I consider it more likely than not that if the wife had known about the continuing relationship between the husband and MD she would have been much more cautious about returning to New York. When giving her evidence the wife came across as someone who thinks very carefully before making decisions, in particular something as significant as moving to live in New York and the consequences for the children’s education. In her oral evidence she described herself as ‘methodical’. In her affidavit sworn on 30^th November 2009 at paragraph 127 she stated ‘If I had known that [JCN’s] relationship with [MD] continued I would not have agreed to move to New York with the children. I believe [JCN] was aware of this. I was reluctant to do so, with many doubts, and only did so in the end because [JCN] promised me he was honourable and committed to our marriage.’ In her oral evidence she stated ‘If [JCN] really did not know about the global… jobs as it seems [he] did not exactly when it was going to be [as] it seems now, and had I been told about the affair as I said in my fourth affidavit, yes I would have liked to have brought the children back to what was their home and their community and where they had places in all their schools and activities for the Fall and where we had our housing.’ She rejected any suggestion (during cross examination) that there was not going to be any particular stability if the family had remained in London in 2008 ‘Three of the four would be moving into schools where I knew the administrators and the community extremely well and where they knew me and where I knew many of the families as they had multiple siblings. I am now in a very fragmented situation where none of the schools have any prior history with me or the children. Not only do they not know me particularly well, there are four different schools for four different children. If I know ten families in each school I am lucky, so that’s 40 different families who don’t [know] me well but who in London would have known me and the children.’

I accept her evidence that she had immersed herself more into life in this country than the husband gave her credit for, particularly after the children started school through links made with other parents at the school. As she said in her evidence ‘..the children were in British Schools and I became friendly with, through the schools, a number of British mothers that I liked a lot, and I began to work for the British children charity through a British friend of mine, that I mention in my affidavit, that I still see. So I did not necessarily see myself as a person stationed here for a certain period of time who was always going to leave.’ she said a bit later ‘my social life as a mother was the domestic side of things and that was where I socialise, was with the mothers who were a part of these schools and many of them were British and are British, and who I still see.’ The husband was not around on a day to day basis as she was. I also accept her evidence that her relationships with her family were not so strong to be a magnetic factor in favour of returning to live in New York. She described her relationship with her parents and brother; they did not come across in her evidence as close relationships that would give her significant emotional support, she said ‘our families are very powerful and can be very controlling and I was very aware of that fact that I thought I had flourished in my own household in London’, later she said ‘..they [her family in New York] have a very low tolerance of things like this, in terms of support actually I have gotten it from like minded people of my own age’. She accepted her mother cared for the children, and was caring for them whilst the parties were here during the course of this hearing but they have taken their child-carer’s with them to New York (during holidays) to ‘help reduce the childcare burden on her mother and her resultant anger at [JKN], that we were both well aware of’ (husband’s affidavit paragraph 60 20^th January 2010). In relation to her brother he had given some practical help (as evidenced by the emails) but her brother is younger than her, in her oral evidence she said ‘I think my brother made one link that was able to be effective at the school. I have never seen the inside of his offices and since he is a good five years younger than me I don’t socialise with him really at all.’

On the evidence I have heard and read I consider the husband was the driving force (to use the wife’s term in her oral evidence) regarding the move back to New York. There were job opportunities there and there was some suggestion that he may take over from his boss in New York. The husband’s suggestion at paragraph 14 of his affidavit sworn on 4^th December 2009 that the move to New York was the wife’s idea gives, in my judgment, an entirely selective and inaccurate view of the history. He stated in his affidavit:

The wife’s case was that she was tricked or induced by the husband in returning to New York, the inference I am invited to draw from the husband’s behaviour is that he wanted her out the way to avoid her finding out about his plans with MD and to deprive the courts here of having jurisdiction. MD came to this country to study in February and stayed here until June. She then returned to Russia, with a trip back here between September and December and again in February 2010 to sit some exams. It was also hinted that part of the trick was to get the wife to return to New York to enable divorce proceedings to be issued there or, at least, prevent proceedings being issued here.

Whilst, in my judgment, the wife may well not have moved to live in New York if she had known the truth regarding the continuing relationship between the husband and MD I am not satisfied, on the balance of probabilities, that this was part of some calculated planning by the husband. In the emotional turmoil during the final stages of the breakdown of the marriage both parties were making decisions in very difficult circumstances. In my judgment the wife was clinging to the hope that her marriage would continue and felt a move to New York may assist with that, as she understood the husband’s job was going to move there and she did not want to be left behind (‘her one fear’ she said in evidence), the husband confirmed his commitment to their relationship in late August 2008 and continued to stay with the family in New York until May 2009 attending therapy/counselling. However, the reality was, in fact, very different, the husband was continuing his relationship with MD without being honest about his intentions to his wife. In the middle of this emotional turmoil they, as parents, needed to make decisions about the best educational provision for their children. Looking at the evidence as a whole over the period 2007 to 2009 there is no doubt the husband was being deceptive about his relationship with MD and may well have considered the advantages in terms of his relationship with MD of the wife and children being away from London but I am not able to find that this was part of some wider plan connected with any jurisdictional arguments for the divorce proceedings at the time of the move by the wife and children to New York in 2008.

Divorce proceedings

I am satisfied that the wife’s decision to issue proceedings here was done at a time when she was not able to issue proceedings in New York, as she had not been resident in New York for the minimum 12 month period by May 2009. In her evidence she said ‘I was advised that I couldn’t issue proceedings in New York and at the time that I issued [JCN] was living here, [JCN] has conceded since that he was a resident, a habitual resident here.’ It was also at a time when she considered the husband was still based in London. It is reasonable to infer from what the wife said that had she been able to she would have issued her divorce proceedings in New York.

I am equally satisfied that the husband’s proceedings in New York have been tactical. It must have been obvious at the time that in June 2009 neither party fulfilled the 12 month residency requirement. This view is re-inforced by the terms of the draft complaint produced on his behalf in late 2009/early 2010 which contained the following provision at paragraph 3:

Expert evidence regarding the New York divorce proceedings and this court’s jurisdiction under the Domicile and Matrimonial Proceedings Act 1973

I have considered carefully the written and oral evidence from the experts regarding the minimum time required to issue proceedings in New York and accept the view expressed by Mr Sheresky that the case of Lacks does not support Mr Mantel’s position regarding post-issue amendment that can retrospectively cure the defect. As he says, Lacks is distinguished on its own facts; the jurisdiction point was not taken at the time of issue of the proceedings. As Mr Mantel accepted in his evidence, a motion to dismiss (on the basis of failure to meet the residency requirements) made soon after the summons on behalf of the wife would probably have succeeded.

It is very likely that one of the considerations regarding the decision to issue proceedings in New York is that the date of issue does what had been described in the oral evidence as ’drawing a line in the sand’ as to whether assets fall for consideration as being acquired during the marriage or not. It was in the husband’s interests to issue the proceedings as soon as possible.

The question is am I satisfied whether ‘any proceedings in respect of the marriage in question, or capable of affecting its validity or subsistence, are continuing in another jurisdiction’ (Sch 1 para 9 DMPA 1973)? Whilst there remain issues regarding jurisdiction and procedure, as has been explored in the evidence, the evidence is clear they remain valid until a motion to dismiss is made and succeeds; therefore, in my judgment, the New York proceedings satisfy the requirements of paragraph 9.

In the light of the procedural matters explored during the expert evidence Mr Scott QC has (at the court’s invitation) sought to put before the court proposed terms on which the husband says the court should grant his application to stay the proceedings here which will, if the court found it had jurisdiction to grant a stay, provide a clearer procedural path forward in New York. The husband initially suggested the current (June 2009) proceedings in New York should continue, on the basis the ‘line in the sand’ would be re-drawn to the end of August 2009. At the invitation of the court those terms were reconsidered by the husband.

The revised terms circulated by Mr Scott QC the evening before final submissions were as follows:

Mr Scott QC made it clear in his oral submissions that the provisions of paragraph 4 were a shield not a sword; the paragraph was there to deal with any anticipated submission made on behalf of the wife that the flawed nature of the proceedings would prevent the stay application meeting the requirements in the 1973 Act. Mr Scott QC said during submissions that his client would agree to provide a suitably worded irrevocable undertaking in order to allay any fears the court had that this paragraph, and the June 2009 proceedings, may hide some residual meaning within the structure of what was being proposed. This will only become relevant in the event I consider granting the husband’s application for a stay and there is jurisdiction to do so.

Mr Marshall in his closing submissions (whilst not resiling from his primary position as to this court’s ability to exercise a discretionary stay) made powerful points regarding these proposed terms and raised a number of points they do not cover.

Whilst there is fundamental disagreement between the parties regarding the extension of the Owusu doctrine as outlined below, there is no issue between the parties as to the applicable principles if the court retains its discretion to order a stay.

The relevant statutory provisions are s 5 and para 9 of schedule 1 of the Domicile and Matrimonial Proceedings Act 1973:-

Section 5

“(2)

The court shall have jurisdiction to entertain proceedings for divorce or judicial separation if ( and only if ) —

The leading cases are Spiliada Maritime Corporation v Cansulex Ltd [1987] A.C. 460 and De Dampierre v De Dampierre [1987] 2 FLR 300. In the latter case the House of Lords held the test under Paragraph 9 Sch 1 to the 1973 Act was to be approached on the same basis as the common law test in Spiliada. Lord Goff set out the considerations for the court in Spiliada at pp 476 – 478:

The Civil Jurisdiction and Judgments Act 1982 introduced into English law the Brussels Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters. The Brussels Convention was an instrument designed and drafted by civil lawyers for civil lawyers. It had already been in force among the original Member States in the EC (as it then was) for 18 years before the 1982 Act came into force in 1987. Since that time common lawyers have had to get used to a widening interface between English family law and EU law. In 2001 the Brussels II Regulation came into force. In 2002 the Brussels Convention was effectively replaced (as between Member States) by Regulation 44/2001, the Brussels I Regulation. In 2005 the BIIR came into force.

The civil law concept of legal certainty is one area that common lawyers have been coming to terms with, as illustrated in para 11 of the Preamble to the Brussels I Regulation which states that, ‘The rules of jurisdiction must be highly predictable’. The exercise of discretionary powers is much less common in civil systems. The need for predictability has led to the strict first past the post system which applies under both Brussels I and BIIR. The tension between the common law preference (in many areas) for discretion and the civil law preference for certainty was brought to a head in Owusu.

In January 2009 the Commission accepted the United Kingdom’s intention to adopt the provisions of a new Council Regulation (“Reg 4/2009”) which deals specifically with maintenance obligations. Virtually all of the provisions of Reg 4/2009 will not apply until 18th June 2011, in terms of maintenance the amendments will not significantly depart from the current provisions of Brussels I.

This issue was first raised in this case in the wife’s fourth affidavit sworn on 30^th November 2009 when the second paragraph stated the following:

The wife’s case can be summarised as follows:

The Owusu issue remained central to the wife’s case; in her written opening submissions the major part of the document was taken up with the wife’s Owusu arguments. In his closing submissions Mr Marshall submitted that the court need only consider the Owusu issue once it had undertaken a preliminary consideration of the discretionary stay principles and it was only if, having considered those matters, the court was minded to grant the stay did the court then need to go on and determine the Owusu issue. If the court determined that the stay should be dismissed, there was no need for the court to determine the Owusu issue. This, said Mr Marshall, followed a similar ‘pragmatic approach’ that had taken place in a number of cases (e.g. Deutsche Bank v Sebastian Holdings PLC [2009] EWHC 3069 (Comm)). Mr Scott said that this was leading the court down a ‘primrose path’ and amounted to a change in emphasis as to the way the wife put her case at the commencement of the hearing. In his opening skeleton argument Mr Marshall stated at paragraph 11 ‘It is suggested that, logically, the court should consider the Owusu point first.’

The husband’s case can be summarized as follows:

Tempting though it may be to follow Mr Marshall down the ‘primrose path’, and avoid the need to determine the Owusu issue, in my judgment it is unavoidable that I have to grapple with this issue because, as I understand the wife’s case, the court does not retain any discretion in these matters by virtue of the ratio in Owusu. So the question I have to confront is whether, after the case of Owusu, the court still retains any discretion to order a stay in the circumstances of this case and, if so, should the court exercise its discretion to grant one.

The relevant facts in Owusu can be summarised relatively briefly. The claimant, domiciled in the United Kingdom, had hired from the first defendant, also domiciled in the United Kingdom, a holiday villa in Jamaica which had access to a private beach. During a holiday there the Claimant suffered severe injuries when he dived from the beach onto a submerged sandbank. He brought an action in England for damages against the first defendant and other defendants, Jamaican companies of which one owned the beach and the other had licences in connection with its use.

The defendants invited the judge to decline jurisdiction in favour of the Courts in Jamaica, on the basis of the doctrine of forum non conveniens, the judge refused on the grounds that, despite the connecting factors with Jamaica, article 2 of the Brussels Convention in Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters 1968 (as amended; now Council Regulation No 44/2001 Brussels I) obliged him to assume jurisdiction vis-à-vis the first defendant in view of the defendant’s domicile, and that if he did not try the action against the other defendants also, there would be a risk of conflicting decisions in different jurisdictions. On the defendant’s appeal and reference by the Court of Appeal to the Court of Justice of the European Communities (‘ECJ’) for a preliminary ruling, the principal question referred was whether, where the case before a court of a Brussels Convention contracting state had connecting factors with a non-contracting state but none with any other contracting state, the court could exercise a discretionary power, available under its national law, to decline jurisdiction in favour of the courts of the non-contracting state.

The court held, on the reference, that since article 2 of the Convention was mandatory and the Convention contained no express exception relating to forum non-conveniens, it was not open to a court of a contracting state to decline jurisdiction conferred on it by article 2 on the ground that a court of a non-contracting state would be a more appropriate forum for the trial of the action, even if the jurisdiction of no other contracting state was in issue or the proceedings had no connecting factor with any contracting state. The ECJ did not answer the second question, namely

Although the judgment itself in Owusu is relatively concise it appears from its terms to have followed the opinion of Advocate-General Leger which I have been referred to and have read. That opinion sets out the general principles that underpinned the ECJ jurisprudence.

At paras.229-230, the Advocate-General made plain that when the Brussels Convention and the Accession Convention of 1978 were negotiated and concluded, a majority of the Member States were either opposed to the inclusion of the doctrine of forum non conveniens, or had no intention of including it. This is because the doctrine was alien to almost every other Member State apart from the United Kingdom, and such a particularly common law concept that would be incongruous with civil law systems. The Advocate-General argued at [230]:

In his view, the clear, mandatory wording of the first paragraph of Article 2 itself militated against the acceptance of a doctrine of forum non conveniens, especially when read together with the overriding objectives of the Regulation. At para.278, the Advocate-General cited Recital 11 of Brussels I as a good example of these objectives:

At paras.263 – 265, the Advocate General explained why the doctrine of forum non conveniens is, by its very nature, incompatible with the aims and objectives of the convention, as it ‘seriously affects the predictability of the effects of the jurisdiction rules laid down by the Convention, in particular the rule in Article 2’. He continued to explain the reliance on predictability in the operation of community law

The Advocate-General’s opinion was effectively adopted by the ECJ in Owusu at paras 35 - 36 of its judgment:

At paras.37-38, the ECJ expressly disapproved the compatibility and continuing existence of the doctrine of forum non conveniens. Moreover, the ECJ hinted (at para.37) that complaints from jurisdictions (such as the United Kingdom) who wished to retain the doctrine would be misplaced, given that it had been specifically discussed when the 1978 Convention was framed. In other words, the United Kingdom knew what it was contracting into;

At paras. 38 – 43 of the judgment the ECJ reiterate the opinion of the Advocate-General as to the principles that underpin Brussels I, the need for legal certainty and a simple, uniform application of rules within the community:

It is submitted, on behalf of the wife that any consideration by this court as to whether this case could be more conveniently undertaken in a New York State court is irrelevant in the light of the ratio of the decision in the decision in Owusu which considered a similar submission (that Jamaica was the obvious place to try the case), and made plain that any perceived inconvenience or practical difficulties created by an inflexible application of Brussels I are outweighed by the overarching benefits of that inflexibility (namely the promotion of legal certainty). The wife relies, in particular, on para [44]:

The ratio in Owusu has subsequently been considered in a number of non-family cases. The wife submits that they demonstrate the acceptance in the other two Divisions of the Owusu principle and support her arguments; the husband contends that they demonstrate a divergence of opinion on the issues I have to grapple with. I shall consider them each in turn.

In Konkola Copper Mines plc v Coromin [2005] EWHC 898 (Comm) Colman J considered the Owusu decision. Konkola concerned reinsurance contracts and the question before Colman J was whether the ratio of Owusu applied where a provision of the contract conferred exclusive jurisdiction on a non-Member State. He found that it did not. That part of his decision was, I understand, not appealed (see Konkola Copper Mines Plc v Coromin Ltd [2006] APP.LR. 01/17 para 47) Whilst it is some way from family law, the analysis of Owusu is helpful:-

“76.

In Andrew Owusu v. NB Jackson & Others, supra, the ECJ decided that it was not open to the English court to decline to exercise jurisdiction over a claim for breach of contract against a defendant domiciled in England by application of forum non conveniens principles. The claim was brought by an English-domiciled claimant for breach of an implied term in a contract of letting of a holiday villa in Jamaica, owned by the defendant, to the effect that the adjacent beach would be reasonably safe and free from hidden dangers. The claimant was rendered tetraplegic after striking his head against a submerged sandbank while swimming. The claimant also joined other defendants in Jamaica, claiming against them in tort for breach of a duty of care. The defendants, including Mr Jackson, applied to the English court to decline to exercise jurisdiction on the grounds that Jamaica was clearly the more appropriate forum having regard to the location of the evidence and of most of the defendants. The trial judge declined so to order, holding that, having regard to the decision of ECJ in UGIC v. Group Josi [2000] ECR1-5925, if a defendant were sued in a contracting state in which he was domiciled by a claimant domiciled in a non-Contracting State, Article 2 applied so as to confine jurisdiction to the state of the defendant's domicile. The decision of the Court of Appeal in In re Harrods (Buenos Aires) Ltd [1992] Ch 72 was wrong. He could not therefore stay the English proceedings against Mr Jackson and he declined to stay the proceedings against the Jamaican defendants because, if he did so, there would be parallel proceedings in England and Jamaica. On appeal to the Court of Appeal questions were referred to the ECJ. The only material one is as follows:

"Is it consistent with the Brussels Convention …, where a claimant contends that jurisdiction is founded on Article 2, for a court of a Contracting State to exercise a discretionary power, available under its national law, to decline to hear proceedings brought against a person domiciled in that State in favour of the courts of a non-Contracting State:

(a)

if the jurisdiction of no other Contracting State under the 1968 Convention is in issue;

(b)

if the proceedings have no connecting factors to any other Contracting State?"

77.

The ECJ decided that the answer to that question was: ".. the Brussels Convention precludes a court of a Contracting State from declining the jurisdiction conferred on it by Article 2 of that convention on the ground that a court of a non-Contracting State would be a more appropriate forum for the trial of the action even if the jurisdiction of no other Contracting State is in issue or the proceedings have no connecting factors to any other Contracting State."

78.

The reasoning by which the ECJ arrived at that conclusion may be summarised as follows:

i)

The jurisdictional code contained in the Brussels Convention does not operate exclusively by reference to legal relationships involving Contracting States alone, but also takes effect where there is an international legal relationship between a contracting state and a non-Contracting State.

ii)

The Brussels Convention was concluded on the basis of Article 220 of the Rome Treaty (now Article 293 EC) specifically "to facilitate the working of the common market through the adoption of rules of jurisdiction for disputes relating thereto and through the elimination, as far as is possible, of difficulties concerning the recognition and enforcement of judgments in the territory of the Contracting States."

In the appeal decision (Konkola Copper Mines Plc v Coromin Ltd [2006] APP.L.R. 01/17) Rix LJ said:

In Catalyst v Lewinsohn [2009] EWHC 1964 (Ch) Barling J considered the scope of Owusu in some detail in the context of applications made to stay proceedings in this jurisdiction, reliance being placed in particular upon the existence of corresponding proceedings between the same parties in another jurisdiction (Utah, USA). He held in cases where there were parallel proceedings that the reasoning in Owusu did apply with the effect that the Court is disabled from staying proceedings before it (see paras 56 and 57). It had been submitted that the existence of parallel proceedings in a non-Member State triggered a residual forum conveniens discretion, because a ‘reflexive analogy’ could be made with Article 27 of Brussels I; it was submitted that because Article 27 demands a court of a Member State which is ‘second seised’ take a decision that it should decline jurisdiction, the doctrine of forums non conveniens is retained in this circumstance. In rejecting this submission Barling J stated at para [69]

Barling J also cited (at paras 75 – 80) English authorities which support the rebuttal of the ‘reflexive analogy’ point; Potter J (as he then was) in Arkwright Mutual Insurance Co v Bryanston Insurance Co Ltd [1990] 2 All ER 335 and Hobhouse J (as he then was) in S&W Berisford plc v New Hampshire Insurance Co [1990] 2 All ER 321 who stated at page 332 “…the availability of such a discretion would destroy the framework of the convention and create lack of uniformity in the interpretation and implementation of the convention.” At paragraph 80 Barling J held that, ‘whatever the precise position in terms of precedent, far from being satisfied that the reasoning of Potter J is wrong, I find it compelling and agree with it.’

At paragraphs 86 – 104 Barling J considers the considerable academic commentary on this issue, and disagrees with the view taken by Dicey, Morris and Collins and (more tentatively) by Briggs and Rees that a discretionary stay would still be permissible if proceedings in a non-Member State were first in time. Neither Dicey nor Briggs assert that any discretion would be retained if the proceedings in the Member State were seised first in time. The ‘analogy’ is made with Articles 27 and 28, which only allow ‘any court other than the court first seised’ to stay proceedings.

The decision in Catalyst has been the subject of some criticism; see Briggs and Rees, Civil Jurisdiction and Judgments (5^th Ed) at 2.260:

In his judgment Barling J referred to the decision in Goshawk Dedicated Ltd v Life Receivables Ireland Ltd [2008] IEHC 90 in which the Irish Commercial Court (Clarke J) considered this issue. The context was an action brought in Georgia, USA for misrepresentation, and subsequent mirror image declaratory proceedings brought in Ireland. The defendant in the Irish action applied for a stay in favour of the earlier US proceedings arguing either (1) that Owusu did not preclude a discretionary stay based on lis alibi pendens, or alternatively (2) that a stay was possible or even obligatory where (a) the non-EU country’s court was first seised and (b) the judgment of that court was such that it would be recognized in the EU state on the basis of the Regulation. In each case Article 27 was prayed in aid by analogy. By the close of the hearing before Clarke J the first argument appears to have been all but abandoned by the defendant leaving the judge to observe ‘Having regard to Owusu, I am not satisfied that any doctrine of lis alibi pendens which retained a significant discretion on the part of the courts, is sustainable as being consistent with the Brussels Regulation’ (para 5.5).

Turning to the second argument referring to Articles 27 and 34(4) Clarke J accepted that there was an acknowledgement in the Regulation of both the principle of lis alibi pendens and the appropriateness of affording precedence to an earlier judgment in a non-EU state which satisfied the international law requirements of the Member State of recognition. In relation to the latter he distinguished priorities as between judgments from priorities as between pending proceedings; the real question, he said, was whether the fact that those matters were acknowledged in the Regulation was sufficient to warrant a departure from what he regarded as the clear mandatory language of Art 2 as interpreted in Owusu. He considered that one obstacle to such a departure was the clear statement by the ECJ in a number of cases to the effect that deviations or derogations from the underlying provisions of the Regulations must be found in the Regulation itself, which enumerates exhaustively the cases in which a person may be sued outside the State in which he is domiciled. Clarke J held that Article 27 applies only where the court first seised actually has jurisdiction. As a non- Member State will decide whether it has jurisdiction by reference to its principles of private international law it will not be bound by Brussels I. Thus, Clarke J held the reflexive analogy with Article 27 does not arise in the case of a non-Member State. On appeal from Clarke J the Irish Supreme Court did not criticize Clarke J’s reasoning in its judgment. It decided to refer an appropriate question to the ECJ for a preliminary ruling, but I was told during this hearing that had not taken place and the case had resolved.

In Skype Technologies SA v Joltid Ltd and others [2009] EWHC 2783 (Ch) the court was concerned with a jurisdiction clause in a License Agreement. Proceedings had been issued here and subsequently in the US and the issue was whether the clause fell within Article 23 of Brussels 1 and, if it did, whether the court should grant an anti suit injunction. Lewison J said

In Global Multimedia International Ltd v Ara Media Services and another [2006] EWHC 3107 (Ch), the Defendants asserted that they would encounter inconvenience and expense in defending proceedings in England when compared with the defence of parallel proceedings in Saudi Arabia. At para.34 of his judgment, Sir Andrew Morritt C held that the Defendant was ‘entitled, indeed, bound, to defend that claim in England’. He went on to say:

Many of the commercial cases cited involved prorogation of jurisdiction clauses where jurisdiction is founded not by the domicile of the defendant (Article 2 jurisdiction), but by a prior agreement between the parties that any dispute between them will be dealt with in the English courts (Article 23 jurisdiction).

Gomez and others v Gomez-Monche Vives [2008] All ER (D) 247 (Feb) concerned proceedings which arose out of a declaration of trust made in June 1984, expressed to be subject to English law. It had been submitted that the Owusu doctrine only applied to Article 2 (as it is ‘mandatory’), but need not apply to Article 5 (which is a ‘permissive’ derogation from Article 2). Morgan J rejected this submission after reviewing the authorities and a lot of academic commentary. He said

In UBS AG and UBS Securities LLC v HSH Nordbank AG [2009] EWCA Civ 585 the appeal turned on the construction of a jurisdiction clause. Lord Collins of Mapesbury summarised the current position:

In Dicey, Morris and Collins ‘The Conflict of Laws’ (14^th Ed.) the authors state that at para 12-020:

In Lucasfilm Ltd and others v Ainsworth and another [2009] EWCA Civ 1328, the Court of Appeal considered whether it had jurisdiction to hear a case which involved infringements of United States copyrights committed within the UK by a defendant domiciled in England.

Whilst the Court accepted (at paragraph 99) that because the defendant was physically within the bounds of the jurisdiction of England and Wales, the English court clearly had ‘personal jurisdiction’, a separate question arose as to whether the English court had ‘subject matter’ jurisdiction.

Jacob LJ referred to three principal arguments advanced for the existence of ‘subject matter jurisdiction’, the first of which was the force of the Owusu doctrine.

Jacob LJ made plain that the facts of Owusu, and the consequent judgment of the ECJ, were confined to a case where the ‘subject-matter’ jurisdiction of the English court was not in doubt.

Jacob LJ confirmed that Article 2 of Brussels I does not create ‘subject- matter jurisdiction’ in the court of a Member State per se as a bi-product of ‘personal jurisdiction’. Subject-matter jurisdiction needs to be already conferred, at which time Article 2 mandates its exercise (as was the case in Owusu):

There has been limited consideration of Owusu in family cases.

In Cook v Plummer [2008] 2 FLR 989 the Court of Appeal refused permission to allow a proposed appellant to argue before the full court that the Owusu doctrine applied in a family context. At para 10 Thorpe LJ observed that there were ‘contrary arguments’ and the decision in Owusu was ‘deeply unpopular’.

In J v P [2007] EWHC 704 Sumner J considered an application under Schedule 1 to the Children Act 1989 in circumstances where the father had issued a petition in Italy first and the mother subsequently issued proceedings in England. The father applied for a stay, citing Articles 27 and 28 of Brussels I, as the petition involved the same cause of action in both jurisdictions (the maintenance of the child, which falls within Brussels I), and asserted that the Judge therefore had no forum conveniens discretion to keep the case in England when Article 27 – 28 of Brussels I demanded that it must be stayed to allow the Italian court to consider whether it had jurisdiction. Sumner J (reluctantly) acceded to the father’s argument and stayed the application.

In Ella v Ella [2007] 2 FLR 35 the Court of Appeal upheld the granting of a stay in English divorce proceedings in favour of subsequent proceedings in Israel. Owusu was not cited.

The Owusu doctrine was referred to by the Supreme Court in Re I (a child)(contact application: jurisdiction) [2009] UKSC 10. This case involved an application by a mother to vary a contact order. The High Court had decided that it had no jurisdiction to hear the case under the Family Law Act 1986, and the mother appealed on the basis that the court did have jurisdiction under Article 12 (3) of BIIR. It was submitted that Article 12 (4) of BIIR extended the scope of the jurisdiction to children who were habitually resident in ‘third’ (i.e. non-Member) states. Baroness Hale asks

“[17] Can article 12 apply at all where the child is lawfully resident outside the European Union? In my view it clearly can. There is nothing in either article 12.1 or article 12.3 to limit jurisdiction to children who are resident within the EU. Jurisdiction in divorce, nullity and legal separation is governed by article 3 of the Regulation, which lists no less than seven different bases of jurisdiction. It is easy to think of cases in which a court in the EU will have jurisdiction under article 3 but one of the spouses and their children will be resident outside the EU. A court in England and Wales would have jurisdiction if the petitioning mother were living with the children in the USA and the respondent father were living in this country. A court in England and Wales would have jurisdiction if the petitioning father had lived here for at least a year and the respondent mother were living with the children in the USA. A court in England and Wales would have jurisdiction if the spouses were living here but their children were living in the USA. In some of these cases the spouses might well wish to accept the jurisdiction of the English court to decide matters relating to parental responsibility so that their children’s future could be decided in the same jurisdiction as their status, property and finances. Professor Rauscher is quite clear that “the new rule not only applies to children residing in a Member State which is not the forum State (as Article 3 Brussels II did) but also to children residing in Non-Member States” (T Rauscher, “Parental Responsibility Cases under the new Council Regulation ‘Brussels IIA’”, The European Legal Forum, 1-2005, 37 – 46 at p 40). There is nothing to differentiate article 12.3 from article 12.1 in this respect.”

There has been some discussion regarding the application of the Owusu doctrine to family cases in a number of articles that have been included in the authorities bundle (cf ‘The State of International Family Law Issues: A view from London’ [2009] IFL 35) which support the view that the Owusu doctrine must carry over to BIIR. Professor Briggs (the leading academic in the field of Private International Law who is on record lamenting the effect of Owusu) has acknowledged that the Owusu doctrine may carry over to BIIR (cf: ‘The Death of Harrods: forum non conveniens and the European Court’ [2005] LQR 535). In ‘The State of International Family Law Issues: A view from London’ [2009] IFL 35 HHJ Ian Karsten QC states ‘The time cannot be far off when an English judge will have to decide what the effect of Owusu is upon the power to stay divorce proceedings under the 1973 Act.’ Timothy Scott QC in ‘Certainty and Discretion: EU and English Family Law’ [2009] IFL 155 states ‘The impact of Owusu in the sphere of English family law is a matter of continuing debate.’

The wife’s case, put simply, is that Owusu has confirmed the mandatory exercise of jurisdiction, in accordance with Brussels I, includes cases where the alternative jurisdiction is not a Member State. Owusu expressly prohibits and disavows the doctrine of forum conveniens in favour of the civil law principle of legal certainty. The Owusu doctrine has been applied by judges in the Queen’s Bench Division and Chancery Division since 2005 (see Catalyst and Goshawk above).

The wife submits there is no doubt that both personal jurisdiction and subject-matter jurisdiction already pre-exist under Brussels I in respect of the wife’s financial (‘maintenance’) claims, subject (per ss.23 and 24 MCA 1973) to pronouncement of a decree of divorce. Therefore (just as in Owusu) Article 2 of Brussels I compels a full exercise of jurisdiction without recourse to any forum non conveniens discretion.

Article 2 of Brussels I states:

Article 2 of Brussels I is mandatory; a defendant must be sued in a Member State of his domicile. This is subject to Article 3, which allows a defendant domiciled in a Member State to be sued in another Member State under one of the ‘exceptional’ jurisdictions permitted by Brussels I.

In Owusu the ECJ made plain that an English court was not entitled to stay personal injury proceedings arising out of an accident that occurred in Jamaica which had been brought by an English claimant against a number of defendants, most of who were based (i.e. domiciled) in Jamaica. The fact that one of the defendants was domiciled in England conferred Brussels I jurisdiction on the English court and the ECJ ruled that this jurisdiction was compulsory; it could not be declined on the basis of forum non conveniens.

In Catalyst Barling J discussed and disagreed with the academic commentary (Dicey, Morris and Collins; Briggs and Rees) on this issue (per Barling J at paragraphs 86 – 104) that a discretionary stay would still be permissible if proceedings in a non-Member State were first in time. None of the academic commentary asserts that any discretion would be retained if the proceedings in the Member State were seised first in time. The ‘analogy’ is made with Articles 27 and 28 Brussels I, which only allow ‘any court other than the court first seised’ to stay proceedings. In this case, the English court was first seised, consequently, it is submitted, the analogy simply does not apply.

Even if it was permissible in circumstances where a non-Member State were seised by ‘reflexive analogy’, the court cannot apply the analogy unless satisfied that the court of the non-Member State is properly seised in accordance with Articles 27 and 28. It is submitted there remains an issue in this case as to whether the husband’s proceedings in New York are valid.

The wife submitted such is the force and clarity of the jurisprudence in Owusu, its application must carry over to BIIR.

Article 3 BIIR provides as follows:

It is submitted on behalf of the wife that it is inconceivable that the Owusu doctrine could apply to Brussels I and not to BIIR. In support of that the following points linking the two Regulations are relied upon:

Reliance is placed on what is said in Cheshire, North and Fawcett Private International Law (OUP 4^th Ed 2008) at pages 962 – 963 where it is stated:

In addition it is submitted (‘oblique’) support is found for extending the Owusu doctrine to BIIR in Re I ibid where Baroness Hale referred to Owusu in the context of stating that the making of no order in a children’s case did not offend against Owusu.

The Owusu doctrine dictates that the mandatory jurisdiction of Article 2 of Brussels I applies in disputes (as here) where the dispute involves a third (non-Member) State. The wife submits there can be no doubt that ‘maintenance’ is one of the ‘civil and commercial matters’ which Article 1 of Brussels I indicates are covered by Brussels I and to which the ‘general’ Article 2 jurisdiction applies. Recital 11 of Brussels IIR states:

Article 5(2) of Brussels I provides a permissive (alternative) extension of the mandatory Article 2 jurisdiction. It provides a maintenance creditor with an additional option to sue in the courts of a Member State in which he or she is domiciled (or habitually resident), as opposed to being limited to actions brought only in the Member State of the defendant’s domicile.

Following de Cavel v de Cavel C-143/78 [1979] 2 CMLR 547 it is submitted that ‘maintenance’ is an umbrella term for any financial award including lump sum and transfer of property) which is made in order to provide for the respective needs and resources of the parties. In Van den Boogard v Laumen [1997] 2 FLR 399 the ECJ refined its autonomous definition of maintenance and specifically applied it to English ancillary relief:

The wife submits that in the present case, once sums held on solicitors’ accounts are stripped out, the liquid asset base is approximately £7m less tax (or £4m excluding the gross value of the husband’s options/unexercisable shares). This will have to be divided to enable each party to fund suitable properties in New York City to enable the wife to be rehoused with the four children and for the husband to have the children for staying contact. If (and it is most unlikely) there are deferred surplus funds, these too will be divided between the parties to meet needs.

Given the standard of living enjoyed during the marriage, the available capital will wholly or substantially be utilised in meeting the rehousing needs of the parties, as opposed to sharing extraneous capital between them, or compensating the parties significantly over and above their immediate capital needs. In this sense the present case falls within the Van den Boogard definition of maintenance as ‘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’

If the Owusu doctrine applies to BIIR then the discretion to order a stay on principles of forum non conveniens in accordance with para 9 of Schedule 1 to the Domicile and Matrimonial Proceedings Act 1973 (‘DMPA 1973’) is now no longer available if the jurisdiction is founded on Article 3 BIIR. It is conceded the position is different if Article 7 (residual jurisdiction) applies (this is unnecessary to decide here).

The material parts of DMPA 1973 are s 5(1) and (2) and para 9 Schedule

These provisions were amended to provide that they only apply to proceedings ‘other than proceedings governed by the Council Regulation’. It is submitted on behalf of the wife that the effect of this is that the discretion to stay proceedings is removed in cases that come within BIIR, as in those cases the court shall have jurisdiction conferred under BIIR.

Mr Marshall referred me to the case of Hadadi [2009] EUECJ C-168/08 as being a useful case which considers the underlying purpose and principles of BIIR. Even though that case concerned Member States he submitted there is a ‘remarkable echo of the approach in Owusu’ to when the same principles were extended to non-Member States as they submit there should be here.

In relation to DMPA 1973 the wife submits:

The husband’s submissions fall under four main heads.

(1) He submits that a key aspect of the decision in Owusu is that there were no competing proceedings in Jamaica, therefore Owusu does not address the position which arises under the 1973 Act where by definition there are concurrent proceedings. Accordingly it cannot be argued that Owusu is binding in the present circumstances and a major question left open by the ECJ is whether its reasoning should be extended to cover a situation where there are competing proceedings in a non-Member State. It is submitted that the only case that has considered this question is Catalyst and it is not binding on this court.

It is further submitted that it is not desirable to extend the Owusu principle for the following reasons:

The Husband submits that the reasoning that underpins the decision in Owusu is not incompatible with a power to stay in favour of a non-Member State. The reasoning and argument are summarised as follows:

Therefore the issue is: is it desirable that Owusu should be extended in the way advocated on behalf of the wife? The husband submits not, for the reasons outlined in the previous paragraph he says, it would be an unwelcome development and the discretionary power of the court to order a stay remains.

(2) Does the wife’s interpretation of Owusu apply to BIIR? This submission is on the basis that the husband’s previous submission is not successful. It is submitted there are a number of reasons why the extension of Owusu to BIIR is neither necessary nor desirable:

(3) The construction point relates to the DMPA 1973. The relevant provisions are set out in paragraph 127 above. The phrase “other than proceedings governed by the Council Regulation” in Sch. 1 Paragraph (9)(1) was inserted by the amendment to the statute which was made necessary by Brussels II, before the decision in Owusu. The key question for the construction point is: what does this phrase mean? It has been argued that all proceedings where jurisdiction is asserted under any of the indents of Article 3(1)(a) of BIIR or the shared domicile provisions in Article 3(1)(b) are “governed by the Council Regulation”. Therefore the only proceedings which are not “governed by the Council Regulation” are those covered by s5(2)(b) (where no court of a Member State has jurisdiction under Article 3 and therefore, by virtue of Article 7 jurisdiction is determined in each Member State by its own domestic law: which in England means the domicile of only one party). Divorce suits where jurisdiction is asserted under s5(2)(b) and Article 7 form only a very small minority of the total, and therefore the effect of this construction, if correct, would be to take away from the court the power to grant a stay in the great majority of cases.

Is this wide construction of “proceedings governed by the Council Regulation” correct? As with any question of statutory construction, the court must seek to discern the intention of Parliament. The purpose of the amendment was to give effect to the provisions of Brussels II in its unrevised form: not to make wholesale reforms to the law. The amendment was brought about by the European Communities (Matrimonial Jurisdiction and Judgements) Regulations, S.I. 2001/310. The Explanatory Note to this S.I. says:-

“The Council Regulation is directly effective in the United Kingdom and, consequently, the changes effected by these Regulations are limited to those necessary to amend inconsistent provisions of national law.”

It is submitted that Parliament cannot have intended that Regulations with this express, and limited, goal would have the effect of abolishing the power to grant stays in the great majority of divorce proceedings where the competing forum is not an EU Member State. Indeed if that were the intention, Parliament would simply have stated that the power to stay is only available where jurisdiction is founded on s5(2)(b) (which governs divorce and judicial separation) and s5(3)(b) (which governs nullity). That would have swept away the statutory power without any ambiguity.

Thus the natural and preferable construction of “proceedings governed by the Council Regulation” is that it refers to the position where there are competing proceedings in another Member State. In that situation Article 19 of BIIR applies – the first in time provision where two Member States are both seised. In order to give effect to Brussels II – the purpose of the amendment – it was necessary to make it clear that the discretionary powers conferred by Paragraph 9 were ousted in cases where the mandatory provisions of Article 19 were engaged: cases where the competing jurisdiction is another Member State (other than Denmark). On this basis proper deference is given to the Regulation without changing the law more than is necessary for that purpose.

If, as a matter of pure construction, the narrow approach is correct, the power to stay remains in place unless the court is driven to the conclusion that such an approach is incompatible with EU law so that it is obliged to disapply the Westminster statute. Such a conclusion would fly in the face of the express intention of the Statutory Instrument to bring the law into compliance with EU law.

(4) The position regarding maintenance. The husband submits that the wife’s claim is ancillary to the divorce suit. Therefore, the issue of where the divorce is to be tried must logically be determined first. To seek to do it the other way can produce very undesirable consequences. An English ancillary relief order is capable of being either in the nature of maintenance (in which case it is enforceable under Brussels I) or a claim relating to rights of property arising out of a matrimonial relationship or a hybrid of the two. By the time the order is ready for enforcement, its nature can be discerned from the judgment under which the order is made. Such part of the order as consists of maintenance is enforceable under Brussels I; any order arising out of rights in property is not: see Article 1 (2)(a) of Brussels I and Van den Boogard v Laumen [1997] 2 FLR 399.

However, such an analysis may well be impossible at the stage when proceedings are instituted and when an application for a stay is being considered and made; or even when it is being determined. For example, a wife may be claiming a percentage of the overall assets on the basis of the sharing principle but such claim may fail, so that she only receives an award based on maintenance. Alternatively she may have pitched her claim on alternative bases, and have succeeded only on one. This can only be analysed with hindsight, not prospectively. Moreover the distinction between a maintenance-based award and a rights in property award does not depend on terminology. A lump sum may consist of either; it may have an element of both. So the form of the claim for ancillary relief within a divorce petition does not reveal whether it is in the nature of a claim for maintenance or for rights in property. (see also [2010] Fam Law 385 Cross-Border Enforcement of English Ancillary Relief Orders: Fog in the Chanel – Europe Cut Off? Jens M Scherpe and Anatol Dutta)

So a Respondent to an English divorce petition has no means of knowing from the face of the document whether a claim for ancillary relief which may be included within it is a claim for maintenance; for rights in property arising out of a matrimonial relationship; or a hybrid claim. But if the maintenance point is correct his right to apply for a stay of the proceedings is in effect determined by which category the ancillary relief claim falls into. This would stand on its head the principles of legal certainty and protection of the position of the Respondent which lie at the heart of the Owusu judgement. So far from giving him a reasonable degree of certainty about where he stands, he would be completely in the dark.

There are a number of matters that are not in dispute:

The issue I have to consider has attracted some controversy and comment and I have to guard against applying the law as some may want it to be rather than what it is. The provision of s3 of the Civil Jurisdictions and Judgments Act 1982 and the direct applicability of the European Regulations and ECJ jurisprudence are beyond doubt.

I have considered carefully what I have termed the non-family cases that have considered Owusu and the detailed submissions that have been made.

I have found the decision in this case particularly difficult. The facts have brought into sharp focus whether the Owusu doctrine should be extended to cases where there are parallel proceedings and/or to BIIR. The arguments in favour and against the extension of the doctrine are powerfully made and each, in their own way, persuasive. The arguments have been complex and wide ranging; the submissions have explored the boundaries that separate the EU rules on jurisdiction and the common law rules; it is not always easy to find a smooth transition from one set of rules to another.

I have come to the conclusion (not without some hesitation) that:

For the reasons outlined in the previous paragraph in my judgment this court retains the judicial discretion to grant a stay in this case. I will now turn to consider that issue.

The legal framework is not in issue and I have determined that the New York proceedings come within Sch 1 para 9 of the 1973 Act.

The wife’s submissions can be summarised as follows:

The husband’s submissions can be summarised as follows:

Following Lord Goff of Chieveley in Spiliada there is a burden on the husband to establish that there is another available forum which is clearly or distinctly more appropriate than the English forum. If he does that then the court will ordinarily grant a stay unless there are circumstances by reason of which justice requires that a stay should nevertheless not be granted. It is a two-stage test. The court has to consider the interests of both parties and the ends of justice. Accordingly, provided substantial justice can be done in the available, more appropriate forum or in both forums, the court should not have regard to a particular juridical advantage for one party in one forum rather than the other. Although not canvassed in any great detail during the hearing I note in Mr Sheresky’s report (page 22 – 23) he summarises the approach to financial issues on divorce in New York.

So the first question is which court is clearly and distinctly the more appropriate forum.

The following factors weigh in favour of New York:

The following factors weigh in the balance in favour of London:

Having carefully considered the competing considerations as to which forum is more appropriate, I have come to the very clear decision that it is New York for the reasons outlined in paragraph 156 above. It is the combination of those factors (and the points made in response to the factors in paragraph 157) that drive the court to conclude that New York is the appropriate forum.

I then have to consider the balance of justice and fairness, whether there are circumstances by reason of which justice requires the court not to grant a stay. A significant part of Mr Marshall’s submissions, on behalf of the wife, has focused on the husband’s behaviour during the breakdown of the marriage and leading up to the move to New York. In essence he submits that in those circumstances the justice of the case tips clearly in favour of the proceedings continuing here and the stay being dismissed. In effect, he says, the husband should not be allowed to profit from his manipulative behaviour; he makes the same point about the tactical nature of the husband’s divorce proceedings.

However, the court must stand back and consider all the circumstances of the case and in my judgment, whilst in no way condoning the husband’s behaviour as I have found, it would be wrong to keep litigation here (which may last for many years to come e.g. variation applications) when weighed in the balance with the other factors that signal in favour of New York. I do not consider that the wife’s Article 6 rights have been interfered with by the husband’s behaviour, as has been suggested by Mr Marshall. The husband’s application has taken a conventional route in this jurisdiction and interim orders have been made and the wife has had access to the courts pending this court being able to determine the application.

Subject to the matters outlined below, I have come to the conclusion that New York is the more appropriate forum and there are no other compelling considerations of justice or fairness that require me to determine otherwise.

As has been clear during the course of the hearing I have been anxious to ensure that if the court did decide that the husband’s application should be granted the transition to New York should be as smooth as possible and the focus of the energy and resources should be on seeking to resolve the main issue between the parties, namely the financial application. Both parties accept the marriage has broken down and from what I have heard there is no issue that the children should remain in the full time care of their mother with regular contact to their father.

The decision to grant a stay is subject to the matters outlined below. They are expressed in a general way at this stage; I acknowledge that I can only direct terms to the husband but I considered it would be helpful to outline the matters in the way I have below:

I will obviously hear submissions in relation to any matters that are not agreed and any further terms that are advocated by either party, as well as any applications concerning the costs of these proceedings. I expect the parties to endeavour to agree as much as they can. Obviously once the terms have been approved or determined by the court any alleged breach of them will entitle the wife to apply back to lift the stay (not that any such application is to be encouraged).

This case is listed before me on 19^th May 2010 to deal with the following matters: