Financial Remedies in England after a Divorce Abroad

Unfair settlement after a divorce abroad?

In this article, Sonny Patel, Senior Associate at Expatriate Law, sets out the remedies available in England for British expats who have divorced abroad.

Part III of the Matrimonial and Family Proceedings Act 1984 gives the courts in England and Wales the power to make financial orders after a marriage has been dissolved (or annulled) in a foreign jurisdiction. A successful Part III application in this jurisdiction unlocks the powers of the court to make orders where no financial provision was made by the foreign court, or where the provision made is deemed to be inadequate.

 

What financial claims are available in England after a divorce abroad?

In practice, an application for financial relief after overseas is most likely to become a viable way to proceed in cases where the foreign divorce was in a jurisdiction where the courts:

  • do not have jurisdiction over foreign property;
  • have no, or under-developed, mechanisms to force financial disclosure;
  • demonstrate favouritism towards nationals over expat spouses;
  • have no mechanism to share pensions;
  • demonstrate favouritism towards those of one religion over another; or
  • have no or under-developed mechanisms to enforce agreements and orders.

A case may also be suitable if the applicant was unable to fund legal representation in the jurisdiction where the foreign divorce was granted. This is because, if permission to make an application is granted, the court has jurisdiction to make an interim maintenance order and a costs allowance order if it appears that the applicant and/or the children of the family are in immediate need of financial assistance (unless jurisdiction is established on the basis of a beneficial interest in a matrimonial home in England and Wales).

 

Criteria to be met for a financial claim after a divorce abroad

Before a Part III application can be initiated, certain basic criteria must be met. The marriage between the parties should be recognised in English law, the marriage should have been dissolved by means of judicial or other proceedings in the overseas country, and the divorce must be entitled to be recognised as valid in England and Wales. If the potential applicant has remarried they are barred from making an application.

 

Process for a claim under Part III MFPA 1984

The application begins with a without notice application for permission to proceed. The applicant must show that they have a ‘substantial ground’ for the application to proceed. The permission stage is designed to filter out weak applications before the respondent is put to the significant costs of defending an application that may be fatally flawed or have little merit.

At the permission stage the applicant must be able to show that they satisfy the jurisdictional requirements and that the legal test set out in in the leading case of Agbaje v Agbaje [2010] has been met.

The jurisdictional requirements are:

  • that either party is domiciled in England and Wales on the date of the application for permission, or on the date that the divorce in the foreign country took effect; or
  • that either party was habitually resident for one year ending on either:
    • the date of the application for permission; or
    • the date that the divorce in the foreign country took effect; and
  • either party has, at the date of the application, a beneficial interest, in a dwelling house in England and Wales that was at some time during the marriage used as a matrimonial home. The property need not have been the main matrimonial home. It is because of this wide test that there is a restriction on court’s powers if jurisdiction is solely based on this heading.

 

The legal test on an application for permission is set out at paragraph 33 of Agbaje:

… the principal object of the filter mechanism is to prevent wholly unmeritorious claims being pursued to oppress or blackmail a former spouse. The threshold is not high, but is higher than ‘serious issue to be tried’ or ‘good arguable case’ found in other contexts. It is perhaps best expressed by saying that in this context ‘substantial’ means ‘solid’.

 

Further guidance can be found in Traversa v Freddi [2011] at paragraph 30 and 31:

It is clear that the section 13 filter is there to exclude plainly unmeritorious cases and, although, in the evaluation of substance, regard must be paid to overall merits, it does not call for a rigorous evaluation of all the circumstances that would be considered once the application has passed through the filter.

At the hearing of the section 13 application the judge will of course be conscious of the fact that, once through the filter, the applicant will have to clear a number of fences that the following sections erect. Unless it is obvious that the applicant will fall at one or more of the fences, his performance at each is better left to the evaluation of the trial judge.

 

Factors taken in to account by the court for a claim under Part III

The factors that the judge must take into account when assessing whether the applicant has satisfied the legal test set out in Agbaje are detailed in s16(2), MFPA 1984:

  • the connection that the parties to the marriage have with:
    • England and Wales;
    • the country in which the marriage was dissolved or annulled, or in which they were legally separated; and
    • any other country outside England and Wales;
  • any financial benefit that the applicant, or a child of the family, has received, or is likely to receive, in consequence of the divorce, annulment or legal separation, by virtue of any agreement or operation of the law of a country outside England and Wales;
  • where an order has been made by a court in a country outside England and Wales requiring the other party to the marriage to make any payment of transfer any property for the benefit of the applicant or a child of the family, the financial relief given by the order and the extent to which the order has been complied with or is likely to be complied with;
  • any right that the applicant has, or has had, to apply for financial relief from the other party to the marriage under the law of any country outside England and Wales, and, if the applicant has omitted to exercise that right, the reason for that omission;
  • the availability in England and Wales of any property in respect of which an order in favour of the applicant could be made;
  • the extent to which any order made is likely to be enforceable; and
  • the length of time that has elapsed since the date of the divorce, annulment or legal separation

If permission is granted, the applicant will then make a further procedural application to invoke the usual financial remedy timetable and the court will ultimately have the power to make financial orders as if the parties divorced in England. However, where jurisdiction depends solely on either party having a beneficial interest in a matrimonial home located in England and Wales, the court’s powers are limited to the value of that home, and there is no power to make a maintenance order.

 

Enforcement of English Orders abroad

By definition, every Part III case has an international dimension. An important consideration at the beginning of any case that involves multiple jurisdictions is to assess the likelihood of eventually being able to enforce any order that is achieved. Early consideration should be given to whether action needs to be taken to preserve any available assets such as an application to restrain future dealing. If the respondent resides in a jurisdiction where an order made in this jurisdiction cannot be easily and readily enforced, and if there is property in England in the respondent’s sole name, it is essential to take steps to preserve the property. An application for an order that requires the registrar to enter a restriction in the register of a property owned solely by the respondent can be made on the basis only that it is both ‘necessary and desirable’ to do so. This application can be made alongside a without notice application for permission to proceed.

Preparations for an application under Pt III, MFPA 1984 are heavily front-loaded. The application for permission must be supported by a very detailed statement in support. The statement in support should meticulously address the background of the case, why both the marriage and the foreign divorce is entitled to be recognised as valid in England and Wales and how the jurisdictional requirements are satisfied. The statement should demonstrate that the merits tests set out in the legislation and case law have been met. Where available, very full documentary evidence should be exhibited to the statement. The statement in support of the application is also a good opportunity to discuss in detail the overall merits of the case beyond the application for permission. The court must take into account the financial benefit that has been, or is likely to be, received in the foreign jurisdiction, and if the applicant has the right to apply for relief, and reason why that right has not been exercised. These factors cannot properly be addressed without evidence as to the law of the foreign jurisdiction. The applicant should therefore consider obtaining a short expert report from a specialist in the relevant jurisdiction to be attached to their statement in support of their application for permission.

In cases where the foreign jurisdiction is a European country to which the Council Regulation 4/2009 (the Maintenance Regulation) applies, the case law is not yet clear as to the extent to which the English court might be barred from making an award under Pt III, MFPA 1984. This is because a decision in one Member State is automatically recognised and enforceable in another Member State.  Careful consideration must therefore be given to which elements of the foreign order amount to ‘maintenance’ which, in its wider, European definition, can include capital provision for housing.

 

Although there are jurisdictional and factual hurdles to clear, in appropriate circumstances a Part III application is a potentially powerful means to address real hardship and serious injustice that may be caused by the operation of foreign law. Please contact Sonny Patel, Senior Associate at Expatriate Law, for advice or an initial assessment on your ability to make financial claims after a divorce abroad. Sonny can be reached at [email protected]

 

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