How ‘No-deal Brexit’ may affect Maintenance for Expats

The UK appears to be heading towards a cliff-edge no-deal Brexit. Or not. Until we have clarity about what will happen on 29 March, every industry and professional discipline must prepare for the possibility of an abrupt cutting of ties with the EU.

The Law Society and Resolution has produced a guidance note to family lawyers in England and Wales detailing practical recommendations in the event of a no deal exit from the EU.

From the perspective of English family lawyers who deal with international divorce cases for British expats, there is one particular implication of a no-deal Brexit which will shake-up the tactics of cross-jurisdiction divorce, particularly for clients living in non-EU countries.  In short, a no-deal Brexit will eliminate the restriction on maintenance claims when jurisdiction is established based on the sole domicile of just one of the parties to a divorce.  This statement needs context and explanation.

 

Jurisdiction for divorce

A court’s ability to deal with a divorce is called its ‘jurisdiction’. For British expatriates around the world, a divorce can usually proceed in England based on their ‘domicile of origin’.

Choosing the appropriate jurisdiction for divorce is important. This is because the family courts in each country have developed different rules which guide their exercise of dividing assets and income during a divorce. This can affect the financial outcome of a divorce as a result.

The English courts have jurisdiction to deal with the divorce only where:

  1. Both parties are habitually resident in England and Wales; or
  2. Either party was habitually resident in England and Wales, and one of them still resides there; or
  3. The respondent (the person whom the divorce is filed against) is habitually resident in England and Wales; or
  4. The petitioner (the person who filed the divorce) is habitually resident in England and Wales and has lived there for at least 1 year immediately before the petition is filed; or
  5. The petitioner is domiciled in England and Wales and has been residing in England and Wales for at least 6 months immediately before the petition is filed; or
  6. Both parties are domiciled in England and Wales; or
  7. If none of (1)–(6) above applies and no court of another EU State has jurisdiction, either party is domiciled in England and Wales on the date when the proceedings are begun.

To establish jurisdiction, points (1) to (5) require physical presence in England/Wales of one or both parties.

Points (6) and (7) do not require the physical presence in England/Wales of either of the parties. The practical implication is that expats can invoke the power of the English court to deal with financial matters on divorce, even if the couple have lived abroad for many years.  

In the context of English divorce jurisdiction, it is essential to understand 2 forms of domicile:

  • Domicile of origin; and
  • Domicile of choice.

 

Domicile of origin

The domicile of origin is the domicile that a person acquires at birth and is the country in which their parent is domiciled at the date of birth.

Where the married parents of a child are both alive and living together, the child’s domicile will be that of the father. A child born to unmarried parents or to a mother following the death of the father will have the domicile of the mother.

Domicile of origin is difficult to relinquish. An existing domicile is presumed to continue until it is proven that a new domicile has been acquired. The burden of proof is on the individual to demonstrate that he has lost his domicile of origin.

 

Domicile of choice

A domicile of choice can be acquired by the combination and coincidence of residence in a country and an intention to make one’s home in that country permanently or indefinitely.

In simple terms, the individual must be physically present in the country and be able to demonstrate their intention to live there until the day that they die.

Physical residence for a short period of time, even a few days, may be sufficient to establish a domicile of choice, as long as the intention to reside in that country is for the indefinite future.

A person may abandon a domicile of choice in a country by ceasing to reside there and by ceasing the intend to reside there indefinitely.

When a domicile of choice is abandoned, a new domicile of choice may be acquired. However if it is not acquired, the domicile of origin revives.

 

The sole domicile restriction

When English jurisdiction is pleaded based on both parties being domiciled in England (as per point 6 above), the English court will deal with the division of assets and maintenance.

Where divorce jurisdiction is based on the sole domicile of one spouse (as per point 7  above), the starting point is that the English court does not have jurisdiction to make maintenance orders. Instead it only has jurisdiction to divide assets.

However, for completeness, the English court may still make maintenance orders if:

  • The parties voluntarily submit to the jurisdiction in respect of maintenance;
  • The respondent enters an appearance (other than to contest jurisdiction); or
  • Proceedings cannot reasonably be brought or conducted or would be impossible in a third state.

See Expatriate Law’s case of Baldwin vs Baldwin [2014] EWHC 4857 (Fam): https://www.familylaw.co.uk/news_and_comment/baldwin-v-baldwin-2014-ewhc-4857-fam

 

The implications of a No-deal Brexit

The sole domicile trap arises by operation of EU law, specifically, Article 3(c) of Council Regulation (EC) 4/2009 of 18 December 2008 on jurisdiction, applicable law, recognition and enforcement of decisions and co-operation in matters relating to maintenance obligations. (“The maintenance regulation”).

The Law Society and Resolution guidance note on the implication of No-deal concludes that:

“At present, EU law doesn’t allow maintenance orders based on sole domicile so courts in England and Wales have no power by EU law to make such orders…this restriction will end on Exit Day if there is no deal.”

Therefore, in the event of No deal, when jurisdiction for divorce is based on sole domicile of one of the parties, the full powers of the English court to re-distribute capital and to award spousal and child maintenance will be available. There will be no need to establish any of the exceptions discussed in Baldwin v Baldwin.

Lifting of the sole domicile restriction will primarily benefit English wives who live abroad and who are married to husbands of a different nationality, or the wives of English men living abroad (who can demonstrate that their husband has not fully relinquished his English domicile of origin).

In an international divorce, it essential that the parties involved instruct English lawyers who are experienced working with expats and dealing with the complexities and hidden traps of international law.

Sonny Patel, partner and senior solicitor at Expatriate Law. Please visit our website at www.expatriatelaw.com, telephone 0442030967169 or email [email protected].

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