A fair settlement?

  • Author : Andrew Barton
  • Date : June 2010

ABOUT THE AUTHOR: Andrew Barton is an Associate at Stephens Scown Solicitors

A side effect of the increase in economic migration over the last 40 years has been the increase in foreign divorces involving a husband or wife with pre-existing links to the UK. The significance of this link may at first seem academic to the individuals involved and is unlikely to be of any consequence to either party, as long as they regard the result of their foreign divorce as being ‘fair.’ If the outcome of their overseas divorce is inadequate, however, Part III of the Matrimonial and Family Proceedings Act 1984 (referred to hereinafter as Part III) may provide a lifeline for the aggrieved party.

The Part III procedure provides English courts with the ability to award financial provision after a foreign divorce, not only in cases where no financial provision has already been made overseas, but also where the provision made has been inadequate. It was implemented as a result of recommendations set out in the England and Wales Law Commission’s Working Paper (1980) No.77 on Financial Relief after Foreign Divorce. Its principal aim was to prevent hardship to wives and children where the approach of foreign courts had been too restrictive and perhaps neglectful of their needs.

The ‘corrective’ nature of Part III has meant that until now it has only been used sparingly and as a means of last resort. This, coupled with the need to obtain leave before pursuing a Part III application, discouraging and filtering out the less compelling claims, had meant that although Part III had been on the statute books for over 25 years, it was not until the recent case of Agbaje v Agbaje UKSC 13 that the higher appellate courts had been asked to consider a substantive case brought under the procedure.

The Part III procedure provides English courts with the ability to award financial provision after a foreign divorce

This of itself made the case remarkable. Following the Court of Appeal ruling, however, Mrs Agbaje appealed her case to the Supreme Court and judgment was given on 10 March 2010. The resulting judgments both of the Supreme Court and the Court of Appeal act as a useful note of guidance to practitioners seeking to rely on the principles of Part III.

The facts

Mr and Mrs Agbaje were both born in Nigeria and aged 71 and 68 respectively. They were in their early 20s when they moved England and it was whilst they were in that country that they met and formed a relationship. They married in 1967 and had five children together in England. The parties acquired British citizenship in 1972, shortly after which the husband returned to Nigeria to set up a legal practice. The wife returned to Nigeria with the children in 1974; however the two elder children were brought back in 1975 to attend boarding school in England. Latterly, the other children followed and a property was purchased in New Barnet as a base for the parents when they visited their children in England. They only stayed there for short periods however, and it was not until the parties separated in 1999 that the wife returned to England to stay at the home in New Barnet on a permanent basis.

The husband commenced divorce proceedings in Nigeria in 2003, relying on his domicile in that country. The wife herself commenced proceedings in England, relying on her habitual residence there, however both the Nigerian and the English Courts were of the view that there was no reason justice would not be obtained by the wife in the Courts of Nigeria. As a result of those proceedings the husband was able to retain net assets worth a total of GBP616,000, including two properties in England. The wife, who hoped to remain living in England, was awarded a life interest in the matrimonial home in Nigeria worth GBP86,000, which, together with her modest savings and larger loans, left her with net assets of GBP7,000. The wife applied under Part III for provision in England and leave was granted to pursue her substantive application.

What the trial judge decided

The case was initially heard in England by Coleridge J in the High Court of England and Wales, who considered whether it would be appropriate to ‘revise’ the order of the Nigerian Courts. He summarised the position of the parties as follows:

‘The husband says that this is no more or less than a second bite of the cherry, that the application must fail, because there have been proceedings already in Nigeria. The wife accepts that in a sense it is a second bite of the cherry but that she is entitled to succeed because in the Nigerian proceedings she was afforded only the merest of nibbles and cannot live here on what she has.’

He found that the parties had a long- standing connection with the UK since they were British citizens; their children were British and had been educated in England; the wife was resident in England; and between them, the parties owned two properties in that country. As a result of this link with the UK, Coleridge J took the view that it was appropriate for the English Courts to revise the Nigerian order. He awarded Mrs Agbaje a lump sum of GBP225,000 to meet her housing needs in England, together with an additional GBP50,000 to provide for her in retirement, in return for transferring the Nigerian property back to the husband.

What the England and Wales Court of Appeal decided

Ward LJ weighed up the parties’ connections with the UK in comparison with their Nigerian connections. He observed that this was an important exercise to undertake if the principle of comity was not to be compromised. This was particularly important in the current case, where in his view the Commonwealth jurisdiction of Nigeria had largely embraced the traditions of the UK. The parties had lived most of their lives in Nigeria and this had to be a consideration when determining the appropriate forum.

He also considered that the Nigerian order, in the context of what Mrs Agbaje had initially sought, ie a house and a lump sum. He observed that since the order provided her with a place to live and a capital sum for life, it could not be said that any injustice had occurred. The wife’s claim for further relief under Part III was therefore dismissed.

What the England and Wales Supreme Court decided

Lord Collins delivered judgment and observed that Part III does not necessarily require the court to make a choice between competing forums, since there may be more than one appropriate forum to any case. Instead, the court is required to consider whether it would be appropriate for an order to be made in England, taking into account the factors set out in section 16(2) of the Matrimonial and Family Proceedings Act 1984, but not restricting its reasoning to these factors alone. The court was also able to allow hardship, exceptionality and injustice to influence its decision making, even though these specific terms are not referred to in section 16(2).

Lord Collins did not consider that the principles of comity would be threatened through a proper exercise of the court’s discretion under section 16(2) of the Act.

In commenting on the quantum of award, Lord Collins referred back to the England and Wales Law Commission’s original 1980 recommendations, when it suggested that the guidelines set out in section 25 of the Matrimonial Causes Act 1973 should be followed, a rationale that was followed in the eventual construction of the Act. A trend has developed in recent years restricting Part III provision only to the ‘minimum extent necessary so as to remedy the injustice perceived.’ However Lord Collins commented that this approach did not stand up and instead recommended, as a general rule, that the greater the parties’ connection to England, the closer the Part III award should be to English ancillary relief levels. He also recommended three general principles to be applied by the court when determining the level of award due under Part III:

1The primary consideration should always be the welfare of any children of the marriage.2The award should not exceed what the applicant would have been awarded through an ancillary relief application in England and Wales.3The result should make provision for the reasonable needs of each spouse.

The Supreme Court took the view that Mrs Agbaje’s connections to England were substantial enough to justify the making of a Part III award and restored the award to the full level recommended initially by Coleridge J.

Where does it leave us?

There has been much commentary on this case in the legal press, with concerns that it opens the floodgates to forum shopping. The practical result goes no further in reality than to confirm the position in law prior to the England and Wales Court of Appeal judgment in January 2009. True, there is further guidance as to how the level of a Part III award should be determined. However, in practice this should work to promote negotiation at least as much as it does litigation. The requirement to obtain leave before bringing a Part III claim will continue to prevent less meritorious claims and ensure that the more worthy ones are provided access to justice.

In the context of this article ‘foreign’ and ‘overseas’ refer to non-UK cases.

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