The value of a family business or business interest is treated as an asset and therefore part of the matrimonial pot to be distributed when it comes to negotiating a financial settlement on divorce or...
(Supreme Court; Lord Phillips, President; Lord Rodger, Lady Hale, Lord Collins, Lord Kerr; 10 March 2010)
On appeal from the Court of Appeal Civil Division  EWCA Civ.
The Supreme Court unanimously allowed the Agbaje appeal and in doing so clarified the circumstances in which an order for financial provision can be made under Part III of the Matrimonial and Family Proceedings Act 1984, where a foreign court has made a prior financial order in divorce proceedings.
The Court of Appeal had set aside the ancillary relief awarded to Mrs Agbaje on the ground that the High Court had given insufficient weight to the ancillary relief awarded by a Nigerian court. However, the Justices held that the whole purpose of Part III is to alleviate adverse consequences of no, or no adequate, financial provision being made by a foreign court in a situation where the parties had substantial connections with England.
Mr and Mrs Agbaje were born in Nigeria, acquired UK citizenship in 1972 and were married for 38 years. All five of their children were born (and all but one educated) in England, and in 1975 Mr Agbaje bought a property in England in which their children stayed with a nanny. However, for the majority of their married life Mr and Mrs Agbaje lived in Nigeria.
They separated in 1999, at which point Mrs Agbaje came to live in their English property and has lived there ever since. In 2003 Mr Agbaje issued divorce proceedings in the Nigerian courts in which Mrs Agbaje sought ancillary relief. The Nigerian court awarded her a life interest in a property in Lagos (with a capital value of about £86,000) and a lump sum equivalent to about £21,000.
Part III of the Matrimonial and Family Proceedings Act 1984 was enacted to give the
English court the power to grant financial relief after a marriage has been dissolved (or annulled) in a foreign country. Mrs Agbaje sought such relief and the High Court granted her leave (as required under Part III) and ultimately ordered that she should receive a lump sum equal to 65% of the sale proceeds of the English property (equivalent to about £275,000) on condition that she relinquish her life interest in the Lagos property. The award represented 39% of the total assets.
The Court of Appeal concluded that "it would not be appropriate to grant Mrs Agbaje even another nibble at the cherry".
The issue the Supreme Court had to consider was the proper approach for courts to take when considering applications made under Part III.
In applying Part III, the English courts should not be deciding whether it would be appropriate for an order to be made by a court in England or Wales as opposed to a foreign court. The whole point of Part III is to allow for relief in circumstances where there have already been proceedings in a foreign country.
Relevant to the question of whether an order should be made and, if so, what order, will be a number of factors such as the financial benefit which the applicant has already received, or whether the applicant has failed to take advantage of a right under the foreign law to claim financial relief. The hardship or the injustice which would result if no award were made will be relevant factors, although neither are pre-conditions to an award under Part III.
Although there was no principle that an English court could only make an award that was the "minimum necessary to remedy the injustice" which would otherwise occur, it was equally not the intention of the legislation to allow a simple "top-up" of the foreign award so as to equate with an English award in every case. If the connection with England is not strong and a spouse has received adequate provision from the foreign court, it will not be appropriate for Part III to be used to "top-up" the award. If the English connections are strong, however, it may be appropriate to do so.
The amount of financial provision awarded under Part III will depend on all the circumstances of the case. But three general principles should be applied. First, primary consideration should be given to the welfare of any child of the marriage. Second, it will never be appropriate to make an order which gives the claimant more than she or he would have been awarded had all proceedings taken place within this jurisdiction. Third, where possible the order should have the result that provision is made for the reasonable needs of each spouse.
The Supreme Court restored the order of the High Court.