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Hayley Trim's Analysis: Pandora on the rampage and Agbaje reined in?

Date:3 MAY 2012
Senior Associate Solicitor

Hayley Trim, Family Law PSLColeridge J has been in the news recently for his Marriage Foundation which has had a mixed reception, and perhaps coincidentally there have been two of his judgments landing on my desk in the last few days. They generally make a good read.

My personal favourite Z v A [2012] EWHC 467 concerned whether a wife should be permitted to proceed with her application under Part III Matrimonial and Family Proceedings Act 1984. Coleridge J noted that the case engaged almost every principle recently considered by the House of Lords and the Supreme Court from White, through Miller/McFarlane, Agbaje and Radmacher to Jones v Kernott, each of which (with the exception of Jones) had he said "blown apart years of previously accepted restraint on post divorce financial claims", and as a result "Pandora is on the rampage as almost never before." There's a comforting thought.

Coleridge J notes that cases which engage some of these new principles are taking longer to dispose of due to the highly discretionary and fact sensitive nature of the law in this area. In Riding v Riding [2011] EWHC 3093 (Fam) he commented that the principles collected from the recent cases may have provided a greater degree of sophistication where there is a large surplus over needs, but this can be at the expense of simplicity in cases where the assets are only sufficient (or insufficient) to meet needs. This is a reflection of the fact that most reported cases in the appeal courts are not representative of everyday people with average assets and income, and trying to transpose directly principles from cases involving many millions of pounds is not practical or efficient.

Z v A on the other hand was not a needs case. It concerned a couple who had married abroad under Sharia law and less than 5 years later having lived initially in London and then in the Bahamas they divorced consensually in the same country they had married where neither had any financial claims against the other. There was a young child. The husband was very wealthy (worth about £38m) and the wife was wealthy in her own right (worth about £6m).

The wife had been granted leave to make a claim under Part III Matrimonial and Family Proceedings Act 1984 and the husband applied to strike out that leave, asserting that there was an oral prenuptial agreement that neither would have any claims against the other, and also non-disclosure by the wife regarding interests in her family's business. The wife was seeking over £10m and had obtained a freezing injunction in respect of £12m of the husband's assets.

Coleridge J mused as to the purpose of Part III - is it to prevent hardship, or to allow a full blown financial claim under English law despite a consensual divorce in a country where neither could claim against the other? He noted that this issue had to be confronted even at this leave stage of proceedings. The question under s16 is whether in all the circumstances it would be appropriate for an order to be made by an English court. This means 'is this a proper use of the 1984 Act, and is it being used to address a mischief that the Act was designed to address', particularly given the potential for meritless claims or for the Act to be abused?

The judge found that the husband had not proved the existence of an express prenuptial agreement that excluded all claims and that for such a draconian result there was a high burden of proof upon him. On that basis there was no "knock-out blow" (per Agbaje) to the wife's grant of leave. Non-disclosure was not made out either. However Coleridge J found that there were conversations leading up to the wedding about how the couple would manage their money and that they had gone on to act accordingly during the marriage. He decided that the evidence pointed towards the drawing of an inference (à la Jones v Kernott) that, had the parties been asked at the time of their marriage whether they would intend to make any financial claims in the event of a divorce, both would have responded "only if I really need to". Therefore although there was no basis for overturning the grant of leave the judge considered whether conditions should be imposed and the case only allowed to proceed to the quantum stage on certain terms; for example should the wife only be allowed to proceed with a needs based claim?

In the event conditions were not attached, since the wife decided not to pursue further disclosure thereby accepting that her claims would be restricted to the husband's declared fortune. The undertone of Coleridge's judgment is fairly clear: is it really right for a party who has voluntarily signed up to a foreign divorce to bring proceedings in this country where there is clearly no hardship and indeed she is wealthy in her own right? He notes that some cases under Part III which are English in all but name may well justify the full application of the principles of English law (including compensation, sharing etc), but he questions whether this case falls into that category. He states that this is a central question which would need to be addressed before an FDR could properly proceed. Had the wife not agreed not to seek disclosure, I suspect Coleridge J would have been inclined to restrict the ambit of her claim following a further hearing.

I wonder if this approach makes it more worthwhile to apply to set aside a grant of leave in Part III cases. The Supreme Court in Agbaje discouraged such applications saying the court should use its case management powers to adjourn an application to set aside to be heard with the substantive application unless it was clear that the respondent could deliver a knock out blow. Here the husband claimed the existence of an oral pre-nup constituted such a blow, but failed to prove that the agreement existed. However Coleridge J's approach to deciding what is an appropriate claim perhaps provides an incentive to have a go, even if you are only likely to manage a standing 8 count; it may result in conditions being attached and findings made that effectively restrict the ambit of the claim. This is particularly relevant where the grant of leave is ex parte. Subject always of course to judicial approach, a strike out application (and/or in the alternative an application to attach conditions to the grant of leave) could offer an opportunity for judicial consideration of the merits, strong case management and issue refinement prior to an FDR and consideration of quantum.

Hayley Trim is a Family Law PSL at Jordan Publishing and was formerly a family solicitor practising in London.

She works on the Family Law online major works providing updating notes on cases and other relevant developments as they happen for The Family Court Practice, Children Law and Practice and Matrimonial Property and Finance online.

Contact Hayley on Twitter: @HayleyTrim