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Weightmans , 26 MAR 2018

Re V: how will the challenge to the spirit of the maintenance regulation fare in the Court of Appeal?

Re V: how will the challenge to the spirit of the maintenance regulation fare in the Court of Appeal?
The preface to Council Regulation (EC) No. 4/2009 on jurisdiction, recognition and enforcement of decisions and co-operation in matters relating to maintenance obligations (the maintenance regulation) references the aspiration of creating common procedural rules to ‘simplify and accelerate’ (para (4)) the settlement of maintenance claims and promote ‘legal certainty’ and ‘predictability’ (para (19)) for parties living in the Member States. The merit in its aims is irrefutable but case law since the regulations came into force on 18 June 2011 reveal discrete occasions where it may fail to meet these objectives.

One such challenge lies in the interaction between the maintenance regulation and Council Regulation (EC) No. 2201/2003 concerning jurisdiction and the recognition and enforcement of judgments in matrimonial matters and matters of parental responsibility (Brussels II revised) which governs divorce jurisdiction. Although there is some overlap, the criteria for establishing jurisdiction for divorce and spousal maintenance are different. Where maintenance claims are not necessarily invoked as a matter of standard practice at the commencement of divorce proceedings and free-standing maintenance applications exist in another member state’s domestic law, parties risk litigating matters relating to the breakdown of their marriage in more than one forum. To parties to whom such a scenario could apply, the interpretation of the maintenance regulation appears to complicate, delay and provide legal uncertainty.

The case of Re V (European Maintenance Regulation) [2016] EWHC 668 (Fam)[2017] 1 FLR 1083, due to be heard in the Court of Appeal, presents a novel opportunity for the court to interpret Art 13 of the maintenance regulation in accordance with the regulation’s objectives. This would require the court to find that, in certain circumstances at least, divorce proceedings and spousal maintenance proceedings are ‘related actions’. If Art 13 cannot be construed in this way and no forum conveniens argument can assist, claims for interim maintenance could be substituted with a free-standing claim for maintenance under s 27 of the Matrimonial Causes Act 1973 (MCA 1973). There will then always be a risk of litigation in two jurisdictions where one party can establish jurisdiction under the maintenance regulation in England and Wales and divorce proceedings in another member state do not invoke maintenance claims.

This article revisits the arguments in the cases of Re V and N v N (Stay of Maintenance Proceedings) [2012] EWHC 4282 (Fam), [2014] 1 FLR 1399, considering the similarities in the applications made and the rationale behind two very different decisions from the High Court. In doing so it considers Arts 12 and 13 of the maintenance regulation and whether there is previous case law that could assist in determining the relationship between divorce proceedings and a free-standing spousal maintenance claim. In doing so, it only considers the relationship between divorce proceedings and spousal maintenance claims, not child maintenance claims.

Articles 12 and 13

Article 12 provides that if there is the ‘same cause of action’ before the courts of more than one member state, then any court other than the first court seised ‘shall’ stay its proceedings. Article 13 refers to a scenario in which there are ‘related actions’ in the courts of more than one member state and indicates that the court second in time ‘may’ stay its proceedings or dismiss the application.

There is therefore an implied discretion in the wording of Art 13 that does not exist in Art 12. Article 13(3) continues to provide a definition for ‘related action’ stating that:
‘actions are deemed to be related where they are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings’

It is the ‘risk of irreconcilable judgments’ that calls into question whether the definition could be interpreted widely enough to encompass divorce and financial relief in respect of that marriage.  Article continues below...
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Re V – the facts

The parties in Re V married in 1994, moved to Scotland in 1995 and were habitually resident there until they separated in 2012. On separation, the wife moved to England. In 2013 she issued a petition based on her habitual residence. The husband disputed jurisdiction. 

For the purposes of jurisdiction under (EC) No. 2201/2003 of 27 November 2003 concerning jurisdiction and the recognition of judgments in matrimonial matters and matters of parental responsibility the UK comprises one member state. However, domestic law governs the jurisdiction between the constituent parts and this is set out in the Domicile and Matrimonial Proceedings Act 1973. Under Sch 1, the English court is obliged to stay divorce proceedings if a writ is brought in Scotland, if the place the parties last resided together was Scotland and if one of those parties was habitually resident in Scotland throughout the year ending with the date on which they last resided together. 

It is therefore no surprise that the wife withdrew her English petition by consent. Rather than focus on the proceedings in Scotland, however, the wife applied for interim maintenance under s 27 of MCA 1973. An application under s 27 of MCA 1973 is entirely free-standing rather than a claim that requires divorce proceedings to be underway (there was already unfavourable case law, from the wife’s perspective, preventing her from arguing that the maintenance pending suit application based on her stayed petition should still be heard). 

Section 27 of MCA 1973 does not require the marriage to have broken down. Under s 27(1) the respondent must have ‘failed to provide reasonable maintenance for the applicant’. It requires the court to look at the criteria under s 25(2) of MCA 1973 and to have regard to all the circumstances in the case. Jurisdiction for s 27 of MCA 1973 is determined by the maintenance regulation. Under Art 3(b) the wife qualified as she was habitually resident in England and was the creditor seeking maintenance. For the purposes of the maintenance regulation, each UK jurisdiction is treated as a different member state. 

The remaining question was whether the English court was seised first in time under the maintenance regulation or whether the divorce jurisdiction seised in Scotland, under which maintenance claims could be brought was first in time. It was argued on behalf of the wife that Scottish jurisdiction had not been seised under the maintenance regulation as no financial claim had been craved within the writ. The English court was first in time in securing jurisdiction for maintenance under Art 12 and any subsequent claim in Scotland would need to be stayed or dismissed. 

It is to be noted prior to considering the judgment that the husband was not represented in these proceedings. Had he been represented, the presentation of the case may well have extended to a discussion regarding whether Art 13 of the maintenance regulation applied and equally drawn attention to the earlier High Court decision of N v N. 

Re V – the judgment

Justice Parker held that the lack of financial application within the Scottish writ meant that Scottish jurisdiction was seised in respect of divorce but not maintenance. Article 12, the lis pendens rule meant English jurisdiction was seised as it was first in time. She continued to make interim maintenance and cost orders in favour of the wife. She additionally referred to the maintenance regulation’s jurisdiction based on forum necessitatis determining that this was not applicable in this case. The husband’s appeal against this decision is to be heard by the Court of Appeal. 

N v N – the facts

The parties were married for nine years. The husband was Swedish and the wife was Dutch. They owned homes in Sweden and Spain. It was considered that they had limited connection with England. 

The Swedish court was seised first in time in relation to the divorce proceedings (albeit the wife contested the jurisdiction). She also filed a petition in England citing the Swedish divorce but despite this managed to obtain a decree nisi. The husband accordingly sought to rescind the decree nisi. The Swedish court found against the wife on divorce jurisdiction (although she decided to appeal this decision). Her English divorce proceedings were stayed and the judge found that there was no choice but to stay her application for maintenance pending suit. She was given an opportunity to explore alternative methods of securing an English maintenance order but on notice as to the costs implications of pursuing matters further if she ultimately proved unsuccessful. She issued an application under s 27 of MCA 1973 on the basis that no financial claims were cited in the husband’s petition and that the English court was therefore seised first. 

N v N – the judgment

In N v N, Mr Justice Moor dismissed the wife’s application under s 27 of MCA 1973. He labelled it a device and highlighted that the wife could bring a maintenance application in Sweden as part of the substantive divorce proceedings. He relied on Art 13(2) of the maintenance regulation. He found that the inclusion of Art 13 would be superfluous if jurisdiction under the regulation was only to refer specifically to maintenance claims and found that the wording in Art 13 gave the court scope to dismiss the wife’s s 27 MCA 1973 application based on the Swedish court being seised with a related action (ie the divorce proceedings) and that there was no prejudice to the wife in pursuing her maintenance claims in Sweden. 

Are the judgments reconcilable, if not which is correct?

So there are two seemingly similar scenarios with two very different High Court decisions. In each scenario an EU jurisdiction other than England and Wales was seised in respect of the divorce proceedings. In each scenario no claim for maintenance had been formally invoked within the context of the divorce proceedings but there was no bar and it would have been conventional for the wife in each scenario to make an application for maintenance pursuant to the divorce petition. In both cases the courts of England and Wales had jurisdiction under the maintenance regulation and were therefore able to entertain an application under s 27 of MCA 1973. The question in both cases was whether the divorce proceedings initiated in the other jurisdiction meant that (i) rather than England being the first jurisdiction seised for the purposes of the maintenance regulation, the divorce proceedings secured maintenance jurisdiction as well, or (ii), there was a discretion to stay or dismiss the English proceedings under Art 13 as the divorce proceedings were a related action, or (iii) England was seised first under the maintenance regulation as there was no specific invocation of claims relating to maintenance.

No expert evidence was presented in N v N. The judgment made no suggestion that the wife’s claims for maintenance in Sweden were inferior to her claims in England. In Re V the distinction was made that whilst it was possible for the wife to bring maintenance claims in Scotland it was accepted that these would not be as generous as under the English law and substantive claims would not take account the husband’s resources from inheritance. 

Practical considerations

Had either the Swedish or the Scottish court had a standard form for the commencement of divorce proceedings with a set of boxes to tick, as in England, the loophole presented by s 27 of MCA 1973 could not have been exploited. It is a perverse concept that someone not seeking maintenance needs to plead a maintenance claim to protect the forum and save themselves from litigation in another jurisdiction. It raises the question whether invoking claims that a party envisages the other party to the proceedings may want to pursue, is an option in all member states. Equally is England the exception in having a freestanding claim for spousal maintenance?

A claim under s 27 of MCA 1973 does not encompass all financial claims arising on a divorce. However, based on reciprocal recognition of judgments between member states, a maintenance order made by the English court could not be ignored by the court determining the remaining financial claims between the parties on divorce. Whilst this should prevent an irreconcilable order being made, it does add a level of complexity to the determination of the overall claim if the maintenance provision runs contrary to how the law in that member state would approach the overall financial settlement.

Cases considering the definition of related actions

Council regulation (EC) 44/2001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (Brussels I), which was the predecessor to the maintenance regulation, contained at Art 27 and 28 respectively identical provisions to Art 12 and 13. Prior to that, the 1968 Brussels Convention included the same wording at Art 21 and 22. There is therefore case law on the definition of the same cause of action under Art 12 (which is not given the narrowest of interpretations see B v B (Maintenance Regulation - Stay) [2017] EWHC 1029 (Fam), [2018] 1 FLR 658) and also related actions under Art 13. 

Case law prior to the maintenance regulation that supports the approach taken in the High Court in Re V includes W v W (financial relief: appropriate forum) [1997] 1 FLR 257 in which Holman J concluded that the divorce decree and the finances per se belonged in separate and discrete compartments. Connell J reinforced this view in D v P (forum conveniens) [1998] 2 FLR 25, although the court’s decision in this case included examination of whether the Italian court was already seised based on the ratification of a financial separation agreement prior to the English divorce proceedings. There was also a forum conveniens argument based on the parties’ tenuous connection to England. 

In T v P (Jurisdiction: Lugano Convention and Forum Conveniens) [2012] EWHC 1627 (Fam)[2013] 1 FLR 478, divorce proceedings were issued in Switzerland and England. The husband sought to stay the English proceedings including a claim for maintenance pending suit claiming jurisdiction had been seised in relation to maintenance in Switzerland (under the Lugano Convention which includes identical provisions to Arts 12 and 13). Divorce proceedings filed in Switzerland did go beyond those filed in Scotland and Sweden in Re V and N v N, to the extent that papers included reference to how the husband proposed to deal with financial assets but appeared to fall short of specifically pleading maintenance claims for himself or for the children. Summons from the Swiss court sought financial disclosure from the parties. The case was decided based on the Swiss court being first seised. Roderic Wood J went on to consider Art 28(3) concluding that he was clear that ‘the actions in both Switzerland and England are related actions within the meaning of Art 28(3)’. It is difficult to argue that this supports either Re V or N v N based on the financial element to the Swiss divorce proceedings. 

The earlier judgment of Wermuth v Wermuth (No 2) [2003] EWCA Civ 50, [2003] 1 FLR 1029 was relied on by Moor J in N v N. Divorce proceedings had been issued in Germany and then England. The wife sought maintenance pending suit based on the English petition and her claim was dismissed, (as was the MPS claim in N v N leading to the s 27 MCA 1973 application). In Wermuth, Thorpe LJ reiterated forcefully the objectives of convention, the simplification of jurisdictional rules and the folly of litigating in multiple jurisdiction which lent to the conclusion that Germany as the appropriate forum. He was not obliged to consider a s 27 MCA 1973 application.

In the case of Sarrio SA v Kuwait Investment Authority [1999] 1 AC 32, [1997] 4 All ER 929 Lord Saville found a wide interpretation was required in determining related actions and that a ‘broad common-sense approach to whether the actions in question are related bearing in mind the objective of the article and … refraining from an over-sophisticated analysis of the matter’. It is arguable that the wife’s claim in Re V was a thinly disguised maintenance pending suit claim and that a broad common-sense approach relates maintenance following the breakdown of a marriage with divorce proceedings.

Conclusion

It is difficult to reconcile Moor J’s interpretation of a related action in the context of Art 13(3). However, his broad interpretation staunchly promotes the aims of the maintenance regulation, shutting down a loophole to achieve the simplicity it intended. It is hard not to conclude that s 27 of MCA 1973 is anything other than a device to circumvent the divorce jurisdiction in circumstances when it can be argued that the respondent has ‘failed to provide reasonable maintenance for the applicant’. In 2018 the Court of Appeal will provide clarity on whether s 27 of MCA 1973 will continue to be a loophole available to parties seeking to secure maintenance jurisdiction in England and Wales, despite their divorce being dealt with in the courts of another member state, or whether it has had its moment in the limelight. 
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