Financial Provision in England After an Overseas Divorce

Author(s): JAMES COPSON

Source: Family Law Quarterly , Fall 2011, Vol. 45, No. 3 (Fall 2011), pp. 361-367
Published by: American Bar Association

Stable URL: https://www.jstor.org/stable/23240323

JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide
range of content in a trusted digital archive. We use information technology and tools to increase productivity and
facilitate new forms of scholarship. For more information about JSTOR, please contact support@jstor.org.

Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at
https://about.jstor.org/terms

American Bar Association is collaborating with JSTOR to digitize, preserve and extend access to
Family Law Quarterly

This content downloaded from

3.6.73.78 on Sat, 02 Apr 2022 11:17:53 UTC
All use subject to https://about.jstor.org/terms
 Financial Provision in England
After an Overseas Divorce

JAMES COPSON*

I. Introduction

Every so often there is a sea change in English family law that sweeps
away much of the received wisdom and common practice of years before.
One such sweep occurred in 2000, with the House of Lords (now known
as the Supreme Court) decision in White v. White,1 which is now the
bedrock judgment for asset division on divorce. Another sweep occurred
again in 2010 with the Supreme Court decision in Radmacher v.
Granatino.2 Radmacher has strengthened immeasurably the enforceabili
ty of prenuptial agreements in England and Wales, rendering them
enforceable, unless their terms are held to be unfair.
A third such wave occurred in 2010. In Agbaje v. Agbaje,3 the House
of Lords heralded a new approach in financial provision in England after
a divorce elsewhere, with far-reaching consequences for those around the
* Partner at Withers Solicitors, London.
1. White v. White, [2001 ] 1 All E.R. 43 (H.L.) (appeal taken from Eng.) (finding that there
should be no discrimination between a breadwinner and the homemaker and that the principle
of fairness should prevail).
2. Radmacher v. Granatino, [2010] UKSC 42. The Supreme Court held a husband to the
German-style marriage contract he had signed prior to the marriage at the insistence of his
wife's wealthy family. The agreement, which would have been binding in Germany where the
wife was from and in France where the husband was from, barred the husband from making any
financial claims at divorce. At the time of the divorce, the husband, who had been an investment
banker, was studying for a post-graduate degree at Oxford University, brought financial claims
against the wife for housing and an income fund for ongoing support. The high court had award
ed £5.5 million. The court of appeal found the husband to be "a man of the world" who knew
what he was signing, even without financial disclosure or independent legal advice, but did
award him £2.2 million in housing fund until the child was twenty-two. The Supreme Court
upheld the decision, saying the divorce court should "give effect to a nuptial agreement that
is freely entered into by each party with a full appreciation of its implications, unless in the cir
cumstances prevailing it would not be fair to hold the parties to their agreement."
3. Agbaje v. Agbaje [2010] 1 F.L.R. 1813.

361

This content downloaded from

3.6.73.78 on Sat, 02 Apr 2022 11:17:53 UTC
All use subject to https://about.jstor.org/terms
362 Family Law Quarterly, Volume 45, Number 3, Fall 2011

globe with English connections.

II. The Matrimonial Causes Act of 1973

The 1973 Matrimonial Causes Act remains the foundation for deter
mining how assets are divided on divorce in England.4 Before the seminal
decision in White, the judiciary tended to interpret asset division, so as to
protect the wealthy (often husbands), by limiting the awards to claimants
to a sum sufficient to meet their "reasonable requirements."5 This placed
a glass ceiling on potential wards, such that even in cases like the 1996
Anglo-Michigan case of Dart v. Dart,6 the wife secured an award of just
£10 million from the husband's wealth of around £400 million.
The 1973 Matrimonial Causes Act states that the English court only
has the power to make final financial awards under the Act on or after the
granting of an English decree of divorce.7 In the early days following
passage of the Act, this meant that the wealthy could obtain a decree else
where in a more favourable jurisdiction, engage in lengthy and costly
arguments about whether that decree should be recognised by the English
courts and then, if unsuccessful, could negotiate on a low platform against
an exhausted (in all senses) claimant.

III. The Matrimonial and Family Proceedings Act 1984

This three-stage process was reduced to two with the introduction of
the Matrimonial and Family Proceedings Act of 1984. Part III of that Act
allowed those with English connections to seek financial provision in
England after a foreign divorce. However, the English judiciary at the
time made it clear that the purpose of the 1984 Act was "to remit hard
ships which have been experienced in the past in the presence of a failure
in a foreign jurisdiction to award appropriate financial relief."8 Reading
the judgment in the 1989 case of Holmes, there is a sense that the English
court was then taking a restrictive view in its exercise of its powers so
as not to alienate a friendly (in this case, New York) court by allowing
disgruntled claimants a second bite at the cherry. Even in what were
essentially enforcement cases (such as the 1999 case of Jordan v. Jordan,9
involving enforcement in England of a California order), the English court
demonstrated extreme reluctance to intervene unless it was convinced that
all avenues in the original court had been exhausted.
4. Matrimonial Causes Act, 1973 § 23 (Eng.).
5. White, supra note 1, at 1.
6. Dart v. Dart, [1996] 2 F.L.R. 286 (Eng.).
7. Matrimonial Causes Act, supra note 4, at 1.
8. Holmes v. Holmes, [1989] 3 All E.R. 786.
9. Jordan v. Jordan, [1999] 2 F.L.R. 1069 (Eng.).

This content downloaded from

3.6.73.78 on Sat, 02 Apr 2022 11:17:53 UTC
All use subject to https://about.jstor.org/terms
 Financial Provision in England After an Overseas Divorce 363

IV. The White Revolution

In 2000, the House of Lords case of White swept away much of the
English court's attitude to financial provision on divorce of earlier years.
Together with the 2006 case of Miller v. Miller,10 it forms the touchstone
of the present philosophy. The main principles one can derive from those
cases are:

1. The role of the court is to achieve a fair outcome.

2. Fairness has three elements, namely, needs, compensation, and shar
ing.
3. Needs trump all in smaller money cases, where, quite often, the for
mer matrimonial home can be appropriated for the use of the home
maker and main carer of minor children, who will usually also have
an ongoing maintenance (alimony) award in his or her favour.
4. Compensation, in practice, is rarely awarded. Its role has tended to
be limited to cases involving relationship-generated career loss.11
5. The sharing principle relates to the notion of marriage as a partner
ship in which the couple will, in their different spheres, be seen to
have contributed equally. Whilst fairness cannot always mean equal
ity, it does mean a policy against discrimination between the roles of
the spouses in the marriage.12
6. In a discretionary system, the outcome will necessarily depend upon
all of the circumstances of each individual case. For example, in
short, childless-marriage-cases boundaries can be drawn between
matrimonial and nonmatrimonial property. Matrimonial property
will usually include assets built up during the marriage through the
joint efforts of the parties and other assets used by the parties during
the marriage, regardless of source.13 Nonmatrimonial property will,
on the other hand, often include premarital acquired assets, gifts, and
inheritances and after-acquired wealth.14 It may also include busi
ness assets and assets determined as such by the couple in, for exam
ple, a prenuptial agreement. Even in longer marriages, debate may
reign over the categorisation and sharing of asset classes (especially
in respect of inheritances, business assets, farms, trust interests, fam

10. Miller v. Miller, [2006] UKHL 24 (upholding award of £5 million to the wife after a
three-year marriage where husband had assets of £17.5 million and shares in his new company
valued between £12 and £18 million).
11. McFarlane v. McFarlane, [2006] UKHL 24 (upholding award of £250,000 income a
year (unless she remarries) in addition to her share of the £3 million capital, divided equally
where wife gave up high-earning career to be a homemaker and husband was high-earning
accountant).
12. Cowan v. Cowan, [2001] EWCA (Civ) 679 (Eng.).
13. Wachtel v. Wachtel, [1973] 1 All E.R. 829.
14. FS v. JS, [2006] EWHC 2793; Charman v. Charman (no. 4) [2007] 1 F.L.R. 1246.

This content downloaded from

3.6.73.78 on Sat, 02 Apr 2022 11:17:53 UTC
All use subject to https://about.jstor.org/terms
364 Family Law Quarterly, Volume 45, Number 3, Fall 2011

ily heirlooms, notions of special or stellar contribution, and after

acquired wealth).
The development of these principles has led ultimately to a reappraisal
of the attitude of the English courts to applications for financial provision
after a divorce overseas. Although in 2007, the court of appeal had made
a move in this direction in the Anglo-Spanish case of Moore v. Moore,15
the breakthrough case was that of Agbaje v. Agbaje in 2010.

V. Agbaje and Beyond

The Agbajes were a dual-nationality couple, who divided their time in
their thirty-eight year marriage between England and Nigeria. All of their
children were born in England, and the wife stayed permanently in
England after their separation in 1999. Of the couple's total assets of
£700,000, seventy-five percent were located in England. But, the husband
successfully brought divorce proceedings in Nigeria, where the court
awarded the wife a life interest in an £86,000 property in Nigeria, plus a
further £21,000 to pay off all of her remaining claims for financial provi
sion. The wife made a subsequent application to the English court under
Part III of the Matrimonial and Family Proceedings Act of 1984. In its
judgment, the House of Lords was at pains to emphasise that it accorded
due respect to the findings of the Nigerian court, but it nevertheless made
a more substantial award in favour of the wife.
Making reference to the earlier cases, including that of Holmes, Lord
Collins stated, "Part III contains no express reference to hardship, injustice
or exceptionality. There has been a tendency. . . to regard hardship as a
condition for the exercise of the jurisdiction rather than as an important
factor to be taken into account where it is present."16 He went on to reflect
on an earlier decision typical of prior thinking in which it was held that it
is "only appropriate for the English court to intervene with financial relief
to the minimum extent necessary so as to remedy the injustice perceived to
exist without intervention."17 He decided that this was not the proper
approach and that instead the English court should consider whether it is
the appropriate venue for the application and, if so, whether an order
should be made to take into account all of the circumstances of the case.
He said that this broad discretion would need to take account of the court's
giving primary consideration to the welfare of any childhood marriage and,
where possible, to ensure that provision is made for the reasonable needs
of each spouse. In all of the circumstances of the case, he decided it was

15. Moore v. Moore, [2007] EWCA (Civ) 361 (Eng.).

16. Agbaje v. Agbaje, [2009] EWCA (Civ) 1 (Eng.).
17. A v. S (Financial Relief after Overseas U.S. Divorce), [2002] EWHC 1157.

This content downloaded from

3.6.73.78 on Sat, 02 Apr 2022 11:17:53 UTC
All use subject to https://about.jstor.org/terms
 Financial Provision in England After an Overseas Divorce 365

appropriate to increase the wife's award to around £275,000.

What is clear from both the judgment and from the quantum of the
award is that the wife achieved thirty-nine percent of the total assets. This
was an award which was intended to be less than she might have achieved
had the matter been first determined in England. This raises serious con
cerns for practitioners about the need to secure jurisdiction in the most
favourable forum for their clients at the outset.
However, Lord Collins also highlighted the fact that the English court
should intervene if there was a substantial ground for bringing the appli
cation. He said this must be more than a serious issue to be tried. The later
court of appeal cases of Schofield v. Schofield18 and Traversa v. Freddi19
have indicated that the threshold for making applications is not high,
albeit higher than just a good, arguable case. In each case, the court of
appeal disavowed an earlier judgment that indicated that for a claimant to
be allowed to bring an application, he or she must satisfy the threshold of
likely success of more than fifty percent.
Both Traversa and Schofield are interesting cases in their own right, as
they have extended the relief available following divorces in European
Union countries (Italy and Germany, respectively). This dispels any pos
sible notion that the court in Agbaje v. Agbaje may have adopted the arro
gant, colonialist tone reminiscent of the attitude of the English in the days
of the American War of Independence. For American practitioners, the
case of Schofield might be particularly useful as it provides a mechanism
under which United States' court orders on divorce transferring or appor
tioning United Kingdom pensions may now be enforced by the English
court where there is English jurisdiction for this to happen. Many will in
the past have received correspondence from UK pension providers refus
ing the implementation of such orders, and this new outlet may provide
relief for some of those that have fallen into this trap.
The decision in Agbaje also opened the door to another type of case,
one in which a party's maneuvering to secure a swift divorce elsewhere
has not prevented the English court from making its own determination.
In the 2011 court of appeal case, Golubovich v. Golubovich,20 the Russian
husband was found, despite scant financial disclosure, to have resources
sufficient from evidence of the parties' lifestyle to be able to make a sub
stantial lump-sum payment to his former wife.

18. Schofield v. Schofield, [2011] 1 F.L.R. 2129 (Eng.).

19. Traversa v. Freddi, [2011] EWCA (Civ) 81.
20. Golubovich v. Golubovich, [2011] EWCA (Civ) 479 (Eng.).

This content downloaded from

3.6.73.78 on Sat, 02 Apr 2022 11:17:53 UTC
All use subject to https://about.jstor.org/terms
366 Family Law Quarterly, Volume 45, Number 3, Fall 2011

VI. Part III in Practice

The results of court interpretations of Part III are the following: Before
the English court has the power to intervene, it must be shown that the
applicant has not remarried and that:
(1) Either party is or was at the time of the divorce domiciled in
England and Wales; or
(2) Either party was habitually resident in England and Wales through
out the period of one year, ending with the date of the divorce or the
application for leave; or
(3) Either party had at the date of the application for leave a beneficial
interest in possession (at least partial ownership) of a dwelling
house in England and Wales, which was at some time during the
marriage a marital home.21
The application for leave is to be made without notice to the other
party. With the application, the applicant must apply to the court evidence
on the following matters:
(1) The parties' connection to England and Wales;
(2) Their connection with the jurisdiction in which the order regarding
their marital status was made;
(3) Their connection with any other country;
(4) Any financial benefit the applicant of any child has received or is
likely to receive as a result of the order made outside England and
Wales;
(5) The extent of the financial relief ordered elsewhere and whether
that order has been or is likely to be complied with;
(6) What financial relief is available in the alternative jurisdiction and
whether or not it has been sought;
(7) The property in England and Wales against which an order can be
made;
(8) The extent to which any English order may be enforced; and
(9) The length of time that has elapsed since the end of the matrimoni
al proceedings elsewhere.22
The leave application operates as a filter.23
If the court grants leave, then there will be a full hearing listed on
notice to the other spouse. At this hearing, the court will decide the mer
its of the application. In general terms, at the final hearing, the court will
have the same powers that are available under the 1973 Act and, subject
to the comments made by Lord Collins in Agbaje, it will decide the case

21. Matrimonial and Family Proceedings Act 1984, § 15 (Eng.).

22. Id. at § 16.
23. Id. at § 13; Family Procedure Rules 2010 rule 8.24.

This content downloaded from

3.6.73.78 on Sat, 02 Apr 2022 11:17:53 UTC
All use subject to https://about.jstor.org/terms
 Financial Provision in England After an Overseas Divorce 367

on exactly the same principles as under the 1973 Act. It will, of course,
take into account in its award the extent to which any order elsewhere has
been complied with or is likely to be complied with. However, where
jurisdiction is based on the presence of a dwelling house in England and
Wales, the court is only able to make a lump sum or to make a property
adjustment order in respect of that asset.24
Pending the final hearing, the court can, however, order interim main
tenance (alimony),25 which can include an element of legal cost funding,
and it can make orders to restrain or set aside transactions intended to
defeat the applicant's claims.26 Preparation of the case once leave has
been granted will usually be subject to strict case management directions
so as to confine the parties to the court's view of the issues involved and
to limit the evidence to be filed.

VII. Conclusion

Agbaje v. Agbaje appears to have opened the floodgates, sweeping

away notions of comity between friendly nations. For those with English
connections, there is now the ability to review awards made elsewhere in
the world according to English notions of fairness. This may be unpopu
lar, but it can operate as a cross-check against those wealthy spouses seek
ing to steal a march on their husbands or wives by securing a divorce and
a relatively low financial award elsewhere. It will also operate as a means
of enforcement of otherwise unenforceable orders. However, the relative
ly low award in Agbaje itself, in comparison to what might have been the
award had the matter proceeded in England in the first place, signals that
if in any doubt and where possible claimants should still strive to secure
English jurisdiction at the outset.

24. Matrimonial and Family Proceedings Act § 20.

25. Id. at § 14.
26. Id. at §§ 23 and 24.

This content downloaded from

3.6.73.78 on Sat, 02 Apr 2022 11:17:53 UTC
All use subject to https://about.jstor.org/terms