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AA V BB [2014] EWHC 4210

Judgment of Moylan J involving a complex multi-jurisdictional procedural history, analysis of Articles 12 and 13 of Council regulation No 4/2009 ‘the Maintenance Regulation’ and the law on setting aside the grant of leave

Background
The husband was aged 62 and the wife was aged 57. They were both born in Kosovo and married there in 1981. They had four children, aged between 20 and 33. The marriage lasted approximately 20 years. The parties moved to Slovenia in 1991. The wife and children moved to England in 2008 and have remained since. The husband moved to Dubai in 2010 and has remained there since. The finances in the case were unclear but the wife estimated on the basis of news sources that the husband was worth approximately €68 million and she produced evidence that assets were located in a number of jurisdictions. The parties' marriage was dissolved in Slovenia on 9 November 2011.  

In or around 2008 the wife removed €5 million from an account in the parties' joint names in Austria. The husband initiated proceedings to recover that sum. On appeal the wife was allowed to retain the sum.

Slovenia – Procedural Background
In June 2008 the wife began divorce proceedings. She also sought maintenance for the two younger children. In December 2008 the wife made a separate claim to establish both the scope of, and the parties' respective shares in, their joint assets.  In October 2009 the wife included in her June 2008 application a claim for maintenance for herself. In September 2010, the wife withdrew her claim for maintenance for herself and also withdrew her claim for maintenance for the elder of the two children for whom she had claimed called DD.  The husband expressly agreed with this at a hearing in September 2010 and for this reason the court stopped proceedings. This was recorded in the judgment of the Ljubljana District Court in November 2011. 

The November 2011 judgment awarded the wife maintenance for the youngest child – called CC – at the rate of €5,640 per month. The husband successfully appealed part of this order and the maintenance was reduced. The wife appealed to the Supreme Court of Slovenia. She was successful and at the rehearing the original sum was reinstated.

On 10 May 2011, the Ljubljana District Court gave its decision and a partial judgment in respect of the wife's December 2008 claim.  The court dismissed the wife's claim in respect of all assets which were not located in Slovenia. The husband was ordered to pay a lump sum to the wife of €290,000. The court indicated that it had no jurisdiction to deal with the parties' assets located outside Slovenia. The wife appealed but the judgment was upheld. The husband also appealed on the grounds that the assets included assets held by companies – as in Prest. The husband was successful and the case was remitted to the lower court.

In June 2011, the husband commenced proceedings in Slovenia to recover the €2.6 million sum removed from the parties' account in Austria. This claim was ongoing when the case came before Moylan J.

England and Wales - Procedural Background
On 3 October 2013 Eleanor King J (as she then was) gave the wife leave to apply for financial remedy orders under section 14 of the Matrimonial and Family Proceedings act 1984. The application was made, in accordance with the rules, without notice. Eleanor King J gave directions – Forms E and listing a FA for 5 March 2014. Following leave being granted, the wife made an application for financial remedy orders for herself and for the parties' youngest child.

The husband issued two applications. The first application sought to adjourn the wife's application and to stay the provisions of Eleanor King J's orders. The second application sought that the leave granted be set aside and/or struck out and that the wife's application be stayed on the basis of the Maintenance Regulation (Council regulation No 4/2009).

The Maintenance Regulation
Article 12 of the Maintenance Regulation is headed "Lis pendens". It provides: 

" (1) Where proceedings involving the same cause of action and between the same parties are brought in the courts of different Member States, any court other than the court first seized shall of its own motion stay its proceedings until such time as the jurisdiction of the court first seised is established.

(2) Where the jurisdiction of the court first seised is established, any court other than the court first seised shall decline jurisdiction in favour of that court."

Article 13, which is headed "Related actions" provides:

"(1) Where related actions are pending in the courts of different Member States, any court other than the court first seised may stay its proceedings.

(2) Where these actions are pending at first instance, any court other than the court first seised may also, on the application of one of the parties, decline jurisdiction if the court first seised has jurisdiction over the actions in question and its law permits the consolidation thereof.

(3) For the purposes of this Article, 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."

Submissions
The husband's case was that the wife's financial remedy application should be stayed and/or set aside. This was supported by the provisions of articles 12 and 13 of the EU Maintenance Regulation and the following submissions were made:

(i) The issue of child maintenance in respect of CC has been determined in Slovenia, by the order of 6 February 2013, and the Slovenian court remains seised of the issue of child maintenance.  Accordingly, leave should not have been granted and/or a mandatory stay must be ordered under article 12 in respect of the wife's claims for orders for the benefit of CC.

(ii) (a)  The issue of spousal maintenance has been determined in Slovenia in that the wife's claim was stopped.  This determination is entitled to recognition under the Maintenance Regulation.

(b)  Alternatively, Slovenia remains seised of the issue of spousal maintenance and, accordingly, article 12 applies. 

(c)  Alternatively, the wife's claim for spousal maintenance in England is a related action and a stay should be ordered under article 13 so that all related matters can be determined holistically in Slovenia.

(iii) The financial proceedings which remain outstanding in Slovenia should be determined before the wife's claim under Part III of the 1984 Act is considered.  Accordingly, her application should be adjourned until after the final determination in Slovenia.

(iv) The wife materially misled the court when making her application for leave, both as to the applicability and relevance of the Maintenance Regulation, in that it was not referred to at all, and as to the position in respect of the proceedings pending in Slovenia and the wife's involvement in them.  Accordingly, the grant of leave should be set aside on the basis that the wife can reapply for leave after the proceedings in Slovenia have been finally determined. 

The wife's case was as follows:

(i) There were no jurisdictional obstacles to the wife's claims.

(ii) The husband could not establish any "knock-out blow" as per Agbaje.

(iii) That the Slovenian courts were not seised with any claims for maintenance either for CC or for the wife. The court made a substantive order for child maintenance for CC and those proceedings had concluded. In respect of the wife's claim, she withdrew her claim before the court made any decision.  The withdrawal, which was expressly accepted by the husband, led to the proceedings being stopped.  There was, therefore, no "decision" within the Maintenance Regulation and, because the maintenance proceedings had concluded, the Slovenian court was not seised with any pending claim for spousal maintenance. 

(iv) The English and Welsh court had jurisdiction to determine maintenance because the wife, as creditor, was habitually resident here – Article 3 of the Maintenance Regulation.

Jurisdiction
The judge found that England Wales had jurisdiction because the wife was habitually resident and disagreed with the arguments of the husband, highlighting that the proceedings for child maintenance for CC had been determined by the judgment of 6 February 2013.  There were, therefore, no child maintenance proceedings pending in Slovenia. As to the claim for spousal maintenance, the judge found that as the wife had withdrawn her claim (and that the husband had accepted this) the proceedings were stopped and there had been no "decision" as the claim had been withdrawn rather than being rejected or dismissed.

Lis Pendens/Related Actions
In relation to Article 12 (lis pendens), the judge considered Dicey, Morris & Collins, The Conflict of Laws, Jenard's 1979 Report and Schlosser's 1979 Report and concluded that there must be proceedings "already pending' in another state for the lis pendens' provisions to apply. Moylan J reinforced this conclusion with Gubisch Maschinenfabrik v Palumbo [1987] ECR 4861. The judge was therefore satisfied that Article 12 of the Maintenance Regulation did not apply to the wife's claim for herself or for CC.

In relation to Article 13, the judge held that the wife's claim was not related to the Slovenian proceedings as the Slovenian proceedings were not dealing with, and as a matter of Slovenia law could not deal with, the part of that wealth which was situated outside Slovenia. The judge also noted that in article 13(3) actions are deemed to be related when 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". He considered that there was no prospect of the proceedings being determined together in Slovenia because of the effect of Slovenian law as referred to above.  

Setting Aside
The judge had considered and dismissed the husband's jurisdiction points. The only remaining point that could therefore impact the set aside application was that the wife had misled the court as to the nature of the proceedings in Slovenia and her involvement in them.

Moylan J reminded himself of Lord Collins' dicta in Agbaje:

"In the present context the principal object of the filter mechanism is to prevent wholly unmeritorious claims being pursued to oppress or blackmail a former spouse.  The threshold is not high, but is higher than 'serious issue to be tried' or 'good arguable case' found in other contexts.  It is perhaps best expressed by saying that in this context 'substantial' means 'solid.'"

And of Munby LJ (as he then was) in Traversa v Freddi:

"Those minded to apply to set aside the grant of leave should be mindful of what Lord Collins said.  Such an application, if nonetheless pursued, should be given an appropriately short listing to enable the respondent to demonstrate, if he can - and it will not take all that long, which is why the listing can be appropriately short - that he has some 'knock-out' blow. Unless the respondent can demonstrate that, his application, if not dismissed then and there, should be adjourned to be heard with the substantive application."

The judge found that there was not a knock out blow. However, he did find that the wife had misled Eleanor King J as to the nature of the proceedings in Slovenia and her involvement in them; yet he found that it was not proportionate to set aside her decision.

Summary by Joshua Viney, barrister, 1 Hare Court


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Neutral Citation Number: [2014] EWHC 4210 (Fam)

Case No. FD13F00568

IN THE HIGH COURT OF JUSTICE
FAMILY DIVISION

Royal Courts of Justice
Date:Tuesday, 4th November 2014


Before:

MR. JUSTICE MOYLAN
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B E T W E E N :

 AA Applicant

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 BB Defendant
 
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Transcribed by BEVERLEY F. NUNNERY & CO.
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MR. C HALE QC and MR. H CLAYTON   (instructed by Healys LLP) appeared on behalf of the Applicant.

MR. P MARSHALL QC and MR. P NEWMAN   (instructed by Hughes Fowler Carruthers) appeared on behalf of the Respondent.
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JUDGMENT AA v BB (Application to Set Aside Leave: s.13 MFPA 1984)
This judgment was delivered in private.   The judge has given leave for this version of the judgment to be published on condition that (irrespective of what is contained in the judgment) in any publication the anonymity of the parties and their children must be strictly preserved.  All persons, including representatives of the media, must ensure that this condition is strictly complied with.   Failure to do so will be a contempt of court.


MR JUSTICE MOYLAN:
1. In this judgment I will refer to the parties as "the husband" and "the wife", although their marriage was dissolved by an order made in Slovenia on 8th November 2011.

2. On 3rd October 2013, Eleanor King J (as she then was) gave the wife leave to apply for financial remedy orders under section 13 of the Matrimonial and Family Proceedings Act 1984 ("the 1984 Act").  The application, in accordance with the rules, was made without notice to the husband.  Eleanor King J also gave directions, including that the parties should file Forms E.  She listed the First Appointment for 5th March 2014. 

3. Following the grant of leave, the wife issued an application for financial remedy orders for herself and for the parties' youngest child, CC, who is in full-time education. 

4. The hearing in March 2014 was not effective because no confirmation had been received through the Foreign Process Department that service had been effected on the husband.  Eleanor King J made a new order for the service of Forms E.

5. On 12th May 2014, solicitors came on the record in this jurisdiction as acting for the husband. 

6. On 16th June 2014, the husband issued an application for the adjournment of the wife's financial application and, effectively, for a stay of the provisions of Eleanor King J's orders.  That application was listed, with a one day time estimate, for hearing on 27th October 2014 at the same time as the adjourned First Appointment. 

7. On 13th October 2014, the husband issued a further application.  This seeks an order that the leave granted by Eleanor King J be set aside and/or struck out under r.4.4 of the Family Procedure Rules 2010.  It also seeks a stay of the wife's application, specifically under articles 12 or 13 of Council Regulation (EC) No 4/2009, the Maintenance Regulation, which came into force in the United Kingdom on 18th June 2011.

8. During the course of the hearing the parties' submissions were focussed on the Maintenance Regulation although, because the proceedings in Slovenia were commenced prior to 18th June 2011, the relevant Regulation is, in part, Brussels I (Council Regulation (EC) No 44/2001): see article 75 of the Maintenance Regulation.  However, given that I am not aware of any material differences for the purposes of this case, I propose to adopt the approach of the parties and refer to the relevant articles within the Maintenance Regulation.

9. For the purposes of determining these applications, I have read the documents in the bundle, which include the wife's statement dated 3rd July 2013, in support of her application for leave, and a number of judgments and orders from Slovenia.  I have also read and heard submissions from Mr. Marshall QC and Mr. Newman on behalf of the husband and Mr. Hale QC and Mr. Clayton on behalf of the wife.

Background
10. Giving a summary of the history, the husband is aged 62; the wife is aged 57.  They were both born in Kosovo, then a part of Yugoslavia.  They married in Kosovo in 1981.  They have four children, aged between 20 and 33.  In or about 1991 the family moved to Slovenia.  At that time the wife was working in Pristina.  At about the same time, the parties established a company in Slovenia ("the company"). 

11. The family remained living in Slovenia until 2008 when the wife and children moved to live in England.  She, and they, have lived here since then.  The husband remained living in Slovenia until 2010, when he moved to Dubai, where he currently still lives.

12. At or about the same time as she moved to England, the wife withdrew €5 million from an account in the parties' joint names in Austria.  This led to the husband commencing proceedings in Austria which were resolved in July 2010 when, on appeal, the wife was permitted to retain the sum she had removed from the joint account.  During the course of its judgment, the Austrian court referred to there being "distributable assets of at least €14 million."  This was, it appears, in addition to the sum withdrawn by the wife.

13. I have no clear understanding of the parties' financial resources.  The wife has provided very broad evidence in her statement, including relying on media reports to the effect that the husband is worth an estimated €68 million.  The husband has not yet filed any evidence. 

14. As referred to above, it is clear that the parties established a business in Slovenia in about 1990.  The husband worked in the business as a director and the wife as a vice-president.  The company is owned by the husband.  The wife says that they purchased a state run company with their joint funds and this became the company.  The company is said to be extremely successful with a turnover, at least at one time, of over $1 billion. 

15. The wife has produced a schedule of the assets held by the parties in 2008.  It is only a summary schedule.  It includes assets located in Slovenia and in a number of other jurisdictions, including Kosovo, Switzerland, Ireland, Dubai and the BVI.  The schedule does not seek to identify the total value of the resources.  Some values are given: for example, a property in Slovenia, now held in the name of an Irish company (which is solely owned by the husband), is said to have cost more than €10 million; an account in Switzerland is said to have held €7 million; and the account in Austria, from which the wife withdrew the €5 million, is said to hold a further €1.8 million.  There is reference to other accounts in Austria.  Other companies and properties are listed, including a number which, as I have said, are located in jurisdictions other than Slovenia. 

Slovenian Proceedings
16. Turning now to the Slovenian proceedings, on 20th June 2008, the wife began divorce proceedings in Slovenia.  She also sought maintenance for the two younger children. 

17. On 23rd December 2008, the wife made a separate claim to establish both the scope of, and the parties' respective shares in, their joint assets. 

18. On 9th October 2009, the wife included in her June 2008 application a claim for maintenance for herself. 

19. On 24th September 2010, the wife withdrew her claim for maintenance for herself and also withdrew her claim for maintenance for the elder of the two children for whom she had claimed called DD. 

20. It is recorded in a later judgment, dated 8th November 2011, from the Ljubljana District Court that the husband "showed express agreement with the withdrawal of the claim for the payment of maintenance to the claimant at the hearing on 24th September 2010."  The judgment then continues: "For this reason the court stopped the proceeding with regard to (this) claim."  In the operative part of its judgment, which appears under the word "Decided", it is stated that "Due to the partial withdrawal of the complaint the proceeding regarding the following claim for maintenance has been stopped."   The "following claim" was, in fact, two claims, which are identified as being the wife's claim for maintenance for herself and her claim for DD.

21. The hearing on 24th September 2010 had been preceded by a consent Order, made on application by DD by District Judge Reid, sitting at the Principal Registry of the Family Division, which provided that the husband should pay DD £276,000.

22. The judgment of 8th November 2011 also awarded the wife maintenance for the youngest child, CC, at the rate of €5,460 per month.  The husband appealed this part of the decision.  His appeal was allowed on 29th February 2012 and maintenance for CC was reduced to €3,000 per month.  The wife appealed to the Supreme Court of Slovenia.  Her appeal was successful and a rehearing was ordered.  At the rehearing on 6th February 2013 the original sum of €5,460 was reinstated.

23. On 10th May 2011, the Ljubljana District Court gave its decision and a partial judgment in respect of the wife's December 2008 claim.  The court dismissed the wife's claim in respect of all assets which were not located in Slovenia.  These include, as referred to above, a significant number of companies and properties located in a number of other jurisdictions.  The judgment provides for certain assets, principally specific properties in Slovenia, to be divided equally between the parties and states that "the court will decide on the remaining property in the final decision."   The husband was also ordered to pay the wife a lump sum of €290,000.  The husband had contended that the joint Slovenian assets should be divided as to 90% to him and 10% to the wife. 

24. The judgment explains the dismissal of the wife's claim in respect of assets located outside Slovenia.  Under the Private International Law & Procedure Act 1999, the Slovenian court is not competent to determine disputes concerning assets, including real estate or companies, located outside Slovenia.  The judgment also records that the husband is "explicitly against the court" dealing with real estate or shares in companies located abroad.  This is referred to because, in certain circumstances, the Slovenian court does have power to deal with such assets, but this would require the agreement of the husband as defendant. 

25. Both parties appealed the decision of 10th May 2011.  Their appeals were determined on 25th September 2013.  The wife had appealed against, and, for reasons which are not clear, the husband had also appealed against, the first point in the operative part of the court's decision - namely the dismissal of the wife's claim in respect of non-Slovenian sited assets.  The High Court upheld the lower court's decision that the Slovenian court has no jurisdiction to deal with the parties' assets located outside Slovenia.

26. The husband's appeal against the substantive (partial) judgment dealing with the division of the parties' Slovenian assets was allowed principally, it appears, because the assets in respect of which orders had been made comprised properties held by companies.  This decision mirrors the United Kingdom Supreme Court's decision of Prest v Petrodel Resources Ltd [2013] UKSC 34, in that it was based on the fact that companies are separate legal entities and their assets cannot be put into the "same box" as the parties' assets; the latter can only comprise the shares in the companies. 

27. The wife's claim was returned to the lower court for a new trial with the direction that the court "should account the whole joint property" in Slovenia.  On 28th October 2013, the wife filed what is called a Preliminary Request in her December 2008 application. 

28. In, it appears, June 2011, the husband commenced proceedings in Slovenia against the wife for €2.6 million, being half of the sum removed by her from the parties' account in Austria.  On 29th September 2013, the husband issued what is called a Preparatory Request in respect of this claim.

29. On 2nd December 2013, a hearing took place at the Ljubljana District Court in respect of the wife's December 2008 claim and the husband's June 2011 claim.  The judge adjourned the proceedings to a hearing in February 2014, but suggested to the parties that they consider settling the case by dividing their joint Slovenian assets 60:40 in the husband's favour.  This has not happened. 

30. According to the chronology, prepared on behalf of the husband, there have been a number of further hearings in Slovenia.  It appears that the rehearing of the wife's substantive claim is part heard and the next hearing is fixed for 22nd December 2014. 

Evidence
31. As referred to earlier in this judgment, the only evidence filed in these proceedings is the wife's statement of 3rd July 2013.  This statement exhibits a number of judgments from the Slovenian proceedings.  I have also read a number of later judgments from those proceedings. 

32. In her statement, the wife refers to the Slovenian proceedings and states that the husband has lodged an appeal against the order of 10th May 2011.  She says that no date has been given for the hearing and that "nothing has happened for the last two years."  This was not an accurate description of the Slovenian proceedings, in particular because the wife had also appealed the decision of 10th May 2011.  Further, by the date of the hearing before King J on 3rd October 2013 the parties' appeals in Slovenia had been determined and a rehearing ordered.  King J was not informed about this.

33. The statement also asserts that the wife had not received half of the parties' assets in Slovenia as awarded by the court because: "As far as I am aware, he has sold them all." 

Submissions
34. Mr. Marshall submits that I should stay the wife's financial remedy application and/or set aside the grant of leave.  During the course of his submissions, he has focused significantly on the EU Maintenance Regulation.  He submits that the provisions of articles 12 and 13 apply, requiring me either to order a mandatory stay or, in the circumstances of this case, to order a discretionary stay.  He makes the following specific submissions.

(i)  The issue of child maintenance in respect of CC has been determined in Slovenia, by the order of 6th February 2013, and the Slovenian court remains seised of the issue of child maintenance.  Accordingly, leave should not have been granted and/or a mandatory stay must be ordered under article 12 in respect of the wife's claims for orders for the benefit of CC.

(ii)(a)  The issue of spousal maintenance has been determined in Slovenia in that the wife's claim was stopped.  This determination is entitled to recognition under the Maintenance Regulation.

(b)  Alternatively, Slovenia remains seised of the issue of spousal maintenance and, accordingly, article 12 applies. 

(c)  Alternatively, the wife's claim for spousal maintenance in England is a related action and a stay should be ordered under article 13 so that all related matters can be determined holistically in Slovenia.

(iii)  The financial proceedings which remain outstanding in Slovenia should be determined before the wife's claim under Part III of the 1984 Act is considered.  Accordingly, her application should be adjourned until after the final determination in Slovenia.

(iv)   The wife materially misled the court when making her application for leave, both as to the applicability and relevance of the Maintenance Regulation, in that it was not referred to at all, and as to the position in respect of the proceedings pending in Slovenia and the wife's involvement in them.  Accordingly, the grant of leave should be set aside on the basis that the wife can reapply for leave after the proceedings in Slovenia have been finally determined. 

35. In support of his submission as to this court's jurisdiction, Mr. Marshall has referred me to section 15 and, in particular, section 15(1A) of the 1984 Act.  This provides:

"If an application or part of an application relates to a matter where jurisdiction falls to be determined by reference to the jurisdictional requirements of the Maintenance Regulation … those requirements are to determine whether the court has jurisdiction to entertain the application or that part of it."

36. He has also referred me to passages in Lord Collins' judgment in Agbaje -v- Agbaje [2010] UKSC13 [2010] 1 FL.R 18.13, in particular, at paragraphs 55 and 57.  In paragraph 55, Lord Collins said:

"But, although the point does not arise on this appeal, a warning note must be struck about the position with regard to States to which (Brussels I) applies.  The effect of ss 15(2) and 28(4) of the 1984 Act is that the jurisdictional provisions of Part III and Part IV respectively are subject to the Brussels I Regulation (and the Lugano Convention).  Those sections do not address the question whether a judgment in a Brussels I Regulation State making financial provision on divorce (or refusing to make such provision) would be entitled to recognition so as to prevent an award under Part III or Part IV."

Paragraph 57:

"It is only necessary to mention that if an award of maintenance had been made in another Member State, the question might arise as to whether the application in England under Part III would be precluded on the basis that the issue of maintenance had been determined in the other jurisdiction and that that determination was entitled to recognition. That would depend, at least in part, on whether the application was to be characterised as relating to maintenance or to rights in property arising out of a matrimonial relationship ..."

Lord Collins concludes by saying: "This is an area which involves difficult questions which do not arise for decision on this appeal."

37. Mr. Marshall submits that these paragraphs support his argument that article 12 applies in the present case, both in respect of child maintenance and in respect of spousal maintenance.  He submits that a decision within the Regulation can comprise not only one which makes financial provision but also one which refuses to make such provision. 

38. On the issue of whether the Slovenian court has made a decision in respect of the wife's claim for spousal maintenance, Mr. Marshall points to the use of the word "Decided".  This, as referred to above, appears at the top of the operative part of the court's decision and above item 1, which refers to the withdrawal of the wife's maintenance claim.   He also submits that the Slovenian court's decision of 8th November 2011 could be a substantive determination by way of dismissal or could result in the Slovenian court remaining seised of the issue of maintenance. 

39. Mr. Marshall has also referred me to, and relies on, D -v- P (Forum Conveniens) [1998] 2 FLR 25 and M -v- V (Child Maintenance & Jurisdiction: Brussels I) [2011] 1 F.LR 109.  He submits that these decisions support his argument that article 12 applies, even if proceedings are not pending in a different jurisdiction at the same time.  Once jurisdiction has been established in respect of maintenance in one EU Member State, it cannot subsequently be established in another.  Otherwise, he submits, maintenance claims could be re-litigated in one Member State after another, which would undermine the recognition and enforcement provisions of the Maintenance Regulation. 

40. In respect of his submission that the wife materially misled the court, when applying for leave, Mr. Marshall has referred me to ND -v- KP (Freezing Order: Ex Parte Application) [2 F.LR] 662 and M -v- W [2014] EWHC 925 (Fam).  He relies, as referred to above, on the wife's failure to refer Eleanor King J to the fact that she, too, had appealed the Slovenian court's substantive order of 10th May 2011and that, by the date of the hearing of the application for leave, the Slovenian court had ordered a rehearing of the wife's substantive claim for division of the parties' Slovenian assets; and, to the jurisdictional issues in respect of both child and spousal maintenance. 

41. Mr. Marshall submits that, taken together, these matters represent a significant and material lack of candour which justifies setting aside the grant of leave or, alternatively, the financial remedy claims being adjourned until after the final determination of the Slovenian proceedings.  To meet any potential argument that the husband is merely seeking to avoid giving financial disclosure in this jurisdiction, Mr. Marshall has indicated that the husband is willing, in any event, to file a Form E and he also points to the disclosure made by the husband for the purposes of the proceedings in Slovenia.

42. Mr. Hale, on behalf of the wife, submits that there are no jurisdictional obstacles to the wife's claims proceeding in this jurisdiction and that the husband has not established any "knock-out blow" - using the phrase from Agbaje - which would justify the grant of leave being set aside. 

43. Mr. Hale points to the agreed fact that the Slovenian court has no jurisdiction to deal with assets outside Slovenia.  This, he submits, is a substantial amount of marital wealth, given that it includes the property now held through an Irish company, which cost €10 million, properties and companies located in Dubai, BVI and elsewhere, and accounts in Switzerland and Austria, which in 2008 held €9 million in addition to the €5 million withdrawn by the wife. 

44. He also submits that there is no jurisdictional bar to proceedings taking place in England and Wales under Part III of the 1984 Act at the same time as proceedings in another jurisdiction. 

45. Mr. Hale further submits that the Slovenian courts are not seised with any claims for maintenance, either for CC or for the wife.  The court has made a substantive order for child maintenance for CC and those proceedings have concluded.  In respect of the wife's claim, she withdrew her claim before the court made any decision.  The withdrawal, which was expressly accepted by the husband, led to the proceedings being stopped.  There is, therefore, no "decision" within the Maintenance Regulation and, because the maintenance proceedings have concluded, the Slovenian court is not seised with any pending claim for spousal maintenance. 

46. Mr. Hale submits that this court has jurisdiction to determine maintenance because, the wife, as creditor, is habitually resident here.  This is based on article 3 of the EU Maintenance Regulation. 

47. Mr. Hale also relies on Agbaje -v- Agbaje and, in addition, Traversa -v- Freddi [2011] 2 FLR 272.  He submits, as I have indicated, that there is no "knock-out blow".  He relies on other passages in those decisions to which I will refer later in this judgment. 

Jurisdiction
48. I propose first to address the jurisdiction arguments advanced by Mr. Marshall.  For this purpose, I must determine the status of any maintenance proceedings in Slovenia. 

49. In respect of the proceedings for child maintenance for CC, it is clear that they have been determined by the judgment of 6th February 2013.  There are, therefore, no child maintenance proceedings pending in Slovenia.

50. As for the claim for spousal maintenance, it is clear to me that there are no proceedings concerning spousal maintenance pending in Slovenia.  The wife withdrew her claim.  This was accepted by the husband.  The proceedings were "stopped" with effect, it appears, from 24th September 2010. 

51. I am also satisfied that there has been no "decision", within the meaning of article 2(1) of the Maintenance Regulation, in Slovenia in respect of spousal maintenance.  There has been no "decision in matters relating to maintenance obligations given by a court" in Slovenia because the wife's claim stopped before the court made any decision in respect of it.  I fully accept that a decision can include a determination that a claim is rejected or dismissed, as submitted by Mr. Marshall, but that did not happen in this case.  The claim was merely withdrawn or discontinued.  (I should add that, in my view, there is also no judgment within the meaning of article 32 of Brussels I.)

52. Turning now to the relevant provisions of the 1984 Act and of the Regulation and to some of the authorities to which I have been referred.

53. I have already referred to section 15 of the 1984 Act.  Section 15(1) contains general jurisdiction provisions.  Section 15(1A), as referred to above, deals with claims within the scope of the EU Maintenance Regulation.  Section 15(2) deals with proceedings governed by the Part I of the Civil Jurisdiction and Judgments Act 1982.

54. The jurisdiction provisions of the EU Maintenance Regulation are set out in article 3:

"In matters relating to maintenance obligations in Member States jurisdiction shall lie with:

(a) the court for the place where the defendant is habitually resident, or

(b) the court for the place where the creditor is habitually resident, or

(c) the court which, according to its own law, has jurisdiction to entertain proceedings concerning the status of a person if the matter relating to maintenance is ancillary to those proceedings, unless that jurisdiction is based solely on the nationality of one of the parties, or

(d) the court which, according to its own law, has jurisdiction to entertain proceedings concerning parental responsibility if the matter relating to maintenance is ancillary to those proceedings, unless that jurisdiction is based solely on the nationality of one of the parties."

55. It is clear that England and Wales had jurisdiction in respect of maintenance at the commencement of the wife's application, because the wife was then, and I would add remains, habitually resident in England and Wales.

Lis Pendens/Related Actions
56. Article 12 of the Maintenance Regulation is headed "Lis pendens".  It provides: 

" (1) Where proceedings involving the same cause of action and between the same parties are brought in the courts of different Member States, any court other than the court first seized shall of its own motion stay its proceedings until such time as the jurisdiction of the court first seised is established.

(2) Where the jurisdiction of the court first seised is established, any court other than the court first seised shall decline jurisdiction in favour of that court."

Article 13, which is headed "Related actions" provides:

"(1) Where related actions are pending in the courts of different Member States, any court other than the court first seised may stay its proceedings.

(2) Where these actions are pending at first instance, any court other than the court first seised may also, on the application of one of the parties, decline jurisdiction if the court first seised has jurisdiction over the actions in question and its law permits the consolidation thereof.

(3) For the purposes of this Article, 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."

57. In D -v- P (Forums Conveniens) Connell J, in a typically robust judgment, decided that this court should stay claims for ancillary relief on the basis that Italy was the appropriate forum.  The parties had previously entered into, what was called, "a final settlement of their economic relationships" in Italy.  Connell J's primary decision was that, under the common law principle of forum non conveniens, applying Spiliada Maritime Corporation –v- Consulex Ltd, The Spiliada [1987] AC 460, Italy was the more appropriate forum. 

58. He also, more briefly, considered article 22 of the Brussels Convention 1968, which is effectively in the same terms as article 12 of the Maintenance Regulation.  His decision under this article was based on his conclusion that "the Italian court was first seised of the issue of child maintenance" (p. 34).  He decided that the wife's claim for maintenance was a related matter and should be stayed for the same reasons which had led him to stay her claims under the inherent jurisdiction.  Connell J reached this decision despite the fact that, it appears, there were no proceedings then pending in Italy, because a substantive order had been made in respect of all the wife's claims, including for child maintenance. 

59. In M -v- V (Child Maintenance & Jurisdiction: Brussels I), Sir Nicholas Wall P dismissed an application under Schedule 1 of the Children Act 1989, because the French court had exclusive jurisdiction pursuant to article 23 of Brussels I (Council Regulation (EC) No 44/201) (para 50).  That provision deals with prorogation of jurisdiction which is not applicable to the present case.

60. In Agbaje -v- Agbaje, Lord Collins made observations about what the position might be if Brussels I applied, which it did not in that case.  I have referred above to the relevant passages in paragraphs 55 and 57.  Neither of these paragraphs refer to the lis pendens provisions.  They refer instead to the possible effect of the recognition and enforcement provisions. 

61. Dicey, Morris & Collins, The Conflicts of Laws 15th Edition (2012) is clear as to the circumstances in which the lis pendens provisions apply.  The text deals with article 27 of Brussels I (and of the Lugano Convention) which is in the same terms as article 12 of the Maintenance Regulation, at para 12-071:

"Article 27 of the Regulation and of the Lugano Convention requires that the action be still pending in the court first seised when the proceedings are commenced in the court second seised.  So, if the proceedings in the first court had terminated by judgment and are no longer pending or if they have been discontinued or if they have been struck out on forum conveniens grounds on the relevant date, article 27 will be inapplicable."

62. This extract sets out the relevant principles, which are clearly supported by the authorities to which it refers.  If the proceedings in the first court have terminated by judgment and are no longer pending, as in respect of child maintenance in the present case, article 27/12 is inapplicable.   If the proceedings have been discontinued, as in the present case in respect of spousal maintenance, article 27/12 is also inapplicable. 

63. In my view, Dicey, Morris & Collins makes plain that the lis pendens provisions do not apply in the present case.  Further, both Jenard's 1979 Report and Schlosser's 1979 Report make clear that there must be proceedings "already pending" in another State for the lis pendens' provisions to apply.

64. I have, in addition, been referred to a decision of Mr. Justice McKechnie in the High Court of Ireland, DT -v- FL [2006] 1 EHC 98.  In that case he concludes, after a careful analysis, that the lis pendens provisions only apply if there are concurrent proceedings in existence. 

65. As I have indicated, the view expressed in Dicey is also supported by authority.  In Gubisch Maschinenfabrik v Palumbo [1987] ECR 4861, the ECJ referred to articles 21 and 22 of the 1968 Convention as being intended "to prevent parallel proceedings [my emphasis] before the court of different Contracting States and to avoid conflicts between decisions which might result therefrom." (para 8)

66. I have also considered Internationale Nederlanden Aviation Lease BP -v- Civil Aviation Authority [1997] 1 Lloyd's Reports 80, in which Morison J said: "art. 21 and 22 (of the Brussels Convention) are concerned with concurrent proceedings, and have no application when a party has properly discontinued the first set of proceedings"; and Tavoulareas –v- Tsavliris  [2005] EWHC 2643 (Comm) [2006] 1 All ER (Comm) 30, in which Andrew Smith J decided that article 27 of Brussels I: "applies where there are concurrent proceedings at the time that the court which was not first seised makes its determination", (para 16) after referring to Internationale Nederlanden and the Court of Appeal's decision in  Prudential Assurance Co Ltd v Prudential Insurance Co of America [2003] 1 WLR 2295.  These authorities support the propositions set out in Dicey.

67. What is set out in Dicey also accords with the fact that the article is headed "Lis Pendens".  During the course of the hearing Mr. Marshall was unable to offer any explanation for the use of this phrase and, in particular, the word "pendens" if the article did not require there to be parallel pending proceedings. 

68. What of Mr. Marshal's submission that article 12 must be interpreted as essentially fixing jurisdiction in respect of maintenance in the Member State which was first seised with such proceedings?   In my view, this is not the purpose of the lis pendens provisions.  If they were to apply in this way, it would have the consequence of fixing jurisdiction permanently and exclusively in the present case in Slovenia in respect of CC.  This would be surprising given that maintenance jurisdiction can be exercised by the courts of different Member States at different times.  It is not unusual for maintenance claims to be addressed sequentially in different jurisdictions as the creditor or defendant move from one State to another.

69. It would, in my view, in contrast, be surprising if it were otherwise, because, if Mr. Marshall's submission was correct, a Member State would continue to have jurisdiction even when none of the provisions of article 3 applied and to the exclusion of all other States for all time.  Whilst the intended scope of what Lord Collins had in mind in paragraphs 55 and 57 is not entirely clear to me, it is clear that he was not addressing the lis pendens provisions. 

70. Accordingly, I am satisfied that article 12 of the Maintenance Regulation does not apply either to the wife's claim for maintenance for herself or her claim for CC.  In coming to this conclusion I am following the authorities referred to above other than, possibly, D –v- P.  In my judgment, jurisdiction is not fixed for all time in one Member State, to the exclusion of any other, simply because it has been seised and has made a determination.  The provisions as to jurisdiction are those which must be applied for the purposes of determining whether a Member State has substantive jurisdiction.  This does not conflict with the recognition and enforcement provisions, because, as I have indicated, the Regulation clearly contemplates jurisdiction existing sequentially in different Member States.

71. Turning now to article 13, the wife's financial remedy claim in England could be said to be "related" to the current Slovenian proceedings if that word were to be broadly defined.  In both the wife is seeking a share of the marital wealth.  However, there is an important and, in my view, critical difference.  The Slovenian proceedings are not dealing with, and as a matter of Slovenia law cannot deal with, the part of that wealth which is situated outside Slovenia.  In my view, this alone would be sufficient justification for refusing to stay the proceedings or to decline jurisdiction pursuant to article 13. 

72. I also note that in article 13(3) actions are deemed to be related when 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".  There is no prospect of the proceedings being determined together in Slovenia because of the effect of Slovenian law as referred to above.  

Set Aside
73. I now turn to consider the husband's argument that the grant of leave should be set aside.  I have already dealt with the jurisdiction points also relied on by the husband in support of this submission.  This leaves the point advanced that the wife misled the court as to the nature of the proceedings pending in Slovenia and her involvement in them and that, accordingly, the grant of leave should be set aside.

74. There has been some debate during the course of the hearing as to the approach which the court should take to this issue.   In my view, the position is clear from what Lord Collins said in Agbaje, in particular at paragraph 33.  He said:

"In the present context the principal object of the filter mechanism is to prevent wholly unmeritorious claims being pursued to oppress or blackmail a former spouse.  The threshold is not high, but is higher than 'serious issue to be tried' or 'good arguable case' found in other contexts.  It is perhaps best expressed by saying that in this context 'substantial' means 'solid.'  Once a judge has given reasons for deciding at the ex parte stage that the threshold has been crossed, the approach to setting aside leave should be the same as the approach to setting aside permission to appeal in the Civil Procedure Rules 1998, where (by contrast with the Family Proceedings Rules) there is an express power to set aside, but which may only be exercised where there is a compelling reason to do so: CPR r 52.9(2).  In practice in the Court of Appeal the power is only exercised where some decisive authority has been overlooked so that the appeal is bound to fail, or where the court has been misled: Barings Bank plc (In Liquidation] v Coopers & Lybrand [2002] EWCA Civ 1155. [2002] All ER (D) 278; Nathan v Smilovitch and Another [2002] EWCA Civ 759 [2002] All ER (D) 575.   In an application under section 13, unless it is clear that the respondent can deliver a knock-out blow, the court should use its case management powers to adjourn an application to set aside to be heard with the substantive application."

75. That this is the right approach is confirmed by Traversa -v- Freddi, in which Thorpe LJ said (at para 42):

"The solution was clearly indicated by Lord Collins of Mapesbury in the second half of paragraph 33 of his judgment.  It should be as difficult to set aside leave granted under s.13 as it is to set aside permission to appeal granted in this court.  Lord Collins did not suggest that the problem should be tackled by converting the section 13 application to an inter partes application ..."

76. Munby LJ, as he then was, also addresses an application to set aside leave (in paras 54 and 58).  In paragraph 54, he said:

"Those minded to apply to set aside the grant of leave should be mindful of what Lord Collins said.  Such an application, if nonetheless pursued, should be given an appropriately short listing to enable the respondent to demonstrate, if he can - and it will not take all that long, which is why the listing can be appropriately short - that he has some 'knock-out' blow. Unless the respondent can demonstrate that, his application, if not dismissed then and there, should be adjourned to be heard with the substantive application."

77. Paragraph 58:

"There are, however, two points which I wish to emphasise.  The first is that if the court grants leave at a without notice hearing, any application to set aside … is to be dealt with as at present and in accordance with what Lord Collins said in Agbaje.  Under the new rules, as under the old, unless the respondent can demonstrate that he has some 'knock-out' blow, his application to set aside the grant of permission, if not dismissed then and there, should be adjourned to be heard with the substantive application.  The other is this.  Whether the application for leave is dealt with at a without notice hearing or inter partes, the hearing should be given an appropriately short listing.  Applications for leave or permission in this court and in the Administrative Court, even if listed inter partes, are customarily listed for 30 or at most 60 minutes."

78. The references to "knock-out blow" and to the time which it should take for such a blow to be established, demonstrate the nature of the test and approach which the court applies to an application for leave to be set aside.  The nature and the strength of the material required to be deployed is clearly significant.  In the present case, the hearing took very substantially longer than 30 to 60 minutes (although that specific reference in Munby LJ's judgment was to the application for leave).

79. Quoting next from the commentary in the White Book 2014 to Rule 52.9, under the heading "Cautionary Note":

"This tempting provision should not lure advocates into tactical skirmishing or into manoeuvres designed to wear down the opposition.  Save in exceptional circumstances, it is a misuse of the court's resources and a waste of costs for the court to consider the substance of an appeal on some intermediate date between the permission hearing and the full hearing.  This paragraph of commentary was cited by the Court of Appeal, apparently with approval, in Nathan -v- Smilovitch … 

Rule 52.9(2) provides that the power will only be exercised where there is "a compelling reason".  There would be a compelling reason, if the materials previously before the court were so inaccurate or incomplete that the judge had granted permission when otherwise they would not have done: see Hertsmere Borough Council -v- Harty [2001] EWCA Civ 1238 at [2]; Angel Airlines SA -v- Dean &  Dean [2006] EWCA Civ 1505.  In Nathan -v- Smilovitch … Longmore LJ said:

'For my part, unless the nature of the application shows that some decisive authority or decisive statutory provision has been overlooked by the lord justice granting permission to appeal, an applicant would normally have to show that the single lord justice had actually been misled in the course of the presentation of the application'."

Later:

"An applicant for permission to appeal made without notice is under a duty to make full and frank disclosure to the court, and where that duty is not discharged the applicant runs the risk that any permission granted may be set aside on the respondent's application under Section 52.9(1)(c): see Obsession Hair and Day Spa Ltd -v- Hi-Lite Electrical Ltd [2011] EWCA Civ 1148 … where the authorities on setting aside permission were examined) …"

80. In Obsession Hair and Day Spa Ltd -v- Hi-Lite Electrical Ltd, Ward LJ, after referring to earlier authorities, said (at para 28):

"At the heart of this jurisprudence lies the notion of abuse of the process of the court.  The obligation of full and frank disclosure which falls on any applicant seeking relief without notice to the other side is an obligation to the court itself.  To fail to disclose material information is to abuse the due process of the court and as a consequence to run the risk that the court will deprive the applicant of the fruits of the advantage wrongfully obtained.  This condign sanction is also exacted in order to act as a deterrent to others.  But there is no inexorable rule that the order granted without knowledge of the full facts must be set aside.  A sense of proportion must always be observed.  Too mechanistic a strike out will be an instrument of injustice."

81. In the earlier decision of Hertsmere Borough Council -v- Harty [2001] EWCA Civ 1238, Sedley LJ said (at para 2):

"The power to set aside a grant of permission to appeal is given by Rule 52.9(2) of the Civil Procedure Rules and requires a compelling reason for so doing.  I would remind those thinking of making such applications, as the note in the White Book reminds them, that this is not an opportunity to have an early shot at knocking out a weak appeal or an appeal which is now thought to be weaker than it once was.  But it must be the case that if a respondent can show the court that the judge was misled by an appellant, not necessarily deliberately, into giving permission to appeal, that may well be a compelling reason within the rule.  It must, however, it seems to me, involve showing (a) that the materials put before the judge were inaccurate or incomplete; (b) that these deficiencies had a bearing upon the grounds on which permission to appeal was given; and (c) very importantly, that but for them permission to appeal would not have been given."

82. I have also been referred to Mostyn J's decision in ND -v- KP (Freezing Order: Ex Parte Application).  While some of the matters referred to in that judgment are clearly relevant to an application under Part III for leave, there are, in my view, significant differences between an application for a freezing order and an application for leave under Part III.  I consider that the guidance given by the Supreme Court and the Court of Appeal, in the decisions to which I have referred, are of more direct application and should guide me in the exercise of my discretion in this case. 

83. It is clear from the authorities, and the White Book, that there is a duty on an applicant for leave under Part III to make full and frank disclosure.  It is an important obligation and it is clear that, when it has not been discharged, the court may set aside the grant of leave.  This is in part to protect the court's process from abuse. 

84. Was Eleanor King J misled?  Neither the wife's statement nor the position statement, filed for the purposes of the application for leave, refer to the fact that the wife was also appealing the Slovenian court's decision of 10th May 2011, including in particular the decision that the court had no jurisdiction in respect of non-Slovenian assets, or to the court's decision on 25th September 2013 dismissing the wife's appeal and ordering a rehearing of her substantive claim to a share of the Slovenian assets.  This was misleading.  I am also concerned by the assertion in the wife's statement that the husband has sold all the Slovenian assets, but I am not in a position to weigh the materiality of this assertion in the absence of any evidence from the husband. 

85. I am not persuaded that Eleanor King J's comment, that she had read the bundle, can be taken as remedying these failures.  However, keeping a sense of proportion, as advised by Ward LJ, I do not propose to set aside the grant of leave.  Although it is open to the court to do so, to protect its own process from abuse, to deter others and to reflects its views of the nature and extent to which the court in the particular case has been misled, I am not persuaded that this would be the right response in this case.  

86. I have no doubt that I would grant the wife leave to make an application for financial remedy orders in the circumstances of this case, as they now are.  It is undoubtedly a claim which is substantial in the sense explained in Agbaje.  It is clearly not an unmeritorious claim, given, crucially, that the Slovenian court has no jurisdiction to deal with non-Slovenian assets, which appear to be very substantial in themselves.  If Eleanor King J had known that the parties' appeal or appeals were due to be heard in September 2013, she might have adjourned the application for leave until after then.  However, once the appeal had been determined, I have no doubt that leave would have been granted.  This case is, therefore, very different from Coleridge J's decision in M -v- W [2014] EWHC 925 (Fam).

87. Picking up point (c) in Sedley J's judgment in Hertsmere Borough Council -v- Harty, I am not persuaded that the deficiency or the deficiencies are such that leave would not have been given if the court had been aware of the true circumstances, indeed I am satisfied of the opposite.

88. Accordingly, I see no merit in setting aside leave, only to require the wife to make a fresh application, which I would then grant.  This would not be a proportionate response to what has taken place.

89. The result is that the parties are in the unfortunate position of having to litigate in two countries.  That, however, is a consequence of the limitation of the Slovenian court's powers.  It may be necessary to consider whether this court's adjudication should await determination of the wife's claims in Slovenia, but I do not consider that I am in a position to determine this issue until I have a better understanding of the parties' resources and where they are located.  Accordingly, I propose to order that the husband must file his Form E expeditiously and I will list the application for a directions hearing before me at some point in the New Year. 

90. Having regard to my conclusion that the husband is clearly not able to establish a knock-out blow and having regard to the length of time that I have had to consider his application, I do not propose to adjourn his application to set aside the grant of leave but to dismiss it.


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