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Pension sharing not available in relation to a foreign pension

Wife's claim for a pension sharing order failed in long-running dispute

In Goyal v Goyal [2016] EWHC 2758 (Fam) Mr Justice Mostyn has determined that pension sharing pursuant to s.24B Matrimonial Causes Act 1973 is not available in relation to a foreign pension. Whilst it might be possible for the parties to reach agreement, backed by undertakings, to obtain an order in a foreign jurisdiction to split a pension in that foreign country, in order to approve such technique, the court must be satisfied that the foreign pension provider will give effect to the deal. In this case the wife did not file any evidence to confirm that a pension sharing order would be reciprocally enforced in India. As such, the wife's claim for a pension sharing order failed in limine.

The Court of Appeal had set aside the entirety of an order of Judge Brasse, who had previously made declarations as to the beneficial ownership of an Indian pension fund and directed the husband to transfer to the wife his interest in that fund. The wife's claims for a pension sharing order came to be reheard by Mr Justice Mostyn.

The husband argued that even if the fund is beneficially owned by him, the wife's claim for a pension sharing order should still be dismissed in limine for two reasons:

i) An order for pension sharing under section 24B Matrimonial Causes Act 1973 cannot be made in respect of an overseas pension; and/or

ii) The wife had adduced no evidence that such an order, were it to be made, would be enforced by the courts in India.

When addressing the first argument, whether a s.24B MCA 1973 order can be made in respect of an overseas pension, Mr Justice Mostyn invited written submissions from the FLBA and Resolution. The judge reviewed relevant sections of the Finance Act 2004, the Pension Schemes Act 1993, the Welfare Reform and Pensions Act 1999 and the Matrimonial Causes Act 1973 and was persuaded by the presumption against extra-territorial effect of a statute. As such, Mostyn J was satisfied that pension sharing pursuant to s.24B MCA 1973 is not available in relation to any foreign pension. 

However, Mostyn J pointed out that just because the court does not have dispositive powers over a foreign pension scheme, that does not mean there are no other routes to achieving direct sharing of a foreign pension. An alternative method is an agreement, backed by undertakings, to obtain an order in a foreign jurisdiction to split a pension in that foreign country. Prior to approving such technique, the court must be satisfied that the foreign pension provider will give effect to the deal.

Turning to the husband's second argument, Mr Justice Mostyn accepted that the wife had not filed any evidence that a pension sharing order would be likely to be enforced in India. It was well established that a property adjustment order can in principle be made in respect of property sited overseas provided there is clear evidence that such an order would be implemented in the overseas jurisdiction. However, here the wife did not file any evidence to confirm that a pension sharing order would be reciprocally enforced in India.

Therefore the wife's claim for a pension sharing order failed in limine.

For the judgment, prefaced by a summary by Patrick Paisley of 1 Garden Court Family Law Chambers (from which this item is derived), please click here.

17/11/16