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P v P [2006] EWCA Civ 497

Husband’s appeal, to stay TOLATA proceedings pending the outcome of divorce proceedings in France, allowed.

Court of Appeal: Thorpe and Laws LJJ (16 March 2006)

Summary
Husband's appeal, to stay TOLATA proceedings pending the outcome of divorce proceedings in France, allowed.

Background
The parties were married in 1981 and lived in the UK until about 1988 when they moved from Essex to France. The wife was English and the husband's nationality was not clearly established; the husband stated that he was domiciled and habitually resident in France, although the wife challenged that contention.

In May 2004, the husband petitioned for divorce in France. Shortly thereafter, the wife issued divorce proceedings in the UK, but that move was 'frozen' by application of Council Regulation (EC) 2201/2003 (Brussels II Revised); she then issued proceedings under the Trusts of Land and Appointment of Trustees Act 1996 (TOLATA), by which she sought a declaration as to equal ownership in equity of two properties acquired during the marriage, and a tracing order in relation to the proceeds of sale of the Essex property.

In April 2005, the husband applied in the UK for an order staying the TOLATA proceedings until the French proceedings had been concluded; the wife sought to rely on Article 22 of Council Regulation (EC) 44/2001 (Brussels I) which grants exclusive jurisdiction, in proceedings which have as their object rights in rem in immovable property, to the courts of the member state where the property is situated. The wife's assertion failed at first instance, but succeeded on appeal.

The husband appealed, submitting that the TOLATA proceedings did not fall within Article 22, since a similar submission had already been considered and accepted by the European Court of Justice (ECJ) in Webb v Webb, reported at [1994] QB 696.

Judgment
Held, allowing the appeal, that Article 22 did not apply to the TOLATA proceedings, as established by the decision in Webb v Webb, and the husband was entitled to the stay of those proceedings.

Since this was a second appeal, it was caught by section 55 of the Administration of Justice Act 1999; however, the court was confident that the stringent test for hearing a second appeal was satisfied by the fact that the issue had previously been considered by the ECJ and the Court of Appeal, and none of that material had been cited at either of the earlier hearings. Accordingly, the need for a second appeal flowed directly from the flaws in previous hearings, which were themselves created by the oversight on the part of counsel instructed to cite the governing authorities. All of those factors constituted ample justification for granting permission.

The court made some general points:

(1) it was hard to conceive that, where a married couple were engaged in contested ancillary relief proceedings, the application of a TOLATA claim by one against the other could possibly be justified. The House of Lords' decision in White v White made it plain that issues between a husband and a wife were to be determined within the four corners of the Matrimonial Causes Act and on the application of the statutory criteria there set out; the issue of separate proceedings to establish relatively arcane questions as to equitable entitlement between them was deprecated;

(2) the proportionality between the costs in ancillary relief proceedings and the amounts in issue were a matter of continuing concern in this jurisdiction, certainly to judges and probably to practitioners; it was very important to impose judicial restriction to curtail unnecessary proceedings; and

(3) the whole force of developing European legislation in the family law field was to impose clear and simple rules to establish the primary jurisdiction and to ensure that, once that primary jurisdiction was established, it was given the fullest support in the discharge of its consequent responsibilities. Having recognised the primacy of the French jurisdiction by the stay imposed on the divorce proceedings initiated by the wife in the UK, it would be quite inconsistent with the objectives and underlying policy of the Brussels II Revised to say, in the exercise of the discretion, that the wife could bring civil proceedings in this jurisdiction which only thinly disguised their true competitive objectives.

Read the full text of the judgment here