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Part III and the Maintenance Regulation: Clash of the Titans

Charles Hale QC and Henry Clayton, both of 4 Paper Buildings, outline the debate which the Court of Appeal declined to resolve in the recent case of Ramadani v Ramadani [2015] EWCA Civ 1138.

Charles Hale QC, 4 Paper BuildingsHenry Clayton, barrister, 4 Paper Buildings

Charles Hale QC amd Henry Clayton, barrister, both of 4 Paper Buildings

At a time when the ceding of domestic sovereignty to Europe is something of a hot topic, the Court of Appeal has just touched on an issue that will become fully developed in future cases. The issue is whether a matrimonial award, with an element of maintenance, in another EU state automatically precludes the court of England and Wales from making an award under Matrimonial and Family Proceedings Act 1984 Part III (hereafter just 'Part III') which amounts to maintenance (in its wider sense as interpreted in European jurisprudence including, for example, capital provision for housing).

At the root of this debate is comment by Lord Collins in the case of Agbaje v Agbaje [2010] UKSC 13 (a Nigerian case and therefore very much obiter) at [55]. The equivalent EU provision at the time of that case was Brussels I which has now been superseded by Council Regulation 4/2009 ("The Maintenance Regulation").  The comment was as follows:

"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 the Council Regulation (EC) 44/2001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters ('the Brussels I Regulation') applies. The effect of sections 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…"

In practice, a prior maintenance award in another EU country would not prevent financial provision outside of the scope of the Regulation – which does not apply to property rights arising out of a matrimonial relationship (ie. claims for sharing of marital wealth). Both Munby LJ at [63] and Thorpe LJ at [35] made that clear in Traversa v Freddi  [2011] EWCA Civ 81 when they agreed that,  'an order which contains an element of maintenance does not fix jurisdiction in relation to all financial issues '.

So the question remains, what does it "fix"?  For some practitioners, this has become known as "the Agbaje question".

The Maintenance Regulation
The relevant parts of the Maintenance Regulation are those concerning Recognition and Enforcement. They are contained in Article 17 for States bound by the Hague Protocol (in practice, where the divorce is in a Member state other than Denmark or the UK):

"Article 17
Abolition of exequatur

(1) A decision given in a Member State bound by the 2007 Hague Protocol shall be recognised in another Member State without any special procedure being required and without any possibility of opposing its recognition.

(2) A decision given in a Member State bound by the 2007 Hague Protocol which is enforceable in that State shall be enforceable in another Member State without the need for a declaration of enforceability."

In Ramadani, the Court of Appeal held that there was no need to address the argument about recognition because there had been no 'decision' in another EU state to recognise (the wife had merely withdrawn her maintenance claims in Slovenia and that withdrawal, said the Court, could not on the facts amount to a "decision"). In Article 2 the term 'decision' is defined as,

"a decision in matters relating to maintenance obligations given by a court of a Member State, whatever the decision may be called, including a decree, order, judgment or writ of execution, as well as a decision by an officer of the court determining the costs or expenses."

Importantly, it should be noted that pursuant to Article 48 of the Maintenance Regulation, court settlements and authentic instruments are enforceable in the same way as decisions.

However, perhaps because of the fact that the Court of Appeal has not decided the point, it is worth readers being aware of the arguments which may reappear in future and which the Court of Appeal would have had to grapple with had they determined that a "decision" had indeed been made in Slovenia.  (For the avoidance of doubt, this article does not cover the situation where there are pending proceedings in another EU country – the principle of lis pendens – which is addressed by Articles 9, 12 and 13 of the Maintenance Regulation and is the subject of well worn arguments elsewhere).

Part III
Here is not the place for a wholesale review of Part III but, by way of recap only, it must be remembered that Part III awards are already limited by the provisions of the domestic legislation. A Part III applicant must cross a number of statutory hurdles, namely:

So back to the Agbaje question. The argument against Lord Collins' dictum, against recognition, is  as follows: if Parliament had intended something as sweeping as removing the jurisdiction to make maintenance awards under Part III where the original divorce and financial proceedings were in the EU, it would have said so.  After all, it is an atypical feature of Part III cases that there will have been a financial award in the state which pronounced the divorce (and this is expressly provided for by s.16(e) as a matter for our courts to take into account).

The amendment to Part III by virtue of s.15(1A) made in light of the coming into force of the Maintenance Regulation appears to relate only to Article 3 of the Regulation (which sets out by reference to habitual residence which Member State will have jurisdiction).

The purpose of the Maintenance Regulation
On the other hand, a plain argument for Part III remaining unaffected by the Maintenance Regulation lies in the rationale of this particular EU legislation, as stated in the preamble at (9):

"A maintenance creditor should be able to obtain easily, in a Member State, a decision which will be automatically enforceable in another Member State without further formalities."

There is no sense in the preamble or any of the commentaries or reports that the Regulation was intended to be used as a shield by maintenance debtors.   Although the Jenard report (OJEC 79/C 59/01) refers to recognition 'conferring on judgments the authority and effectiveness accorded to them in the state in which they were given' (also cited in the ECJ case Hoffman v Krieg [1988] ECR 645) it is clear that this was said in the context of enforcement not jurisdiction.

The preamble also states at (25): "Recognition in a Member State of a decision relating to maintenance obligations has its only object to allow the recovery of the maintenance claim determined in the decision." Emphasis has been added to the word 'only', but it seems fairly clear that the purpose is not to protect the payer from a Part III claim.

It would be curious, if the provisions relating to recognition (which appear much later in the Regulation) were intended to curtail the jurisdiction of the national courts, particularly as nothing is said about this in Article 3 which addresses the basis on which jurisdiction over maintenance can be exercised.

Some conclusions
On the facts of Ramadani, the proposition advanced by Lord Collins would have led to an  absurd and unfair result, because Slovenia (the foreign state in that case) cannot in law take into account resources outside of its own borders (see the first instance judgment AA v BB [2014] EWHC 4210 (Fam)) .The consequence would therefore be  a maintenance decision binding throughout the European Union but without taking into account resources in other States.

Such an interpretation of the Regulation could lead to England and Wales being expected to apply the laws of other Member States to its own domestic legislation. During argument in the Court of Appeal the question was raised:  does the concept of recognition of the decisions of the other Member States merely mean recognising that the decision in question and therefore the payer's liability under the law of the Member State in question (e.g. Slovenia), or does it determine the respondent's liability under the laws of England and Wales? As it happened, the Court of Appeal did not need to come to a conclusion on this point.

Plainly, the fact that a maintenance award has been made in another EU state will be a matter of significant weight to be taken into account, in accordance with the other circumstances of the case, both when granting leave under Part III to apply and when determining the substantive application. However it is far from clear that the Maintenance Regulation would automatically preclude the court of England and Wales from exercising jurisdiction. That, some might think, would not conform with Queensberry Rules, let alone the legislative intentions of the Part III.

So for now the Agbaje question will remain unanswered, but for how long?