Crown Copyright ©
Miss Theis QC:
1.This matter concerns the application made by JCN (the Respondent
husband) for a stay of the divorce proceedings issued in this jurisdiction
by JKN (the Petitioner wife).
2.The wife issued her divorce petition here on 20th May 2009, the
husband filed an acknowledgement of service on 11th June 2009
confirming that he did not intend to defend the proceedings here but
stating that New York was the appropriate forum. On the 5th June 2009
the husband issued a summons for divorce proceedings in New York and
on 12th June 2009 the husband issued his application to stay the divorce
proceedings here to allow the New York proceedings to proceed.
3.At the same time as the wife issued her divorce petition here she
sought, and obtained, a freezing order relating to the husband's assets.
She also issued her Form A seeking financial provision and an application
for maintenance pending suit. In response to the husband's divorce
proceedings in New York and his application for a stay the wife issued an
application for a Hemain injunction restraining the husband from taking
any further steps in the New York proceedings.
4.This application potentially raises an important legal issue that I
am asked to determine; namely, whether this court is prevented from
exercising its discretionary jurisdiction to stay the English divorce
proceedings issued by the wife by the operation of Article 3 of Council
Regulation (EC) No 2201/2003 (hereafter "BllR") and the case of Owusu v
Jackson C-281/02 [2005] All ER (D) 47; [2005] ECR 1 - 1383 (hereafter
"Owusu").
5.This is an issue that has been the subject of some considerable
academic debate and comment. I am told that whatever my decision
there is likely to be an appeal and possibly a referral to the ECJ.
6.The case was listed before me on 15th March 2010 with a 5 day time
estimate (it was released to me by a Judge of the High Court for the
purposes of avoiding it coming out of the list). The first day was a reading
day. I heard the oral evidence of the parties and, by video link, their
respective experts who are based in New York. The documentation in the
case is voluminous, running to some 6 lever arch files with an additional
3 lever arch files of authorities. I have had the benefit of extremely
full opening and closing documents, produced through the industry of
both legal teams, for which I am very grateful. I have read the court
bundles and considered the authorities and academic material I have
been referred to. The court had the benefit of daily transcripts during the
hearing of both the oral evidence and submissions.
7.It is a matter of some regret that the combined legal costs in this case
have reached a staggering £900,000, even at this preliminary stage (this
is the husband's estimate and includes the stay application, the freezing
order application and the application for maintenance pending suit). This
is not a big money case; the assets are about £7m (less tax) and the
husband's net income in the region of £1m (including bonus). I would
sincerely hope that, despite the interest in the legal issue I have outlined,
once this jurisdiction issue has been determined serious attempts will be
made to agree the financial aspects before there is any further damaging
erosion of the relatively limited available assets through increased legal
costs, which are already so alarmingly high.
Background
8.Much of the essential background is not in dispute. Both the husband
and wife are American by origin; both having been born and brought
up in New York. The wife is 40 years and the husband 43 years. They
married on 6th July 1996. By that stage the husband had moved to
London to take up a post with M Bank, which he started in May of that
year. Following their marriage, the wife joined the husband in London and
they lived here until 2008.
9.They have four children; two boys (9 and 8 years old respectively) and
two girls (6 and 3 years old respectively). Prior to the birth of the children
the wife worked for various news organizations. She did not return to
work after the birth of her first child. The children were all born in London
and, once of the relevant age, started attending school here.
10.The husband and wife applied for, and were granted, British citizenship
and British passports in 2004. The children have dual UK and US
nationality from birth.
11.During the whole of their time here the family lived in a number of
rented properties in London. They considered purchasing a property here
but, in fact, remained in rented accommodation.
12.The husband left M Bank in 2000/2001 and co-founded a mortgage
intermediary based in London. In 2001 the husband joined D Bank as
Commercial Real Estate Director for Europe. He continues to work for the
Bank, albeit now in a different role.
13.The husband travelled extensively with his work. The pattern appears
to have developed that the parties would return to New York each year
during the school holidays, usually the summer holidays, rent holiday
accommodation and visit family and friends, whom they sometimes
stayed with. The wife's parents live in a County in New York State, her
brother lives in New York and her sister in Los Angeles. The husband's
parents and brother also live in New York State. At one stage they
considered purchasing a property in New York as a holiday home to use
during these holiday visits, but did not proceed with this plan.
14.It is clear from the evidence I read and heard that the marriage was
in some difficulty by 2007. It transpired during the oral evidence that
the parties (separately or together) had had marriage counselling and/
or therapy for a number of years, either based here or by telephone or
in person during holiday visits to New York. In her oral evidence the wife
referred to marital therapy in 2005 in London and some that took place in
2003. As the wife said in her oral evidence, 'I think [JCN] acknowledges
in his affidavit that we went through rough patches, generally probably
about the births of the babies, there is a lot of care involved, a lot of time.
During none of these times did we ever up-stick at that point and leave
London though.'
15.The husband states in his written evidence that the wife requested
periods of separation in the latter part of 2007 and that she said she
expected that separation to end in a divorce. The wife said this is taken
out of context, it was a general discussion about separation that could
end in divorce; it was not a discussion about their circumstances. It was
suggested to the wife that at this time she was feeling 'semi-detached'
from the marriage; she said she felt there was something wrong but
she 'could not put my finger on what.' It was suggested to her that
seeking to meet an old college friend without informing the husband was
symptomatic of the poor state of the parties relationship, she denied that.
16.It was around this time (late 2007/early 2008) that the parties were
considering whether to move to live in New York. There is a dispute as
to who took the lead on this. It is the wife's case that she was tricked by
the husband into returning to live in New York. She says if she had known
that the husband was continuing his relationship with MD she may have
made a different decision. He told her the relationship was over. She said
in evidence that she hoped the move back to New York would be with a
view to them getting back together; she said the husband had told her
that he would secure a job that would be based in New York by no later
than February 2009. She said if she had known about the continuing
relationship between the husband and MD the position may have been
different; she may well have stayed here and not disrupted the children's
education. She did not accept that she would have moved back anyway,
that the children were moving schools anyway and she sought the support
of her family who lived in New York.
17.The husband's case on the move back to New York was that it was
the wife who was pressing to return to New York, she had never really
settled here and they had lived, what he described as an expatriate life.
According to him, his wife had pressed him to get a transfer within the
bank, or another job, based in New York.
18.During this hearing Mr Scott QC, on behalf of the husband, sought to
present a more moderate position regarding the move to New York. He
referred to various emails (relating to proposed schooling for the children)
where he said the husband demonstrates that he was equivocal about
the move, was not pressing for it to happen and what the emails show in
reality are two parents seeking to find the best solution for the education
of their children.
19.In August 2007 it is common ground that the husband met MD in
Moscow whilst on business, and soon thereafter began a relationship with
her. The wife remained in ignorance of the existence of this relationship
until January 2008 when she discovered some earrings and a large
amount of cash under their bed at the family home in London. The
husband admitted his relationship with MD and told the wife it was over.
20.As mentioned earlier, by the end of 2007 the parties were thinking
seriously about a move to New York. The wife says the husband said that
he would be getting a job in New York and that she should explore looking
at New York schools. The wife said the 'driving force' was the husband
saying he was going to be based in New York and she did not want to be
left behind. In his affidavit sworn on 20th January 2010 at paragraph 34
the husband said 'I repeat that whilst I advocated the move to New York,
it emerged over time in discussions between us.' The wife accepted that
there were other considerations including whether the American schools
would be better for their eldest son. There were a number of emails
around this time to various schools in New York, and the wife's family
provided some assistance in this search. The husband said in his affidavit
sworn on the 6th November 2009 at paragraph 18 'In early 2008, the
Petitioner and I decided that it felt like the right time for us to go home;
that it would be best for the children and for the sake of our marriage.'
21.After the discovery of the relationship between the husband and MD
there were a number of emails written by the wife which illustrate the
extent of her distress at the discovery of the relationship. As she said,
she was 'in extremis' during that time. There is one email at this time
that the husband places reliance upon as not only showing the volatility
of the wife's frame of mind and that she was, in part, the instigator of the
move to New York. There was a suggestion on behalf of the wife that the
husband had forged the email but that allegation was not pursued and
was withdrawn. The wife does not recall sending the email.
22.The parties continued making enquiries about schools in New York and
kept the schooling options open here. The parties travelled to New York in
April 2008 to enable the boys to sit the ERB examination (to enable them
to apply for schools in New York). In the early part of 2008 there was
some uncertainty about the job in New York and the husband said he was
reluctant to commit himself to anything until he knew that schools had
been organised in New York. The wife said she feared being left behind;
the husband told her he was going to get a job in September 2008, as
time went by he said it was February 2009 at the latest. She said she
believed the marriage was 'intact', they were in therapy and, according to
the wife, the husband was telling her he was committed to the marriage.
23.There were a number of emails in the spring/summer 2008 when
the parties expressed views about the various schooling options for the
children here and in New York e.g. the husband liked the response from
a school in London regarding provision for their eldest son (he had been
accepted into that school and another London school from September
2008) and the wife said in her oral evidence her concerns about the
proposed school in New York. In June 2008 their eldest daughter secured
a place at a nursery school in New York which would help access other
schools there. An indication of the uncertainty about the situation is
illustrated by the fact that the wife took their eldest daughter to a Girls'
Prep school welcome tea in London in July 2008 in preparation for her
starting classes there in August 2008.
24.In fact the wife and children flew to New York on 11th July 2008 on
return tickets having not reached a final decision on schooling for the
children from September. The house in London had not been packed up
and they were intending to return to London. Whilst the wife and children
were en route to New York confirmation came through that the boys had
places at a school in New York. The parties then decided to accept the
places at that school. The wife said in evidence that she felt under some
pressure about that, particularly as the deposit required to secure the
places at that school was $10,000. By the end of July the wife was in
contact with letting agents in New York making enquiries about suitable
accommodation. The children started at their schools in New York in
September and in fact the children have not returned to London since.
25.The wife returned to London for a few days in August to pack up the
house in London. She said that the husband had promised that he was
still committed to the marriage at a therapy session in London and his
plans were to move to New York. In her affidavit sworn on 30th November
2009 paragraph 100 she stated 'At our marital therapy session with [the
therapist] on 22nd August 2008 [JCN] confirmed repeatedly that he was
committed to our marriage. He specifically promised that he would be
working in New York at the very latest by February 2009, that he was
entirely committed to our marriage, that he was not involved with any
other woman and that he would not commit any indiscretions. It was
on the basis of [JCN's] promises that I finally agreed to move to New
York.' The wife said it was after that session that the moving agents
were instructed to carry out the international house move and the school
places in London were cancelled. She returned for a short period in early
September to pack up their London home.
26.The wife returned to New York and settled the children into their
new schools. After a period living in serviced apartments they rented
accommodation in Manhattan from December 2008. The husband rented
serviced accommodation in London and stayed with the family when in
New York until May 2009 when he moved out of the rented Manhattan
apartment. He now has his own rented accommodation elsewhere in
Manhattan and states 'I am no longer habitually resident in England and
Wales' (paragraph 66 affidavit 20th January 2010).
27.In fact the husband did not secure the move of job to New York until
July 2009. Prior to that he was spending about half of his time in New
York and the rest of the time away either in London or other locations.
28.On 11th May 2009 the husband requested (at a joint counselling
session in New York) a separation for four months; according to the wife,
he requested a complete separation in that the parties would have no
contact and this included the husband not having any contact with the
wife. According to the wife the husband stated that neither party should
have any intimate relationship with anyone else during this period. The
husband denied they had discussed that sort of detail. However there
was, as I understand the evidence, a separation and in fact the husband
continued to see MD.
29.In May 2009 the wife discovered that, unbeknown to her, the husband
had continued his relationship with MD. She had moved to London to
start a course in February and stayed until June 2009. She went back
to Russia for the summer and returned to London in September 2009
until December and then was back for a short period in February 2010. In
reality during that time she was living with the husband in London when
he was there. Their relationship continues and she was in fact in New York
for about a month during this hearing. He said in evidence if there was
going to be a long term relationship with her that would be in New York.
30.The wife issued divorce proceedings in the Principal Registry of the
Family Division on 20th May 2009. When asked in her evidence why
she issued them here she replied 'I was advised that I couldn't issue
proceedings in New York and at the time that I issued [JCN] was living
here, [JCN] has conceded he was a resident, a habitual resident here.
The almost entirety of my marriage was in London. I am a UK citizen. My
children were all born here. They are all UK citizens. My children were all
born here. They are all UK citizens as well, they have all been to British
schools her and at that point it was to me the place to proceed.' She said
she had been advised she could not issue in New York as the residency
requirements in New York had not been fulfilled. On the same day the
wife sought a freezing order and issued ancillary applications, including
her Form A. Freezing orders were made on the 21st May and the husband
was served with the proceedings on the 22nd May at Nassau airport in
the Bahamas where he had gone on holiday with MD. On the 4th June
the wife applied for maintenance pending suit and an A v A order, this
application was listed on the return date of the freezing order, the 15th
June.
31.On 5th June the husband issued a summons for divorce proceedings
in New York. On the 11th June he completed the acknowledgement
of service within the divorce proceedings issued here stating that he
accepted jurisdiction and indicating that he did not intend to defend
the proceedings in this country. On 12th June the husband issued his
application to stay the proceedings in this jurisdiction. On the same
day the wife issued a summons for a Hemain injunction to restrain the
husband from taking any further proceedings in New York.
32.On 15th and 16th June the matter came before Mrs Justice Black. She
made comprehensive directions, including:
oThe wife shall not seek to rely upon the fact that the Respondent
has completed a Form E and made associated disclosure within the
maintenance pending suit proceedings as being a relevant consideration
for the Court in determining the stay application.
oEach party reserved their position regarding the New York proceedings
and it was agreed neither party shall take any steps in those proceedings
until the determination of the husband's stay application in this
jurisdiction.
oInterim financial terms were agreed pending the hearing of the wife's
application for maintenance pending suit.
oThe first appointment in the ancillary relief proceedings was vacated.
oGiving the wife permission to instruct an expert in New York law to
provide a report as to whether the husband has available to him in New
York the relief that he has claimed in those proceedings with provision for
the husband to instruct an expert in reply.
oNo further steps were to be taken in the suit in this jurisdiction or the
ancillary relief application save for the wife's application for maintenance
pending suit and the husband's application for a discretionary stay.
33.On 25th June the husband received a contract of employment in the
US to begin in July 2009 in a senior management position (Americas).
This required him to be based in New York. His job changed again in early
2010, when he was appointed to a more senior management position
(Global) at D Bank. He said in evidence that in reality it made little
difference as the bulk of his previous responsibility at D Bank was based
in America.
34.The freezing order was discharged by Mrs Justice Eleanor King on 28th
July 2009 by consent, upon compliance with the terms of the agreement
reached at the hearing before Mrs Justice Black on 15th and 16th June.
35.The current position is the wife remains in rented accommodation in
New York with the children. The husband is in serviced accommodation
in New York. The children are all in full time education in New York and
neither party has any plans to move and, in particular, there are no plans
for either the husband or the wife to return to live in this country.
Expert evidence
36.The expert evidence was filed; Mr Sheresky on behalf of the wife and
Mr Mantel on behalf of the husband. I heard both these experts given oral
evidence during the hearing, by video link with New York. They both have
impressive CVs setting out their expertise in matrimonial law in New York.
37.The focus of their evidence was on the validity of the action for divorce
issued by the husband on the 5th June in the Supreme Court, New York
County seeking a divorce on the ground of cruel and inhuman treatment
and ancillary relief including custody of the children, a declaration of
separate property, title to his separate property, equitable distribution
of marital property and counsel fees. No further judicial proceedings
have been taken since the issue of the summons and the service of a
'Notice of Appearance' by the wife's New York counsel on 6th July. No
complaint has been filed in those proceedings specifying the jurisdictional
basis upon which the husband is relying or setting out the alleged cruel
and inhuman treatment of him by the wife or setting out the basis on
which he is seeking custody of the children. This is in accordance with the
agreement reached by the parties that no further step should be taken
in those proceedings until this application is determined. The husband's
draft complaint in the New York proceedings was made available to these
experts (although only seen for the first time by the wife's advisers and
Mr Sheresky on receipt of Mr Mantels' report on 15th January 2010).
38.In summary, Mr Sheresky's position was that the husband's New York
proceedings contravened section 230 of the Domestic Relations Law; to
be granted a divorce in New York the husband must either demonstrate
that New York's residency requirements (12 months prior to the issue of
proceedings, per s 230) have been met or prove the New York domicile
of either party. He said when the husband commenced his action in
June 2009, neither party had been resident for a year and he did not
consider the domicile requirement was established. It was his view that
the failure to meet these requirements dealt a fatal blow to the husband's
divorce action, although he accepted, in answer to a question I put to
him, that the proceedings remained valid until a motion to strike out was
determined.
39.Mr Mantel did not dispute the statutory provision referred to. He
contended that any defect can be cured by subsequent amendment after
the 12 month period had passed. He relied on a case calledLacks v Lacks
41 NY2d 71, 390 NYS 2d 875 (1976)7. I have a copy of the judgment
of the Supreme Court of New York, Appellate Division, First Department
decided in December 1975 and the Court of Appeals of New York decided
in December 1976. The brief circumstances of that case was there had
been extensive litigation over a number of years (the Defendant is
recorded as having had 32 attorneys since the litigation began and there
had been a number of previous appeals) with the Defendant seeking to
vacate the grant of the judgment of divorce made in 1970. In this appeal
the Defendant sought a late challenge to the judgment on the basis that
the residency requirement in s 230 was not satisfied when the judgment
was made 5 years previously. Section 230 had been amended during the
course of the litigation; the amendment, as I understand it, introduced
the 12 month residency requirement and permitted a grant of divorce
upon proof of cruel and inhuman treatment; prior to that the law only
permitted a judgment of separation in such circumstances. Mr Mantel
relied on this case as being authority for the court to permit subsequent
amendment of a complaint to cure any failures to meet the 12 month
residency requirement at the time of issue. The end of the Opinion of
the Appellate Decision First Department states 'Under the circumstances,
therefore, the continued residency, after the action was brought, and prior
to entry of a decree, gave the court jurisdiction to permit amendment of
the complaint. Indeed, to hold otherwise, would exalt form over substance
since plaintiff could have instituted another action seeking to dissolve
the marriage at any time after he completed the one year residency
requirement, was improperly given retroactive effect herein, i.e. to the
date of the original action for separation and that there was jurisdiction to
grant the divorce.'
40.Mr Sheresky did not consider the case of Lacks overrode what he
said was the plain language of s 230, which necessitated 12 month
residency before divorce proceedings could be issued. He saidLacks was
easily distinguished on its own facts and had not, to his knowledge, been
relied on since 1976 for the proposition being advanced by Mr Mantel.
Mr Sheresky relied on the concluding part of the opinion in the Court of
Appeal which stated 'In concluding the jurisdiction-competence issue it is
not assumed that the courts in the action made any error of law or fact in
determining the durational or initial residence requirements to maintain
an action for a separation or divorce. Nor is it assumed that the same
courts did not consider and determine the issues of residence, whether or
not raised by the wife. On the contrary there was considerable evidence
of residence by the husband, and the court obviously determined that
the husband had some residence even if not of the duration to satisfy the
matrimonial statutes. The point is that the litigation having gone to final
judgment, the right to review by appeal having been exhausted, this is
and should be the end of the matter.'
41.Mr Mantel's oral evidence conceded, in relation to any motion to
dismiss the husband's action being made by the wife, that 'it is critically
important to focus on when the motion to dismiss would be made. Again
if [the wife] moved to dismiss the New York action in June shortly after
the summons was filed claiming that she or [the husband] did not then
meet the 230 requirements she may have and probably would have
prevailed.' It is right to record, due to the Hemain order made in these
proceedings, neither party has been able to take any steps in the New
York proceedings.
42.During the course of his oral evidence it appeared Mr Mantel was
reading from a document (draft complaint in the New York proceedings)
which was different than that which appeared in the bundle in these
proceedings. Upon further investigation it appeared that, unbeknown
to the husband's legal team here, there had been exchanges of emails
between Mr Mantel and the husband's New York lawyer Mr Wrubel. Those
email exchanges were disclosed and it is apparent that Mr Mantel had
twice drawn to the attention of Mr Wrubel ways in which the complaint
in the husband's divorce proceedings should be amended. There was
no reference to this exchange in Mr Mantel's report and as the London
legal team had not known about this exchange they had attached to Mr
Mantel's report the first (and what they thought was the only) draft of the
husband's complaint.
43.Mr Marshall, on behalf of the wife, asked for Mr Mantel to be recalled
to deal with these matters and he gave evidence again, via video link,
the following day. He said he thought the husband's London legal team
had been copied into these exchanges and was not aware that only the
first draft complaint had been attached to his report. Mr Marshall pressed
Mr Mantel as to why there was no reference to this email exchange in his
report or any reference to his proposed amendments to the complaint.
Mr Marshall suggested that such behaviour compromised Mr Mantel's
evidence as he had clearly stepped out of the role of being an expert
and stepped into the role of advising the husband of the steps he should
take in relation to this complaint. Paragraph 2.2 of the Experts Practice
Direction provides as follows 'Experts should assist the court by providing
objective, unbiased opinions on matters within their expertise, and should
not assume the role of an advocate ' [emphasis added]
44.Even making all due allowances for the time of year (some of these
email exchanges took place between Christmas and New Year) it is clear,
in my judgment, that by taking the steps he did Mr Mantel left his role as
being an expert in the case (with his consequent duties to the court) and
advised the husband as to what steps he should take. Any comments he
had on the draft complaint should have been set out in his report.
45.In fact the exchange of emails and the course taken by Mr Mantel
do not directly impact on the judgment I have formed regarding the
evidence of the legal position in New York relating to the husband's
divorce proceedings.
Evidential matters in issue
(1) The move to New York
46.The husband is clearly very successful in his job. He gave his evidence
with confidence and was candid in expressing feelings of remorse for
his deception to his wife regarding his continued relationship with MD.
He accepted he had told his wife in early 2008 that the relationship was
over and maintained that position despite the reality being very different;
he continued to still see MD and still does and has given her financial
support. The wife, on the other hand, was more hesitant in the evidence
she gave. The breakdown of the marriage had clearly taken its emotional
toll on her; she found giving evidence about the details of the breakdown
of the marriage very difficult.
47.Having had the benefit of seeing both parents give evidence I consider
it more likely than not that if the wife had known about the continuing
relationship between the husband and MD she would have been much
more cautious about returning to New York. When giving her evidence the
wife came across as someone who thinks very carefully before making
decisions, in particular something as significant as moving to live in
New York and the consequences for the children's education. In her oral
evidence she described herself as 'methodical'. In her affidavit sworn
on 30th November 2009 at paragraph 127 she stated 'If I had known
that [JCN's] relationship with [MD] continued I would not have agreed to
move to New York with the children. I believe [JCN] was aware of this.
I was reluctant to do so, with many doubts, and only did so in the end
because [JCN] promised me he was honourable and committed to our
marriage.' In her oral evidence she stated 'If [JCN] really did not know
about the global… jobs as it seems [he] did not exactly when it was going
to be [as] it seems now, and had I been told about the affair as I said in
my fourth affidavit, yes I would have liked to have brought the children
back to what was their home and their community and where they had
places in all their schools and activities for the Fall and where we had
our housing.' She rejected any suggestion (during cross examination)
that there was not going to be any particular stability if the family had
remained in London in 2008 'Three of the four would be moving into
schools where I knew the administrators and the community extremely
well and where they knew me and where I knew many of the families
as they had multiple siblings. I am now in a very fragmented situation
where none of the schools have any prior history with me or the children.
Not only do they not know me particularly well, there are four different
schools for four different children. If I know ten families in each school
I am lucky, so that's 40 different families who don't [know] me well but
who in London would have known me and the children.'
48.I accept her evidence that she had immersed herself more into life
in this country than the husband gave her credit for, particularly after
the children started school through links made with other parents at the
school. As she said in her evidence '..the children were in British Schools
and I became friendly with, through the schools, a number of British
mothers that I liked a lot, and I began to work for the British children
charity through a British friend of mine, that I mention in my affidavit,
that I still see. So I did not necessarily see myself as a person stationed
here for a certain period of time who was always going to leave.' she said
a bit later 'my social life as a mother was the domestic side of things and
that was where I socialise, was with the mothers who were a part of these
schools and many of them were British and are British, and who I still
see.' The husband was not around on a day to day basis as she was. I
also accept her evidence that her relationships with her family were not
so strong to be a magnetic factor in favour of returning to live in New
York. She described her relationship with her parents and brother; they
did not come across in her evidence as close relationships that would
give her significant emotional support, she said 'our families are very
powerful and can be very controlling and I was very aware of that fact
that I thought I had flourished in my own household in London', later
she said '..they [her family in New York] have a very low tolerance of
things like this, in terms of support actually I have gotten it from like
minded people of my own age'. She accepted her mother cared for the
children, and was caring for them whilst the parties were here during the
course of this hearing but they have taken their child-carer's with them
to New York (during holidays) to 'help reduce the childcare burden on her
mother and her resultant anger at [JKN], that we were both well aware
of' (husband's affidavit paragraph 60 20th January 2010). In relation to
her brother he had given some practical help (as evidenced by the emails)
but her brother is younger than her, in her oral evidence she said 'I think
my brother made one link that was able to be effective at the school. I
have never seen the inside of his offices and since he is a good five years
younger than me I don't socialise with him really at all.'
49.On the evidence I have heard and read I consider the husband was
the driving force (to use the wife's term in her oral evidence) regarding
the move back to New York. There were job opportunities there and there
was some suggestion that he may take over from his boss in New York.
The husband's suggestion at paragraph 14 of his affidavit sworn on 4th
December 2009 that the move to New York was the wife's idea gives, in
my judgment, an entirely selective and inaccurate view of the history. He
stated in his affidavit:
"I did not persuade [JKN] to move to New York. We had been thinking
about moving back home for some time. I attach a copy of an email dated
2nd February '08 from [JKN] to me showing that the move to New York
was her idea. We agreed in the Spring of 2008 we would move later that
year. I was hoping to secure a promotion of work which would move a
permanent move to New York. [JKN] and the children moved first to settle
in before the start of the term."
He attached to that affidavit an (apparently isolated) email in the
following terms:
"[JCN], since [the eldest son] is not in any schools here and you are now
Global Head, would consider all of us as a family and husband and wife
moving back to New York this summer. I am not trying to trick you. It
really offends me when you insinuate that it makes me really upset. I
really do love you and I would not be so committed to try and get us back
together and be together as a family, but what if we moved back and
you worked out of New York for [D Bank] and did your travel etc based
out of New York and have [C] manage London while you flew in and out.
We have so much money and I really, really mean that. We could leave
with all this money and the kids would have so much anyway. It would be
better for them, for both of us too. What do you think? My option, it is a
good one. [JKN]."
What this extract and email fails to mention is that the wife had
discovered, only a short period before, that the husband had been
conducting a relationship with MD and other emails around this time (only
hours either side) demonstrated how upset the wife was at this discovery.
The way this has been presented by the husband is revealing as to his
ability to present a tactical picture to suit the evidential picture he seeks
to present. It appears that, at about the same time, he was giving the
more critical emails written just before and just after this email to his New
York lawyer for inclusion in the detailed complaint filed in the New York
proceedings making allegations against the wife. The wife said she had
no recollection of sending the email exhibited to the husband's affidavit.
On the evidence I am unable to make any finding about its generation
and by whom, one way or the other or that it is demonstrative of volatile
behaviour by her.
50.The wife's case was that she was tricked or induced by the husband
in returning to New York, the inference I am invited to draw from the
husband's behaviour is that he wanted her out the way to avoid her
finding out about his plans with MD and to deprive the courts here of
having jurisdiction. MD came to this country to study in February and
stayed here until June. She then returned to Russia, with a trip back here
between September and December and again in February 2010 to sit
some exams. It was also hinted that part of the trick was to get the wife
to return to New York to enable divorce proceedings to be issued there or,
at least, prevent proceedings being issued here.
51.Whilst, in my judgment, the wife may well not have moved to
live in New York if she had known the truth regarding the continuing
relationship between the husband and MD I am not satisfied, on the
balance of probabilities, that this was part of some calculated planning
by the husband. In the emotional turmoil during the final stages of the
breakdown of the marriage both parties were making decisions in very
difficult circumstances. In my judgment the wife was clinging to the
hope that her marriage would continue and felt a move to New York may
assist with that, as she understood the husband's job was going to move
there and she did not want to be left behind ('her one fear' she said in
evidence), the husband confirmed his commitment to their relationship
in late August 2008 and continued to stay with the family in New York
until May 2009 attending therapy/counselling. However, the reality was,
in fact, very different, the husband was continuing his relationship with
MD without being honest about his intentions to his wife. In the middle
of this emotional turmoil they, as parents, needed to make decisions
about the best educational provision for their children. Looking at the
evidence as a whole over the period 2007 to 2009 there is no doubt the
husband was being deceptive about his relationship with MD and may well
have considered the advantages in terms of his relationship with MD of
the wife and children being away from London but I am not able to find
that this was part of some wider plan connected with any jurisdictional
arguments for the divorce proceedings at the time of the move by the
wife and children to New York in 2008.
(2) Divorce proceedings
52.I am satisfied that the wife's decision to issue proceedings here was
done at a time when she was not able to issue proceedings in New York,
as she had not been resident in New York for the minimum 12 month
period by May 2009. In her evidence she said 'I was advised that I
couldn't issue proceedings in New York and at the time that I issued
[JCN] was living here, [JCN] has conceded since that he was a resident,
a habitual resident here.' It was also at a time when she considered the
husband was still based in London. It is reasonable to infer from what the
wife said that had she been able to she would have issued her divorce
proceedings in New York.
53.I am equally satisfied that the husband's proceedings in New York have
been tactical. It must have been obvious at the time that in June 2009
neither party fulfilled the 12 month residency requirement. This view is
re-inforced by the terms of the draft complaint produced on his behalf in
late 2009/early 2010 which contained the following provision at paragraph
3:
Each of the parties has resided in the State of New York for a continuous
period in excess of two years immediately preceding the commencement
of this action
It is quite clear, on any view of the case, that those assertions were
simply not true. It is also right to record that the other terms set out
in the complaint are in the most provocative terms. Even making
due allowance for the need to make sure there is sufficient evidence
to establish the ground relied on, they could not be put in more
inflammatory way. As has already been referred to it transpired during the
expert evidence there were subsequent amendments made to the draft
complaint.
(3) Expert evidence regarding the New York divorce proceedings and this
court's jurisdiction under the Domicile and Matrimonial Proceedings Act
1973
54.I have considered carefully the written and oral evidence from the
experts regarding the minimum time required to issue proceedings in New
York and accept the view expressed by Mr Sheresky that the case of Lacks
does not support Mr Mantel's position regarding post-issue amendment
that can retrospectively cure the defect. As he says, Lacks is distinguished
on its own facts; the jurisdiction point was not taken at the time of issue
of the proceedings. As Mr Mantel accepted in his evidence, a motion
to dismiss (on the basis of failure to meet the residency requirements)
made soon after the summons on behalf of the wife would probably have
succeeded.
55.It is very likely that one of the considerations regarding the decision
to issue proceedings in New York is that the date of issue does what
had been described in the oral evidence as 'drawing a line in the sand'
as to whether assets fall for consideration as being acquired during
the marriage or not. It was in the husband's interests to issue the
proceedings as soon as possible.
56.The question is am I satisfied whether 'any proceedings in respect
of the marriage in question, or capable of affecting its validity or
subsistence, are continuing in another jurisdiction' (Sch 1 para 9 DMPA
1973)? Whilst there remain issues regarding jurisdiction and procedure,
as has been explored in the evidence, the evidence is clear they remain
valid until a motion to dismiss is made and succeeds; therefore, in
my judgment, the New York proceedings satisfy the requirements of
paragraph 9.
57.In the light of the procedural matters explored during the expert
evidence Mr Scott QC has (at the court's invitation) sought to put before
the court proposed terms on which the husband says the court should
grant his application to stay the proceedings here which will, if the court
found it had jurisdiction to grant a stay, provide a clearer procedural path
forward in New York. The husband initially suggested the current (June
2009) proceedings in New York should continue, on the basis the 'line in
the sand' would be re-drawn to the end of August 2009. At the invitation
of the court those terms were reconsidered by the husband.
58.The revised terms circulated by Mr Scott QC the evening before final
submissions were as follows:
HUSBAND'S PROPOSALS FOR THE FUTURE CONDUCT OF THE NEW YORK
PROCEEDINGS
1. The Court has expressed concerns that if a stay of the English
proceedings were to be granted:-
(i) In the light of the evidence of the New York law experts there would be
scope for a challenge by W to the New York proceedings on the basis that
the jurisdictional requirements of S.230 Domestic Relations Law were not
met and that this defect could not be cured. H does not accept the validity
of this potential challenge but it could give rise to substantial further delay
and costs in a case where the costs are already very large.
(ii) The circumstances in which H's new York Action was started on 5/6/09
were such that W might be unfairly deprived of the chance to pursue a
claim under New York law in respect of assets accrued since that date.
2. The Court has invited H to make proposals to meet these concerns.
3. H's proposal is as follows. He accepts that a stay should be subject to a
term that:
(i) He does not pursue his present action in the New York Court.
(ii) He starts a fresh action for divorce. The sole ground on which he
would rely would be constructive abandonment.
4. This proposal is not and should not be treated for any purpose as a
concession that the present New York Action is other than a properly
constituted and valid proceeding; or that it does not amount to a
proceeding in respect of the parties' marriage and/or a proceeding which
is capable of affecting the subsistence of the marriage. It was accepted
by the wife's New York law expert Mr Sheresky that the action is a valid
action: See Transcript Day 2 p.113.
5. The Court will be invited to record this in a recital to the order and to
make a specific finding to this effect.
59.Mr Scott QC made it clear in his oral submissions that the provisions
of paragraph 4 were a shield not a sword; the paragraph was there to
deal with any anticipated submission made on behalf of the wife that
the flawed nature of the proceedings would prevent the stay application
meeting the requirements in the 1973 Act. Mr Scott QC said during
submissions that his client would agree to provide a suitably worded
irrevocable undertaking in order to allay any fears the court had that
this paragraph, and the June 2009 proceedings, may hide some residual
meaning within the structure of what was being proposed. This will
only become relevant in the event I consider granting the husband's
application for a stay and there is jurisdiction to do so.
60.Mr Marshall in his closing submissions (whilst not resiling from his
primary position as to this court's ability to exercise a discretionary stay)
made powerful points regarding these proposed terms and raised a
number of points they do not cover.
Stay
61.Whilst there is fundamental disagreement between the parties
regarding the extension of the Owusu doctrine as outlined below, there
is no issue between the parties as to the applicable principles if the court
retains its discretion to order a stay.
62.The relevant statutory provisions are s 5 and para 9 of schedule 1 of
the Domicile and Matrimonial Proceedings Act 1973:-
Section 5
"(2) The court shall have jurisdiction to entertain proceedings for divorce
or judicial separation if ( and only if ) —
(a) the court has jurisdiction under the Council Regulation; or
(b) no court of a Contracting State has jurisdiction under the Council
Regulation and either of the parties to the marriage is domiciled in
England and Wales on the date when the proceedings are begun.
Schedule 1, paragraph 9
(1) Where before the beginning of the trial or first trial in any matrimonial
proceedings, other than proceedings governed by the Council Regulation,
which are continuing in the court it appears to the court —
(a) that any proceedings in respect of the marriage in question, or
capable of affecting its validity or subsistence, are continuing in another
jurisdiction; and
(b)that the balance of fairness (including convenience) as between the
parties to the marriage is such that it is appropriate for the proceedings
in that jurisdiction to be disposed of before further steps are taken in the
proceedings in the court or in those proceedings so far as they consist of
a particular kind of matrimonial proceedings,
the court may then, if it thinks fit, order that the proceedings in the court
be stayed or, as the case may be, that those proceedings be stayed so far
as they consist of proceedings of that kind.
63.The leading cases are Spiliada Maritime Corporation v Cansulex Ltd
[1987] A.C. 460 and De Dampierre v De Dampierre [1987] 2 FLR 300. In
the latter case the House of Lords held the test under Paragraph 9 Sch 1
to the 1973 Act was to be approached on the same basis as the common
law test in Spiliada. Lord Goff set out the considerations for the court in
Spiliada at pp 476 – 478:
(i) a stay will only be granted on the ground of forum non-conveniens
where the court is satisfied that there is some other available forum,
having competent jurisdiction, which is the appropriate forum for the
trial of the action i.e. where the case may be tried more suitably in the
interests of all the parties and the ends of justice;
(ii) if the court is satisfied that there is another available forum which is
prima facie the appropriate forum for the trial of the action, the burden
will then shift to the plaintiff to show that there are special circumstances
by reason of which justice requires that the trial should nevertheless take
place in this country;
(iii) the court will have regard (inter alia) to whether jurisdiction been
founded as of right; is the connection with England a fragile one?
(iv) if 'substantial justice' can be done in the available, more appropriate
forum, or in both forums, the court should not have regard to a particular
juridical advantage for one party in one forum rather than the other;
(v) if there is no other available forum which is clearly more appropriate
for the trial of the action, the court should ordinarily refuse the stay;
(vi) if there is some other available forum which is prima facie more
appropriate, the court will ordinarily grant a stay unless there are
circumstances by reason of which justice requires that a stay should
nevertheless not be granted;
(vii) the court must consider all the circumstances of the case including
those which go beyond those taken into account when considering
connecting factors with other jurisdictions e.g. will the plaintiff obtain
justice in the foreign jurisdiction?
The Brussels Regulations
64.The Civil Jurisdiction and Judgments Act 1982 introduced into English
law the Brussels Convention on Jurisdiction and the Enforcement of
Judgments in Civil and Commercial Matters. The Brussels Convention was
an instrument designed and drafted by civil lawyers for civil lawyers. It
had already been in force among the original Member States in the EC
(as it then was) for 18 years before the 1982 Act came into force in 1987.
Since that time common lawyers have had to get used to a widening
interface between English family law and EU law. In 2001 the Brussels
II Regulation came into force. In 2002 the Brussels Convention was
effectively replaced (as between Member States) by Regulation 44/2001,
the Brussels I Regulation. In 2005 the BIIR came into force.
65.The civil law concept of legal certainty is one area that common
lawyers have been coming to terms with, as illustrated in para 11 of the
Preamble to the Brussels I Regulation which states that, 'The rules of
jurisdiction must be highly predictable'. The exercise of discretionary
powers is much less common in civil systems. The need for predictability
has led to the strict first past the post system which applies under both
Brussels I and BIIR. The tension between the common law preference (in
many areas) for discretion and the civil law preference for certainty was
brought to a head in Owusu.
66.In January 2009 the Commission accepted the United Kingdom's
intention to adopt the provisions of a new Council Regulation ("Reg
4/2009") which deals specifically with maintenance obligations. Virtually
all of the provisions of Reg 4/2009 will not apply until 18th June 2011, in
terms of maintenance the amendments will not significantly depart from
the current provisions of Brussels I.
The 'Owusu' issue
67.This issue was first raised in this case in the wife's fourth affidavit
sworn on 30th November 2009 when the second paragraph stated the
following:
2. For the reasons set out below, I respectfully invite the Court to dismiss
[JCN's] application on the basis:
2.1 the courts in New York do not provide an obviously more appropriate
forum in which to resolve the issues between us;
2.2 the courts in England and Wales are well able to resolve those
disputes;
2.3 in any event, in accordance with the decision of the European
Court of Justice in Owusu v Jackson, there is no jurisdiction to grant a
discretionary stay [emphasis added]; and
2.4 it is my case that [JCN] deceived me as to his true intentions to
induce me into returning to New York with the children in an attempt to
deprive the courts in England and Wales of jurisdiction, even though we
had spent the past 12 years (and almost the entirety of our marriage)
living in England and our whole family acquired British citizenship. Even
now I believe [JCN] divides his time as it suits between New York (where
his domestic arrangements remain largely superficial) and London (where
he continues to pursue his relationship with his girlfriend, [MD]).
68.The wife's case can be summarised as follows:
(i) Owusu confirmed the mandatory exercise of jurisdiction in accordance
with Article 2 of Brussels I includes cases where the alternative
jurisdiction is not a Member State and expressly prohibits the doctrine
of forum non conveniens principles in favour of the civil law principle of
certainty.
(ii) The Owusu doctrine must necessarily extend to Article 3 of BIIR in
relation to this divorce suit and accordingly, the court cannot apply forum
non conveniens principles or order a stay of the suit.
(iii) The husband does not dispute England has jurisdiction under BIIR and
he has indicated that he does not intend to defend the suit.
(iv) The husband was 'domiciled' in England for the purposes of Brussels I
at the time of issue.
(v) All or substantially all of the assets are likely to fall within the terms of
Brussels I jurisdiction regarding maintenance which is subject to Owusu.
(vi) Even if the court finds that forum non conveniens principles do apply
England is the most convenient jurisdiction to deal with the suit due, in
particular, to the fact the parties spent the majority of their married life in
England and the proceedings here are not contested.
(vii) Subject only to pronouncement of a decree, England has jurisdiction
to make ancillary financial orders under Part II of the Matrimonial Causes
Act 1973.
69.The Owusu issue remained central to the wife's case; in her written
opening submissions the major part of the document was taken up with
the wife's Owusu arguments. In his closing submissions Mr Marshall
submitted that the court need only consider the Owusu issue once it had
undertaken a preliminary consideration of the discretionary stay principles
and it was only if, having considered those matters, the court was minded
to grant the stay did the court then need to go on and determine the
Owusu issue. If the court determined that the stay should be dismissed,
there was no need for the court to determine the Owusu issue. This,
said Mr Marshall, followed a similar 'pragmatic approach' that had taken
place in a number of cases (e.g. Deutsche Bank v Sebastian Holdings
PLC[2009] EWHC 3069 (Comm)). Mr Scott said that this was leading the
court down a 'primrose path' and amounted to a change in emphasis as
to the way the wife put her case at the commencement of the hearing. In
his opening skeleton argument Mr Marshall stated at paragraph 11 'It is
suggested that, logically, the court should consider the Owusu point first.'
70.The husband's case can be summarized as follows:
(i) In relation to the Owusu issue that case be distinguished on the basis
that
(a) there are competing proceedings in the other non-Member State (this
issue was not addressed in Owusu);
(b) it is neither necessary nor desirable to extend Owusu to cover cases
where there are continuing proceedings in a non-Member State;
(c) the language and purpose of BIIR is different from Brussels I, that to
apply the Owusu reasoning to BIIR is unwarranted and undesirable;
(d) Paragraph 9 of Schedule 1 to the 1973 Act does not warrant the
construction which must be advanced on behalf of the wife;
(d) any argument by the wife that her claim involves maintenance and
therefore the court is disabled from staying that aspect (due to the
effect of Brussels I) only comes into play if the court extends Owusu to
a situation where there are competing proceedings and it ignores the
fact that the wife's maintenance claim is ancillary to her petition. If the
petition is stayed there is no maintenance claim.
(ii) If the court considers this case on the conventional discretionary stay
principles under Paragraph 9 of Schedule 1 to the 1973 Act as applied by
de Dampierre and applies the two stage test: (i) Is there a forum which
is more appropriate and in which proceedings have been started? 'More
appropriate' means where the case has a more substantial connection
with that forum and that it is the natural forum. If that other forum is
not more appropriate, a stay will not be granted. If it is (ii) a stay will
ordinarily be granted unless there are circumstances by reason of which
justice requires otherwise.
71.Tempting though it may be to follow Mr Marshall down the 'primrose
path', and avoid the need to determine the Owusu issue, in my judgment
it is unavoidable that I have to grapple with this issue because, as I
understand the wife's case, the court does not retain any discretion in
these matters by virtue of the ratio in Owusu. So the question I have to
confront is whether, after the case of Owusu,the court still retains any
discretion to order a stay in the circumstances of this case and, if so,
should the court exercise its discretion to grant one.
Owusu
72.The relevant facts in Owusu can be summarised relatively briefly.
The claimant, domiciled in the United Kingdom, had hired from the
first defendant, also domiciled in the United Kingdom, a holiday villa in
Jamaica which had access to a private beach. During a holiday there the
Claimant suffered severe injuries when he dived from the beach onto
a submerged sandbank. He brought an action in England for damages
against the first defendant and other defendants, Jamaican companies of
which one owned the beach and the other had licences in connection with
its use.
73.The defendants invited the judge to decline jurisdiction in favour of the
Courts in Jamaica, on the basis of the doctrine of forum non conveniens,
the judge refused on the grounds that, despite the connecting factors
with Jamaica, article 2 of the Brussels Convention in Jurisdiction and the
Enforcement of Judgments in Civil and Commercial Matters 1968 (as
amended; now Council Regulation No 44/2001 Brussels I) obliged him to
assume jurisdiction vis-à-vis the first defendant in view of the defendant's
domicile, and that if he did not try the action against the other defendants
also, there would be a risk of conflicting decisions in different jurisdictions.
On the defendant's appeal and reference by the Court of Appeal to the
Court of Justice of the European Communities ('ECJ') for a preliminary
ruling, the principal question referred was whether, where the case before
a court of a Brussels Convention contracting state had connecting factors
with a non-contracting state but none with any other contracting state,
the court could exercise a discretionary power, available under its national
law, to decline jurisdiction in favour of the courts of the non-contracting
state.
74.The court held, on the reference, that since article 2 of the Convention
was mandatory and the Convention contained no express exception
relating to forum non-conveniens, it was not open to a court of a
contracting state to decline jurisdiction conferred on it by article 2 on
the ground that a court of a non-contracting state would be a more
appropriate forum for the trial of the action, even if the jurisdiction of no
other contracting state was in issue or the proceedings had no connecting
factor with any contracting state. The ECJ did not answer the second
question, namely
'in connection with cases involving identical or related proceedings
pending before a court of a non-contracting state, or a convention
granting jurisdiction to such a court, or in connection with that state
of the same type as those referred to in article 16 of the Brussels
Convention'. [see paragraphs 48 – 52]
75.Although the judgment itself in Owusu is relatively concise it appears
from its terms to have followed the opinion of Advocate-General Leger
which I have been referred to and have read. That opinion sets out the
general principles that underpinned the ECJ jurisprudence.
76.At paras.229-230, the Advocate-General made plain that when
the Brussels Convention and the Accession Convention of 1978 were
negotiated and concluded, a majority of the Member States were either
opposed to the inclusion of the doctrine of forum non conveniens, or
had no intention of including it. This is because the doctrine was alien to
almost every other Member State apart from the United Kingdom, and
such a particularly common law concept that would be incongruous with
civil law systems. The Advocate-General argued at [230]:
'To accept the opposite view would therefore be tantamount to
disregarding the intentions of the States which are parties to the
Convention, as amended by the Accession Convention of 1978, and it is
clear that those intentions were not subsequently departed from when the
later accession conventions or Regulation No 44/2001 were adopted'
77.In his view, the clear, mandatory wording of the first paragraph of
Article 2 itself militated against the acceptance of a doctrine of forum non
conveniens, especially when read together with the overriding objectives
of the Regulation. At para.278, the Advocate-General cited Recital 11 of
Brussels I as a good example of these objectives:
'(11) The rules on jurisdiction must be highly predictable and founded
on the principle that jurisdiction is generally based on the defendant's
domicile and jurisdiction must always be available on this ground save in
a few well-defined situations…'
78.At paras.263 – 265, the Advocate General explained why the doctrine
of forum non conveniens is, by its very nature, incompatible with the aims
and objectives of the convention, as it 'seriously affects the predictability
of the effects of the jurisdiction rules laid down by the Convention, in
particular the rule in Article 2'. He continued to explain the reliance on
predictability in the operation of community law
'…predictability of the jurisdiction rules constitutes the only way of
ensuring observance of the principle of legal certainty and ensuring
greater legal protection for people established in the Community, in
accordance with the objectives pursued by the Convention. Any impact
of that kind on the predictability of the jurisdiction rules laid down by
the Convention, in particular in Article 2 (which is a general jurisdiction
rule) thus ultimately detracts from the effectiveness of the Convention.
In that connection, it is important to bear in mind that the Convention
is largely inspired within the civil law system, which attaches particular
importance to the predictability and inviolability of rules on jurisdiction….
It is therefore clear that that doctrine is hardly compatible with the spirit
of the Convention'
79.The Advocate-General's opinion was effectively adopted by the ECJ in
Owusu at paras 35 - 36 of its judgment:
'[35] It follows from the foregoing that Article 2 of the Brussels
Convention applies to circumstances such as those in the main
proceedings, involving relationships between the courts of a single
Contracting State and those of a non-Contracting State rather than
relationships between the courts of a number of Contracting States.
[36] It must therefore be considered whether, in such circumstances,
the Brussels Convention precludes a court of a Contracting State from
applying the forum non conveniens doctrine and declining to exercise the
jurisdiction conferred on it by Article 2 of that Convention. '
80.At paras.37-38, the ECJ expressly disapproved the compatibility and
continuing existence of the doctrine of forum non conveniens. Moreover,
the ECJ hinted (at para.37) that complaints from jurisdictions (such as the
United Kingdom) who wished to retain the doctrine would be misplaced,
given that it had been specifically discussed when the 1978 Convention
was framed. In other words, the United Kingdom knew what it was
contracting into;
'[37] It is common ground that no exception on the basis of the
forum non conveniens doctrine was provided for by the authors of the
Convention, although the question was discussed when the Convention
of 9 October 1978 on the Accession of Denmark, Ireland and the United
Kingdom was drawn up, as is apparent from the report on that Convention
by Professor Schlosser (OJ 1979 C 59, p. 71, paragraphs 77 and 78).'
81.At paras. 38 – 43 of the judgment the ECJ reiterate the opinion of the
Advocate-General as to the principles that underpin Brussels I, the need
for legal certainty and a simple, uniform application of rules within the
community:
'[38] Respect for the principle of legal certainty, which is one of the
objectives of the Brussels Convention (see, inter alia, Case C-440/97 GIE
Groupe Concorde and Others [1999] ECR I-6307, paragraph 23, and Case
C-256/00 Besix [2002] ECR I-1699, paragraph 24), would not be fully
guaranteed if the court having jurisdiction under the Convention had to be
allowed to apply the forum non conveniens doctrine.
[39] According to its preamble, the Brussels Convention is intended to
strengthen in the Community the legal protection of persons established
therein, by laying down common rules on jurisdiction to guarantee
certainty as to the allocation of jurisdiction among the various national
courts before which proceedings in a particular case may be brought
(Besix, paragraph 25).
[40] The Court has thus held that the principle of legal certainty requires,
in particular, that the jurisdictional rules which derogate from the
general rule laid down in Article 2 of the Brussels Convention should be
interpreted in such a way as to enable a normally well-informed defendant
reasonably to foresee before which courts, other than those of the State
in which he is domiciled, he may be sued (GIE Groupe Concorde and
Others, paragraph 24, and Besix, paragraph 26).
[41] Application of the forum non conveniens doctrine, which allows
the court seised a wide discretion as regards the question whether a
foreign court would be a more appropriate forum for the trial of an action,
is liable to undermine the predictability of the rules of jurisdiction laid
down by the Brussels Convention, in particular that of Article 2, and
consequently to undermine the principle of legal certainty, which is the
basis of the Convention.
[42] The legal protection of persons established in the Community would
also be undermined. First, a defendant, who is generally better placed to
conduct his defence before the courts of his domicile, would not be able,
in circumstances such as those of the main proceedings, reasonably to
foresee before which other court he may be sued. Second, where a plea
is raised on the basis that a foreign court is a more appropriate forum to
try the action, it is for the claimant to establish that he will not be able to
obtain justice before that foreign court or, if the court seised decides to
allow the plea, that the foreign court has in fact no jurisdiction to try the
action or that the claimant does not, in practice, have access to effective
justice before that court, irrespective of the cost entailed by the bringing
of a fresh action before a court of another State and the prolongation of
the procedural time-limits.
[43] Moreover, allowing forum non conveniens in the context of the
Brussels Convention would be likely to affect the uniform application of
the rules of jurisdiction contained therein in so far as that doctrine is
recognised only in a limited number of Contracting States, whereas the
objective of the Brussels Convention is precisely to lay down common
rules to the exclusion of derogating national rules.'
82.It is submitted, on behalf of the wife that any consideration by this
court as to whether this case could be more conveniently undertaken in a
New York State court is irrelevant in the light of the ratio of the decision
in the decision in Owusu which considered a similar submission (that
Jamaica was the obvious place to try the case), and made plain that any
perceived inconvenience or practical difficulties created by an inflexible
application of Brussels I are outweighed by the overarching benefits of
that inflexibility (namely the promotion of legal certainty). The wife relies,
in particular, on para [44]:
'[44] The defendants in the main proceedings emphasise the negative
consequences which would result in practice from the obligation the
English courts would then be under to try this case, inter alia as regards
the expense of the proceedings, the possibility of recovering their costs
in England if the claimant's action is dismissed, the logistical difficulties
resulting from the geographical distance, the need to assess the merits of
the case according to Jamaican standards, the enforceability in Jamaica of
a default judgment and the impossibility of enforcing cross-claims against
the other defendants. In that regard, genuine as those difficulties may
be, suffice it to observe that such considerations, which are precisely
those which may be taken into account when forum non conveniens is
considered, are not such as to call into question the mandatory nature of
the fundamental rule of jurisdiction contained in Article 2 of the Brussels
Convention, for the reasons set out above.'
Consideration of Owusu in non-family cases
83.The ratio in Owusu has subsequently been considered in a number of
non-family cases. The wife submits that they demonstrate the acceptance
in the other two Divisions of the Owusu principle and support her
arguments; the husband contends that they demonstrate a divergence of
opinion on the issues I have to grapple with. I shall consider them each in
turn.
84.In Konkola Copper Mines plc v Coromin [2005] EWHC 898 (Comm)
Colman J considered the Owusu decision. Konkola concerned reinsurance
contracts and the question before Colman J was whether the ratio of
Owusu applied where a provision of the contract conferred exclusive
jurisdiction on a non-Member State. He found that it did not. That part of
his decision was, I understand, not appealed (see Konkola Copper Mines
Plc v Coromin Ltd [2006] APP.LR. 01/17 para 47) Whilst it is some way
from family law, the analysis of Owusu is helpful:-
"76. In Andrew Owusu v. NB Jackson & Others, supra, the ECJ decided
that it was not open to the English court to decline to exercise jurisdiction
over a claim for breach of contract against a defendant domiciled in
England by application of forum non conveniens principles. The claim was
brought by an English-domiciled claimant for breach of an implied term in
a contract of letting of a holiday villa in Jamaica, owned by the defendant,
to the effect that the adjacent beach would be reasonably safe and free
from hidden dangers. The claimant was rendered tetraplegic after striking
his head against a submerged sandbank while swimming. The claimant
also joined other defendants in Jamaica, claiming against them in tort for
breach of a duty of care. The defendants, including Mr Jackson, applied
to the English court to decline to exercise jurisdiction on the grounds that
Jamaica was clearly the more appropriate forum having regard to the
location of the evidence and of most of the defendants. The trial judge
declined so to order, holding that, having regard to the decision of ECJ
in UGIC v. Group Josi [2000] ECR1-5925, if a defendant were sued in a
contracting state in which he was domiciled by a claimant domiciled in a
non-Contracting State, Article 2 applied so as to confine jurisdiction to the
state of the defendant's domicile. The decision of the Court of Appeal in
In re Harrods (Buenos Aires) Ltd [1992] Ch 72 was wrong. He could not
therefore stay the English proceedings against Mr Jackson and he declined
to stay the proceedings against the Jamaican defendants because, if he
did so, there would be parallel proceedings in England and Jamaica. On
appeal to the Court of Appeal questions were referred to the ECJ. The only
material one is as follows:
"Is it consistent with the Brussels Convention …, where a claimant
contends that jurisdiction is founded on Article 2, for a court of a
Contracting State to exercise a discretionary power, available under its
national law, to decline to hear proceedings brought against a person
domiciled in that State in favour of the courts of a non-Contracting State:
(a) if the jurisdiction of no other Contracting State under the 1968
Convention is in issue;
(b) if the proceedings have no connecting factors to any other Contracting
State?"
77. The ECJ decided that the answer to that question was: ".. the Brussels
Convention precludes a court of a Contracting State from declining the
jurisdiction conferred on it by Article 2 of that convention on the ground
that a court of a non-Contracting State would be a more appropriate
forum for the trial of the action even if the jurisdiction of no other
Contracting State is in issue or the proceedings have no connecting
factors to any other Contracting State."
78. The reasoning by which the ECJ arrived at that conclusion may be
summarised as follows:
i) The jurisdictional code contained in the Brussels Convention does
not operate exclusively by reference to legal relationships involving
Contracting States alone, but also takes effect where there is an
international legal relationship between a contracting state and a non-
Contracting State.
ii) The Brussels Convention was concluded on the basis of Article 220 of
the Rome Treaty (now Article 293 EC) specifically "to facilitate the working
of the common market through the adoption of rules of jurisdiction
for disputes relating thereto and through the elimination, as far as is
possible, of difficulties concerning the recognition and enforcement of
judgments in the territory of the Contracting States."
iii) Paragraph 34 of the judgment states:
"… the consolidation as such of the rules on conflict of jurisdiction and on
the recognition and enforcement of judgments, effected by the Brussels
Convention in respect of cases with an international element, is without
doubt intended to eliminate obstacles to the functioning of the internal
market which may derive from disparities between national legislations on
the subject."
iv) Article 2 provides as follows:
"Subject to the provisions of this Convention, persons domiciled in a
Contracting State shall, whatever their nationality, be sued in the courts
of that State.
Persons who are not nationals of the State in which they are domiciled
shall be governed by the rules of jurisdiction applicable to nationals of
that State."
It therefore applies to circumstances involving the relationship between
the courts of a Contracting State and those of a non-Contracting State.
"(v) It must be observed, first, that Article 2 of the Brussels Convention
is mandatory in nature and that, according to its terms, there can be no
derogation from the principle it lays down except in the cases expressly
provided for by the Convention.
Respect for the principle of legal certainty, which is one of the objectives
of the Brussels Convention would not be fully guaranteed if the court
having jurisdiction under the Convention had to be allowed to apply the
forum non conveniens doctrine"
v) At Paragraphs 39-43 the court said this:
"According to its preamble, the Brussels Convention is intended to
strengthen in the Community the legal protection of persons established
therein, by laying down common rules on jurisdiction to guarantee
certainty as to the allocation of jurisdiction among the various national
courts before which proceedings in a particular case may be brought.
The Court has thus held that the principle of legal certainty requires,
in particular, that the jurisdictional rules which derogate from the
general rule laid down in Article 2 of the Brussels Convention should be
interpreted in such a way as to enable a normally well-informed defendant
reasonably to foresee before which courts, other than those of the State
in which he is domiciled, he may be sued.
Application of the forum non conveniens doctrine, which allows the court
seised a wide discretion as regards the question whether a foreign court
would be a more appropriate forum for the trial of an action, is liable
to undermine the predictability of the rules of jurisdiction laid down by
the Brussels Convention, in particular that of Article 2, and consequently
to undermine the principle of legal certainty, which is the basis of the
Convention.
The legal protection of persons established in the Community would also
be undermined. First, a defendant, who is generally better placed to
conduct his defence before the courts of his domicile, would not be able,
in circumstances such as those of the main proceedings, reasonably to
foresee before which other court he may be sued. Second, where a plea
is raised on the basis that a foreign court is a more appropriate forum to
try the action, it is for the claimant to establish that he will not be able to
obtain justice before that foreign court or, if the court seised decides to
allow the plea, that the foreign court has in fact no jurisdiction to try the
action or that the claimant does not, in practice, have access to effective
justice before that court, irrespective of the cost entailed by the bringing
of a fresh action before a court of another State and the prolongation of
the procedural time limits.
Moreover, allowing forum non conveniens in the context of the Brussels
Convention would be likely to affect the uniform application of the rules
of jurisdiction contained therein in so far as that doctrine is recognised
only in a limited number of Contracting States, whereas the objective
of the Brussels Convention is precisely to lay down common rules to the
exclusion of derogating national rules."
vi) At paragraph 44-45 the Court, while recognising the extremely
inconvenient consequences of imposing English jurisdiction on the facts
of that case, concluded that they were not such as to call in question the
mandatory nature of "the fundamental rule of jurisdiction contained in
Article 2" of the Convention."
85.In the appeal decision (Konkola Copper Mines Plc v Coromin Ltd [2006]
APP.L.R. 01/17) Rix LJ said:
[27] 'The Brussels Convention on Jurisdiction and the Enforcement of
Judgments in Civil and Commercial Matters 1968 (and now Council
Regulation No. 44/2001 ("the Regulation")) also approaches the risk of
inconsistent decisions with the same dislike. However, the techniques
of the English common law and of the Regulation are different. The
common law ultimately relies on an exercise of discretion to reach what
in each case seems to the court to be the right result. The Convention
and Regulation state rules designed to avoid inconsistent decisions, but if
those rules fail in a particular case to avoid that danger, there can be no
fall-back on discretionary powers: see Erich Gasser GmbH v. MISAT Srl
[2004] 1 Lloyd's Rep 445, Owusu v. Jackson (Case C-281/02) [2005] QB
801'
86.In Catalyst v Lewinsohn¬ [2009] EWHC 1964 (Ch) Barling J
considered the scope of Owusu in some detail in the context of
applications made to stay proceedings in this jurisdiction, reliance being
placed in particular upon the existence of corresponding proceedings
between the same parties in another jurisdiction (Utah, USA). He held
in cases where there were parallel proceedings that the reasoning in
Owusu did apply with the effect that the Court is disabled from staying
proceedings before it (see paras 56 and 57). It had been submitted that
the existence of parallel proceedings in a non-Member State triggered
a residual forum conveniens discretion, because a 'reflexive analogy'
could be made with Article 27 of Brussels I; it was submitted that
because Article 27 demands a court of a Member State which is 'second
seised' take a decision that it should decline jurisdiction, the doctrine of
forums non conveniens is retained in this circumstance. In rejecting this
submission Barling J stated at para [69]
'…It is a bold step to seek to import into the Regulation a wide forum non
conveniens discretion, which has been held by the ECJ to be inimical to
the fundamental aims of the Regulation…'
He continued at para [71] – [72]
''It seems to me that the ECJ's reasoning [in Owusu] would apply equally
to the situation…where one of the relevant factors in the application of the
standard forum conveniens test is the existence of parallel proceedings
in the non-Regulation country. If Mr Phillips were right the defendants
in Owusu could have bypassed the effect of that decision and activated
the court's power to stay on forum conveniens grounds, by the simple
expedient of commencing proceedings in Jamaica at any time.'
87.Barling J also cited (at paras 75 – 80) English authorities which
support the rebuttal of the 'reflexive analogy' point; Potter J (as he
then was) in Arkwright Mutual Insurance Co v Bryanston Insurance
Co Ltd [1990] 2 All ER 335 and Hobhouse J (as he then was) in S&W
Berisford plc v New Hampshire Insurance Co [1990] 2 All ER 321 who
stated at page 332 "…the availability of such a discretion would destroy
the framework of the convention and create lack of uniformity in the
interpretation and implementation of the convention." At paragraph 80
Barling J held that, 'whatever the precise position in terms of precedent,
far from being satisfied that the reasoning of Potter J is wrong, I find it
compelling and agree with it.'
88.At paragraphs 86 – 104 Barling J considers the considerable academic
commentary on this issue, and disagrees with the view taken by Dicey,
Morris and Collins and (more tentatively) by Briggs and Rees that a
discretionary stay would still be permissible if proceedings in a non-
Member State were first in time. Neither Dicey nor Briggs assert that any
discretion would be retained if the proceedings in the Member State were
seised first in time. The 'analogy' is made with Articles 27 and 28, which
only allow 'any court other than the court first seised' to stay proceedings.
89.The decision in Catalyst has been the subject of some criticism; see
Briggs and Rees, Civil Jurisdiction and Judgments (5th Ed) at 2.260:
'Give the wide range of non-Member State courts and non-Member State
judicial procedures, the fact that the foreign proceedings may not be far
advanced, and so on, a strict obligation to apply Article 27 by analogy
would be quite inappropriate: Belgium may be one thing, but Burma and
Burundi are quite another….In the one case to confront this issue directly,
however, the judge concluded that Owusu prohibited any reference to a
principle of forum non conveniens (for this would impair the principle of
legal certainty); that Article 27 should not be applied reflexively in the
sense that the prior seisen of a non-Member State should automatically
mean that the English court had no jurisdiction (for this is not what Article
27 says, and in any event the court first seised would determine its
jurisdiction by reference to its own law and not by the Regulation); and
that therefore the existence of prior proceedings in a non-Member State
would, unless these could be seen as an abuse of process, be entirely
ignored. The judgment is regrettable and, given the manner in which it
damages the legal rights of the defendant, one which ought to be re-
considered very soon.'
90.In his judgment Barling J referred to the decision in Goshawk
Dedicated Ltd v Life Receivables Ireland Ltd [2008] IEHC 90 in which the
Irish Commercial Court (Clarke J) considered this issue. The context was
an action brought in Georgia, USA for misrepresentation, and subsequent
mirror image declaratory proceedings brought in Ireland. The defendant in
the Irish action applied for a stay in favour of the earlier US proceedings
arguing either (1) that Owusu did not preclude a discretionary stay based
on lis alibi pendens, or alternatively (2) that a stay was possible or even
obligatory where (a) the non-EU country's court was first seised and
(b) the judgment of that court was such that it would be recognized
in the EU state on the basis of the Regulation. In each case Article 27
was prayed in aid by analogy. By the close of the hearing before Clarke
J the first argument appears to have been all but abandoned by the
defendant leaving the judge to observe 'Having regard to Owusu, I
am not satisfied that any doctrine of lis alibi pendens which retained a
significant discretion on the part of the courts, is sustainable as being
consistent with the Brussels Regulation' (para 5.5).
91.Turning to the second argument referring to Articles 27 and 34(4)
Clarke J accepted that there was an acknowledgement in the Regulation
of both the principle of lis alibi pendens and the appropriateness of
affording precedence to an earlier judgment in a non-EU state which
satisfied the international law requirements of the Member State of
recognition. In relation to the latter he distinguished priorities as
between judgments from priorities as between pending proceedings;
the real question, he said, was whether the fact that those matters were
acknowledged in the Regulation was sufficient to warrant a departure
from what he regarded as the clear mandatory language of Art 2
as interpreted in Owusu. He considered that one obstacle to such a
departure was the clear statement by the ECJ in a number of cases to the
effect that deviations or derogations from the underlying provisions of
the Regulations must be found in the Regulation itself, which enumerates
exhaustively the cases in which a person may be sued outside the State
in which he is domiciled. Clarke J held that Article 27 applies only where
the court first seised actually has jurisdiction. As a non- Member State
will decide whether it has jurisdiction by reference to its principles of
private international law it will not be bound by Brussels I. Thus, Clarke
J held the reflexive analogy with Article 27 does not arise in the case of
a non-Member State. On appeal from Clarke J the Irish Supreme Court
did not criticize Clarke J's reasoning in its judgment. It decided to refer
an appropriate question to the ECJ for a preliminary ruling, but I was told
during this hearing that had not taken place and the case had resolved.
92.In Skype Technologies SA v Joltid Ltd and others [2009] EWHC 2783
(Ch) the court was concerned with a jurisdiction clause in a License
Agreement. Proceedings had been issued here and subsequently in the
US and the issue was whether the clause fell within Article 23 of Brussels
1 and, if it did, whether the court should grant an anti suit injunction.
Lewison J said
'[22] I am inclined to agree with Mr Hollander that the decision of the ECJ
in Owusu has now removed discretionary considerations (such as those
relating to forum non conveniens) from playing any part in the decision
of a court in a Member State from staying its own proceedings. I am
also inclined to agree that the court should not, under the guise of case
management, achieve by the back door a result against which the ECJ has
locked the front door (cf Equitas Ltd v Allstate Insurance Company [2008]
EWHC 1671 (Comm) s 64, [2009] 1 All ER (Comm) 1137, [2009] Lloyd's
Rep IR 227).'
93.In Global Multimedia International Ltd v Ara Media Services and
another [2006] EWHC 3107 (Ch), the Defendants asserted that they
would encounter inconvenience and expense in defending proceedings in
England when compared with the defence of parallel proceedings in Saudi
Arabia. At para.34 of his judgment, Sir Andrew Morritt C held that the
Defendant was 'entitled, indeed, bound, to defend that claim in England'.
He went on to say:
[34] 'Even if it were otherwise desirable, this court could not stay the
proceedings against them (See art 2 of the Judgments Regulation and
Owusu v Jackson [2005] QB 801, [2005] 2 All ER (Comm) 577, [2005] 2
WLR 942).'
94.Many of the commercial cases cited involved prorogation of jurisdiction
clauses where jurisdiction is founded not by the domicile of the defendant
(Article 2 jurisdiction), but by a prior agreement between the parties that
any dispute between them will be dealt with in the English courts (Article
23 jurisdiction).
95.Gomez and others v Gomez-Monche Vives [2008] All ER (D) 247
(Feb) concerned proceedings which arose out of a declaration of trust
made in June 1984, expressed to be subject to English law. It had been
submitted that the Owusu doctrine only applied to Article 2 (as it is
'mandatory'), but need not apply to Article 5 (which is a 'permissive'
derogation from Article 2). Morgan J rejected this submission after
reviewing the authorities and a lot of academic commentary. He said
[112] 'in my judgment, there is no difference between the claimant in
Owusu exercising the permission given by Article 2 to sue the defendant
in the United Kingdom and the Claimants in the present case exercising
the permission in Article 5(6) (if it applied) to sue the First Defendant in
England. What was "mandatory" in Owusu was that the rules laid down
in the Judgments Regulation ruled out the possibility that a court of a
Member State had a discretion to decline jurisdiction. That applies in a
case under Article 5(6) just as much as it applies to a case under Article
2.'
96.In UBS AG and UBS Securities LLC v HSH Nordbank AG [2009] EWCA
Civ 585 the appeal turned on the construction of a jurisdiction clause.
Lord Collins of Mapesbury summarised the current position:
[102] 'Finally, it is a matter of controversy whether there is any room at
all under the Brussels I Regulation regime for a stay on forum conveniens
grounds. The effect of the ruling of the European Court in Case C-281/02
Owusu v Jackson [2005] ECR I-1383, [2005] QB 801 is that the Brussels I
Regulation precludes a court of a Member State from declining jurisdiction
under Article 2 (domicile of the defendant) on the ground that a court of
a non-Member State would be a more appropriate forum for the trial of
the action. The Supreme Court of Ireland has made a reference to the
European Court as to whether the ruling in Owusu v Jackson applies even
where proceedings have been commenced in a non-Member State prior to
the proceedings in Ireland (the so-called "reflexive effect" of Regulation
provisions, which does not arise in the present case): Goshawk Dedicated
Receivables Ltd v Life Receivables Ireland Ltd [2009] IESC 7, [2009] ILPr
26.
[103] The prevailing view is that there is no scope for the application of
forum conveniens to remove a case from a court which has jurisdiction
under the Regulation, even as regards a defendant who is not domiciled in
a Member State: see , e.g. Dicey, Morris & Collins, Conflict of Laws, 14th
ed 2006, paras 11-023, 12-020, and specifically in relation to jurisdiction
agreements, para 12-124, and Briggs, Agreements on Jurisdiction and
Choice of Law (2008), para 7.02; and it has been held at first instance
that Owusu v Jackson applies to cases where Article 23 applies: Equitas
Limited v. Allstate Insurance Company [2008] EWHC 1671, [2009] Lloyd's
Rep IR 227, at [64].'
97.In Dicey, Morris and Collins 'The Conflict of Laws' (14th Ed.) the
authors state that at para 12-020:
'the fact that the answer of the European Court [in Owusu] was expressed
in terms of jurisdiction which had been founded on Article 2 is of no real
importance; there is no basis for supposing that the answer would have
been any different if the English Court had been given jurisdiction under
another provision of the 1968 Convention or the Judgments Regulation.'
98.In Lucasfilm Ltd and others v Ainsworth and another [2009] EWCA Civ
1328, the Court of Appeal considered whether it had jurisdiction to hear a
case which involved infringements of United States copyrights committed
within the UK by a defendant domiciled in England.
99.Whilst the Court accepted (at paragraph 99) that because the
defendant was physically within the bounds of the jurisdiction of England
and Wales, the English court clearly had 'personal jurisdiction', a separate
question arose as to whether the English court had 'subject matter'
jurisdiction.
100.Jacob LJ referred to three principal arguments advanced for the
existence of 'subject matter jurisdiction', the first of which was the force
of the Owusu doctrine.
[105] 'The proposition is that Owusu decided that, for the EU, the courts
of the Member State of the Defendant's domicile have, and must exercise,
subject-matter jurisdiction over any claim in any civil or commercial
matter brought against the Defendant unless it is one of the excluded
matters provided for in art 1 of the Regulation. It makes no difference
that the claim is in respect of acts done by the Defendant in a place
far away from the EU. Or that the acts, if done by the Defendant in
his Member State of domicile, are lawful by the law of that State. Or
that the courts of the country where the Defendant actually did the
allegedly wrongful act also have personal jurisdiction over him, with
the obvious consequences for forum shopping that implies. Or that the
dispute concerned has no intra-Member State or effect. Or that there is
no EU interest requiring or making it convenient that the Member State
concerned should have jurisdiction. If correct, the rule is rigid, admitting
of no exception. We will call the postulated subject-matter jurisdiction
the "extra EU jurisdiction". It could also be called "universal international
jurisdiction".
[106] The postulate involves this: that the Convention and then its
replacement Regulation which are essentially about allocation of
jurisdiction and recognition of judgments of EU Member States have, by
a side-wind, created the extra EU jurisdiction, even though the subject-
matter has nothing to do with the EU.'
101.Jacob LJ made plain that the facts of Owusu, and the consequent
judgment of the ECJ, were confined to a case where the 'subject-matter'
jurisdiction of the English court was not in doubt.
[122] 'What is of great importance to note is that this was not a case
where it was suggested that the English Court did not have subject-
matter jurisdiction. On the contrary the very premise of a forum non
conveniens argument is that the court has got subject-matter jurisdiction
but should not exercise it because there is a more convenient forum for
the litigation. So there can be no doubt that the question the ECJ had to
face had nothing to do with subject-matter jurisdiction.
[123] The problem for the Defendants was that Mr Jackson was domiciled
in England. Article 2(1) of the Brussels Convention (now art 2(1) of the
Regulation) lays down the fundamental basic rule: "1. Subject to this
Regulation, persons domiciled in a Member State shall, whatever their
nationality, be sued in the courts of that Member State".'
102.Jacob LJ confirmed that Article 2 of Brussels I does not create
'subject- matter jurisdiction' in the court of a Member State per se as a
bi-product of 'personal jurisdiction'. Subject-matter jurisdiction needs to
be already conferred, at which time Article 2 mandates its exercise (as
was the case in Owusu):
[127] 'So Owusu establishes where art 2 confers personal jurisdiction
in a court of a Member State by reason of the Defendant's domicile in
that State, the court cannot refuse to hear the case because there is a
more appropriate forum abroad. It does not begin to address a quite
different question, namely given personal jurisdiction, is the subject-
matter jurisdiction of the court also displaced by art 2?
[128] Mr Bloch submitted that because art 2 does confer subject-
matter jurisdiction on the courts of a Member State in respect of acts
done elsewhere in the EU, it must also have the same effect as regards
acts done outside the EU. We do not see why – there is an enormous
difference between the two. For intra-EU events the Regulation is a
carefully balanced piece of legislation. Its components are interrelated.
Thus it provides for all the consequences of its allocation of jurisdiction
rules – exclusive jurisdiction for court first seised, a lis alibi pendens rule
in other courts, mutual recognition of judgments and so on. None of that
balance or interrelation is provided by the suggested extra-EU jurisdiction.
Nor could it be, for to achieve it you need to legislate for all the courts to
which the rules apply and the Regulation has no effect on the courts of
third countries.
[129] So for all the reasons we have indicated above we think that it
clear that the Regulation does not create the extra-EU jurisdiction as we
have defined it. The Regulation is not setting up the courts of the Member
States as some kind of non-exclusive world tribunals for wrongs done
outside the EU by persons who happen to be domiciled within the EU.
That is the sort of thing that is done reciprocally and by an international
Convention – it goes well beyond the remit of judges whose job is to
interpret the law, not to legislate. We think the point is acte clair and
would accordingly not refer it.'
Consideration of Owusu in family cases
103.There has been limited consideration of Owusu in family cases.
104.In Cook v Plummer [2008] 2 FLR 989 the Court of Appeal refused
permission to allow a proposed appellant to argue before the full court
that the Owusu doctrine applied in a family context. At para 10 Thorpe LJ
observed that there were 'contrary arguments' and the decision in Owusu
was 'deeply unpopular'.
105.In J v P [2007] EWHC 704 Sumner J considered an application under
Schedule 1 to the Children Act 1989 in circumstances where the father
had issued a petition in Italy first and the mother subsequently issued
proceedings in England. The father applied for a stay, citing Articles
27 and 28 of Brussels I, as the petition involved the same cause of
action in both jurisdictions (the maintenance of the child, which falls
within Brussels I), and asserted that the Judge therefore had no forum
conveniens discretion to keep the case in England when Article 27 – 28 of
Brussels I demanded that it must be stayed to allow the Italian court to
consider whether it had jurisdiction. Sumner J (reluctantly) acceded to the
father's argument and stayed the application.
106.In Ella v Ella [2007] 2 FLR 35 the Court of Appeal upheld the
granting of a stay in English divorce proceedings in favour of subsequent
proceedings in Israel. Owusu was not cited.
107.The Owusu doctrine was referred to by the Supreme Court in Re I
(a child)(contact application: jurisdiction) [2009] UKSC 10. This case
involved an application by a mother to vary a contact order. The High
Court had decided that it had no jurisdiction to hear the case under the
Family Law Act 1986, and the mother appealed on the basis that the court
did have jurisdiction under Article 12 (3) of BIIR. It was submitted that
Article 12 (4) of BIIR extended the scope of the jurisdiction to children
who were habitually resident in 'third' (i.e. non-Member) states. Baroness
Hale asks
"[17] Can article 12 apply at all where the child is lawfully resident
outside the European Union? In my view it clearly can. There is nothing in
either article 12.1 or article 12.3 to limit jurisdiction to children who are
resident within the EU. Jurisdiction in divorce, nullity and legal separation
is governed by article 3 of the Regulation, which lists no less than seven
different bases of jurisdiction. It is easy to think of cases in which a court
in the EU will have jurisdiction under article 3 but one of the spouses
and their children will be resident outside the EU. A court in England
and Wales would have jurisdiction if the petitioning mother were living
with the children in the USA and the respondent father were living in
this country. A court in England and Wales would have jurisdiction if the
petitioning father had lived here for at least a year and the respondent
mother were living with the children in the USA. A court in England and
Wales would have jurisdiction if the spouses were living here but their
children were living in the USA. In some of these cases the spouses might
well wish to accept the jurisdiction of the English court to decide matters
relating to parental responsibility so that their children's future could be
decided in the same jurisdiction as their status, property and finances.
Professor Rauscher is quite clear that "the new rule not only applies to
children residing in a Member State which is not the forum State (as
Article 3 Brussels II did) but also to children residing in Non-Member
States" (T Rauscher, "Parental Responsibility Cases under the new Council
Regulation 'Brussels IIA'", The European Legal Forum, 1-2005, 37 – 46
at p 40). There is nothing to differentiate article 12.3 from article 12.1 in
this respect."
Later in her judgment, making it clear that the court must exercise its
jurisdiction (even if it was simply deciding to make no order), Baroness
Hale refers to Owusu
[40] 'There are many conclusions which the court hearing this case might
reach. Among them is an order that it would be better for the child to
make no order at all: Children Act 1989, s 1(5). But this is not a refusal of
jurisdiction (cf Owusu v Jackson).'
Lord Collins highlighted the extent to which Brussels I and BIIR must be
regarded as complementary and subject to uniform jurisprudence:
[52] 'The answer to this question must be found in the light of Article
12 `as a whole in the context of the Brussels II Revised Regulation as a
whole, and in the light of the instruments which preceded it'
His Lordship later (at para 53) drew parallels between Brussels I and
Brussels IIR.
Lord Clarke remarked (at para.88) that he agreed that it would be 'very
odd' that a principle could apply to Brussels I, but not to Brussels IIR.
However, Lord Clarke then goes on in that paragraph to make a distinction
between Brussels I and BIIR (Article 24 of Brussels I is free-standing
ground of jurisdiction; whereas it is not in BIIR)
108.There has been some discussion regarding the application of the
Owusu doctrine to family cases in a number of articles that have been
included in the authorities bundle (cf 'The State of International Family
Law Issues: A view from London' [2009] IFL 35) which support the view
that the Owusu doctrine must carry over to BIIR. Professor Briggs (the
leading academic in the field of Private International Law who is on
record lamenting the effect of Owusu) has acknowledged that the Owusu
doctrine may carry over to BIIR (cf: 'The Death of Harrods: forum non
conveniens and the European Court' [2005] LQR 535). In 'The State
of International Family Law Issues: A view from London' [2009] IFL 35
HHJ Ian Karsten QC states 'The time cannot be far off when an English
judge will have to decide what the effect of Owusu is upon the power
to stay divorce proceedings under the 1973 Act.' Timothy Scott QC in
'Certainty and Discretion: EU and English Family Law' [2009] IFL 155
states 'The impact of Owusu in the sphere of English family law is a
matter of continuing debate.'
The wife's submissions
109.The wife's case, put simply, is that Owusu has confirmed the
mandatory exercise of jurisdiction, in accordance with Brussels I, includes
cases where the alternative jurisdiction is not a Member State.Owusu
expressly prohibits and disavows the doctrine of forum conveniens in
favour of the civil law principle of legal certainty. The Owusu doctrine
has been applied by judges in the Queen's Bench Division and Chancery
Division since 2005 (see Catalyst and Goshawk above).
110.The wife submits there is no doubt that both personal jurisdiction and
subject-matter jurisdiction already pre-exist under Brussels I in respect
of the wife's financial ('maintenance') claims, subject (per ss.23 and 24
MCA 1973) to pronouncement of a decree of divorce. Therefore (just as
in Owusu) Article 2 of Brussels I compels a full exercise of jurisdiction
without recourse to any forum non conveniens discretion.
111.Article 2 of Brussels I states:
(1) Subject to this Regulation, persons domiciled in a Member State shall,
whatever their nationality, be sued in the courts of that Member State.
(2) Persons who are not nationals of the Member State in which they
are domiciled shall be governed by the rules of jurisdiction applicable to
nationals of that State.
112.Article 2 of Brussels I is mandatory; a defendant must be sued in a
Member State of his domicile. This is subject to Article 3, which allows
a defendant domiciled in a Member State to be sued in another Member
State under one of the 'exceptional' jurisdictions permitted by Brussels I.
113.In Owusu the ECJ made plain that an English court was not entitled
to stay personal injury proceedings arising out of an accident that
occurred in Jamaica which had been brought by an English claimant
against a number of defendants, most of who were based (i.e. domiciled)
in Jamaica. The fact that one of the defendants was domiciled in England
conferred Brussels I jurisdiction on the English court and the ECJ ruled
that this jurisdiction was compulsory; it could not be declined on the basis
of forum non conveniens.
114.In Catalyst Barling J discussed and disagreed with the academic
commentary (Dicey, Morris and Collins; Briggs and Rees) on this issue
(per Barling J at paragraphs 86 – 104) that a discretionary stay would still
be permissible if proceedings in a non-Member State were first in time.
None of the academic commentary asserts that any discretion would be
retained if the proceedings in the Member State were seised first in time.
The 'analogy' is made with Articles 27 and 28 Brussels I, which only allow
'any court other than the court first seised' to stay proceedings. In this
case, the English court was first seised, consequently, it is submitted, the
analogy simply does not apply.
115.Even if it was permissible in circumstances where a non-Member
State were seised by 'reflexive analogy', the court cannot apply the
analogy unless satisfied that the court of the non-Member State is
properly seised in accordance with Articles 27 and 28. It is submitted
there remains an issue in this case as to whether the husband's
proceedings in New York are valid.
116.The wife submitted such is the force and clarity of the jurisprudence
in Owusu, its application must carry over to BIIR.
117.Article 3 BIIR provides as follows:
Article 3
General jurisdiction
(1) In matters relating to divorce, legal separation or marriage
annulment, jurisdiction shall lie with the courts of the Member State
(a) in whose territory:
— the spouses are habitually resident, or
— the spouses were last habitually resident, insofar as one of them still
resides there, or
— the respondent is habitually resident, or
— in the event of a joint application, either of the spouses is habitually
resident, or
— the applicant is habitually resident if he or she resided there for at least
a year immediately before the application was made, or
— the applicant is habitually resident if he or she resided there for at least
six months immediately before the application was made and is either
a national of the Member State in question or, in the case of the United
Kingdom and Ireland, has his or her 'domicile' there;
(b) of the nationality of both spouses or, in the case of the United
Kingdom and Ireland, of the 'domicile' of both spouses.
(2) For the purpose of this Regulation, 'domicile' shall have the same
meaning as it has under the legal systems of the United Kingdom and
Ireland.
118.It is submitted on behalf of the wife that it is inconceivable that the
Owusu doctrine could apply to Brussels I and not to BIIR. In support of
that the following points linking the two Regulations are relied upon:
(i) Both Regulations deal with civil matters.
(ii) Recital 11 BIIR refers to Brussels I (excluding from scope of BIIR
maintenance obligations as they are already covered by Brussels I)
suggesting the two Regulations are not mutually exclusive.
(iii) There are significant similarities between the two Regulations e.g.
Article 16 of BIIR mirrors Article 30 of Brussels I; Article 19 of BIIR
mirrors Article 27 of Brussels I; Article 22 of BIIR mirrors Article 34 (4) of
Brussels I
119.Reliance is placed on what is said in Cheshire, North and Fawcett
Private International Law (OUP 4th Ed 2008) at pages 962 – 963 where it
is stated:
'The likelihood is that the ECJ, if asked by means of a preliminary
reference to give an interpretative ruling on the point, would deny the
possibility of any derogation from the principle enshrined in Article
3, except such as is expressly provided for by Article 7 (residual
jurisdiction). The Regulation provides no exception in relation to forum
non conveniens, at least in relation to matrimonial proceedings. It is
highly probable that application, in a case such as has been conjectured,
of the doctrine of forum non conveniens by means of the operation of a
discretionary stay, would be deemed to undermine the desired objectives
of certainty and predictability, which are inherent in the Regulation, as
well as to jeopardise the legal protection of persons established in the
European Community'.
This view was supported in HHJ Karsten QC in his article The State of
International Family Law Issues: A View from London' [2009] IFL 35
120.In addition it is submitted ('oblique') support is found for extending
the Owusu doctrine to BIIR in Re I ibid where Baroness Hale referred to
Owusu in the context of stating that the making of no order in a children's
case did not offend against Owusu.
121.The Owusu doctrine dictates that the mandatory jurisdiction of Article
2 of Brussels I applies in disputes (as here) where the dispute involves a
third (non-Member) State. The wife submits there can be no doubt that
'maintenance' is one of the 'civil and commercial matters' which Article 1
of Brussels I indicates are covered by Brussels I and to which the 'general'
Article 2 jurisdiction applies. Recital 11 of Brussels IIR states:
'Maintenance obligations are excluded from the scope of this Regulation
as these are already covered by Council Regulation No 44/2001. The
courts having jurisdiction under this Regulation will generally have
jurisdiction to rule on maintenance obligations by application of Article
5(2) of Council Regulation No 44/2001.'
122.Article 5(2) of Brussels I provides a permissive (alternative)
extension of the mandatory Article 2 jurisdiction. It provides a
maintenance creditor with an additional option to sue in the courts of a
Member State in which he or she is domiciled (or habitually resident), as
opposed to being limited to actions brought only in the Member State of
the defendant's domicile.
123.Following de Cavel v de Cavel C-143/78 [1979] 2 CMLR 547 it is
submitted that 'maintenance' is an umbrella term for any financial award
including lump sum and transfer of property) which is made in order to
provide for the respective needs and resources of the parties. In Van den
Boogard v Laumen [1997] 2 FLR 399 the ECJ refined its autonomous
definition of maintenance and specifically applied it to English ancillary
relief:
'[22] It should be possible to deduce that aim from the reasoning of the
decision in question. If… a provision awarded is designed to enable one
spouse to provide for himself or herself or if the needs and resources of
each of the spouses are taken into consideration in the determination
of its amount, the decision will be concerned with maintenance. On the
other hand, where the provision awarded is solely concerned with dividing
property between the spouses, the decision will be concerned with rights
in property arising out of a matrimonial relationship and will not therefore
be enforceable under the Brussels Convention. A decision which does both
these things may, in accordance with Art 42 of the Brussels Convention,
be enforced in part if it clearly shows the aims to which the different parts
of the judicial provision correspond. '
124.The wife submits that in the present case, once sums held on
solicitors' accounts are stripped out, the liquid asset base is approximately
£7m less tax (or £4m excluding the gross value of the husband's options/
unexercisable shares). This will have to be divided to enable each party
to fund suitable properties in New York City to enable the wife to be
rehoused with the four children and for the husband to have the children
for staying contact. If (and it is most unlikely) there are deferred surplus
funds, these too will be divided between the parties to meet needs.
125.Given the standard of living enjoyed during the marriage, the
available capital will wholly or substantially be utilised in meeting the
rehousing needs of the parties, as opposed to sharing extraneous capital
between them, or compensating the parties significantly over and above
their immediate capital needs. In this sense the present case falls within
the Van den Boogard definition of maintenance as 'designed to enable one
spouse to provide for himself or herself or if the needs and resources of
each of the spouses are taken into consideration in the determination of
its amount'
126.If the Owusu doctrine applies to BIIR then the discretion to order
a stay on principles of forum non conveniens in accordance with para
9 of Schedule 1 to the Domicile and Matrimonial Proceedings Act 1973
('DMPA 1973') is now no longer available if the jurisdiction is founded on
Article 3 BIIR. It is conceded the position is different if Article 7 (residual
jurisdiction) applies (this is unnecessary to decide here).
127.The material parts of DMPA 1973 are s 5(1) and (2) and para 9
Schedule
1 are set out below:
5. Jurisdiction of High Court and county courts.
(1) Subsections (2) to (5) below shall have effect, subject to section
6(3) and (4) of this Act, with respect to the jurisdiction of the court to
entertain—
(a) proceedings for divorce, judicial separation or nullity of marriage; and
(b) proceedings for death to be presumed and a marriage to be dissolved
in pursuance of section 19 of the Matrimonial Causes Act 1973
(2) The court shall have jurisdiction to entertain proceedings for divorce
or judicial separation if (and only if) —
(a) the court has jurisdiction under the Council Regulation; or
(b) no court of a Contracting State has jurisdiction under the Council
Regulation and either of the parties to the marriage is domiciled in
England and Wales on the date when the proceedings are begun.
…..
9(1) Where before the beginning of the trial or first trial in any
matrimonial proceedings, other then proceedings governed by the Council
Regulation, which are continuing in the court it appears to the court -
(a) that any proceedings in respect of the marriage in question or
capable of affecting its validity or subsistence are continuing in another
jurisdiction;
and
(b) that the balance of fairness (including convenience) as between the
parties is such that it is appropriate for proceedings in that jurisdiction
to be disposed of before further steps are taken in proceedings in the
Court or in those proceedings so far as they consist of a particular kind of
matrimonial proceedings.
The court may then, if it thinks fit, order that the proceedings in the court
be stayed or, as the case may be, that those proceedings be stayed so far
as they consist of proceedings of that kind.
9(2) In considering the balance of fairness and convenience for the
purposes of sub-paragraph (1)(b) above, the court shall have regard to
all factors appearing to be relevant including the convenience of witnesses
and any delay or expense resulting from the proceedings being stayed or
not being stayed.
128.These provisions were amended to provide that they only apply to
proceedings 'other than proceedings governed by the Council Regulation'.
It is submitted on behalf of the wife that the effect of this is that the
discretion to stay proceedings is removed in cases that come within BIIR,
as in those cases the court shall have jurisdiction conferred under BIIR.
129.Mr Marshall referred me to the case of Hadadi [2009] EUECJ
C-168/08 as being a useful case which considers the underlying purpose
and principles of BIIR. Even though that case concerned Member States
he submitted there is a 'remarkable echo of the approach in Owusu' to
when the same principles were extended to non-Member States as they
submit there should be here.
130.In relation to DMPA 1973 the wife submits:
(i) Owusu only applies to cases which are governed by Brussels I and BIIR
– there is no blanket ban on the forum non conveniens doctrine existing in
common law.
(ii) principles of intra-community legal certainty and uniformity are
not affected, if no Member State (including England and Wales) has
jurisdiction under Article 3;
(iii) if (residual) jurisdiction arises only pursuant to domestic law (s.5(2)
(b) DMPA 1973) because the case lies outside Article 3 but within Article 7
of BIIR ('Residual jurisdiction'), the jurisdiction is 'extra-community' and is
untouched by Owusu principles;
(iv) the DMPA 1973 needs no further amendment, as the limitation on its
scope is congruous with Article 3 of BIIR.
The husband's submissions
131.The husband's submissions fall under four main heads.
132.(1) He submits that a key aspect of the decision in Owusu is that
there were no competing proceedings in Jamaica, therefore Owusu
does not address the position which arises under the 1973 Act where
by definition there are concurrent proceedings. Accordingly it cannot be
argued that Owusu is binding in the present circumstances and a major
question left open by the ECJ is whether its reasoning should be extended
to cover a situation where there are competing proceedings in a non-
Member State. It is submitted that the only case that has considered this
question is Catalyst and it is not binding on this court.
133.It is further submitted that it is not desirable to extend the Owusu
principle for the following reasons:
(i) If there are identical proceedings in a non-Member State it will create
a real risk of irreconcilable judgments. It is argued that the effect of
Article 34(4) of Brussels I is that if there were proceedings validly issued
in a non-Member State, as well as proceedings issued in a Member
State, to which it is said Article 3 BIIR applies, if the proceedings in the
non-Member State were not stayed, there is the prospect of both sets
of proceedings having judgment delivered. If the non-Member State
judgment is first in time the subsequent judgment by the Member State
would not be recognised (by virtue of Article 34(4)). It is acknowledged
that Potter J (as he then was) in Arkwright did not find such an argument
persuasive when he stated at 664b
'Í do not regard it as an indication of a wider purpose in the Convention
to permit discretionary stays on the grounds of lis alibi pendens or forum
non conveniens so that the situation under article 27(5) may be avoided.'
Article 34(4) of Brussels I was not cited or addressed by the ECJ in
Owusu (there was no need to as there were no competing proceedings in
Jamaica). It is accepted that Article 34(4) is a reflection of the principle
of res judicata, but it is not accepted that it is irrelevant to the question
of whether there is a power to stay. It is submitted that (interpreting
Brussels I purposively) Article 34(4) is compatible with the proposition
that there is a power to stay in favour of a non-Member State; two
fundamental and related objectives of the Brussels scheme are: (i) to
avoid irreconcilable judgments between Member States; and (ii) to ensure
recognition of judgments between member states. The Brussels scheme
should not be interpreted in a way which leads to the proliferation of
judgments that are likely to come within Article 34(4). The ECJ in Owusu
could not have intended such consequences. It is submitted by the
husband that, if the wife is correct in her argument, that that would be an
inevitable consequence.
(ii) It could lead to an undesirable lacuna in the law as where Article
2 is engaged, and there are competing proceedings in a non-Member
State, there is no mechanism for resolving this situation. The lis pendens
provisions in Brussels I only apply as between member states and, if the
wife's arguments are correct, forum non conveniens has no application.
There is nothing the court can do; it simply has to let both proceedings
continue.
134.The Husband submits that the reasoning that underpins the decision
in Owusu is not incompatible with a power to stay in favour of a non-
Member State. The reasoning and argument are summarised as follows:
(i) Legal certainty (Owusu paras 38 – 41): The ECJ reasoned that legal
certainty is an important objective and that a normal well-informed
defendant should be able reasonably to foresee before which courts,
other than the court of his domicile he may be sued. This certainty is
undermined by the discretionary power of forum non conveniens. It is
submitted that this reasoning does not apply where there are competing
proceedings between the same parties as it is the defendant domiciled in
the Member State who will be bringing the competing proceedings in the
non-Member State. Article 2 of Brussels I is all about providing certainty
to the defendant but as he will be bringing the proceedings in the non-
Member State he obviously will know where he is bringing them and will
not be deprived of any certainty.
(ii) Legal protection for both defendants and claimants will be undermined
(Owusu para 42): In relation to defendants the ECJ reasoned that a
defendant who is generally better placed to conduct his defence before
the courts of his domicile would not be able reasonably to foresee before
which other court he could be sued. As in (i) above if the defendant
is bringing the proceedings in the non-Member State his protection is
obviously not undermined. In relation to claimants, first, if a plea of
forum non conveniens is raised the claimant has to establish that he will
not be able to obtain justice before that foreign court or, if the plea is
successful, that the foreign court does not have jurisdiction or that the
claimant does not have access to effective justice, irrespective of cost.
The claimant would only have to do this if the defendant were to establish
that the competing forum were more appropriate. Article 2 of Brussels I
is principally about protecting defendants who are domiciled in a Member
State (there is no reference to claimants in Article 2), if a defendant who
has successfully established in his own Member State that another non-
Member State where he has commenced proceedings is more appropriate,
is it so onerous to require a claimant to prove that he would not obtain
effective justice in that non-Member State? Secondly, there will already
be proceedings which the claimant will have knowledge of and have to
defend either substantively or as to jurisdiction, thus there is unlikely to
be much, if any, additional cost. If the wife's arguments prevail and there
is no power to stay the costs are likely to increase as there could be two
sets of proceedings in two jurisdictions continuing to final judgment.
(iii) Convention uniform application of rules of jurisdiction would be
undermined (Owusu para 43): The force of this reasoning diminishes in
a situation where there are competing proceedings due to the risk of two
sets of proceedings, two irreconcilable judgments; judgments being given
in a Member State that are not recognized in another Member State.
There are situations where national conflict of law rules (i.e. forum non
conveniens) are permitted to operate in cases involving the Convention.
It is submitted that if the Convention provides no mechanism for how
to resolve a particular situation (here competing proceedings between
the same parties with the same subject matter) there is little alternative
but to resort to national law. To provide no solution in such situations
produces worse results.
(iv) Jurisdiction should only be declined as provided for in the Convention
(Owusu para 37): If this is correct there was no need to leave the second
question in Owusuunanswered and the ECJ would have been clearer. In
the ECJ's decision in Corek Maritime gmbH v Handelsveem BV [2000] ECR
1-9337 the ECJ held
"Article 17 of the Convention does not apply to clauses designating a
court in a third country. A court situated in a Contracting State must, if
it is seised notwithstanding such a jurisdiction clause, assess the validity
of the clause according to the applicable law, including conflicts of laws
rules, where it sits".
The consequences of this decision is illustrated by an example provided
by Dicey (Dicey, Morris and Collins: The Conflict of Laws (14th Ed.) at
12-021):
"Accordingly, if the parties have agreed that a dispute shall be submitted
to the exclusive jurisdiction of the courts of New York, an English court
will be entitled to apply the relevant principles of English law to an
application by the defendant for a stay of proceedings. There is no reason
to believe that, only four years after this decision, the European Court in
Owusu v Jackson had changed its mind."
There is no provision for a stay in these circumstances in Brussels
I, but that is the effect of the ECJ's decision in Coreck. If the stark
interpretation of Owusu is taken (that there can only be a departure from
the Convention if it is expressly provided for) then the power, as explained
in Coreck, would have disappeared. If that were the intention the ECJ
would have said so. So, it is submitted, whilst the absence of an express
reference to forum non conveniens in the Regulation is an important
factor, it is not and cannot be determinative. If it is not determinative
then there is nothing in Owusu which necessitates the conclusion that
there is no power to stay when there are competing proceedings between
the same parties and the same subject matter.
135.Therefore the issue is: is it desirable that Owusu should be extended
in the way advocated on behalf of the wife? The husband submits not, for
the reasons outlined in the previous paragraph he says, it would be an
unwelcome development and the discretionary power of the court to order
a stay remains.
136.(2) Does the wife's interpretation of Owusu apply to BIIR? This
submission is on the basis that the husband's previous submission is
not successful. It is submitted there are a number of reasons why the
extension of Owusu to BIIR is neither necessary nor desirable:
(i) The underlying basis for the Brussels Convention (and hence for the
Brussels I Regulation) was what was originally Article 220 of the Rome
Treaty. Brussels I is essentially a commercial Regulation, paragraph 2 of
the Preamble stresses its purpose is to underpin "the sound operation of
the internal market". The inclusion of maintenance in Article 5 (2) is the
only reference to family law in what is otherwise a Regulation dealing with
contract and torts.
(ii) The difference in language between Article 2 of Brussels I and Article
3 of BIIR. Article 2 is described as 'mandatory' by the ECJ. It not only
confers jurisdiction on the court of the Member State in which the
defendant is domiciled but it requires the exercise of that jurisdiction once
the court is seised. Moreover, if the claimant is to sue the defendant there
is a mandatory obligation imposed upon him to sue the defendant in the
State of the defendant's domicile. This is clear from the words "shall…
be sued". Article 3 of BIIR is different. Although it too contains the word
"shall", it is used in a different context. It states that "jurisdiction shall lie"
in various situations. Thus Article 3 merely regulates the circumstances
in which various Member States are to have jurisdiction. It merely
facilitates jurisdiction. There is no corresponding obligation upon a Court
to exercise that jurisdiction or on the applicant as to where he or she
must bring proceedings. There is a very good reason why there are no
such obligations: Article 3 of BIIR envisages a multiplicity of Member
States having concurrent jurisdiction. Article 2 of Brussels I envisages
only one.
(iii) The principle of legal certainty is central to Brussels I and the ratio in
Owusu and whilst accepted is of general application in EU law and the civil
tradition from which it flows, it is not so obviously central to BIIR. There
is no mandatory obligation of the kind which appears in Article 2. In BIIR
it is possible to have a Petitioner choose between three Member States
(State where the Respondent is habitually resident; State where the
Petitioner has been resident for one year and is habitually resident; State
of shared nationality or domicile of the parties). This is not undermined by
Article 6 which is permissive.
(iv) Protection of the Defendant must be looked at differently in the
context of divorce. Owusu was the paradigm civil/commercial case
where the parties will remain the same whichever jurisdiction they are
in. In divorce cases the roles are frequently reversed in the different
jurisdictions. The rationale of protecting the Defendant disappears.
(v) If the strict interpretation of Owusu is taken, that it is only possible to
decline jurisdiction if it is expressly permitted in the Regulation, the words
"Subject to the Regulation" in Article 2 take on a particular significance
thereby only permitting derogations set out in the Regulation; it is an
important distinction that Article 3 does not contain those words.
(vi) Owusu creates a lacuna where there are competing proceedings in
a non-Member State. Article 19 deals with the position where there are
competing proceedings in Member States (first in time has priority); if
Article 7 applies national law provides the solution.
(vii) Owusu considered the common law doctrine, BIIR is considering s
5(2) of the DMPA 1973 which needs to take account of the construction
argument outlined in para 137 below.
(viii) If the wife's arguments prevail Owusu should also apply to Article 8
as well as Article 3. Article 8 provides:
"The courts of a Member State shall have jurisdiction in matters of
parental responsibility over a child who is habitually resident in that
Member State at the time the court is seised".
Article 8 is in similar terms to Article 3: "shall have jurisdiction". If a
court is disabled from applying domestic law to stay a petition founded on
Article 3, it must also be similarly precluded from staying under domestic
law a children's case of which it has jurisdiction pursuant to Article 8. If
that is the state of the current law, two consequences follow: (a) Article
15 permits in certain circumstances a court of a Member State to transfer
the case to another court where that is in the best interests of the child.
There is no express provision to deal with the situation as between a
Member State and a non-Member State. There is no justification for
depriving courts of that power. (b) s 5(2) of the Family Law Act 1986
expressly empowers the court to grant a stay in favour of a non-Member
State. However, if the wife's argument is correct, Owusu means that once
a case is in the Regulation, it remains in the Regulation; and therefore
s 5(2)(b) is deprived of effect. This court would therefore be required to
disapply the provisions of primary legislation which has been amended
with the specific purpose of bringing the statute into conformity with the
Regulation (Article 15) which cannot be what was intended.
137.(3) The construction point relates to the DMPA 1973. The relevant
provisions are set out in paragraph 127 above. The phrase "other than
proceedings governed by the Council Regulation" in Sch. 1 Paragraph
(9)(1) was inserted by the amendment to the statute which was made
necessary by Brussels II, before the decision in Owusu. The key question
for the construction point is: what does this phrase mean? It has been
argued that all proceedings where jurisdiction is asserted under any of
the indents of Article 3(1)(a) of BIIR or the shared domicile provisions
in Article 3(1)(b) are "governed by the Council Regulation". Therefore
the only proceedings which are not "governed by the Council Regulation"
are those covered by s5(2)(b) (where no court of a Member State has
jurisdiction under Article 3 and therefore, by virtue of Article 7 jurisdiction
is determined in each Member State by its own domestic law: which
in England means the domicile of only one party). Divorce suits where
jurisdiction is asserted under s5(2)(b) and Article 7 form only a very
small minority of the total, and therefore the effect of this construction, if
correct, would be to take away from the court the power to grant a stay in
the great majority of cases.
138.Is this wide construction of "proceedings governed by the Council
Regulation" correct? As with any question of statutory construction, the
court must seek to discern the intention of Parliament. The purpose
of the amendment was to give effect to the provisions of Brussels
II in its unrevised form: not to make wholesale reforms to the law.
The amendment was brought about by the European Communities
(Matrimonial Jurisdiction and Judgements) Regulations, S.I. 2001/310.
The Explanatory Note to this S.I. says:-
"The Council Regulation is directly effective in the United Kingdom and,
consequently, the changes effected by these Regulations are limited to
those necessary to amend inconsistent provisions of national law."
139.It is submitted that Parliament cannot have intended that Regulations
with this express, and limited, goal would have the effect of abolishing the
power to grant stays in the great majority of divorce proceedings where
the competing forum is not an EU Member State. Indeed if that were the
intention, Parliament would simply have stated that the power to stay is
only available where jurisdiction is founded on s5(2)(b) (which governs
divorce and judicial separation) and s5(3)(b) (which governs nullity). That
would have swept away the statutory power without any ambiguity.
140.Thus the natural and preferable construction of "proceedings
governed by the Council Regulation" is that it refers to the position
where there are competing proceedings in another Member State. In
that situation Article 19 of BIIR applies – the first in time provision where
two Member States are both seised. In order to give effect to Brussels
II – the purpose of the amendment – it was necessary to make it clear
that the discretionary powers conferred by Paragraph 9 were ousted in
cases where the mandatory provisions of Article 19 were engaged: cases
where the competing jurisdiction is another Member State (other than
Denmark). On this basis proper deference is given to the Regulation
without changing the law more than is necessary for that purpose.
141.If, as a matter of pure construction, the narrow approach is correct,
the power to stay remains in place unless the court is driven to the
conclusion that such an approach is incompatible with EU law so that it is
obliged to disapply the Westminster statute. Such a conclusion would fly
in the face of the express intention of the Statutory Instrument to bring
the law into compliance with EU law.
142.(4) The position regarding maintenance. The husband submits that
the wife's claim is ancillary to the divorce suit. Therefore, the issue of
where the divorce is to be tried must logically be determined first. To seek
to do it the other way can produce very undesirable consequences. An
English ancillary relief order is capable of being either in the nature of
maintenance (in which case it is enforceable under Brussels I) or a claim
relating to rights of property arising out of a matrimonial relationship
or a hybrid of the two. By the time the order is ready for enforcement,
its nature can be discerned from the judgment under which the order is
made. Such part of the order as consists of maintenance is enforceable
under Brussels I; any order arising out of rights in property is not: see
Article 1 (2)(a) of Brussels I and Van den Boogard v Laumen [1997] 2 FLR
399.
143.However, such an analysis may well be impossible at the stage when
proceedings are instituted and when an application for a stay is being
considered and made; or even when it is being determined. For example,
a wife may be claiming a percentage of the overall assets on the basis of
the sharing principle but such claim may fail, so that she only receives
an award based on maintenance. Alternatively she may have pitched her
claim on alternative bases, and have succeeded only on one. This can only
be analysed with hindsight, not prospectively. Moreover the distinction
between a maintenance-based award and a rights in property award
does not depend on terminology. A lump sum may consist of either; it
may have an element of both. So the form of the claim for ancillary relief
within a divorce petition does not reveal whether it is in the nature of a
claim for maintenance or for rights in property. (see also [2010] Fam Law
385 Cross-Border Enforcement of English Ancillary Relief Orders: Fog in
the Chanel – Europe Cut Off? Jens M Scherpe and Anatol Dutta)
144.So a Respondent to an English divorce petition has no means of
knowing from the face of the document whether a claim for ancillary relief
which may be included within it is a claim for maintenance; for rights
in property arising out of a matrimonial relationship; or a hybrid claim.
But if the maintenance point is correct his right to apply for a stay of
the proceedings is in effect determined by which category the ancillary
relief claim falls into. This would stand on its head the principles of legal
certainty and protection of the position of the Respondent which lie at
the heart of the Owusu judgement. So far from giving him a reasonable
degree of certainty about where he stands, he would be completely in the
dark.
Discussion of the Owusu issue
145.There are a number of matters that are not in dispute:
(i) The husband does not take issue with the jurisdiction of the English
Courts to grant a divorce upon the wife's petition.
(ii) BIIR is only concerned with the suit.
(iii) The wife's divorce petition is first in time.
(iv) The judgment of the ECJ in Owusu is binding.
(v) The parties were born and brought up in New York.
(vi) The parties married in New York in 1996.
(vii) The parties spent the major part of their marriage living in London
(1996 – 2008).
(viii) All four children were born in England.
(ix) The parties and their children have dual UK-USA citizenship.
(x) The husband's relationship with MD commenced in August 2007 and
the husband actively deceived the wife between January 2008 and May
2009 as to his continuing adulterous affair.
(xi) In September 2008 the wife and children moved to New York
expecting the husband to follow in February 2009.
(xii) All four children started schooling in New York in September 2008
(xiii) The wife moved to New York expecting to live with the Husband as
husband and wife.
(xiv) The wife issued divorce proceedings in England in May 2009 as the
residency requirements were not met to issue proceedings in New York.
(xv) The husband issued divorce proceedings in New York on 5th June.
(xvi) The husband's job moved to New York on 1st July 2009.
(xvii) Neither party has any intention now, or in the foreseeable future, to
live in England.
146.The issue I have to consider has attracted some controversy and
comment and I have to guard against applying the law as some may want
it to be rather than what it is. The provision of s3 of the Civil Jurisdictions
and Judgments Act 1982 and the direct applicability of the European
Regulations and ECJ jurisprudence are beyond doubt.
147.I have considered carefully what I have termed the non-family cases
that have considered Owusu and the detailed submissions that have been
made.
Should Owusu be extended to apply to parallel proceedings; is it
necessary to do so?
(i) Barling J did consider Owusu in the context of parallel proceedings in
Catalyst and determined that Owusu prevented the court from granting a
stay. Having considered the submissions that have been made I consider
his reasoning does not deal with the position where the defendant
may be the person bringing the proceedings in the other jurisdiction,
thereby undermining the force of the rationale regarding certainty
for the defendant. The fear of bypassing the decision by the issue of
proceedings in the other jurisdiction ignores the fact that in many cases
the defendant may not always want to, or be able to, issue proceedings in
the other jurisdiction. His rationale for distinguishingCoreck on the basis
of jurisdiction clauses does not consider what is said to be the rationale of
Owusu that as the Regulation does not permit a stay in favour of a non-
Member State, then there is no power to do so yet Coreck states that it
can do so. The Article 34(4) point was not considered in Owusu (it did not
apply on the facts), but is nevertheless an important consideration; the
proliferation of judgments given by Member States that would be non-
recognisable in other Member States is contrary to the whole Brussels
regime.
As Jacobs LJ stated in Lucasfilm para 134:
'Finally as regards the Owusu contention is concerned, our attention was
drawn to a decision of Barling J, Catalyst Investment Group v Lewinsohn
[2009] EWHC 1964. The question there was whether the court could stay
proceedings in a case where the same point was being litigated between
the same parties in the courts of a third country. He held that Owusu
prevented that, essentially because the lis pendens rule is to some extent
a facet of forum non conveniens. We do not have decide whether that
was correct, though we note that, if he his right, there is this oddity: that
there is a clear lis pendens rule, with associated court first seized rule,
for parallel cases within the EU but none for parallel cases where one is
running within an EU Member State and one without. What Barling J did
not decide was that art 2 conferred extra-EU subject matter jurisdiction
generally.'
(ii) The analysis by the Court of Appeal in Lucasfilm provides support for
the husband's submissions cautioning against the extension of Owusu in
cases where there are parallel proceedings, in particular the possibility of
inconsistent judgments and the consequences regarding recognition of
judgments. Jacob LJ stated at para 111 – 112:
"[111] Moreover although the Regulation has a clear lis pendens rule
about parallel actions relating to the same alleged wrong in different
Member States, there is no lis pendens rule for a similar situation
concerning parallel actions in a court of a Member State and that of a
third country. Nor could there be, for the EU could not legislate for third
countries. So here, for instance, if Lucasfilm had sued Mr Ainsworth both
in the US and here at the same time, the Regulation has no rule, "first
seised" or otherwise, to deal with it. Both actions could proceed with the
obvious possibility of inconsistent judgments. [emphasis added]
[112] It is also noteworthy that if this far-reaching and important
jurisdiction existed, no-one has noticed it from the time of the initial
Brussels Convention in 1968 until now."
Does Owusu apply to BIIR?
(iii) None of what I have termed the non-family cases considered Owusu
in the context of BIIR.
(iv) Whilst there is some force in the general proposition that Brussels I
and BIIR are complementary it is important to consider their respective
purpose and precise terms. Brussels I is essentially a commercial
Regulation, although it does include maintenance obligations. Whilst
BIIR does expressly refer (Recital 11) to Brussels I, it is no more than to
acknowledge that maintenance obligations are excluded from BIIR and
retained by Brussels I. There is no express connectivity between the two
Regulations.
(v) Whilst the court can look at Brussels I to interpret BIIR where
the language is identical (e.g. seisin) the respective provisions of the
Regulations are different in a number of material respects. In particular:
(a) The difference in language in Article 2 of Brussels I and Article 3 of
BIIR. The former is mandatory requiring the exercise of that jurisdiction
once the court is seised; the latter facilitates jurisdiction with no
corresponding obligation on a court to exercise that jurisdiction or on the
applicant as to where he or she must bring proceedings.
(b) The principle of legal certainty is not so central to BIIR as the
Petitioner/Claimant could potentially choose between three Member
States as to where proceedings are issued, whereas in Brussels I (central
to the ratio in Owusu) it is the right of the Defendant to know in which
court he is liable to be sued.
(c) In BIIR the position of the parties, as in this case, will often
respectively be Claimant and Defendant in whichever forum prevails,
so the notion of protecting the position of the Defendant, which was an
important part of the ratio in Owusu, disappears in the context of BIIR.
(d) If Owusu does warrant a stark interpretation as only permitting a
departure from Article 2 if expressly provided for in the Regulation the
words "Subject to the Regulation" in the opening parts of Article 2 but
absent from Article 3 become significant as their absence indicates a less
restrictive approach.
(e) There is no good reason for the lacuna which would operate if Owusu
applied. BIIR provides in Article 19 a mechanism if there are competing
divorce proceedings in another Member State; if jurisdiction is based on
Article 7 national law provides the solution. If the jurisdiction is based on
Article 3 and the other competing forum is a non– Member State there is
no mechanism to deal with this. This can result in two sets of proceedings
with the resulting consequences and increased cost.
(f) Extending Owusu to BIIR is bound to have
implications regarding Article 8 and jurisdiction in matters relating to
parental responsibility. First, Article 15 provides a mechanism for a
transfer of a case relating to parental responsibility between Member
States where that is in the best interests of the child. There is no
corresponding provision permitting a case to be stayed in favour of a non-
Member State. There is no justification for depriving the courts of that
power if it is in the best interests of the child to do so. Secondly, section
5(2) of the Family Law Act 1986 expressly empowers the court to grant
a stay in favour of a non-Member State. Extending Owusu to BIIR would
require the court to disapply the provisions of primary legislation which
has been amended with the specific purpose of bringing the statute into
conformity with BIIR.
(vi) The reference to Owusu by the Supreme Court in Re I is, as Mr
Marshall acknowledges, 'oblique'. The Supreme Court records that there
are some differences between Brussels I and BIIR (end of paragraph 29;
paragraph 88). Re I makes clear that forum non conveniens is not an
anathema to BIIR (see Articles 12 and 15) whereas part of the wife's case
(and Barling J's analysis in Catalyst) is that it is an anathema to Brussels
I.
DMPA 1973
(vii) In Owusu the ECJ was considering a common law doctrine whereas
in relation to BIIR the court is considering s5(2) of the DMPA 1973. The
phrase 'other than proceedings governed by the Council Regulation' in
Sch 1 para 9(1) was inserted by the European Communities (Matrimonial
Jurisdiction and Judgements) Regulations S.I. 2001/310 to give effect to
Brussels II in its unrevised form. The Explanatory Note reads as follows:
"The Council Regulation is directly effective in the United Kingdom and,
consequently, the changes effected by these Regulations are limited to
those necessary to amend inconsistent provisions of national law."
The question is whether, by this amendment, Parliament intended to
abolish the power to grant stays in the majority of divorce proceedings
(save those limited cases caught by s 5(2)(b) and Article 7). If that
were the intention Parliament could have been clearer and stated that
the power to stay is only available where jurisdiction is founded on s
5(2)(b) and s 5(3)(b). In that context it could be said that the natural
and preferable construction of 'proceedings governed by the Council
Regulation' refers to the position where there are competing proceedings
in another Member State. Article 19 BIIR applies in that situation and
it was necessary to make clear that the discretionary powers conferred
by Paragraph 9 were ousted in cases where the mandatory provisions
of Article 19 were engaged. On this (narrower) construction the power
to stay remains in place where the competing proceedings are in a non-
Member State. Such a construction is not incompatible with EU law as it
provides for the express provision in Article 19 and leaves a mechanism in
place to deal with competing non-Member State proceedings.
Maintenance and Brussels I
(viii) The wife submits that the Owusu doctrine dictates that the
mandatory jurisdiction of Article 2 of Brussels I applies in disputes
where the disputes involve a non-Member State and that this applies to
maintenance. The wife submits that maintenance in Brussels I is to be
defined autonomously and is in reality an umbrella term for any financial
award which is made in order to provide for the respective needs and
resources of the parties. The wide scope of 'maintenance' under Brussels
I is because of a further distinction between the common law approach
in England and Wales, and the civil law approach in the rest of Europe.
In England and Wales, property rights and periodical payments are dealt
with in a 'package solution', whereas in continental jurisdictions the two
pillars are distinct. The wife submits that all or substantially all of the
assets are likely to fall within the terms of Brussels I.
(ix) The wife's maintenance claim is not freestanding. If her petition is
stayed, the maintenance automatically falls away. That proposition has
not been challenged.
(x) In his closing submissions, Mr Scott QC developed an argument
based on the distinction between personal jurisdiction and subject-
matter jurisdiction. Article 2 of Brussels I confers personal jurisdiction.
Article 5(2) confers subject-matter jurisdiction in certain circumstances.
Article 3 of BIIR is different from Article 2 of Brussels I in that it confers
subject-matter jurisdiction in respect of divorce proceedings, but not in
respect of maintenance or rights in property. In the present case, Article
3 of BIIR confers personal jurisdiction over the husband and subject-
matter jurisdiction in respect of the divorce suit, but jurisdiction over
ancillary relief is not conferred by Brussels I since personal jurisdiction is
conferred by Art 3 of BIIR and there is an extra-EU dimension. Neither is
it conferred by BIIR since it is expressly excluded from the ambit of BIIR.
Therefore, it is submitted that jurisdiction over ancillary relief is conferred
by national legislation and the wife's attempt to apply Owusu directly via
Brussels I is misconceived (since neither Article 2 nor 5 are engaged) and
the attempt to apply Owusu to BIIR indirectly via Brussels I is equally
misconceived (since Brussels I is not engaged in the first place).
Decision on the Owusu issue
148.I have found the decision in this case particularly difficult. The facts
have brought into sharp focus whether the Owusu doctrine should be
extended to cases where there are parallel proceedings and/or to BIIR.
The arguments in favour and against the extension of the doctrine are
powerfully made and each, in their own way, persuasive. The arguments
have been complex and wide ranging; the submissions have explored the
boundaries that separate the EU rules on jurisdiction and the common
law rules; it is not always easy to find a smooth transition from one set of
rules to another.
149.I have come to the conclusion (not without some hesitation) that:
(i) It is neither necessary nor desirable to extend the Owusu principle in
cases where there are parallel proceedings in a non-Member State. I have
reached this conclusion for the following principal reasons:
(a) The risk of irreconcilable judgments which undermine two important
objectives of the Brussels scheme namely: avoiding irreconcilable
judgments between Member States and ensuring recognition of
judgments between Member States.
(b) It would lead to an undesirable lacuna, as there will be no mechanism
in place for resolving this situation with the consequence of both
proceedings continuing with the consequent increased uncertainty and
cost.
(c) The supporting rationale by Jacob LJ in Lucasfilm
'..the EU could not legislate for third countries' [111];
'The Regulation is not setting up the courts of the Member States as some
kind of non-exclusive world tribunals for wrongs done outside the EU by
persons who happen to be domiciled within the EU.' [129]
'We do not have to decide whether [Catalyst] was correct, though we note
that, if he is right, there is this oddity: that there is a clear lis pendens
rule, with associated court first seized rule, for parallel cases within the
EU but none for parallel cases where one is running within the EU Member
State and one without. What Barling J did not decide was that art 2
conferred extra-EU subject matter generally' [134] [emphasis added,
Jacob LJ is speaking for the Court]
(d) The reasoning that underpins Owusu is not incompatible with retaining
the discretionary power where there are parallel proceedings in a non-
Member State. It does not undermine certainty for the defendant (as
he will be bringing the proceedings in the non-Member State); the
claimant (although not mentioned in Article 2) will have knowledge of
the proceedings in the non-Member State and it is likely to be in his
interests to have one set of proceedings rather than two (the latter would
happen if the Owusu doctrine was extended); there would be less risk of
irreconcilable judgments given in Member States which are not recognised
in another Member State; Coreck (which was decided 4 years before
Owusu) permits judicial discretion in circumstances where there is no
provision for it in Brussels I.
(ii) If I am wrong about what is set out in (i) above, I have come to
the conclusion that it is neither necessary nor desirable for the Owusu
doctrine to be extended to BIIR for the following principal reasons:
(a) There is no direct connection between Brussels I and BIIR save for the
reference in recital 11 of BIIR to maintenance obligations being excluded
from its scope as these are already covered by Brussels I.
(b) Whilst the court can look at one Regulation to interpret the other
where their language is identical, the respective provisions in the
Regulations are different in a number of material respects as set out in
paragraph 147 (v) above with the consequences, if the Owusu doctrine is
extended, outlined in that paragraph.
(c) Re I makes clear that forum non conveniens is not an anathema to
BIIR.
(iii) In so far as it is necessary, bearing in mind my conclusions in (i) and
(ii) above, I accept the arguments advanced on behalf of the husband
that the narrow construction of the amendment to Sch 1 para 9 DMPA
1973 is to be preferred for the following reasons:
(a) The natural and preferable construction of 'proceedings governed by
the Council Regulation' refers to the position where there are competing
proceedings in another Member State.
(b) This construction is necessary to make clear that the discretionary
powers conferred by paragraph 9 were ousted in cases where the
mandatory provisions of Art 19 BIIR were engaged.
(c) The court's discretion to stay under paragraph 9 remains in place
where the competing proceedings are in a non-Member State.
(d) This construction is not incompatible with EU law as it provides for the
express provision in Article 19 and provides a mechanism in place to deal
with competing non-Member State proceedings and reduces the risk of
irreconcilable judgments.
(iv) Turning to the wife's argument regarding maintenance and Brussels I,
in my judgment they fail for the following reasons:
(a) Owusu does not apply where there are parallel proceedings.
(b) The wife's claims for maintenance are not free- standing. If her
petition is stayed, the maintenance claim automatically falls away.
(c) Following the rationale in Lucasfilm, personal jurisdiction over the
husband and subject-matter jurisdiction in respect of the divorce suit
are conferred on this court by virtue of Article 3 of BIIR. Jurisdiction for
ancillary relief is not conferred by Brussels I since personal jurisdiction
is conferred over the husband by Article 3 of BIIR and not by Brussels I
and it is expressly excluded from the ambit of BIIR (recital 8). Jurisdiction
over ancillary relief is therefore conferred not by either of the Regulations
but by national legislation (Matrimonial Causes Act 1973 (as amended)).
150.For the reasons outlined in the previous paragraph in my judgment
this court retains the judicial discretion to grant a stay in this case. I will
now turn to consider that issue.
Submissions on the stay issue
151.The legal framework is not in issue and I have determined that the
New York proceedings come within Sch 1 para 9 of the 1973 Act.
152.The wife's submissions can be summarised as follows:
(i) The subject of the suit (the marriage) was conducted virtually
exclusively in England and the vast majority of the complaints by either
party arising out of the marriage occurred in England;
(ii) Jurisdiction regarding the wife's petition is not disputed and is not
defended by the husband;
(iii) Jurisdiction regarding the husband's petition is in issue as are the
facts relied on with consequent delays and increased costs;
(iv) The husband's application to stay the suit here is motivated by the
fact that if the decree is granted here the wife's ('maintenance') claims
would have to be determined here in accordance with Article 2 of Brussels
I.
(v) On the facts of this case, where the wife asserts that the husband
has (a) deceived the wife regarding his true intentions in relation to
their marriage at the time of the move to New York; (b) tactically issued
proceedings in New York to frustrate the progress of the proceedings
here and New York (c) as a result obtained a procedural and financial
advantage; it would compound injustice to reward the husband for his
'abuses'.
(vi) It is not possible to prevent the husband from profiting from his
litigation misconduct in the event the case is sent to New York and the
husband makes no proposals that address these concerns; the court
can have no confidence that the husband will not seek to side-step any
condition or term on him if a stay was granted.
(vii) The husband's continued refusal to make open financial proposals
makes it impossible for the court to identify the real issues likely to
arise in New York, as a result the wife remains at risk of the husband's
continued manipulation of these proceedings.
(viii) The fact that the parties now live in New York is but one factor of
many that the court must consider when exercising its discretion.
(ix) With modern technology and the involvement of the legal teams here
London is as convenient a forum as New York.
153.The husband's submissions can be summarised as follows:
(i) It is accepted the parties spent 12 years (the majority of their
marriage) based in London, but they retained strong links with New York.
(ii) The family have been based back in New York since at least
September 2008.
(iii) The court should avoid looking into the minutiae of family life in
London and should stand back and ask itself whether, as of March 2010,
this is an English family or a New York family.
(iv) This is not a clean break case, in addition to other claims, the wife
seeks continuing maintenance which may require some assessment of
needs which the New York Court is better equipped to undertake.
(v) Future variations of maintenance, which may take place many years
hence, are better dealt with in New York.
(vi) There is little if any countervailing convenience in continuing the
London proceedings. The parties have severed their links with London,
and neither party has any future plans to return to this jurisdiction to live.
The only asset in this jurisdiction is a relatively modest sum in one bank
account.
(vii) The financial disclosure made in these proceedings can readily be
used in the New York proceedings.
Discussion on the stay issue
154.Following Lord Goff of Chieveley in Spiliada there is a burden on the
husband to establish that there is another available forum which is clearly
or distinctly more appropriate than the English forum. If he does that
then the court will ordinarily grant a stay unless there are circumstances
by reason of which justice requires that a stay should nevertheless
not be granted. It is a two-stage test. The court has to consider the
interests of both parties and the ends of justice. Accordingly, provided
substantial justice can be done in the available, more appropriate forum
or in both forums, the court should not have regard to a particular
juridical advantage for one party in one forum rather than the other.
Although not canvassed in any great detail during the hearing I note in Mr
Sheresky's report (page 22 – 23) he summarises the approach to financial
issues on divorce in New York.
155.So the first question is which court is clearly and distinctly the more
appropriate forum.
156.The following factors weigh in favour of New York:
(i) The parties are living there. Mr Marshall submits the court should
weigh in the balance the circumstances surrounding the way the family
came to re-locate to New York. Whilst my findings make clear at the
relevant time the parties were making the decision whether to return to
New York the husband was lying to his wife regarding his relationship with
MD that, in my judgment, should not be determinative in exercising the
court's discretion when there are no plans to return to live in England.
Would that justify keeping proceedings (which may last for many years
e.g. maintenance variation applications over the next 20 years) in a
jurisdiction where the parties have no intention to return to? In the
circumstances of this case it does not.
(ii) Neither party has any intention of returning to live in England.
(iii) There is an obvious physical 'convenience' in terms of the logistics of
seeing lawyers and attending court which, in my judgment, outweigh the
advantages (even with modern technology) of having legal teams up to
full speed in England. This is not a particularly difficult or complex case.
(iv) There are factors that the New York court is better equipped
to deal with in the short and long term e.g. cost and availability of
accommodation, factors to be considered in variation application(s)
regarding maintenance for the wife and/or children (which could
potentially take place over the next 20+ years). It is not the same as this
court considering the cost of accommodation in, say, Newcastle or even
Budapest (if this was a BIIR case where the court would have no choice).
There is no identified advantage in this court increasing its burden in this
way.
157.The following factors weigh in the balance in favour of London:
(i) The parties spent the most part of their marriage in London and
retain some links in London. The wife relies on the circumstances of her
departure from this country as strengthening her past and continuing
links with London. The current links are, on any view, now very tenuous.
Neither party has visited London other than for the purposes of this
litigation (save for one visit by the wife since September 2008) or, in the
husband's case, connected with his work.
(ii) The proceedings here have reached a relatively advanced stage and
the legal teams in this country are familiar with the case. The divorce is
not contested and the decree could be granted with little delay. It was
agreed between the parties in the June order that the wife 'shall not seek
to rely upon the fact that the husband has completed a Form E and made
associated disclosure within the maintenance pending suit proceedings
as being a relevant consideration for the court in determining the stay
application.' The court can take into account the fact that the procedure
that operates in this jurisdiction regarding ancillary relief applications
is court managed and as a matter of fact the process within these
proceedings is more advanced than it is in New York (due to the Hemain
order). However, the information that is available in these proceedings
can readily be made available within the New York proceedings where
both parties have instructed lawyers.
Decision on the stay issue
158.Having carefully considered the competing considerations as to which
forum is more appropriate, I have come to the very clear decision that
it is New York for the reasons outlined in paragraph 156 above. It is the
combination of those factors (and the points made in response to the
factors in paragraph 157) that drive the court to conclude that New York
is the appropriate forum.
159.I then have to consider the balance of justice and fairness, whether
there are circumstances by reason of which justice requires the court
not to grant a stay. A significant part of Mr Marshall's submissions, on
behalf of the wife, has focused on the husband's behaviour during the
breakdown of the marriage and leading up to the move to New York. In
essence he submits that in those circumstances the justice of the case
tips clearly in favour of the proceedings continuing here and the stay
being dismissed. In effect, he says, the husband should not be allowed to
profit from his manipulative behaviour; he makes the same point about
the tactical nature of the husband's divorce proceedings.
160.However, the court must stand back and consider all the
circumstances of the case and in my judgment, whilst in no way
condoning the husband's behaviour as I have found, it would be wrong to
keep litigation here (which may last for many years to come e.g. variation
applications) when weighed in the balance with the other factors that
signal in favour of New York. I do not consider that the wife's Article
6 rights have been interfered with by the husband's behaviour, as has
been suggested by Mr Marshall. The husband's application has taken a
conventional route in this jurisdiction and interim orders have been made
and the wife has had access to the courts pending this court being able to
determine the application.
161.Subject to the matters outlined below, I have come to the conclusion
that New York is the more appropriate forum and there are no other
compelling considerations of justice or fairness that require me to
determine otherwise.
162.As has been clear during the course of the hearing I have been
anxious to ensure that if the court did decide that the husband's
application should be granted the transition to New York should be as
smooth as possible and the focus of the energy and resources should be
on seeking to resolve the main issue between the parties, namely the
financial application. Both parties accept the marriage has broken down
and from what I have heard there is no issue that the children should
remain in the full time care of their mother with regular contact to their
father.
163.The decision to grant a stay is subject to the matters outlined below.
They are expressed in a general way at this stage; I acknowledge that I
can only direct terms to the husband but I considered it would be helpful
to outline the matters in the way I have below:
(i) That the parties endeavour to agree suitably constituted fresh divorce
proceedings in New York which the wife should be given first refusal to
issue (if so advised) failing which they should be issued by the husband
along the lines set out in the written document he presented to the court.
The terms of the proceedings (particulars of complaint etc) should, if
possible, be agreed with a clear timetable. Suitable provision needs to
be made to ensure that the fresh proceedings will dismiss the 5th June
proceedings.
(ii) The husband enters into a suitable irrevocable undertaking (terms
to be agreed by the wife or in default as determined by the court) that
ensures no advantage or point is taken in the financial proceedings in New
York by virtue of the fact that he issued his proceedings on the 5th June.
(iii) Subject to any submissions I am minded to make a term that the
husband pays all the wife's legal costs of the existing proceedings in New
York and all her costs of any fresh proceedings in New York (whoever they
are issued by).
(iv) Suitable provision needs to be made regarding interim financial
arrangements for the wife and the children.
(v) I would like consideration to be given to a timetable (to be agreed
between the parties and submitted to the court) that provides a timetable
and structure for exploring settlement (in whole or part) of the financial
issues between the parties. There was force in the general point made by
the wife that she has sought to try and resolve the financial matters only
to be met by a wall of silence by the husband.
164.I will obviously hear submissions in relation to any matters that are
not agreed and any further terms that are advocated by either party,
as well as any applications concerning the costs of these proceedings. I
expect the parties to endeavour to agree as much as they can. Obviously
once the terms have been approved or determined by the court any
alleged breach of them will entitle the wife to apply back to lift the stay
(not that any such application is to be encouraged).
165.This case is listed before me on 19th May 2010 to deal with the
following matters:
(i) The terms of the stay (to include any matters set out in paragraph
163);
(ii) Costs (including of the stay, the maintenance pending suit hearing
before Mrs Justice Eleanor King on 4th December and the freezing order,
including the hearing before Mrs Justice Black on 15th and 16th June
2009);
(iii) (if necessary) permission to appeal;
(iv) Reporting (to include anonymisation)