Source: http://www.iflg.uk.com/guidance/best-interests-child-overrides-eu-finance-jurisdiction-law
Timestamp: 2018-02-25 19:30:51
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I am grateful to Tim Scott QC, counsel for the wife in the English proceedings, for bringing this to my attention. The case was heard in England as EA v AP (2013) EWHC 2344. The Opinion is found here.
This commentary sets out the factual background, the separate proceedings in England and Italy, the question of law referred to the CJEU by the Italian court, the issues before the CJEU, the content of the Opinion and then a few implications
This is set out in the judgment of Mrs Justice Parker in the English reported decision, above. The husband and wife were Italian and lived throughout their entire married life in London where they were habitually resident. The husband was a hedge fund manager, said in 2013 to be worth perhaps £30 million. At that time the two children were aged 9 and 4. The wife contended that the household expenditure was about £300,000 per annum.
So when the relationship broke down, this was a family which had spent the past decade or so in one country, acquiring wealth in that country, living in that country, with children who had entirely grown-up and spent their lifetime thus far in that country. It takes a very strong EUphile to argue that it is entirely right and fair that another country in the EU should instead deal with the divorce and all consequential financial matters of the family. This possibility of course is what the EU has imposed on member states from March 2001 with Brussels II. Italy was available for the divorce because the parties were both Italian nationals. There is no power to transfer to the country with the closer connection. There is no power to decline proceedings in favour of the country with the closer connection. Issuing first, by a matter of minutes, gives jurisdiction irrespective of having a weak and more distant connection. This is EU law.
Furthermore England is perceived as generous in its financial provision, although I would strongly argue that it is not generosity as such but gender and spousal fairness when assets have been acquired during a relationship. In like measure Italy is sometimes perceived as less generous.
Consequently the husband issued in Italy. He clearly did not welcome the English courts dealing with the financial affairs of the family despite having lived here, worked here and having had his family life here for the past decade. He took the opportunity of the EU law to issue in the country favourable to him, even with relatively little connection. The law report is not clear what had been the belief of the wife about the state of the marriage but she issued in England two weeks later. However she was second in time and by virtue of the first to issue principle in Brussels II, her English divorce proceedings had to come to an end and were stayed.
But in the meantime other sets of proceedings were going ahead and it is these which created the collision course which eventually brought the matter before the English High Court, the equivalent court in Italy and then before the European Court.
Separate proceedings in England and Italy
The husband issued s8 Children Act proceedings. Clearly England had jurisdiction as the children are habitually resident here. A shared residence order was made.
The wife applied to the CSA and a couple of weeks later issued Sch 1 CA proceedings seeking child maintenance, lump sum and transfer of property orders for the benefit of the children. This brought an immediate overlap with the husband’s Italian separation/divorce proceedings which contained claims for consideration of financial matters.
A month later an Italian judge certified first that the Italian court had jurisdiction for the separation (as a preliminary to an Italian divorce) as the Italian proceedings were first in time, secondly that the English court had jurisdiction to deal with matters concerning the children (known in EU terminology as parental responsibility but wider than the English technical term), thirdly that the Italian court could deal with matters of spousal maintenance/needs as this was ancillary to status proceedings i.e. the separation and divorce in Italy but fourthly and crucially she said the Italian court could not decide on maintenance in respect of the children as this was not ancillary to the separation and divorce proceedings but ancillary to the proceedings in England concerning parental responsibility. Moreover and following this fourth element, interim measures, known in EU speak as provisional including protective measures, were not available under Brussels II as none of the parties, spouses or children, resided in Italy.
So she made an order that the parties could live apart, a prerequisite under Italian law for a subsequent divorce, ordered spousal maintenance of €3200 per month but specifically made no rulings on custody of the children or maintenance payments.
The husband challenged this decision for various Italian procedural and process reasons and on its merits.
In the meantime the wife had sought to vary a CSA assessment of £5 per week. The husband applied to stay the wife’s Sch 1 proceedings on the basis that the Italian court had priority as it was first in time. It was this stay application which came before the English High Court. Also the husband petitioned the Italian Supreme Court for a declaration that the Italian courts had jurisdiction for child maintenance. The husband also appealed the CSA subsequent determination that in fact he should pay £400 per week, again on the basis that the Italian courts were seized of child maintenance matters.
A summary of these respective sets of proceedings, described by the High Court judge as jockeying for tactical positions, explains vividly why there must be good and effective laws across Europe for international families.
Mrs Justice Parker looked at the jurisdiction for maintenance under MR which is primarily in Article 3. This provides initially for the place where the defendant, often the paying party, is habitually resident or the place where the creditor, the claimant, is habitually resident. But Art 3 then goes on to allow jurisdiction in the court which is entertaining proceedings relating either to the status of a person or to parental responsibility if maintenance is ancillary to those proceedings with a caveat that this jurisdiction is not possible based on sole domicile alone. Proceedings relating to status are invariably separation or divorce proceedings. Proceedings relating to parental responsibility are invariably matters concerning custody, residence, contact, access and similar.
In this case the proceedings relating to status were in Italy and first in time and the proceedings relating to parental responsibility were in England. Although Brussels II is infamous for its first to issue, lis pendens, principle, it is also found in MR at Art 12: Where proceedings involving the same course of action between the same parties are brought in different member states, the second seized must stay its proceedings in favour of the first seized with jurisdiction.
In this case it was very clear that the parental responsibility, s8 CA and Sch 1 CA, proceedings were second in time and therefore should be stayed in as much as they related to child maintenance. This would be the conventional and expected approach, however harsh given the limited connection with Italy and the fact that the parties and children were habitually resident in England.
But in this distinctive case there was an extra element. The Italian judge had declined jurisdiction in Italy for child maintenance proceedings because, she said, the children were habitually resident in England. It was this aspect which brought the case out of the usual run of such forum disputes. The wife said that as a consequence of Italy saying it had no child maintenance jurisdiction, England had in effect a clear run. It was no longer second in time. The husband said that he was appealing (technically, challenging) the Italian court order for a number of Italian procedural reasons and that until the Italian court had resolved the issue at the highest appropriate level, England should not be dealing with the matter.
Tim Scott QC on behalf of the wife put forward many reasons why the English court should nevertheless proceed even though there were pending proceedings before the Italian court which was first in time. See paras 24 - 36 of the judgment. They are not set out in this commentary which concentrates on the CJEU Opinion. But they are strong arguments going to the rationale, purpose and process of the MR.
The High Court judge found herself in real difficulties because there was then no news about what was happening in the Italian proceedings, specifically any date for a review, challenge, setting aside, appeal or similar from the initial Italian court decision. The judge was very anxious that the wife might be without a remedy for the foreseeable future pending the Italian court coming to a conclusion. There is a worry amongst international family lawyers that sometimes the Italian family courts can be quite or very slow in their processes.
Nevertheless the judge was also very anxious that if she allowed the Sch 1 CA proceedings to continue in England, it would inevitably create irreconcilable judgements with the Italian proceedings. Avoiding this sort of situation is a primary purpose of EU family law legislation. She therefore ordered a stay of the English court proceedings pending resolution of the issue of child support in Italy, recognising that this decision may cause hardship and injustice to the wife but was the only principled way in which the dispute could be determined.
So at this point when the English judgement was given in June 2013 the matter went back to Italy. It’s not clear from the case reports when but sometime later, probably in 2014, the Italian Supreme Court referred the matter to the CJEU for a preliminary ruling on which of two courts, the court dealing with matters of status and ancillary financial matters or the court dealing with parental responsibility and ancillary financial matters, should deal with child maintenance.
Matters before the CJEU and the AG Opinion
CJEU procedure is that a case is investigated and reported by one of nine Advocates General whose role is to consider the written and oral submissions to the Court in every case that raises a new point of law, and deliver an impartial opinion to the Court on the legal solution. Their opinions are often but certainly not always made into judgements of the CJEU. So this is only an opinion but it carries significant weight. (Numbers referred to paragraphs of the Opinion.)
Advocate General Yves Bot is a highly experienced French judge who has been a CJEU Advocate General since 2006. He has handed down many opinions on a wide range of legal matters. What is striking is that he comes from a very different approach, in a highly refreshing way for family lawyers and which is not bound by the previous orthodoxy of how EU family law would necessarily operate. He makes it absolutely clear at the beginning of his Opinion (5) that he is guided by the best interests of the child. He said this notion permeates family law in a binding way when the child’s position is affected by the dispute in the main proceedings (29). He refers to Art 24.2 of the Charter of Fundamental Rights of the European Union that in all actions relating to children their best interests must be a primary consideration (5 and 30).
He finds this in several CJEU decisions (32 – 34). He finds that the best interests of the child can preclude a certain interpretation of EU family law legislation (34). The best interests of the child must, he says, be the guiding consideration of the application and interpretation of EU legislation (35). He quotes the Committee on the Rights of the Child attached to the Office of the UN High Commissioner for Human Rights which had pointed out that the best interests of the child constitute a standard, an objective, an approach, a guiding notion, that must clarify, inhabit and permeate all the internal norms, policies and decisions as well as the budgets relating to children (35) in the context of laws. He says that it would be incomprehensible if the intensity of this principle could vary dependent upon the area of family law in question since, whatever that area may be, the child remains deeply concerned (36).
He makes clear that it is artificial to treat child maintenance as if it was wholly unconnected with the breakup of family life which is the stuff of status proceedings i.e. separation and divorce (44). The living arrangements of the spouses and their financial arrangements inevitably include the arrangements for the children and child support. So to suggest that child support is in some ways disconnected with the separation proceedings is, he says, running totally contrary to the best interests of the child (44). It would otherwise potentially mean periods when there was no support for the child whilst other arrangements were being sorted out (48).
But this would not be a problem in most cases where the parties separated and they and the children remained in one country (50). But the fundamental EU entitlement of the freedom of movement and freedom of establishment, thereby facilitating EU travel and inevitably the creation of many EU international families, lies at the root of what he called this unfavourable situation (50). So although it may only affect a minority of cases, he records it was necessary to resolve this issue. He repeats the guiding principle was the best interests of the child.
He records that the simplistic answer was that child maintenance should follow the status proceedings i.e. dealing with the separation of the parents (52). But this had a genuine difficulty because Brussels II divorce jurisdiction allows divorce proceedings to be in a country where the parties are not habitually resident, as has happened in this case where the husband issued in Italy on the basis of joint Italian nationality even though they had not lived primarily in Italy throughout the marriage. He also states (52), but in a way which I respectfully believe is wrong as a matter of law, that MR also prevents proceedings on the basis of joint nationality or joint domicile. In fact MR says it is only prevented on the basis of sole nationality or sole domicile when maintenance is ancillary to other proceedings. The point is probably not crucial for the judgement although it begs the issue of what happens if one parent is habitually resident in one of the countries and the other parent is habitually resident in the other country in which there are proceedings: does the habitual residence of the child trump? Because of what I believe is a mistake in law in the Opinion, this is not categorically resolved although it would seem to be the habitual residence of the children which trumps
So he records again that the status proceedings i.e. divorce proceedings are on a collision course with the parental responsibility proceedings when the former are unrelated to habitual residence and the latter are specifically on the basis of the habitual residence of the children and one or both parents (53).
He refers to a criterion of proximity (58). He finds this criterion satisfied in habitual residence. He finds this in the initial parts of Art 3 of MR which refers to the habitual residence of the paying party or the claimant party. He finds this in the Art 3 Brussels II jurisdiction although by his referring (59) to habitual residence as the first listed ignores, deliberately or mistakenly, the fact that any of the Art 3 criteria can be used and there is not any hierarchy or priority.
So he says that the initial determination of maintenance and parental responsibility to contribute to children’s maintenance must be raised in the context of proceedings initiated to secure a divorce (62). But this anticipates that the children are habitually resident in the country in which the divorce proceedings are taking place. If they are not, then the criterion of proximity requires that the jurisdiction dealing with the divorce proceedings should decline to deal with child maintenance in favour of the country where the children are habitually resident and where proceedings concerning the children are taking place (64).
Therefore in this particular case the Italian court, although initially deemed the most obvious court because that is where matters concerning the relationship and status of the parties was being dealt with, should decline to deal with child maintenance in favour of the English court where the children and parties were habitually resident (64). He also adds (64) that the freedom of choice of parties to choose the court having jurisdiction is inevitably limited for the sake of the best interests of the children. So there can be no freedom of choice of law which conflicts with best interests of the child through habitual residence.
He therefore concludes (66) in answering the question put by the Italian Supreme Court that where there are status, divorce proceedings and an issue concerning child maintenance arises in those proceedings then the court has jurisdiction to deal with them. However where the children are habitually resident in another member state including with parental responsibility proceedings, then the criterion of proximity compels that child maintenance is dealt with in those proceedings, and not in the status, divorce and ancillary spousal financial proceedings.
At one level this is fairly narrow in its application. Child maintenance proceedings ancillary to a divorce are taking place in a jurisdiction where the children are not habitually resident, although this set of circumstances occurs quite often in forum disputes with international families. Moreover it would not apply outside of the EU because although the Art 3 Brussels II divorce jurisdiction still applies, forum remains post-Mittal a matter of discretion for the English court as to where the proceedings should take place and the court will often take materially into account where children may be habitually resident.
However, in its principles and guiding criteria, this Opinion is potentially very far reaching.
Whilst the Opinion certainly respectfully nods in the direction of the first to issue principle, very little weight is given. Instead it is blown away by the supreme importance of the best interests of the child. In the EU land of jurisdictional criteria (Arts 3 of both Brussels II and MR) where all are equal and all can be equally used, with no hierarchy or preferences, suddenly one criteria is greater than them all. Moreover it is a criteria which children lawyers find thoroughly familiar and take for granted and yet has often little resonance in family law finance and forum work. It is a criteria which the Advocate General describes as a notion permeating family law in a binding matter. The criteria is the best interests of the child.
So where does this lead us if the Opinion is in a CJEU judgement?
Certainly issuing divorce proceedings first in time, with ancillary financial proceedings first in time e.g. Form A, will no longer be good enough if the children are habitually resident in another EU member state so that child maintenance should be dealt with in that member state.
Then if child maintenance is dealt with elsewhere in the EU, should all of the other financial elements of the divorce also be transferred as a related action under Art 13 MR? The answer is quite probable under the authority of D v P ((1989) 2 FLR 25, also an Anglo Italian case where the English court transferred the financial proceedings to Italy which was first in time on child maintenance proceedings). So the best interests of the child potentially extend well beyond child support. It could inform the forum of the entire financial proceedings.
The Advocate General looked at only the third and fourth jurisdictional bases of Art 3 MR. The first two are the habitual residence of the defendant, often the paying party, and of the claiming party. But what if the habitual residence of the child was in another EU state? Should jurisdiction be declined of the paying or claiming party in favour of the jurisdiction of the habitual residence of the child especially if the claim related to child maintenance in whole or part? It is difficult not to see this extended logic from the Opinion.
The Advocate General said that the choice of law of the couple has to be sacrificed to the habitual residence, criteria of proximity, of the child. In fact the jurisdictional basis of Art 4 MR, choice of law, does not apply to child support for a child under 18. Nevertheless it is a significant statement that choice of law is not the supreme criteria, as some EU policymakers would suggest, and can be or at least should be sacrificed for stronger jurisdictional criteria of connection and proximity.
Once there is any grading or priority to jurisdiction i.e. supremacy to best interests of the child, then it is a very small step to a hierarchy of jurisdiction for both divorce and maintenance. The lack of any hierarchy and instead very many jurisdictional criteria, some of which overlap, has driven the number of forum races and disputes. I and others have argued for many years that a hierarchy of jurisdiction would resolve many of the fundamental problems with Brussels II divorce jurisdiction. This Opinion does not argue for a hierarchy but does create one higher jurisdictional criteria and thereby implicitly a hierarchy. This must be strongly considered in the present review of BII.
English lawyers have not liked the first to issue principle. It is highly arbitrary and favours the party who wants to break up the marriage and/or is not interested in reconciliation or ADR. It ignores any marital agreements. It directly favours the spouse who is wealthy to afford legal costs and is accustomed to seeking quick, early and international advice. It discriminates against the spouse who wants to attempt to save the marriage or attempt a settlement through ADR or does not have the funds for international legal advice. There is no other group of countries in the world where cross-border proceedings are determined only by which party arrives first at the court office of their choosing. But we have felt dominated by the EU policymakers who have been so adamant that the first to issue principle is fundamental for their laws. It was in Brussels II then repeated in MR and appears in the draft Marital Property Regulation. Yet elsewhere, outside forum and finance, first to issue does not rule supreme. Jurisdiction in children matters in Brussels II has a cascading set of provisions, Arts 8-14 with a sweeping up transfer provision. The EU Applicable Law Regulation has directly cascading jurisdictional criteria for applicable law in Art 8. It is found elsewhere. There is no reason why future EU legislation cannot have a hierarchy or a cascading set of jurisdictional criteria given the impetus from the priority to the best interests of the child.
Most of all this is a refreshing development because of the recognition yet again of the paramountcy of the child in all family law matters, and specifically not just in discrete specific issues affecting the parenting arrangements. Child support and perhaps extended into other finance arrangements and even further into divorce and status should be subservient to the best interests of the child as understood in a proper fashion and without narrow legalism. It may have required a civil law judge from outside the family law world to make this fundamental issue widely known and of potentially very significant importance in EU family law.
I am not yet aware when the CJEU will in fact have their hearing but it will now be followed with even greater interest and importance affecting the whole EU family law community.