A second bite of the financial cherry after an overseas divorce
By:0 commentsOctober 10, 2017
Or: Just what is Part III of the Matrimonial and Family Proceedings Act 1984 for?
Last week the Court of Appeal overturned an award of £1.14 million made to a Russian wife who had already received a substantial settlement, by agreement, following her divorce in Russia. The award had been made under Part III of the Matrimonial and Family Proceedings Act 1984, which gives the courts in England and Wales the power to make financial awards in favour of spouses who have divorced in another country.
The case was Zimina v Zimin. Giving the leading judgment Lady Justice King said that the wife’s application amounted to her having a ‘second bite of the cherry’, something that is not normally allowed, given the principle that there should if at all possible be finality in litigation, and that agreements freely reached should be upheld.
I’m not going to comment upon the case – I’m sure many far more learned than I will be doing that. Instead, what struck me about the case, and others that have recently been taken under Part III, is that it always seemed to me to stretch the whole idea of Part III to its limit, if not beyond.
Part III was enacted following a recommendation of the Law Commission, in its report Family Law: Financial Relief after Foreign Divorce, which was published in 1982. In paragraph 1.2 of the report the Commission explained the mischief that its recommendation was intended to deal with, by reference to a hypothetical scenario.
The scenario went as follows:
“Suppose an English woman marries a wealthy Ruritanian, and they establish the matrimonial home here in a house owned by the husband. In due course, the husband divorces her in Ruritania perhaps by pronouncing the word “talaq” three times (as is permitted by the law in many countries). No financial order is made in Ruritania. The Ruritanian divorce is recognized in this country as effective to terminate the parties’ marriage. The wife then has no right to apply to the court here for financial provision: she will have ceased to be the husband’s wife, so that he is no longer under a legal liability to maintain her. She cannot invoke the powers of the divorce court to make financial provision or property adjustment orders because the court only has such powers if it grants a decree and it cannot do this because there is no longer a marriage to dissolve. She cannot enforce any foreign financial order, because no such order exists … Such a woman may thus face destitution, and her only source of financial support may be [state benefits] … The fact that the husband lives in this country and has substantial assets here makes no difference to the legal position.”
Now, The Commission admitted that the scenario was “to some extent exaggerated”, but there are at least two important points that it raises, as arguments in favour of the enactment of what was to become Part III.
The first point is that the wife here received nothing. In the Zimina case she received a very substantial settlement. Not only that, but she agreed to the settlement. Surely, the Law Commission did not intend that someone in her position should take advantage of Part III? OK, she ultimately failed, but what if the husband had not appealed the original decision in favour of the wife? The court must give applicants leave to make an application under Part III. This is intended as a ‘filter’, to ensure that Part III is only invoked in cases in which it is appropriate for the English court to intervene. I really don’t think that this case should have passed through that filter – surely, Part III is only for spouses who have received nothing, or at least clearly substantially less than the English court considers they should have? Perhaps the cut-off should simply be where their reasonable needs have been met.
The other point is that the scenario envisages the wife becoming dependent upon state benefits, thereby making it clear that there is a good cause for the state (i.e. the law) to intervene, in order to recover or prevent an expenditure that it would not have had if the foreign divorce court had made reasonable financial provision for the wife. This was not just about the wife, but also about the state itself. The wife in Zimina is a multi-millionaire, hardly likely to trouble the Department for Work and Pensions. The point I’m getting at here is that Part III interferes with the actions of the courts of a foreign country. Some might well say that we have no right to do that, without very good reason. Again, I come back to the point about reasonable needs – perhaps our courts should only interfere where they have not been met by the foreign court.
In short, my question is this: surely, Part III was never intended to be a mechanism whereby a second bite at an already well-bitten cherry should be allowed – is it now being used for purposes way beyond what was envisaged by the Law Commission?
Photo by Stuart Webster via Flickr under a Creative Commons licence.
October 10, 2017
Categories: Family Law