Jurisdictions in a family court
Family
Legal bulletin | 27 April 2010
The recently reported case of Z v Z (Divorce: Jurisdiction) [2010]1 FLR 694 highlights the predicament facing the increasing number of “international families” for whom relocations of varying durations to a succession of EU countries are a feature of their employment or business interests. The case demonstrates again that the law on where in Europe a divorce can take place is ripe for dispute and the outcome, which can have profound financial consequences for the parties, inherently difficult to predict.
As a result of EU regulation the English courts have jurisdiction to hear divorce proceedings, including related financial proceedings, between foreign nationals provided that certain criteria involving the parties’ “habitual residence” are met. The fact that the parties may have been married abroad is irrelevant. The English court will have jurisdiction to grant foreign nationals a divorce and make financial orders for, for example, transfer of property and assets and maintenance payments if:
• the spouses are habitually resident in England; or
• the spouses were last habitually resident here and one of them still resides here; or
• the respondent is habitually resident here; or
• the applicant is habitually resident here and has resided here for at least a year immediately prior to the application; or
• the applicant is habitually resident here, has resided here for at least six months immediately prior to the application and is domiciled here.
Under the rules it can often be the case that another EU member state will also have jurisdiction under the rules to hear divorce proceedings. Where that is the case a “first past the post” rule applies: only the country in which proceedings are first issued will have jurisdiction.
The EU regulation contains no definition of the crucial term “habitual residence” but the English courts employ the following Europe-wide definition:
“The place where the person has established, on a fixed basis, the permanent or habitual centre of his interests, with all the relevant factors being taken into account for the purpose of determining such residence.”
If one party disputes habitual residence it is for the other party to prove it and Z v Z highlights how uncertain and unpredictable the outcome can be. The significance of the outcome cannot be overstated. Put simply, the English courts are much more generous to the financially weaker spouse in divorce cases than any European jurisdiction. They are also much more willing and able than courts in countries such as France to investigate - and draw inferences from - the financially stronger spouse’s presentation of his or her finances. The pre-nuptial agreements which are common place in countries such as Germany are not – as the law presently stands – enforceable in England.
Although the husband in this case told the court – and the court accepted – that the financial arrangements he intended to propose would be the same whether the divorce took place here or in France, the wife in the present case was undoubtedly astute in petitioning for divorce in England.
The case shows that if one party to a marriage is keen to avoid the prospect of a foreign court dealing with a divorce and related financial matters he or she needs to be very clear about whether a relocation to another country is intended to be indefinite or temporary. In addition to the parties’ living arrangements the court will take into account evidence of intention. If relocation is clearly expressed and intended to be temporary then this should militate against a finding of habitual residence.
The husband in this case was one of thousands of European nationals working in the financial sector – in this case as managing partner of an international private equity firm - who relocate each year to London. Under generous re-location arrangements the husband, his wife and the three children left their Paris apartment vacant and took up residence in serviced apartments. Previously the family had spent three years in the Netherlands. The three children were enrolled in school, including a French lycée in London. The family’s Paris home was not sold and remained un-let. The husband retained his membership of a French golf club and conducted an extramarital affair in France. The parties retained French passports, ID cards, bank accounts, credit cards and paid tax and national insurance in France, albeit as foreign residents. The wife believed that the move was open-ended and initial steps were taken to look for a home to buy in London.
Sadly, the parties’ relationship was in difficulties prior to the relocation in August 2007 and by February 2008 they had begun a trial separation with the husband moving into a separate flat in the same block. In July 2008 the wife issued an English divorce petition on the basis that both she and the husband were habitually resident in England.
The husband commenced divorce proceedings in France in September 2008 but those proceedings were stayed pending a determination of whether the English courts had jurisdiction. The husband disputed the jurisdiction of the English courts. In April 2009 the husband was requested by his employer to return permanently to Paris by January 2010 at the latest.
A number of factors emerge from the court’s observations on “habitual residence”:
• The test is not concerned with the length of time a person has resided in a particular country; it is a qualitative not a quantitative test.
• The relocation of centre of interests may take place very quickly – in effect a change in habitual residence may be affected on the first day that a person sets foot on foreign soil.
• In addition to looking at the objective facts the court must also take into account the person’s intentions. The move need not be permanent but must be intended to be of a lasting character.
• Intention proved to be the determinative factor in this case, the court finding that, at the time the petition was issued it was the husband’s intention that the move to London be for the long term and it was only later that he changed his mind and decided to return to France.
The court recognised that there are many international families who relocate on a regular basis and who, in doing so, take steps such as enrolling children in school and opening foreign bank accounts, steps which might evidence a change in habitual residence but for the fact the parties intend their stay to be temporary. The court acknowledged that there would be undesirable policy consequences for such families if BIIR operated to bring them within the jurisdiction of the family courts in whichever country they happen to be living for the time being.
Those advising international couples now face the difficulty of working out how to ensure that a temporary relocation which may be for an unspecified period of some years does not lead to habitual residence if that is not what the parties – or one of them - intend.