Forum shopping is alive and well: Villiers v Villiers Supreme Court decision
The Supreme Court issued its decision today leaving open the possibility of forum shopping in maintenance cases between Scotland and England as well…
The Supreme Court issued its decision today in the case of Villiers v Villiers leaving open the possibility of forum shopping in maintenance cases between Scotland and England as well as other jurisdictions. The decision was by a majority verdict with, notably, two of the five judges including former family law barrister Lady Hale dissenting.
The case concerned a husband and wife who had been married in 1994 and lived most of their married life in Scotland. After they separated in 2012 the wife (“W”) moved to England with their daughter. In 2013 she raised a petition for divorce in England. The proceedings were stayed after similar proceedings were raised for divorce in Scotland by the husband (“H”).
Legislation provided conflict rules between Scotland and England that, where an action was raised for divorce, it should be in the place of the parties’ last habitual residence which, in this case, would have been Scotland. Therefore, the court would normally stay proceedings in favour of the court with more appropriate jurisdiction (known as the “forum non conveniens” argument).
W not surprisingly consented to the action of divorce in England being stayed in January 2015 so that matters could therefore proceed in Scotland.
Section 27 Maintenance application
However, W then raised an application for maintenance in the English court under s. 27 of the Matrimonial Causes Act 1973 (“MCA”), a little-used provision, alleging failure to provide reasonable maintenance. H argued that this application should be stayed given the related divorce case in Scotland.
W argued that the court did not have the same discretion to stay the proceedings in a maintenance action as it was covered by specific EU legislation brought about in 2011 specifically governing jurisdiction in maintenance actions. W also argued that the Scottish divorce action was not a related action for the purposes of that EU legislation which would have given the judge discretion to stay the proceedings in favour of the Scottish action.
H argued the EU Legislation did not apply intra UK between England and Scotland as the UK was a member state and it only applied between the UK and other states.
H lost his appeal after the court decided the EU legislation specifically applied to intra UK cases as well as intra member states and, therefore, effectively took away the discretion of the court to stay the proceedings.
The main reasoning was that the legislation was put in place to allow the person seeking maintenance to decide which court they should use and, the separate divorce action in Scotland, was not in their view a related action in terms of that legislation.
EU Maintenance Regulation
The case centred around the provisions of Council Regulation (EC) Number 4/2009 (“the Maintenance Regulation”) which deals with jurisdiction, applicable law, recognition and enforcement of decisions and cooperation in matters relating to maintenance obligations. The Civil Jurisdiction and Judgements (Maintenance) Regulations 2011 (particularly Schedule 6) brought the Maintenance Regulation into effect in the UK.
Leading the judgment, Lord Sales indicated that the court took the view that the legislation applied intra UK as well as between member states.
Secondly, the EU legislation was inconsistent with the courts of a member state retaining any discretionary power to stay proceedings on “non forum conveniens” grounds. The Maintenance Regulation aimed to afford special protection to a maintenance creditor by giving him or her the right to choose jurisdiction.
Thirdly, there was no issue with the Secretary of State acting beyond the terms of the European legislation when he provided subordinate legislation to bring it into effect. The Schedule 6 provisions replicated the effect of the Maintenance Regulation or intra member state cases.
Lastly, the court considered that the divorce proceedings were not a “related action” within the meaning of Article 13 of the Maintenance Regulation. Therefore, there was no permission for the English court to decline jurisdiction.
The court held that the Maintenance Regulation must be considered in light of its fundamental objective of conveying the right to choose jurisdiction on a maintenance creditor.
The word “actions” refers primarily to maintenance claims to which the rest of the Regulation applies. The court found that there was no relevant connection between W’s Section 27 maintenance claim in England and the Scottish proceedings concerned with determining marriage status (i.e. divorce).
Interestingly, Lord Wilson and Lady Hale who are both family lawyers considered the Scottish proceedings for divorce were related actions and a common sense approach should be taken. They would have allowed H’s appeal.
What does this mean for cross-border cases?
As one judge, Lady Black indicated, this is likely to lead to a fragmentation of proceedings required to resolve financial affairs upon divorce.
The Scottish view
The decision will not sit very easily with Scottish family lawyers as they would regularly seek aliment (which is the Scottish form of maintenance during marriage) and periodical allowance (which is the Scottish form of maintenance after divorce) all within the same divorce action.
It will be difficult to find a Scottish family lawyer (or an English one) who will therefore agree that the divorce action is not related to maintenance.
This case is likely to lead to the potential scenario of a decision being made in England in relation to maintenance, where Section 27 applies and, likewise, consideration of the same issue in the Scottish courts in the context of a divorce action.
It is well known that the maintenance provisions in Scotland are much more conservative than that in England. Therefore, this decision is highly likely to lead to a situation where parties who have cross border connections may be advised to move to England after separation so that they can specifically seek maintenance there.
No doubt, Scottish lawyers will continue to be vigilant in ensuring that their clients do not allow the other party to gain this advantage through the English court
The English view
The ability to make a claim for maintenance under Section 27 MCA is limited, and applies to very few maintenance cases in practice as a party must have failed to have made reasonable provision for maintenance. In most maintenance cases, a party is likely to have paid some maintenance – just not as much as the receiving party believes is reasonable and fair. As such, it has been a little-used provision.
This judgment upholds the decision of the Court of Appeal that an otherwise forgotten paragraph in our matrimonial legislation can sometimes be used to make financial orders in England after a divorce writ has already been issued in Scotland.
It remains to be seen whether the provisions of this European legislation will subsist post-Brexit. The future and relevance of this ‘loophole’ will need to be examined again when the Brexit transition period ends and EU law no longer applies to English-Scottish divorces.
For the time being the decision in Villiers is likely to cause some major confusion and conflicting legal advice to clients in relation to family law cases that have cross-border elements. Advice should be sought at an early stage.