Financial settlement after an overseas divorce

It is becoming increasingly common for parties to marry in England and Wales and to thereafter relocate overseas because of work commitments; family ties or for other personal reasons. If the parties marriage therefore breaks down whilst they are living in another country then, depending on their circumstances they may divorce overseas rather than in England and Wales.

This is because for proceedings to be issued in England and Wales then one of the five factors must apply:-

1. The Petitioner and Respondent are habitually resident in England and Wales.
2. The Petitioner and Respondent were last habitually resident in England and Wales and one party still resides there.
3. The Respondent is habitually resident in England and Wales.
4. The Petitioner is habitually resident in England and Wales and has resided there for at least a year immediately prior to the presentation of the petition.
5. The Petitioner and Respondent are both domiciled in England and Wales.

If none of the above five factors apply, or for other reasons a couple decide to divorce where they are living, the divorce and any subsequently financial remedy proceedings may be issued abroad.

If however one party returns to England and Wales and wishes to resolve the financial position in this country then there is the ability to do so under Part III of the Matrimonial and Family Proceedings Act 1984 (“MFPA”). The option to apply under Part III is available where:-

1. The marriage has been dissolved or annulled, or the parties to the marriage have been legally separated by means of judicial or other proceedings in an overseas country.
2. The divorce, annulment or legal separation is entitled to be recognised as valid in England and Wales.

It is important, however, that in the first instance jurisdiction of the English Court is determined. For the Courts of England and Wales to determine an application under Part III, the application must meet one of the following requirements (in accordance with Section 15(1), MFPA 1984):

1. Domicile: Either party is (on the date of the permission application) or was at the time of foreign decree domiciled in England and Wales.
2. Habitual Residence: Either party was habitually resident in England and Wales throughout the period of one year ending with the date of the application for leave, or the date when the foreign divorce, annulment or legal separation took effect.
3. Matrimonial home in England and Wales: Either party has or had at the material time beneficial interest in possession in a dwelling-house in England or Wales that was at some time during the marriage a matrimonial home of the parties.

The first stage when issuing proceedings under Part III of the MFPA 1984 is to apply to the Court for permission. This is the first stage in a two-stage process, in which the Court must grant permission and consider the substance of the application. The Court may not grant permission unless it considers there is substantial ground for making an application.

So what does substantial ground mean? Essentially, this means solid. In the case of Agbaje -v- Agbaje [2010] the Supreme Court provided the following guidance:

“the principal object of the filter mechanism is to prevent wholly unmeritorious claims being pursued to oppress or blackmail a former spouse. The threshold is not high, but is higher than ‘serious issue to be tried’ or ‘ good arguable case’ found in other contexts. It is perhaps best expressed by saying that in this context ‘substantial’ means ‘solid’”.

The Court will also need to give some consideration to whether it would be appropriate to grant financial relief at the permission hearing. Such considerations will include:

The parties' connections. In particular:

• The connection that the parties to the marriage have with England and Wales;
• The connection that those parties have with the country in which the marriage was dissolved or annulled or in which they were legally separated; and
• The connection that those parties have with any other country outside England and Wales.

Financial relief. This includes:

• Any financial benefit that the applicant or child of the family has received or is likely to receive because of the divorce, annulment or legal separation, under an agreement or the operation of the law of a country outside England and Wales;
• In a case where an order has been made by a Court in a country outside England and Wales that requires the other party to the marriage to make any payment or transfer any property for the benefit of the applicant or a child of the family, the financial relief given by the order and the extent to which the order has been complied with or is likely to be complied with;
• Any right that the applicant has or has had to apply for financial relief from the other party to the marriage under the law of any country outside England and Wales and if the applicant has not applied for such relief, the reason for that omission; and
• The availability in England and Wales of any property for which an order under Part III of the MFPA 1984 in favour of the applicant could be made.

Enforceability. That is, the extent to which any order made under Part III is likely to be enforceable.

• Time elapsed since decree. That is, the length of time that has elapsed since the date of the divorce, annulment or legal separation.

These are all important preliminary considerations which must be considered in detail before any application is submitted to Court.

If permission is thereafter granted to the applicant then the application will progress to the second stage, which is the substantive application. This will mean that the application will follow the more standard procedure for financial settlement upon divorce in England.

Practicalities include filing and exchanging financial disclosure as the Court will need to fully understand the parties' financial circumstances.

The Court will then consider a two-stage test in deciding whether or not to make an order:-

• Stage One:      

The appropriateness of the order. The Court must consider in all the circumstances of the case whether it would be appropriate for the order to be made by a Court in this country.

• Stage Two:

Whether it appropriate to make the order under Section 16(2) of the MFPA.

This is an extremely complex area of international family law and if you are in a position whereby it may be applicable to your circumstances then we suggest seeking legal advice from a specialist international family law solicitor at the earliest possible opportunity as delay can affect the merits of an application.

For more information in relation to this matter or for any other family law advice then please contact Kate Barlow or another member of the family team.