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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Potanina v Potanin (Rev 2) [2021] EWCA Civ 702 (13 May 2021) URL: https://www.bailii.org/ew/cases/EWCA/Civ/2021/702.html Cite as: [2021] EWCA Civ 702, [2022] Fam 23, [2021] 3 WLR 967, [2021] WLR(D) 279 |
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ON APPEAL FROM HIGH COURT OF JUSTICE (FAMILY DIVISION)
Mr Justice Cohen
FD18F00074
Strand, London, WC2A 2LL |
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B e f o r e :
LORD JUSTICE DAVID RICHARDS
and
LORD JUSTICE MOYLAN
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NATALIA NIKOLAEVNA ![]() | Appellant |
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- and - |
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VLADIMIR OLEGOVICH ![]() |
Respondent |
____________________
Mr Stewart Leech QC, Mr Adam Wolanksi QC (who did not attend the hearing) and Mrs Rebecca Bailey-Harris (instructed by Payne Hicks Beach) for the Respondent
Hearing dates: 26- 27 January 2021
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Crown Copyright ©
Lady Justice King:
Factual Background
Procedural Background
"(1) The application must be made without notice to the respondent.
(2) Subject to paragraph (3), the court must determine the application without notice.
(3) The court may direct that the application be determined on notice if the court considers that to be appropriate."
"10. I am thus, satisfied having read her evidence and heard from Mr Howard, that the tests of s16(2) for the grant of leave are met.
11.I do not think that it is necessary for me to say anything more about the law. I have, of course, applied the test of whether there are solid grounds or substantial grounds for the court to be able to say that an order might be made. I am satisfied, for all the reasons given, that those grounds exist. If, of course, the husband feels that he does have what is sometimes known as a 'knock-out blow' to the application, then it is open to him to make an appropriate application to strike out the leave."
FPR r.8.25: ex parte applications
"……reading the rule in the context of both present practice and, more particularly, what Lord Collins said in Agbaje, it seems that what the new rules contemplate is an application which is to be made without notice but where the court has power to decline to make the order except at an inter partes hearing."
In order, the court was told, to reflect the view expressed by Munby LJ in Traversa v Freddi, namely that the application for leave must be made ex parte, a further change to the rule came about in 2017 whereby applications for leave reverted to being required to be made ex parte as set out in para.[17] above.
The approach to applications for leave
"In the present context 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.' Once a judge has given reasons for deciding at the ex parte stage that the threshold has been crossed, the approach to setting aside leave should be the same as the approach to setting aside permission to appeal in the Civil Procedure Rules, where (by contrast with the Family Proceedings Rules) there is an express power to set aside, but which may only be exercised where there is a compelling reason to do so: CPR r 52.9(2). In practice in the Court of Appeal the power is only exercised where some decisive authority has been overlooked so that the appeal is bound to fail, or where the court has been misled: Barings Bank plc v Coopers & Lybrand [2002] EWCA Civ 1155; Nathan v Smilovitch [2007] EWCA Civ 759. In an application under section 13, unless it is clear that the respondent can deliver a knock-out blow, the court should use its case management powers to adjourn an application to set aside to be heard with the substantive application."
i) The test is not high for the grant of leave but there must be a 'solid' case to be tried;
ii) The power to set aside may only be exercised where there is some compelling reason to do so. In practice it will only be exercised where a decisive authority is overlooked or the court has been misled;
iii) Unless the applicant can deliver a 'knock -out blow', an application to set aside should be adjourned to be heard with the substantive application.
"[30] It is clear that the s 13 filter is there to exclude plainly unmeritorious cases and, although, in the evaluation of substance, regard must be paid to overall merits, it does not call for a rigorous evaluation of all the circumstances that would be considered once the application has passed through the filter.
[31] At the hearing of the s 13 application the judge will of course be conscious of the fact that, once through the filter, the applicant will have to clear a number of fences that the following sections erect. Unless it is obvious that the applicant will fall at one or more of the fences, his performance at each is better left to the evaluation of the trial judge." (my emphasis)
"Such an application, if nonetheless pursued, should be given an appropriately short listing to enable the respondent to demonstrate, if he can – and it will not take all that long, which is why the listing can be appropriately short – that he has some 'knock-out blow'. Unless the respondent can demonstrate that, his application, if not dismissed then and there, should be adjourned to be heard with the substantive application."
"Duty of the court to consider whether England and Wales is appropriate venue for application.
(1) Subject to subsection (3), before making an order for financial relief the court shall consider whether in all the circumstances of the case it would be appropriate for such an order to be made by a court in England and Wales, and if the court is not satisfied that it would be appropriate, the court shall dismiss the application.
(2) The court shall in particular have regard to the following matters—
(a) the connection which the parties to the marriage have with England and Wales;
(b) the connection which those parties have with the country in which the marriage was dissolved or annulled or in which they were legally separated;
(c) the connection which those parties have with any other country outside England and Wales;
(d) any financial benefit which the applicant or a child of the family has received, or is likely to receive, in consequence of the divorce, annulment or legal separation, by virtue of any agreement or the operation of the law of a country outside England and Wales;
(e) in a case where an order has been made by a court in a country outside England and Wales requiring 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;
(f) any right which 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 omitted to exercise that right the reason for that omission;
(g) the availability in England and Wales of any property in respect of which an order under this Part of this Act in favour of the applicant could be made;
(h) the extent to which any order made under this Part of this Act is likely to be enforceable;
(i) the length of time which has elapsed since the date of the divorce, annulment or legal separation.
(3) If the court has jurisdiction in relation to the application or part of it by virtue of the Maintenance Regulation and Schedule 6 to the Civil Jurisdiction and Judgments (Maintenance) Regulations 2011, the court may not dismiss the application or that part of it on the ground mentioned in subsection (1) if to do so would be inconsistent with the jurisdictional requirements of that Regulation and that Schedule."
The Judgments:
The Leave Hearing
"5. The parties had no connection prior to 2013, but a schedule that has been produced to me today, and which is formally exhibited, shows that London has been her principal home since at least January 2016. I have not asked for any diarisation going further back before that date. She has lived over the last three years far more in London than she has anywhere else; the main other place she has visited being America, where the parties' youngest child is living and studying. Her visits to Russia have been very limited due to various adverse circumstances which are set out in her statement and to which it is unnecessary for me to refer further in this short judgment. She has in my judgment, plainly established a connection with England and Wales.
6. She did a have very strong connection with Russia, but that connection now has been very largely severed and remains in existence only because her elderly mother, who cannot travel for health reasons outside that country, is living in Moscow. Apart from Russia, the wife has limited connection with any other country outside England and Wales and, certainly, there is no other country at the present time with which she has a greater connection."
The set aside judgment
"I am in no doubt that if I had had the full picture before me on 25 January 2019 I would not have granted W leave to make her application."
"I am further satisfied therefore that the grant of leave was given as a result of material misleading of the court, however unintentional that might have been."
"(3) If the court has jurisdiction in relation to the application or part of it by virtue of the Maintenance Regulation and Schedule 6 to the Civil Jurisdiction and Judgments (Maintenance) Regulations 2011, the court may not dismiss the application or that part of it on the ground mentioned in subsection (1) if to do so would be inconsistent with the jurisdictional requirements of that Regulation and that Schedule".
Allegations of misleading the Judge
i) The more complex the case, the greater the detail that will be required in order to achieve the fair disclosure necessary on any ex parte application;
ii) Not every misrepresentation will justify the setting aside of leave. The matters said to be misleading have to be either individually or collectively misleading and sufficiently material to justify setting aside the leave;
iii) The courts are required to keep a sense of proportion. See AA v BB;
iv) If it can be said objectively that the matters alleged did not mislead or are not sufficiently material to the issues informing the grant of leave, then leave will not be set aside.
Discussion as to Alleged Misrepresentations
Factual Misrepresentations
Russian Litigation
Misrepresentation as to English Law
"It would be wrong for me to say that the court was not directed to the appropriate passages of Agbaje. They are set out along with a paragraph of Zimina v Zimin [2018] 1 FCR 164 in the skeleton argument… but they did not form a significant part of the hearing and were not the subject of discussion. In particular, I was not referred in oral submissions to paragraphs 70-72'"
"70. This is not the solution adopted in Part III. Section 18 could have provided that, once England and Wales was to be regarded as the appropriate forum under section 16, then the case was to be treated as a purely English proceeding for financial relief. But it did not do so. Instead a more flexible approach was deliberately adopted. There will be some cases, with a strong English connection, where it will be appropriate to ask what provision would have been made had the divorce been granted in England. There will be other cases where the connection is not strong and a spouse has received adequate provision from the foreign court. Then it will not be appropriate for Part III to be used simply as a tool to 'top-up' that provision to that which she would have received in an English divorce.
The proper approach
71. To take up some of the points made in the preceding paragraphs, the proper approach to Part III simply depends on a careful application of sections 16, 17 and 18 in the light of the legislative purpose, which was the alleviation of the adverse consequences of no, or no adequate, financial provision being made by a foreign court in a situation where there were substantial connections with England. There are two, inter-related, duties of the court before making an order under Part III. The first is to consider whether England and Wales is the appropriate venue for the application: section 16(1). The second is to consider whether an order should be made under section 17 having regard to the matters in section 18. There are two reasons why the duties are inter-related. First, neither section 16(2) nor section 18(2) and (3) refers to an exhaustive list of matters to be taken into account. Section 16(1) directs the court to have regard to 'all the circumstances of the case' and section 16(2) refers the court to certain matters 'in particular.' Second, some of the matters to be considered under section 16 may be relevant under section 18, and vice versa. An obvious example would be that section 16(2)(e) refers the court to the financial provision which has been made by the foreign court. Plainly that would be relevant under section 18. So also the direction in section 18(6) to the court, in considering the financial resources of a party, to have regard to whether an order of a foreign court has been complied with would plainly be relevant in considering whether England is the appropriate venue.
72. It is not the purpose of Part III to allow a spouse (usually, in current conditions, the wife) with some English connections to make an application in England to take advantage of what may well be the more generous approach in England to financial provision, particularly in so-called big-money cases. There is no condition of exceptionality for the purposes of section 16, but it will not usually be a case for an order under Part III where the wife had a right to apply for financial relief under the foreign law, and an award was made in the foreign country. In such cases mere disparity between that award and what would be awarded on an English divorce will certainly be insufficient to trigger the application of Part III. Nor is hardship or injustice (much less serious injustice) a condition of the exercise of the jurisdiction, but if either factor is present, it may make it appropriate, in the light of all the circumstances, for an order to be made, and may affect the nature of the provision ordered. Of course, the court will not lightly characterise foreign law, or the order of a foreign court, as unjust".
"i) The extent of the connection of the parties to England;
ii) Whether or not W was attempting to use these proceedings as a top-up;
iii) The interplay between the adequacy of the Russian award and the connection with England;
iv) Whether W has suffered injustice and or hardship
This is not to say that these are necessarily pre-conditions of an award, but are matters that need consideration. As a result of these deficiencies I am satisfied that I did not properly consider the legislative purpose of Part III of the Act".
Conclusions as to Non-Disclosure
Conclusion on Appeal against the Set-Aside
S.16(3): A Footnote
i) The Maintenance Regulation referred to in s.16(3) continues to apply to these proceedings as they were issued before 11.00pm on 31 December 2020 (IP completion day);
ii) Section 16(3) & 16(4) have been repealed by para.13 of Schedule 1 to the Jurisdiction and Judgments (Family) (Amendments etc) (EU Exit Regulations 2019 (SI 2019/519) (' the 2019 Regulations') as substituted by Regulation 5 of the Jurisdiction, Judgments and Applicable Law (Amendment) (EU Exit) Regulations 2020 (SI 2020/1574.);
iii) The Maintenance Regulation was revoked by Regulation 4 of the 2019 Regulations.
Lord Justice David Richards:
Lord Justice Moylan: