Two roads diverged in a wood, and I—
I took the one less traveled by,
And that has made all the difference.
Robert Frost, The Road Not Taken (1916)
In his most famous poem, Robert Frost tells the story of a traveller confronted by the choice of two different paths through a wood. The poem ends with the traveller claiming that, as he looks back on his life, his choice "has made all the difference". Frost intended it as a joke, for the poet Edward Thomas: Thomas had a habit of turning back on himself during their woodland walks, and worrying that he had taken the wrong route. Frost's point was that we invest past choices with a significance they do not deserve.
I mention all of this not just because it is interesting, but because the significance of a simple choice has been the subject of a recent case in the English High Court. A jurisdiction clause in a pre-nuptial agreement has had a powerful effect; and it may point the way to a greater willingness to "bifurcate": in other words, to accept that while England may have divorce jurisdiction, another country should resolve the parties' financial claims.
In DB v. PB, heard in November, the parties were Swedish nationals resident in England. They signed no less than three pre-nuptial agreements, all of which contained two crucial clauses. The first was an agreement for a regime of complete separation of property; the second was an agreement that the Swedish courts should have exclusive jurisdiction in matters relating to the marriage.
The parties applied for divorce on the same day: the wife in England; the husband in Sweden. The husband's application was second in time, and so the divorce proceeded in England under the standard application of the Brussels II bis Regulation. However, the husband contended that as the jurisdiction clause was binding on the English court thanks to the Maintenance Regulation; and as it was fair to uphold the separate property regime under the test in Granatino v. Radmacher; the only order the court should make was the sale of the parties' jointly-held property, and division of the proceeds in equal shares. The wife contended that the pre-nuptial agreements were unfair, and so should be ignored.
Inevitably, the court had to examine the background to the signing of the agreements in the type of detail now familiar in English cases, and baffling to everyone else. The wife's diaries for a trip to Niagara Falls, where one of the agreements was signed, were subjected to intense textual analysis. She, the husband and various lawyers were cross-examined as to their understanding of the parties' states of mind at the time. It is a besetting sin of English law that it indulges a party's attempt to undermine a marriage contract on grounds which would not remotely be entertained in a commercial dispute.
However, the husband passed this test; and the wife failed it. The court found she made the agreement "consensually" and that its terms were not vitiated by any of the circumstances of its signing. Thus the agreement, and the jurisdiction clause, stood. The wife had to plead her maintenance claims in Sweden.
This was much more significant than it might sound. We know, from Radmacher, that a nuptial agreement will not be enforced against a party if it leaves him or her in a "predicament of real need". However, because under the Maintenance Regulation "maintenance" means any order with the purpose of meeting financial need, the jurisdiction clause makes any such order impermissible. The court could only consider the wife's rights in property; and those were debarred by her agreement to a separate property regime.
The judgment has a number of interesting consequences for domestic English cases, but in this note I want to highlight the jurisdictional question. The clause was binding (as the judge saw it) under the Maintenance Regulation, and so he was robbed of any discretion. It might be said that, if and when Brexit means the United Kingdom is no longer subject to the Regulation, this issue will disappear.
I am not so sure. Even before the European regulations arrived, the English court agreed that a jurisdiction clause was a factor in supporting it declining jurisdiction on forum conveniens grounds: see, for example, Mr Justice Wilson's judgment in a forum dispute with New York in S v. S (Matrimonial Proceedings: Appropriate Forum) in 1997. Indeed, even without an agreement, the English court has been prepared to bifurcate: also in 1997, in W v. W (Financial Relief: Appropriate Forum), Mr Justice Holman stayed English financial proceedings in favour of Canada, notwithstanding an English decree absolute of divorce; he did the same in relation to Germany in 1999 in Krenge v. Krenge.
In my view, the increasing respect shown by the English court to foreign nuptial agreements means that this trend will continue. This is quite apart from the complex and unresolved question of whether after Brexit the United Kingdom will remain part of the Brussels or Lugano Conventions, which also permit jurisdiction clauses with respect to maintenance. We are all likely to be confronted with at least two roads diverging in a wood.
If you require further information on anything covered in this briefing please contact Nicholas Bennett ([email protected] , 020 3375 7103) or your usual contact at the firm on 020 3375 7000. Further information can also be found on the Family Team page on our website.
This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.
© Farrer & Co LLP, March 2017