G v G: A TLATA Jurisdiction Dispute

cyanotype smithsonian

G v G [2015] EWHC 2101 (Fam)

Trusts of Land – Application by H to dismiss or stay W’s TLATA claim for order for sale and equal division of proceeds — Appropriate Jurisdiction for Claim – Matrimonial financial remedies case in Poland – Application for sale and division of proceeds in England – Whether a claim for sale order and division of proceeds was a claim in rem or in personam – Applicability of Brussels I arts 5(6), 22, 28

Given the amount of times the issue must arise, it’s interesting that there have not been more cases about the appropriate jurisdiction for TLATA claims where either (1) the parties are domiciled abroad but the property is situated in England or (2) the parties are domiciled here but the property is abroad. G v G is the latest addition to a slender collection, comprising also Webb v Webb [[1991] 1 WLR 1440/[1994] QB 696] and Prazic v Prazic [2006] 2 FLR 1128. Both Prazic and Webb were considered in G v G, which makes it a particularly useful case, although all three cases leave some conceptual difficulties unaddressed.

In brief, H and W were British nationals. They owned property in Poland, France, and in London. They divorced in France, the decree taking effect in July 2013. There were proceedings in France relating to real property and moveables there, and also proceedings in Poland. These Polish proceedings had had quite a chequered history, but it’s enough to know at the moment that they had commenced in July 2013, that H was seeking a 90:10 split of all of the matrimonial property in his favour, but that the proceedings had not been served on W.

In April 2014, W issued a TLATA claim in the County Court seeking an order for sale and equal division of the proceeds of sale. She had severed the joint tenancy of the London property in October 2011.

The Court [Bodey J] carefully considered five separate contentions made by H as to why W could not, or should not be permitted to, make a claim against him in the English courts. The most important of these for present purposes was the question of whether the English courts had exclusive jurisdiction over the London property because W’s claim was a claim in rem. In the context of G v G, if the answer to that question was “yes”, then all of the other contentions made by H were more or less otiose.

Bodey J’s answer to this question distinguished G v G from Webb, which up to now has been the case with the most substantial reasoning of the appropriate forum for a TLATA claim. In Webb the property was in France, and the claim (by a father [F])  was for a declaration that his son S, the sole registered owner,  was holding the property in trust for F absolutely, and then for the French equivalent of rectification of the Land Register. The Webb claim was brought in England, and S argued that the English courts did not have jurisdiction because of the equivalent of Art. 22 of Brussels 1 which was in operation at the time.

Article 22 of Brussels 1 provides that “the court of the Member State in which the property is situated” “shall have exclusive jurisdiction, regardless of domicile … in proceedings which have as their object rights in rem in immoveable property” [emphasis added].

Just a quick reminder that a claim in rem is a claim to a right that, if upheld, will be valid and binding on all the world, while a claim in personam is a claim to a right which, if upheld, will be binding on the particular person(s) against whom the claim has been brought.

In Webb, the English Court, and subsequently the European Court of Justice [CJEC], had affirmed that the claim for a declaration that there was a bare trust, and the claim for rectification of the Register, were in personam claims. That meant that although the property was situated in France, F could validly bring his claim in England.

The particular significance of G v G is that Bodey J decided that W’s claim was a claim in rem, and that the English court therefore had exclusive jurisdiction over the London property.  This looks baffling at first, since both the claimants in Webb and G v G were making a claim under the same statute and indeed under the same section of the same statute.

The crucial difference for Bodey J was that in Webb, the claimant “was seeking to establish and acquire rights in immovable property by way of constructive or resulting trust” [Bodey J’s emphasis] and that in G v G in contrast, “the existence of the trust is not in dispute … [W] already had proprietary rights in the London house as co-owner. What she is seeking to do is to enforce and give effect to those rights …”. W’s proprietary right existed because the London property was registered the joint names of H and W, and the law implied a statutory trust of land whenever land was conveyed into more than one name. In Webb, the property had been conveyed into S’s sole name, so the statutory implication did not arise.

W’s counsel put forward an argument that this reasoning took no account of the Prazic case. Unfortunately the Prazic case report does not make it absolutely clear in whose name the properties were owned, although the context appears to suggest strongly that H owned the properties in his sole name, and Bodey J took this view. The Judge also noted that there was no claim for an order for sale in Prazic, that the judgment made clear that W was seeking a declaration that she was an equal owner of the properties in equity, and that “by parity of reasoning with Webb v Webb, that would be a claim in personam”.

The practical, and sensible, result is that any application for an order for sale of an English property within the framework of an acknowledged and existing trust of land will fall within the exclusive jurisdiction of and English Court under Art. 22 of Brussels 1. However, an application for a declaration that a trust exists in relation to an English property will not fall within the exclusive jurisdiction, and may well be heard in a foreign jurisdiction, depending on the other circumstances of the case.

 

 

Form JO – Law Society Issues Practice Note

Mr Jaggers: No nonsense about joint ownership in his day.

Mr Jaggers: No nonsense about joint ownership in his day.

Following the publication by the Land Registry of Form JO, which I covered in my previous post here, the Law Society has now issued a practice note advising conveyancing solicitors on a number of matters to be taken into account when dealing with joint purchasers. It’s all good, sensible stuff and can be found here. Of course there are some problems that Form JO cannot solve, most notably the concealed or phantom purchaser and the “ambulatory trust” whose existence was confirmed in Kernott. But it’s a start.

Long time no write


Oh dear. Well, it’s true I have been very busy, but apologies for the long gap between posts. Many interesting things have happened while I’ve been elsewhere, although from my point of view the most interesting is probably the Jones v Kernott decision, about which I intend to write in the near future, but there are lots of other potentially important developments. I hope to return very shortly with more news and comment.

A Familiar Tale of Woe

charmkin family

By Merwing Little Dear from Flickr

I’ve just got back from a week away and will be rounding up some interesting developments over the past few days, but thought I would start by directing the attention to this very familiar tale from the Times. If you’ve come to this blog looking for information about your rights when living together, I urge you to read this story, which is very typical, to see what can go wrong. The moral, as always, is get proper legal advice. My professional legal readers will note the all too common aside that this couple congratulated themselves on holding on to their money for fixtures and fittings, and keeping it out of the clutches of the lawyers. Note also the womanly attitude, sadly very typical in my experience, that it isn’t romantic to discuss these things: Mills and Boon have a lot to answer for in the opinion of your humble servant. Still, fortunately for them, these two managed to sort it out in the end, which was just as well given the amount of equity in the property. On this topic, there is an interesting comment in the Times here to the effect that over the next few years, the nation will become divided into the equity-haves and equity-have-nots. It’s already happening, I think, with serious consequences for the unwary cohabitee. More on that anon …

Openness in the Family Courts: A Rare Voice

New openness in the family justice system is going to affect children cases more than finance ones, but although it’s not of direct relevance to this blog, I’m linking to this interesting article by Thomas McMahon on spiked about the lifting of reporting restrictions in the family courts. I confess I have quite a lot of sympathy for the views he expresses. It has done the family courts no favours to develop a culture of secrecy, and that is the way the public perceive it, whether that was the intention or not. On many occasions the spectre of confidentiality seems to be invoked to protect the children involved when in reality the real aim is to protect the adults. The welfare principle can sometimes seem to be more honoured in the breach than in the observance. My guess is that opening up the reporting of proceedings and in particular making the general public more aware of the welfare principle will make everyone involved in Children Act proceedings more careful about ensuring that they refer expressly to section 1. Anything that achieves that aim in my view has to be a good thing. Unfortunately many of the partisans of a more open family justice system want to move in the opposite direction. It’s particularly interesting that Mr McMahon is not a lone voice, but a pretty rare one. Are most people simply not bothered about the family justice system until it affects them personally?

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Welcome to Family Property. This blog is a resource for all lawyers and legal professionals based in England and Wales who advise their clients on issues involving family-owned property or money. The blog is written by Sheila Hamilton Macdonald, a barrister working in Nottingham (see the “About” page for more details about Sheila and her practice).