G v G: A TLATA Jurisdiction Dispute

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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.