Zimina v Zimin [2017] EWCA Civ 1429

Case No B6/2016/3070[2017] EWCA Civ 1429
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
FAMILY DIVISION
Mrs Justice Roberts
FD14F00368
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 05/10/2017
Before
LORD JUSTICE PATTENLORD JUSTICE FLOYDLADY JUSTICE KING
Between
ZiminaRespondentZiminAppellant
Lewis Marks QC and Catherine Cowton (instructed by Stewarts Law LLP) for AppellantRichard Todd QC and Nicholas Yates (instructed by Vardags) for RespondentHearing Hearing dates: 14, 15 June 2017
Judgment
[1]This is an appeal against an order made by Mrs Justice Roberts on 13 July 2016. The respondent (wife’s) application had been made pursuant to the Matrimonial and Family Proceedings Act 1984 Part III: Financial Relief in England and Wales after Overseas Divorce etc. (MFPA 1984 or Part III). By her order the judge ordered the appellant (husband) to pay to the wife a lump sum of £1,148,480 (£1.14m) together with provision for the children of the marriage.[2]The issue before the court relates not to the quantum of the lump sum in itself, but as to whether it was appropriate in all the circumstances of the case for the judge to have made a lump sum order at all.[3]The case turns on the proper application of sections 16 – 18 MFPA 1984 against the backdrop of the decision of the Supreme Court in Agbaje v Agbaje [2010] 1 AC 628 (Agbaje). This case specifically relates to a situation where, following foreign divorce proceedings, a foreign consent order was made with a number of ancillary agreements, in circumstances where both parties had legal representation. The terms of the order having been implemented, five years later (there having been no change in her circumstances) the wife made an application under Part III seeking substantial additional provision for herself.[4]It is accepted by both the appellant and respondent that it is unusual for an order to be made under Part III where a foreign order is in place. The question for the judge, and now for this court, is whether this is one such case.

Background

[5]The husband and wife are Russian nationals who married in Moscow in 1997. There are three children of the marriage, now aged 20, 19 and 17 years old. In August 2004 the family moved to London where they lived in rented accommodation until August 2007 when a substantial property in Kensington (the Kensington house) was bought for the family as a home. By the time the property was ready for occupation the marriage had failed and the wife and children moved in without the husband.[6]The wife continues to live in the Kensington house with the two younger children of the family. The husband has remarried and has two young children, each of whom suffers from serious health problems. The husband now divides his time between homes in Cyprus and Bulgaria.[7]It is common ground that all the wealth in this case was created by the husband’s father, Dr Z. Dr Z’s personal wealth was said to be in the region of $182m. Dr Z is a highly respected Russian philanthropist whose money has been largely used, through the vehicle of a charitable foundation, D Foundation, for philanthropic purposes and, in particular, the development of science and education in Russia.[8]On 18 February 2005, Dr Z settled the BMT Trust, an irrevocable Bermudan settlement. Dr Z and the D Foundation were the two main beneficiaries, with provision, on Dr Z’s death, for the husband, his children and Dr Z’s wife (Mrs Z) to become members of a discretionary class. The BMT Trust bought and owned the Kensington house through a company, Kopt Development Ltd (“Kopt”). The BMT Trust also provided that, in the event of the husband’s death, the wife was to receive an annuity, payable monthly for the rest of her life, at a minimum rate of $20,000 per calendar month. Both the BMT Trustees, and Kopt were joined as parties to these proceedings but have played no part in the litigation although they have been involved from the side-lines.[9]In parallel with the arrangements through the BMT Trust, a further trust, the M Trust, was funded by Dr Z, but settled by Mrs Z. The husband and the wife were among the beneficiaries under this Trust and it was this Trust from which the family’s day-to-day living expenses were funded. The Trust was wound up during the course of 2008.

The Russian Proceedings

[10]On 1 September 2008, the marriage having broken down, immediately prior to the wife and children moving into the Kensington house, the husband sent an email to the wife (copied in to Dr Z) which confirmed the details of their separation. Having dealt with a number of personal matters the husband turned to what he described as the “material position” saying :
“2. However my relations with Ella develop and whatever changes may occur in Ella’s personal life, I believe it essential and I will apply my efforts in good faith to finance the basic education of the children at private schools (and subsequently at university), medical care for the children, the residence of the children at [the Kensington house], reasonable expenses for [the] children’s clothes, food and transport. Please note: Ella is an integral part of the children’s lives, so her accommodation is also guaranteed.”
[11]On 1 November 2008 the husband issued divorce and associated financial proceedings in Russia. On 28 November 2008 a draft settlement agreement provided for each party to retain the assets held in their own name, with the wife to have a Moscow apartment and the husband their Russian country house. The wife and the children were to live in the Kensington house and the husband was to pay rent to Kopt on their behalf. Although it was some months before a detailed agreement was reached, this proposal formed the basis of the ultimate order made by consent in the Russian courts.[12]Matters stalled for a number of months whilst the wife attempted, and ultimately failed, to bring proceedings in England. Meanwhile, Mr Harper, of Withers who represented the wife, wrote to the trustees of the M Trust indicating that they would be shortly making an application under Part III of the Matrimonial Family and Proceedings Act 1984. Mr Harper asked for a full set of the trust documents and accounts. On 26 February 2009 the trustee’s solicitors sent Withers a bible of trust documents for both the BMT Trust and the M Trust, (the latter of which had already been wound up), together with undertakings not to take any steps intentionally to prejudice the wife’s or children’s interests in the BMT Trust.[13]On 1 April 2009 the husband’s solicitors wrote to Withers saying that the husband would pay the rent on the Kensington property, together with child periodical payments and school fees. On that basis, they said that any application for leave to bring proceedings under the 1984 Act would be opposed. Two days later, on 3 April 2009 the Trust’s solicitors wrote to Withers saying that the trustee “was and is sympathetic” to the wife’s wish to remain in the Kensington property and offering reassurance that there was no intention to sell the property in the foreseeable future. A further letter of comfort on similar lines was sent on 8 June 2009.[14]At a hearing on 30 June 2009 the Russian judge expressed, in robust terms, his wish for the case to be settled, indicating that he was considering reporting the parties to the Russian tax authorities. It would seem that such a report would have been in the context of the husband being the alleged wrongdoer, and the wife a witness. In her first witness statement the wife said in relation to the negotiations leading up to the settlement:
“….(H) refused to participate in the renewed negotiations but once I told him that I would co-operate in the tax investigation which that judge threatened to instigate unless we reached an agreement, he produced an amended agreement, now in its third version. We signed the document…”
[15]It was this document of July 2009 which was incorporated into an order dated 21 August 2009. Pursuant to the order, the wife retained investments in her own name and a flat in Moscow to a total value of $10m out of total assets of $13.3m (this settlement, it is agreed between the parties, is equivalent to £5.1m when converted to sterling using the exchange rate applicable at that time.)[16]The same, or the following, day the wife’s tenancy in respect of the Kensington house was extended for a further three years. The Russian order contained a number of additional clauses agreed between the parties of a type often found in recitals to an English order. In particular: “To approve the amicable agreement concluded between B D Zimin and E V Zimina regarding the following: 1. Any property, including real property, personal property, stock, deposits, shares in capital assets of organizations, financial and other investments, property in trusts and funds in bank accounts acquired during the time of the marriage is the property of that Party in whose name the indicated property was registered. . . .10. The parties have concluded this agreement as obligatory for them in all countries of the world, wherever they may live, and wherever their property may be located.11. This agreement will comprehensively regulate all property and financial relationships between the parties.” . . .[17]The order and the circumstances leading up to the agreement as reflected in the order were the subject of extensive evidence and led to Roberts J making the following findings: i) That the wife was at all times represented by both English and Russian lawyers. ii) That following the Russian judge having questioned whether tax liabilities had been evaded through the various movements of funds which had funded the parties’ lifestyle, the wife had threatened the husband that she would give evidence against him if they did not reach agreement. iii) At the time the order was made, the wife was aware of the annuity provision in the BMT Trust and knew that her entitlement to the annuity would be preserved under the terms of the Russian agreement. The wife knew that the husband would be getting further “family money” in due course and that at that time the BMT Trust held assets worth some $40m. iv) That the husband had “fought hard” for the inclusion in the agreement of the expression that the agreement was to be “obligatory for them in all countries of the world wherever they may live, and wherever their property may be located.” [Judgment 1, para 105] v) That the wife knew that the order covered not only real property but trust property, in particular the BMT Trust. vi) The wife was fully aware that she was agreeing to the dismissal of her own claims for spousal maintenance. vii) The judge neither found (nor believed) that the wealth which was to flow into the husband’s hands subsequently was either deliberately delayed or suppressed (by agreement with Dr Z or otherwise) during the course of the Russian proceedings. viii) Whilst the wife did not have the benefit of the full and transparent disclosure exercise which would have been available had the proceedings taken place in England, the judge was “entirely satisfied” that the husband’s financial disclosure in relation to the Trust and the exchange of documents which took place prior to the conclusion of the English proceedings, was full. The husband, held the judge, “cannot be criticised for any non-disclosure in the context of the Russian proceedings insofar as that disclosure process is measured against his obligations in an English context”. ix) That the wife must be presumed to have relied, to an extent, on assurances given by the husband that she could remain at the Kensington house until the children were no longer minors, although no such agreement appeared in the agreement or order. x) That the agreement would satisfy the Radmacher fairness test.

Events leading up to the issue of the Part III proceedings

[18]Shortly after the finalisation of the Russian agreement, the assets of the BMT Trust were reorganised by Dr Z leaving only the two London properties it owned (including the Kensington house) in the trust. The husband’s position remained unchanged in that he was still only to join the discretionary class of beneficiaries upon the death of Dr Z.[19]In March 2012 (nearly three years after the Russian order and unbeknownst to the husband) the wife instructed Frances Lindley solicitors. Dissatisfied with them, she re-engaged Mark Harper of Withers on 25 November 2012. No contact was made at that time with the husband or the Trust’s solicitors. On 1 February 2013 the wife placed the Moscow apartment (which had been transferred to her as part of the settlement) on the open market for $8.6m.[20]On 1 March 2013 Withers contacted the Trust’s solicitors seeking details of any changes to the trust and seeking further undertakings in relation to the wife’s occupation of the house. Withers said that the wife sought a formal order in relation to child maintenance and school fees. The Trust’s solicitors replied with a letter of comfort, during which they commented that “Your client’s ancillary relief application has long since fallen away”. In a further letter from Withers to the Trust’s solicitors on 7 May 2013, Mr Harper said that unless the trustees could assist in formalising the wife’s secure accommodation at the Kensington house she would consider issuing proceedings. There was no suggestion in the correspondence that the wife now looked to the transfer of the Kensington property to her sole name and there was no further communication on the wife’s behalf from Withers for the next fourteen months.[21]Prompted by the severe ill health of his daughter (from his current marriage), who, it was thought, was likely to require an urgent heart transplant in the USA, the Z family altered their financial arrangements. Due to the significant tax and reporting requirements which would arise in respect of the family trust structure upon the husband’s relocation to the United States, a decision was made to distribute about $37m to the husband during July and November 2013. Most of this money was settled into 5 new trusts which continue to support the husband, his new family and the children of his marriage to the wife.[22]Further restructuring took place in January 2014 (now 4 years 5 months after the Russian order) when, still in ignorance of any planned application by the wife, the husband, following his father’s death (his father remaining the sole beneficiary during his lifetime), for the first time, became the sole discretionary beneficiary of the BMT Trust. In addition a new ‘BMT Legacy Trust’ was established. By his letter of wishes, Dr Z indicated a desire to make provision for the wife over and above the annuity and expressed his wish that $930,000 was to be paid to the wife on his death. This ‘wish’ was revoked in August 2014 when Dr Z became aware of the wife’s Part III application.[23]On 24 April 2014 the wife sold the Moscow apartment for a reduced price of $6.2m gross ($4.9m net) and a few weeks later, on 3 July 2014 she applied for permission to make a Part III MFPA 1984 application. Permission was granted by Singer J on 28 July 2014 and the wife’s substantive application was issued on 5 August 2014, five years after the Moscow order had been made.

The Part III proceedings: Stage I

[24]The Part III proceedings proceeded in conventional form and included the filing of questionnaires, the obtaining of expert evidence, a failed dispute resolution-type hearing and a number of directions hearings. On 15 December 2015 at the pre-trial review it became clear that the 7 day time estimate was inadequate and it was agreed by common accord that, rather than lose the fixture, the listing would be used to determine whether it would be appropriate, pursuant to section 16 MFPA 1984, for an order to be made under Part III. (Stage I)[25]On 27 January 2016, 6 weeks before the trial commenced, the wife filed a notice of change of solicitors from Withers to Messrs Vardags. This change marked a radical change of approach on the wife’s part who, on 19 February 2016, filed a twenty page statement seeking to justify the delay in issuing proceedings by reference, in minute detail, to the difficulties she had faced in relation to her own well-being and that of the children in the intervening period. Unsurprisingly, the husband’s solicitors objected and took particular issue with the admission in evidence of a psychological report which had been exhibited to the wife’s new statement without the leave of the court. The judge declined to admit the late medical evidence but accepted that “the intervening years have been difficult for the applicant”. She went on to say, Stage I, para 124:
“Nevertheless, I am concerned that the evidence which appears for the first time in her latest statement is an attempt to bolster her defence to the perceived deficiencies in the case she was previously advancing, particularly in relation to the aspect of delay. To that extent, I have formed the view that I have to treat with some caution those matters which she raises for the first time in terms of the weight I can properly attach to them.”
[26]The judge indicated at Stage I that it was the issue of delay which troubled her most. (Although she was of the view that she was entitled to take into account the fact that the applicant had been seeing a psychotherapist on a regular basis over a period of seventeen months, and also that after March 2012 the wife was actively engaged in seeking advice in relation to her claims). The judge concluded at the end of Stage I that:
“[156] - By the narrowest of margins, I have decided that the particular and exceptional circumstances of this case as I have set them out at considerable length in this judgment, even viewed against the backdrop of delay, make it appropriate for an English court to make an order for financial provision in the applicant’s favour. I am not in any sense seeking to prejudge the outcome of the second stage of this litigation but I make plain now in the clearest terms my view that the applicant’s overall target of the Kensington House with the second London trust apartment and a sum of £8 million is wildly ambitious and needs careful reconsideration. The factor of delay is bound to be reflected in any substantive order which the court might make pursuant to section 17 of the 1984 Act…”

The judge went on:

“…Any order made will be based on the applicant’s needs and those needs must, in my judgment, be restricted to reflect the delay which there has been in bringing her claim. The fact that she acknowledged that she knew she was surrendering her future claims for maintenance by her compromise of the Russian proceedings will inevitably find reflection to some degree in the outcome of Stage II. Whilst the court will be concerned to ensure that her future housing needs are met in an appropriate manner when, and if, her occupation of the Kensington House comes to an end, it will not and cannot allow Stage II of this litigation to present the applicant with a “second bite” following her inability to deal successfully with the property in the context of the Russian proceedings.”
[28]It follows therefore that when embarking on Stage II, the court was alert to the danger of the wife using the proceedings as an opportunity to have a ‘second bite of the cherry’, the judge had also given a clear indication to the wife that the delay in issuing proceedings would have an impact upon the outcome of the case. The judge allowed the case to proceed to Stage II ‘by the narrowest of margins’ only because she was concerned to ensure that the wife’s housing needs would be adequately met once her occupation of the Kensington house came to an end when the children had grown up. The Part III proceedings: Stage II Findings in relation to Delay

The Part III proceedings: Stage II

[29]The issue of delay was accordingly revisited at Stage II and is a matter of importance in the case. Mr Todd QC, who represents the wife, seeks to persuade this court that the only period of delay which should be taken into account is the period of time between the re-instruction of Mr Harper by the wife on 25 November 2012 and the issue of her application in July 2014, that is to say some nineteen months (rather than five years). The findings of the judge in my judgment undermine such a submission. She said at Stage II, [28]: “…The matter which I shall need to address in this judgment is how that delay can and should properly be reflected in any award made for the benefit of the applicant in a case advanced on the basis of needs simpliciter. I am unable to accept the submission made by Mr Todd and Mr Yates on behalf of the applicant that the delay in this case can somehow be air-brushed completely from the case on the basis of the explanations provided by their client. Those explanations and the details which she sought to graft onto her case in relation to undue pressure or duress came at a very late stage in the day (see paragraph 12 of my Stage I judgment). There was no complaint about pressure or duress in relation to the Russian agreement when Mr Harper resumed conduct of the case on her behalf in November 2013. The correspondence passing between solicitors at the time contains no reference to possible non-disclosure on the part of the respondent, nor does it advertise in any material respect the case which she now seeks to run in relation to her health or her psychological inability to proceed expeditiously with any extant financial claims she wished to pursue in this jurisdiction. Whilst I accept that this aspect of her case was touched upon at various points in her earlier statements, the full exposition in all its detail only came in the weeks leading up to the Stage I hearing after many months of on-going litigation and case management. In these circumstances, I keep well in mind – as I did during the Stage I hearing - the need to assess the weight which can properly be attached to the applicant’s case in relation to the reasons for the delay and the psychological pressures which she contends were operative during this period and preventing her from issuing her application.[30]The judge found that whilst the prospect of further litigation with the respondent was daunting and potentially costly, it was not an explanation for the degree of delay in the case. The judge was unimpressed by the late complaint that pressure or duress had led to the wife consenting to the agreement and order.[31]The judge, having observed that there was a “striking proximity” between the sale of the Russian property and the issue of proceedings, posed the question of whether or not, against the background of the already considerable delay on the wife’s part, the completion of the sale of the Russian property was (as the wife would have had the judge believe) merely coincidental and the proceedings were issued a few weeks later only because it was at precisely the point in time that the wife felt psychologically strong enough to contemplate further litigation.

The judge did not accept that to be the case and found that, Stage II, [52]:

“I am unable to accept that there was not at least an element of tactical delay in her procrastination and I agree with Mr Marks and Miss Cowton that such delay should fairly operate in a more conservative assessment of her future needs.”
[33]I do not accept the submission of Mr Todd that certain periods of time between the divorce and the issue of Part III proceedings can, in some way, be filleted out. As will be referred to further below, the statute specifically requires the court to have regard to “the length of time which has elapsed since the date of the divorce” (Section 16(2)(i)).In my judgment any delay in issuing Part III proceedings following the foreign divorce in question is relevant to a consideration by the court as to how it will regard the length of time which has elapsed since the date of the divorce. It is thereafter a matter of weight as to how the delay is to be regarded and the extent to which it impacts upon the wife’s application.[34]The judge found the late explanations for the delay in taking proceedings which had been “grafted onto her case” by the wife at a late stage to be unattractive, although she was prepared to accept that the wife had faced personal difficulties in the years following her divorce.[35]What was, in my judgment, particularly serious on the facts of this case was that for a period of three years there was no hint that the wife sought anything other than the security of occupation of the Kensington house during the children’s minority. There then followed, as the judge found, a further significant period of tactical delay, designed to enable the wife to put herself in a better position in the litigation before she finally issued Part III proceedings. Meanwhile, the husband and his family, confident that all claims by the wife had long since been resolved, blindly continued to arrange their affairs including the distribution of $37m out of the trusts to the husband; actions which the wife then relied upon in support of her claim to the Kensington property (£4.9m) and a lump sum for herself of £8m.

The Law

[36]The proceedings focused upon the proper application of Part III of MFPA 1984. Any consideration of the application of that Act necessarily goes hand in hand with the well-known Supreme Court decision, Agbaje, in which, through the medium of the judgment of Lord Collins of Mapesbury, guidance was given as to the proper approach to Part III applications.[37]The starting point must, as ever, be the statute. The relevant sections are s.13 and ss.16-18 MFPA 1984: 16 Duty of the court to consider whether England and Wales is appropriate venue for application.(1) 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. 17 Orders for financial provision and property adjustment. (1) Subject to section 20 below, on an application by a party to a marriage for an order for financial relief under this section, the court may— (a) make any one or more of the orders which it could make under Part II of the 1973 Act if a decree of divorce, a decree of nullity of marriage or a decree of judicial separation in respect of the marriage had been granted in England and Wales, that is to say - (i) any order mentioned in section 23(1) of the 1973 Act (financial provision orders); and (ii) any order mentioned in section 24(1) of that Act (property adjustment orders); and …. 18 Matters to which the court is to have regard in exercising its powers under s. 17. (1) In deciding whether to exercise its powers under section 17 above and, if so, in what manner the court shall act in accordance with this section. (2) The court shall have regard to all the circumstances of the case, first consideration being given to the welfare while a minor of any child of the family who has not attained the age of eighteen.(3) As regards the exercise of those powers in relation to a party to the marriage, the court shall in particular have regard to the matters mentioned in section 25(2)(a) to (h) of the 1973 Act and shall be under duties corresponding with those imposed by section 25A(1) and (2) of the 1973 Act where it decides to exercise under section 17 above powers corresponding with the powers referred to in those subsections.” (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. 17 Orders for financial provision and property adjustment. (1) Subject to section 20 below, on an application by a party to a marriage for an order for financial relief under this section, the court may— (a) make any one or more of the orders which it could make under Part II of the 1973 Act if a decree of divorce, a decree of nullity of marriage or a decree of judicial separation in respect of the marriage had been granted in England and Wales, that is to say - (i) any order mentioned in section 23(1) of the 1973 Act (financial provision orders); and (ii) any order mentioned in section 24(1) of that Act (property adjustment orders); and …. 18 Matters to which the court is to have regard in exercising its powers under s. 17. (1) In deciding whether to exercise its powers under section 17 above and, if so, in what manner the court shall act in accordance with this section. (2) The court shall have regard to all the circumstances of the case, first consideration being given to the welfare while a minor of any child of the family who has not attained the age of eighteen. (3) As regards the exercise of those powers in relation to a party to the marriage, the court shall in particular have regard to the matters mentioned in section 25(2)(a) to (h) of the 1973 Act and shall be under duties corresponding with those imposed by section 25A(1) and (2) of the 1973 Act where it decides to exercise under section 17 above powers corresponding with the powers referred to in those subsections.”[38]It can be seen therefore that there is a somewhat protracted route to obtaining an[39]Leave having been given under section 13, the breadth of the enquiry is evident from the wording of the statute which thereafter requires the court at each stage to take into account all the circumstances of the case.[40]In Agbaje Lord Collins sought to provide assistance to practitioners and the courts in relation to each of the three stages. No issue arises in the present case in respect of the section 13 MFPA 1984 filter stage.[41]Lord Collins considered the relevance of the s.16(2) factors that is to say these matters which go to the “duty of the court to consider whether England and Wales is the appropriate venue for application”. Lord Collins held that in the case before the court, the lower courts had been in error to the extent that they had treated section 16 itself as “determining the criteria by which the question whether the order for financial provision was to be made”. The question of what order is to be made he said depends upon the combined effect of ss.16, 17 and 18: “44 . . . By section 18(2) the court is to have regard to "all the circumstances of the case," and several of the factors in section 16(2) will plainly be relevant to the question of whether an order is to be made, and, if so, what[42]Lord Collins reverted to the role of “hardship” and “injustice” later in his judgment. At paragraph 59 he put it this way:
“59. . . . Part III contains no express reference to hardship, injustice or exceptionality. There has been a tendency in the Family Division and in the Court of Appeal to regard hardship as a condition for the exercise of the jurisdiction rather than as an important factor to be taken into account where it is present. There has been a similar tendency in the Court of Appeal to treat the element of exceptionality in the same way, by saying that the jurisdiction should be exercised only in exceptional circumstances: Holmes v Holmes [1989] Fam 47, 59; Hewitson v Hewitson [1995] Fam 100, 105. 60. It is true that at least one of the purposes of Part III is "to remit hardships which have been experienced in the past in the presence of a failure in a foreign jurisdiction to afford appropriate financial relief. But hardship is not a pre-condition of the exercise of the jurisdiction.”
[43]Lord Collins went on at paragraph 61 to say:
“61 . . . injustice is not a necessary pre-condition. Although they are not pre-conditions, both hardship and injustice will of course be relevant factors for the court to take into consideration under both section 16 and section 18.”
[44]Lord Collins went on to deprecate an approach whereby it would only be “appropriate” for an English court to interfere with financial relief to the “minimum extent, so as to remedy the injustice perceived to exist without intervention”. His Lordship identified the type of circumstances where an order would be appropriate, absent a hardship or injustice saying, at [64]:
“There is no statutory basis for this limitation (the minimum extent necessary), and it is contrary to principle. For example a talaq entitled to recognition may be granted abroad in a "big money" case when almost all relevant connecting factors are with England. In those circumstances there would be no reason not to apply English law so as to give the same provision for the wife as she would have obtained had there been divorce proceedings in England. There would be no need for any enquiry as to the minimum required to remedy the injustice. Nor, if the wife had independent means, would an enquiry into hardship be necessary or relevant.”
[45]Lord Collins went on to emphasise at [65] that:
“But equally it is not the intention of the legislation in England and Wales to allow a simple "top-up" of the foreign award so as to equate with an English award.”
And then at paragraph [70]:
“. . . 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.”
[46]Lord Collins thereafter turned to consider, in the well-known passages between [71] and [73], what he identified as the “proper approach” to a Part III application. Having highlighted the statement of principle [71] that the proper approach ‘simply depends upon the proper application’ of the statute he thereafter pulls together and rehearses matters dealt with in the main body of his judgment. Given that much turns on an interpretation of Lord Collins’ judgment, I propose to set out [71]-[73] in their entirety. “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.73. The amount of financial provision will depend on all the circumstances of the case and there is no rule that it should be the minimum amount required to overcome injustice. The following general principles should be applied. First, primary consideration must be given to the welfare of any children of the marriage. This can cut both ways as the children may be being supported by the foreign spouse. Second, it will never be appropriate to make an order which gives the claimant more than she or he would have been awarded had all proceedings taken place within this jurisdiction. Third, where possible the order should have the result that provision is made for the reasonable needs of each spouse. Subject to these principles, the court has a broad discretion. The reasons why it was appropriate for an order to be made in England are among the circumstances to be taken into account in deciding what order should be made. Where the English connections of the case are very strong there may be no reason why the application should not be treated as if it were made in purely English proceedings. The full procedure for granting ancillary relief after an English divorce does not apply in Part III cases. The conditions which can be attached to leave, together with the court's case management powers, can be used to define the issues and to limit the evidence to be filed, as was done by Munby J in this case. This enables the jurisdiction to be tailored to the needs of the individual case, so that the grant of leave does not inevitably trigger a full blown claim for all forms of ancillary relief.”[47]Whilst the proper application of the Agbaje principles is not always straight forward, it is clear for the purposes of the present case that: i) The legislative purpose is to alleviate the adverse consequence of no, or no adequate financial provision having been made by a foreign court in a situation where there are substantial connections with England. ii) The duties under section 16 and section 17 together impose two interrelated duties i.e. to consider whether “in all the circumstances of the case” England and Wales is an appropriate venue and, secondly, whether an order should be made “having regard to all the circumstances” including the matters in section 25(2)(a)-(h) of the Matrimonial Causes Act 1973. iii) Part III cannot be used to ‘top up’ foreign provision in order to make it equate to an English award; it follows that mere disparity will be insufficient to ‘trigger’ the application of Part III. iv) No element of exceptionality is required and neither injustice nor hardships are preconditions. The order need not be the minimum amount required to avoid injustice. v) In considering quantum the court has a broad discretion subject to three principles: a) Primary consideration is to be given to the needs of any children b) It is never appropriate to make an order which gives a claimant more than she would have been awarded had all the proceedings taken place within this jurisdiction c) Where possible the order should have the result that provision is made for the reasonable needs of each spouse

The issues raised by this appeal

[48]This much then is clear from the judgment of Lord Collins. This case has however thrown up other matters of interpretation which impact upon, in particular, the three matters set out at [73] of Lord Collins’ judgment and therefore upon the central issue in the case, namely was it appropriate for the judge to have made any order at all in the circumstances of this case.

Issue (i):Financial benefit

(i) :Financial benefit

[49]Section 16(2)(d) requires the court to take into account any ‘financial benefit received by the applicant or a child of the family’. Mr Todd QC on behalf of the wife, sought to limit that which should be included in an assessment of the financial benefit to that provided under the terms of the Russian order. He submits that as the Russian courts cannot deal with trusts, that the Russian order makes no provision for spousal or child maintenance, and does not provide for accommodation for the wife or child maintenance, it follows that the financial benefit is manifestly inadequate. It was therefore inevitable, he submits, that it would be appropriate for the court to exercise its jurisdiction under Part III to make a substantial order.[50]Mr Marks QC on behalf of the husband, for his part, argues that financial benefit means precisely that, and covers all forms of financial benefit received by the claimant spouse in whatever form.

Conclusion on issue (i)

[51]I have no hesitation in agreeing with Mr Marks. In my judgment, not only is the wording of the statute clear, but, given the many differing forms of provision made in jurisdictions all over the world, it would be quite impossible to get a true and fair picture of the provision made for a wife if was to be limited in such a way. The present case is one such example and Mr Marks helpfully itemised what he submits to have been the entire financial benefit provided to the wife 2009 in the following way: i) Under the Russian order the sole ownership of the unencumbered apartment in Moscow, worth at least $5m (later sold for $6.2m). ii) By operation of the law: the wife retained $5m in cash, received from trusts established by Dr Z, together with the indefeasible right to an annuity of at least $240,000 per annum for life, if she survived the husband. iii) By operation of an agreement, child periodical payments at the rate of £20,000 per annum each, together with school fees. iv) By operation of an agreement she retained the right to occupy, rent free, the Kensington house, a property belonging to Dr Z’s family trust through Kopt, during the minority of the children, (a period of about fourteen years at the date of the agreement).[52]One issue between the parties of particular importance at trial was whether the continued occupation of the Kensington house by the wife and children was, or was not, a financial benefit to be taken into account under s.16(2)(d), Mr Todd submitted that it was not and that therefore, absent proper provision for housing, the provision was, and is, inadequate.[53]Piecing together the judge’s findings in relation to the Kensington house she concluded that: i) Whilst never reduced to a formal agreement, or incorporated in a formal long-term tenancy, the husband gave the wife, on more than one occasion, assurances that she could remain at the Kensington house until the children were no longer minors. The wife, at the very least, was presumed to have relied upon the assurances. ii) The totality of the financial benefit provided for the wife in 2009 would have been likely to “survive a fairness health check”. That provision included the provision of secure housing during the children’s minority and a substantial capital sum and additional property in Russia to provide for her own income and long term housing needs. iii) It is the totality of the financial package as detailed by Mr Marks which had been agreed between the parties and thereafter implemented in the ensuing five years, which forms the financial benefit to be taken into consideration by the court under section 16(2) when deciding whether or not it is appropriate to make an order. The extent of the financial benefit received by an applicant in any case is a matter of fact to be determined by the judge.[54]It follows that consideration as to whether there was adequate provision at the date of the Russian order included, as submitted by Mr Marks, and found by the judge, the provision of the Kensington house for the wife and children during the children’s minority. It was on the basis of this, together with assets in the form of the Russian flat and investments amounting to a total of $10m, that the judge, at Stage I, found that the original agreement would be likely to survive a “fairness” health check, a reference to paragraph [75] of Radmacher (formerly Granatino) v Granatino [2010] UKSC 42; [2010] 2 FLR 1900 (Radmacher).[55]In the event that I am wrong in this respect and the arrangements in relation to the house were insufficiently formal to allow a court specifically to find it to have been a financial benefit under section 16, the continued occupation of the property by the wife from September 2008 onwards was a highly relevant feature to which the court was bound to attach considerable weight when considering all the circumstances of the case.[56]Whilst it was necessary for the judge to determine the position in relation to the Kensington house, the judge’s concern, and the reason for her having concluded that it was appropriate for an order to be made in England (and therefore her moving on to Stage II), was not whether or not the original provision gave the wife security for her continued occupation of the Kensington house during the children’s minority, but whether the provision met her needs for housing once the Kensington house was no longer available for her occupation.

Issue ii: assessment of adequacy of provision

[57]Section 16(2) provides for an order to be made only if “appropriate”. Paragraph 71 of Agbaje speaks of the legislative purpose being to alleviate the adverse consequences of “no or no adequate financial provision”. The practice has therefore developed (not challenged in the present case) that the court will have regard to the matters found in s.16(2) and, when considering the financial benefit the applicant or a child of the family has received or is likely to receive, (s.16(2)(d)), will consider whether that financial benefit does or does not amount to “adequate financial provision” as part of its consideration as to whether, ‘in all the circumstances of the case’, it is appropriate for an order to be made by a court in England and Wales.[58]Almost inevitably, given the significant improvement in the husband’s financial circumstances since the making of the order, a dispute has arisen as to the date upon which the adequacy of financial provision should be determined and as to how the husband’s change in circumstances should be regarded by the court. Mr Marks submits that adequacy of provision is to be judged solely at the date of the original agreement (thus excluding any consideration of the present means of the husband). At that time the package, submits Mr Marks was undoubtedly more than sufficient to meet her needs and the judge was satisfied that the provision would have satisfied the Radmacher ‘fairness test’. That being the case Mr Marks sayss, the provision made for the wife can only subsequently become inadequate if circumstances arise in relation to her, similar to those which would arise in applications made under the principles in Barder v Caluori [1988] AC 20, [1987] 2 FLR 480.[59]It would, Mr Marks continues, be wholly wrong to allow a wife to take advantage of a husband’s improved circumstances as a basis for a submission on her part that her settlement had been inadequate. To do so, Mr Marks says, would put a wife in Part III proceedings in a significantly better position than a wife following domestic proceedings and would not only be a ‘second bite of the cherry’ but would be in direct contravention of Lord Collins’ second principle found at [73] that “it will never be appropriate to make an order which gives the claimant more than he or she would have been awarded had all proceedings taken place within this jurisdiction”.[60]Mr Todd argues that the adequacy of the provision should be determined only as of the date of trial. This, he submits, means that the adequacy of that provision is determined by reference to the means of both parties at the date of the hearing and necessarily requires the court to take into account the significant improvement in the husband’s financial position since the making of the order. No doubt it is a reflection of this approach to her case that, at Stage I, the wife’s “target” (as it was described by the judge) was for an order which, if made, would have been larger than the total assets held by the parties at the date upon which the Russian order was made.[61]I disagree with these polar opposite submissions made respectively by Mr Marks and Mr Todd; each fails to take into account the statutory requirement to consider “all the circumstances of the case” found in both section 16 and section 18. It follows that, contrary to the submission of Mr Todd, the court will necessarily consider the adequacy of the provision as of the date upon which the Russian order was made. The judge was satisfied that it was adequate.[62]Ordinarily an application made under Part III will be sufficiently proximate to the making of the foreign divorce in question so that an assessment of the adequacy of the provision at the date at which it was made followed by a similar assessment conducted by reference to the trial date, would lead to the same outcome.[63]There will however be those rare cases where there is a significant delay between the divorce and the Part III proceedings. In those circumstances the wording of section 18 unequivocally requires the court to take into account all the circumstances as they are which necessarily includes those at the date of trial. It follows, contrary to the submission of Mr Marks, that a consideration of ‘all the circumstances of the case’ may also include an examination of the husband’s means as of the date of the hearing.[64]I say ‘may include an examination of the husband’s means at the date of trial’ because, as Lord Collins emphasised at [73] (see above), the full procedure for granting ancillary relief after an English divorce does not apply to a Part III application and the court can use its case management powers to ‘define issues’ and ‘limit the evidence to be filed’. It follows that the court may make orders limiting disclosure of the husband’s means, if appropriate on the facts of the case. Further, the husband’s means and the adequacy of the provision as assessed at trial will, in any event be but one part of the overall picture, which will be considered against the backdrop of the provision at the date of the divorce.[65]In the present case it may be thought that features of particular importance are not so much the husband’s present financial circumstances as: i) The form the financial benefit took and the circumstances leading up to it, in particular whether the provision was made pursuant to a binding agreement between the parties. ii) Any relevant change of circumstances of the wife since the making of the order iii) Any delay and the reasons for it.

Adequacy of financial provision in 2009

[66]This is not a case where no provision has been made for the wife following the foreign divorce. In this case the parties had engaged in detailed negotiations, each side having the benefit of lawyers, and in the case of the wife, both English and Russian lawyers which negotiations had led to a concluded agreement part of which had been reduced to an order.[67]In those circumstances in addition to carrying out an evaluation as to whether at the date of the order the financial benefit made available to the wife amounted to adequate provision, both the judge and the parties referred to the case of Radmacher thereby incorporating into that evaluation consideration of the fairness of the agreement and the public policy requirement to give effect to agreements freely entered into.[68]At paragraph [93] the judge said: [93] I have already recorded in my earlier judgment that, in the circumstances which prevailed at the time, it is difficult to see how the Russian order would have failed a basic “fairness” health check. It left her with liquid assets (or assets which could readily be realised) worth c.US$8.4 million net and the provision of a very generous annuity for life in the event of the respondent’s death. It was a guaranteed package and, save for the annuity which is being dealt with in the context of these proceedings, it has been implemented in full. There are no outstanding issues of enforcement.”[69]The so-called Radmacher test was formulated by Lord Phillips at paragraph [75] as follows:
“The court should give effect to a nuptial agreement that is freely entered into by each party with a full appreciation of its implications unless in the circumstances prevailing it would not be fair to hold the parties to their agreement.”
[70]Radmacher, was a case which was concerned with a pre-nuptial agreement, Lord Phillips however also discussed Edgar v Edgar [1983] All ER 887, 1981 WLR 1410, a case involving a separation agreement, saying at paragraph 37:
“Although separation agreements do not override the powers of the Court to grant ancillary relief, they have been held to carry considerable weight in relation to the exercise of the court's discretion when granting such relief.”
[71]Lord Phillips went on to quote Ormrod LJ’s seminal passage (taken from paragraph [38] in Edgar), in relation to the weight to be given to a separation agreement:
“To decide what weight should be given, in order to reach a just result, to a prior agreement not to claim a lump sum, regard must be had to the conduct of both parties, leading up to the prior agreement, and to their subsequent conduct, in consequence of it. It is not necessary in this connection to think in formal legal terms, such as misrepresentation or estoppel; all the circumstances as they affect each of two human beings must be considered in the complex relationship of marriage. So, the circumstances surrounding the making of the agreement are relevant. Undue pressure by one side, exploitation of a dominant position to secure an unreasonable advantage, inadequate knowledge, possibly bad legal advice, an important change of circumstances, unforeseen or overlooked at the time of making the agreement, are all relevant to the question of justice between the parties. Important too is the general proposition that formal agreements, properly and fairly arrived at with competent legal advice, should not be displaced unless there are good and substantial grounds for concluding that an injustice will be done by holding the parties to the terms of their agreement. There may well be other considerations which affect the justice of this case; the above list is not intended to be an exclusive catalogue.”
[72]Lord Phillips noted at [42]:
“The approach of the courts to separation agreements, ……, differed markedly from the approach to nuptial agreements that merely anticipated the possibility of separation or divorce and which were consequently considered to be void as contrary to public policy.”
[73]In my judgment there is therefore a qualitative difference between nuptial agreements made to cover the risk of future separation or divorce, and a separation agreement negotiated between the parties at a time when the marriage has come to an end. As Lord Phillips observed at [80]:
“Where the ante-nuptial agreement attempts to address the contingencies, unknown and often unforeseen, of the couple's future relationship there is more scope for what happens to them over the years to make it unfair to hold them to their agreement. The circumstances of the parties often change over time in ways or to an extent which either cannot be or simply was not envisaged. The longer the marriage has lasted, the more likely it is that this will be the case.”
[74]This case was not however an ante-nuptial agreement made whilst the marriage subsisted, but was a concluded agreement reached after the dissolution of the marriage and intended to be a final settlement bringing to an end the parties’ present and future financial claims, save in relation to their children.[75]In my judgment the court, when considering an application under Part III in such circumstances should, as part of their consideration of all the circumstances of the case, have well in mind the fact of the agreement and, in this context, not only the so called Radmacher ‘fairness test’ (if the judge chooses to put the fairness principle in those terms)but also Edgar which enshrines the principle that an agreement “should not be displaced unless there are good and substantial grounds for concluding that an injustice will be done by holding the parties to the terms of their agreement”.[76]The judge set out with care the submissions made by each of the parties in relation to Radmacher, but, with respect to the judge, she did not set out with precision her final conclusions in relation to Radmacher and how, if at all, her findings in this regard interleaved with her application of Part III to the facts of the case (although it will be recollected that the judge had been unimpressed with any suggestion by the wife that she had agreed to the order as a result of some sort of duress or pressure). There is, in particular, no consideration by the judge of the impact of her finding that the agreement was fair upon the application now made by the wife for further substantial provision.[77]Mr Todd further submitted that any consideration of whether or not foreign provision would satisfy the Radmacher “fairness test”, or some sort of Edgar v Edgar analysis, depends not only on the terms of the agreement and surrounding circumstances, but can only be made by reference to the terms of the order which would have been made had the matter proceeded in England and Wales.[78]Mr Todd accepted that in 2009 the wife had received significantly more than fifty per cent of the assets then available to the parties. Even so, he submitted, in support of his submission, had the proceedings been taking place in England or Wales, the inevitable result would have been that the wife’s application for a lump sum order for herself would have been adjourned. This would have been the outcome in domestic proceedings he said as whilst the husband was not a beneficiary under any of the trusts at the time the order was made, both parties knew that in due course, the husband would receive substantial additional sums from his father either directly or through the trusts. The judge was, Mr Todd submits consequently in error in having concluded that the original settlement satisfied the Radmacher fairness test.[79]This line of argument has led to each side going down the highways and byways of examination of the few reported domestic cases, where courts have felt it to be appropriate to adjourn a wife’s application for a lump sum. For my part, whilst I think it unlikely that an English court would have adjourned the wife’s application for a lump sum in the circumstances of this case, I do not find it helpful or necessary to analyse the authorities in relation to the same. With respect to Mr Todd, the question is not whether an English court would or would not have, in addition to the agreed provision for the wife, adjourned her application for a lump sum order for herself. That is to fall into the trap of judging the adequacy of the provision by reference solely to what order would have been made by an English court. Such an approach loses sight of both the purpose of the legislation and the guidance found in Agbaje, and in particular that it is not the intention of the legislation in England and Wales to allow a simple “top-up” of the foreign award so as to make it equate with an English award: see Agbaje [65], and [70].[80]Mr Todd floated, but did not actively pursue, an argument on the basis that the connection in this country was such that the court should simply have treated the case as in any English divorce proceedings. In my judgment, he was wise not to do so. Not only had there been no argument at first instance that this was other than a needs case considered against the backdrop of the provision that had already been made but, in any event, at the time of the agreement, the connection of this family to England was not of the extent and nature the Supreme Court had in mind in Agbaje when contemplating the possibility of a Part III order being made which was equal to that which would have been made in England following domestic proceedings.

Was the financial provision adequate at the date of the trial?

[81]Given that it had been conceded on behalf of the wife that her claim was limited to such figure as would meet her needs, any assessment of the continued adequacy of the financial benefit received by her could only be determined in the first instance by reference to those needs, assessed, as the judge had made clear, against the backdrop of delay.[82]One can well understand that, absent a formal long-term lease on the Kensington house, the wife, although acting on the assurances given by the husband, felt unable to feel wholly secure. This was reflected in the early letters from Mr Harper which were directed to formalising her occupancy, and not towards seeking substantial additional provision. During the intervening years the wife could have made an application by way of Part III, or made an application under Schedule 1 of the Children Act 1989, (which could have given her security in relation to the property in terms routinely made in Schedule 1 proceedings). The wife did neither. Rather, after a period of five years from the divorce, she sought payment of a capital sum of £8m and the transfer of the property to her, then worth £4.9m.[83]In my judgment the court could have concluded, when taking into account all the circumstances including that fact of the agreement, that, notwithstanding the delay and the finding that the agreement had been fair, the wife nevertheless needed and it was appropriate for her to be provided with, security of occupation of the Kensington house. In the event however the trustees had rapidly made up that deficit upon the Part III proceedings being issued in the form of a ‘rent free’ long term lease and, Mr Marks submits, in those circumstances the judge was wrong to have found it to be appropriate to make any further order.[84]The judge was not however concerned with the security of the Kensington house; that issue had been resolved at an early stage and she allowed the case to proceed to Stage II in order to consider whether the wife’s needs would be met when her occupation of the Kensington house came to an end. It was in that context that that the judge made a lump sum order, on the basis that whilst provision had been fair at the time of the agreement, the wife’s future needs now demanded the making of an additional lump sum.[85]In my judgment it was at this stage that the judge fell into error making, as she did, her order by reference to her finding that the residue of the provision made for her in 2009 was, as of the date of the trial, inadequate to meet the wife’s needs (as assessed by the judge). As a consequence, notwithstanding that the judge found there have to have been no change in the wife’s circumstances, she failed to consider whether the fact that the original order had been made by agreement, and the Radmacher test satisfied, should have impacted, or even been determinative, of the question of whether it was appropriate to make any order, regardless of whether the consequences were that the current assessed needs of the wife would not, or may not, be met.[86]Mr Marks submits that if the original provision was adequate then, if a wife under Part III is not to be in a better position than a wife following a domestic law determination, the court should only make an additional order in the same circumstances as those in which the English courts would allow a wife reopen a case following a local divorce, that is to say(i) in the sort of situation envisaged in Edgar, or(ii) where there has been fraud, misrepresentation or mistake or(iii) in the event of a change in the applicant’s circumstances under the principles in Barder v Caluori [1988] AC 20.[87]In Barder v Caluori there had been a consent order made and shortly afterwards the wife committed suicide. The husband sought permission to appeal out of time. The House of Lords held that he could saying that : “My Lords, the question whether leave to appeal out of time should be given on the ground that assumptions or estimates made at the time of the hearing of a cause or matter have been invalidated or falsified by subsequent events is a difficult one. The reason why the question is difficult is that it involves a conflict between two important legal principles and a decision as to which of them is to prevail over the other. The first principle is that it is in the public interest that there should be finality in litigation. The second principle is that justice requires cases to be decided, so far as practicable, on the true facts relating to them, and not on assumptions or estimates with regard to those facts which are conclusively shown by later events to have been erroneous.”(294) “A court may properly exercise its discretion to grant leave to appeal out of time from an order for financial provision or property transfer made after a divorce on the ground of new events, provided that certain conditions are satisfied. The first condition is that new events have occurred since the making of the order which invalidate the basis, or fundamental assumption, upon which the order was made, so that, if leave to appeal out of time were to be given, the appeal would be certain, or very likely, to succeed. The second condition is that the new events should have occurred within a relatively short time of the order having been made. While the length of time cannot be laid down precisely, I should regard it as extremely unlikely that it could be as much as a year, and that in most cases it will be no more than a few months. The third condition is that the application for leave to appeal out of time should be made reasonably promptly in the circumstances of the case. To these three conditions, which can be seen from the authorities as requiring to be satisfied, I would add a fourth, which it does not appear has needed to be considered so far, but which it may be necessary to consider in future cases. That fourth condition is that the grant of leave to appeal out of time should not prejudice third parties who have acquired, in good faith and for valuable consideration, interests in property which is the subject matter of the relevant order. (p295)[88]Coleridge J (as he then was) took much the same approach as that advocated by Mr Marks in his decision in M v W (App after NZ Financial Agreement) [2015] 1 FLR 46 where he said:
“[50] Accordingly the wife is forced back on to the simple point that she is now in straitened financial circumstances. It is at this point that she has to confront head on the ‘second bite of the cherry' argument. However much sympathy I have with the wife, to allow her to proceed in these circumstances would put her in a very much better position than an English wife in comparable circumstances. If a final order had been made in this jurisdiction along the lines of the order made in New Zealand, it would be incapable of being undermined, absent Barder-type factors, simply because a wife had spent her share and needed more. [51] Having considered the competing arguments carefully I find myself unable to see, as a matter of fairness, how it can possibly be justified or right to allow this wife to launch now a second full scale inquiry into the husband's circumstances with a view to extracting further funds from him and with all the attendant costs.”
[89]In my view, reliance on the principles in Barder cannot be taken too far. Barder applies to divorce proceedings which have concluded in their entirety with no further litigation or provision anticipated, intended or available to either party. The situation is rather different in a Part III claim where the object of the statute is to give the court jurisdiction to give a party financial provision over and above that which they have received (or not) following a foreign divorce.[90]Notwithstanding that note of caution, the analogy remains of assistance and the Barder principles have a place when considering ‘all the circumstances of the case’ in Part III proceedingsand the domestic law in relation to agreements provides a valuable cross check.[91]Where the financial provision agreed and implemented between the parties following a foreign divorce, was(i) adequate at the time agreement was reached and(ii) could be said to have satisfied the Radmacher fairness test and the Edgar principles,then a court will scrutinise an application for further provision with care and will hesitate before making an order under Part III in circumstances where there have been no change in the applicant’s circumstances which, had the proceedings been conducted in England, would have satisfied the Barder v Caluori conditions. Naturally there may be exceptions and this case may itself have been one had it been necessary for the court to have made an order to protect the wife and children’s occupation rights in the Kensington house.

Issue (iii): Delay

[92]One of the reasons that delay is iniquitous in Part III cases is because life by its very nature does not stand still. As a consequence, where matters come to court many years after they should or could have done, the judge is faced with the dilemma as to how to manage the fact that inevitably circumstances have changed for both parties and that great unfairness can be caused, and justifiable resentment felt if, years after a spouse believed that their financial relationship was at an end, a judge conducts a fresh evaluation of the recipient spouse’s needs. It is for this reason that in relation to an application to reopen a case on the basis of a change in circumstances, the second of the Barder conditions provides that ‘the new events should have occurred within a relatively short time of the order having been made’ a matter of months up to 12 months is prescribed as an appropriate time scale.[93]How then is delay or, to use the wording of the statute: ‘the length of time which has elapsed since the date of the divorce,’ to be factored in? For help in this regard I turn to Vince v Wyatt [2015] 2 All ER 755 (a domestic case it should be remembered, where no provision whatsoever had been made for the wife and where there had been a delay of over 30 years). At para [32] Lord Wilson referred to “a prominent strain of public policy hostile to forensic delay”. At [33] Lord Wilson considered what factors might lead a wife to success even after a delay of decades: “[33] Confronted by the difficulties identified at (a) to (f) in paras 30 and 31 above, what might the wife assert so as to carry her application forward to possible success? It is, standing alone, insufficient that the husband is now so wealthy that (as has readily been agreed) he can meet whatever award, if any, might reasonably be made in her favour and there is no need for any exploration of his financial circumstances. But the wife asserts needs, both for a better home for herself and her family and, in the light of the severe limitations on her earning capacity, for a fund out of which to maintain herself for the rest of her life. These, with questionable forensic wisdom, she quantifies at £0.55m for the home and £1.35m for the fund, and thus at a total of £1.9m. Even at this stage one can say that, in the light of the negatives, an award approaching that size is out of the question. It is a dangerous fallacy, albeit currently propounded by those who favour reform along the lines of the Divorce (Financial Provision) Bill currently before the House of Lords, that the current law always requires rich men to meet the reasonable needs of their ex-wives. As Thorpe LJ said in North v North [2007] EWCA Civ 760, [2008] 1 FLR 158, at para 32, "… it does not follow that the respondent is inevitably responsible financially for any established needs… [h]e is not an insurer against all hazards…" In order to sustain a case of need, at any rate if made after many years of separation, a wife must show not only that the need exists but that it has been generated by her relationship with her husband: see Miller v Miller, McFarlane v McFarlane [2006] UKHL 24, [2006] 2 AC 618, para 138 (Lady Hale).”[94]In Vince v Wyatt the aspect which led to her claim proceeding many years after the date of separation was not on the basis of need (notwithstanding the fact that she was in parlous financial circumstances). Lord Wilson said “It is not at this stage clear to me that the wife will be able to sustain her claim on the basis of need” [33] but rather she was allowed to proceed with her application in reliance upon her contribution in having cared for the two children of the marriage without any financial contribution to her household from the husband over many years.

Conclusion on issue (iii): Delay

[95]In my judgment the court can in its discretion conclude that it is inappropriate to make an order where there has been a substantial delay notwithstanding that on an objective assessment the applicant has unmet needs. Where however at the date of trial, an outstanding need has been demonstrated to have been generated for the wife by virtue of her relationship with her former husband then, in my judgment, the court may, if it concludes it to be appropriate, make an order in favour of the wife having taken into account all the circumstances including the length of time since the divorce and the reasons for delay in making the application. Mr Todd did not suggest that the judge had been wrong in deciding that ‘the manner in which the element of delay should be reflected in any final award is by the application of a much more conservative assessment of her current and future needs’: [Stage II: 102] and no specific submissions were made by either party in this regard.[96]The judge had decided to proceed to Stage II ‘by the narrowest of margins’ because she was concerned as to whether the provision for accommodation for the wife once the children were grown up and she had left the Kensington house was or was not adequate. For my part, (ignoring for the moment the public policy implication in relation to the agreement) given the delay and the finding that the original financial benefit met the Radmacher fairness test, I am satisfied that it would have been within the discretion of the judge to have held it to be inappropriate to make a further order and to have dismissed the application. However the judge had at the end of Stage I, only an incomplete picture, she had not made her finding of tactical delay and she had not carried out her assessment of the wife’s current needs. As a consequence the judge was in my judgment entitled to allow the matter to proceed to Stage II.[97]The question therefore is whether the judge was in error in making an order at the conclusion of Stage II.

Stage II: The Outcome

[98]The judge began her judgment by observing that much of the same ground had inevitably been covered at both Stage I and Stage II. The judge expressed the view that because of the interrelationship between the various sections of the MFPA 1984 both limbs of an application should be considered at a single hearing and split hearings should be avoided. I agree. The trial took its two stage course as a result of the best intentions on the part of the judge and the parties. It simply did not work from either a legal or case management point of view and in my judgment, leave having been given to bring proceedings pursuant to section 13, the question of whether it is appropriate thereafter to make an order and, if so, the quantum of any order should be determined at one composite hearing.[99]By the time Stage II came on for trial, the BMT Trust had made an open offer to buy out the wife’s prospective annuity for £1m, an offer she wished to accept. At the date of the trial the wife therefore had an asset base (before costs) of £4.68m (£5.68m after payment to her of the capitalised annuity). The husband for his part had £32.9m of which £7.35m was held in trusts for the benefit of his current wife and their children. Unhappily however, each side had by now incurred costs of over £1m.[100]The husband accepted for the purposes of the trial that he had sufficient funds to meet any order the court might make. The wife now accepted that any award would be on a ‘needs’ basis. The wife’s open position at the start of the Stage II hearing, whilst significantly less than that put forward on her behalf at the conclusion of Stage I, remained substantial: a package worth £9.72m (part of which was to be represented by the transfer of the Kensington house or a lump sum of £4.9m, the current value of the property).[101]The judge decided that the wife had no need of the Kensington house once the children had grown up and therefore, on the basis that the Kensington house would be available to the wife and children as a family home for the next six years, she was not prepared to extract the property from the BMT Trust, even if she could properly have done so. She went on to say:
“[127] First and foremost, the provenance of the wealth in this case is an important factor. So, too, are the applicant’s contributions to the welfare of the family and I accept that these have been an important and valuable contribution from her side. Nevertheless, the existence of the Russian agreement and the implementation of the terms of the subsequent Russian order, looked at in the context of the significant delay in this case – delay which was not the responsibility of the respondent who has now had to meet financial claims many years after believing they had been extinguished – all militate against an award which includes provision for housing which I have found to be in excess of her needs beyond 2022.”
[102]The judge concluded that the wife’s needs would be met by a total housing fund of £2.5m together with an income fund of £3.333m. The wife’s total assessed needs were therefore £5.83m together with the use of the Kensington house for the further 6 years, (on the basis that she had relinquished her annuity). After payment of her costs the wife was left with a shortfall of £1.14m in order to meet her assessed needs.[103]For the purpose of the appeal, Mr Marks put the original payment to the wife into context by applying the House Price Index and the RPI to the up to date figures and thereafter reverse engineering them in order to provide a comparison of the actual value of the amount awarded in 2009 measured against the wife’s assessed needs in 2016. By this method the court was able to see that the housing fund necessary to buy a property now costing £2.5m gross would, in 2009, have been £1.42m and the appropriate Duxbury calculation (taking into account rental income) would have produced a lump sum of £2.8m as opposed to £3.3m for the wife.[104]By this route Mr Marks had therefore demonstrated that in 2009, the wife’s needs (as assessed by the judge in 2016) would have required her to receive £4.22m (£1.42m + £2.8m) as against the £5.1m she in fact received. The wife had in addition, the contingent benefit of the annuity whereas the judge’s contemporary assessment of needs at £5.83m is inclusive of the annuity.[105]These figures were produced late in the day and whilst Mr Todd, understandably in those circumstances, did not accept them without reservation, he did not dispute the general picture they demonstrate. What they show is that on any view the financial benefit received by the wife in 2009 more than met her long term needs and further, that had the wife not commenced this litigation and incurred costs of over £1m, she would have had sufficient funds to meet her needs both now and after she leaves the Kensington house.[106]This wife’s needs were generated not by the husband who had adequately provided for her in 2009, but by the wife’s decision to embark upon the litigation as a means to undermine two fundamental aspects of the original agreement namely: i) That rather than having the occupation of the Kensington house for the duration of the children’s childhood she should now have the house transferred to her; and ii) Notwithstanding that she had knowingly agreed to the dismissal of any claims for spousal maintenance, she now sought a substantial lump sum designed to produce an income significantly greater than that which would have been produced pursuant to the agreement.[107]What is particularly regrettable is that when the wife first re-engaged Withers, what she sought was the formalising of the arrangements by which she and the children live in the Kensington house. The trustees were quick to offer that assurance in the form of a 7 year lease with the husband agreeing to pay all the rent in advance. The trustees also offered £1m as a capitalisation payment for her annuity. Notwithstanding that offer, the wife continued the proceedings. At the end of Stage I the judge told the wife unequivocally that her aspirations were exorbitant and urged the parties to negotiate before further costs were incurred, all to no avail as ultimately the wife spent £1.3m + $398,000 in order to get obtain an award of £1.14m.[108]At first blush therefore it is hard to see on what basis it would now have been appropriate to award the wife any additional sum. The judge was however now faced with a shortfall between the assets held by the wife and her assessed needs, albeit created entirely as a consequence of the costs of the litigation. On that basis the judge made the lump sum order in the wife’s favour of £1.14m. At the conclusion of her judgment, the judge said that since she had made her award on the basis of the wife’s needs, she hoped that there would be no applications by the husband in relation to costs. She hoped that “the parties would now draw a line under these proceedings which have already occupied too much of their and the court’s time”.[109]This was however a vain hope. The husband sought and was granted permission to appeal the making of the lump sum order and on 23 December 2016 the wife filed a Respondent’s Notice out of time. By the Notice she seeks the variation of the BMT trust holding the Kensington house to transfer the property to her or, alternatively that the husband be ordered to pay a lump sum of equal value to the wife.[110]In the event, whilst not specifically withdrawing his proposed cross appeal, Mr Todd did not actively pursue the same. In his skeleton argument he referred to his cross appeal as being “entirely reactive” with his primary contention being that the judge’s order should not be revisited. In the event that the husband’s appeal is dismissed he would not he said, be pursuing his appeal on behalf of the wife.

Conclusion

[111]As already identified, the question is whether the judge erred in making the lump sum order in favour of the wife. In my judgment she did.[112]Ultimately the judge decided the case upon her assessment of the wife’s future needs, although assessed conservatively to reflect the egregious and, in part, tactical delay in issuing proceedings on the part of the wife.[113]In my judgment the judge fell into error notwithstanding that she had tried the case with the utmost care and had produced detailed and conscientious judgments. Although the judge restricted the wife’s long term needs to reflect the delay in bringing the proceedings, in my judgment she thereafter failed to stand back and factor that need into all the other circumstances of the case in respect of which she had, within her two substantial judgments, made a number of important findings. Had she done so prior to reaching a decision as to whether in all the circumstances it was appropriate to make an order, the judge would have put together, what are to my mind, a number of important features which in my judgment collectively militate against the making of an[114]In my judgment, following an evaluation of all the relevant factors including the wife’s needs and the matters set out above, the proper conclusion should have been that it was not appropriate to make an order under Part III. In reaching that decision, I have had in mind the findings properly made by the judge in relation to the wife’s long term and continuing contribution in respect of her care of the children and also that, as a consequence of the order I propose to make (if my Lords agree) the wife will have to modify her standard of living in the long term. Even having borne these matters in mind I am satisfied that the appeal should be allowed and the order for a lump sum payment by the husband to the wife be set aside.[115]I agree.[116]I also agree.

order

i) Section 13 (not set out above) requires the leave of the court to be obtained prior to an application being made. ii) The court has to consider, pursuant to s.16, whether in all the circumstances it is appropriate for an order to be made. If England and Wales is not the appropriate venue, the application should be dismissed. iii) If the court concludes that it is appropriate to make an order it may move on to make any of the orders which would be available to the court under s.23(1) of the Matrimonial Causes Act 1973 (that is to say, following a decree granted in England or Wales) having had regard to all the circumstances of the case and in particular those matters set out in section 25(2) (a)-(f) of the Matrimonial Causes Act 1973. order: for example, the financial benefit which the applicant has received; or whether the applicant has failed to take advantage of a right under the foreign law to claim financial relief. So also because the list in section 16(2) is not exhaustive ("The court shall in particular have regard …"), matters which are not expressly referred to in section 16(2), such as hardship or injustice, may be taken into account for the purpose of determining whether it is appropriate that the English court should make an order, just as they can be taken into account under section 18.” order: a) That the provision was made by agreement, an agreement which was not only Radmaher fair but which would have withstood the Edgar test. The judge did not consider whether in those circumstances it was right for the court to go behind the public policy principle that there should, if at all possible be finality in litigation and that agreements freely reached should be upheld (particularly given her findings about delay). b) There had been no change in the wife’s circumstances whether of a Barder nature or otherwise. This application could properly be regarded as a wife seeking a ‘second bite of the cherry’. c) The delay with the serious finding that it had in part been tactical. d) In Vince v Wyatt it was held that “In order to sustain a case of need, at any rate if made after many years of separation, a wife must show not only that the need exists but that it has been generated by her relationship with her husband”. e) That it was hard, if not impossible for the wife to advance a case that she had, or would, suffer injustice or hardship absent the making of an order. In the light of Agbaje, such a finding would not inevitably have led to the dismissal of her application even so, the absence of hardship or injustice must still be an important consideration for a judge when considering whether ‘in all the circumstances’ an order should be made. f) That the financial benefit provided by the husband was adequate in 2009 and remained adequate. The order made by the judge in effect amounted to no more than a contribution by the husband to the wife’s costs of the litigation.

Cited in 13 later judgments

and 4 more of the most senior