04 April 2014

Injunctions in Matrimonial Matters

Michael Gouriet
Partner | UK

The Court of Appeal has dismissed a wife's appeal against an anti-suit injunction preventing her from bringing further proceedings abroad following a divorce and financial settlement in England. Michael Gouriet and Natalie O'Shea of Withers review the court's approach to anti-suit injunctions and also consider what the case demonstrates about injunctions under section 37 of the Matrimonial Causes Act 1973. Ahmed & Anor v Mustafa [2014] EWCA Civ 277

How did the court approach the issue of the anti-suit injunction in this case?

The case concerned a wife who had taken a full part in contested financial provision proceedings on divorce in England, resulting in a comprehensive determination of all financial issues between the parties. She then proceeded to pursue a fresh application for financial provision in a foreign jurisdiction (the Turkish Republic of Northern Cyprus ‘TRNC') before decree absolute was pronounced in England.

Counsel for the husband argued that it would be unconscionable to allow a wife who had petitioned for divorce in England, applied for financial provision, contested the process at first instance, attempted to re-open the matter before the Court of Appeal and breached her undertaking not to pursue proceedings in TRNC, pending a final order by pursuing fresh claims in TRNC.

Counsel for the appellant wife argued that the circumstances fell well short of being ‘unconscionable', stating that Part III of the Matrimonial and Family Proceedings Act 1984 provides for the very same application to be made in the English court following a financial provision order having been made abroad. He went on to suggest that the endorsement given by the Supreme Court to the jurisdiction under that statute (in the case of Agbaje v Agbaje [2010] UKSC 13) was sufficient to distinguish financial remedy cases from other types of cases where the English court must recognise foreign judgments as being determinative on principles of res judicata. It was not unconscionable under international law.

The Court of Appeal held that the subject matter of the proceedings did not render an attempt at foreign litigation ‘unconscionable'. Indeed, Agbage established that such a follow-on jurisdiction is internationally acceptable. Whether such proceedings were unconscionable would turn on the facts of each and every case. Here, the trial judge had found that the various strategies adopted by the former wife were sufficiently unconscionable to warrant the injunction being granted and the Court of Appeal held he was right so to do. The injunction was proportionate and necessary when seen in the light of the wife's conduct.

What does this tell us about the limitations of anti-suit injunctions?

The court was not faced with any controversial arguments concerning the law relating to anti-suit injunctions.  Anti-suit injunctions can be used to enforce a right of party A not to be sued in a foreign jurisdiction by party B. An injunction may also be obtained in order to prevent party B from re-litigating in a foreign jurisdiction matters which are res judicata (ie ‘a matter already judged') between the parties by reason of an English judgment, on the basis that it would be unconscionable.

The Court of Appeal clarified the following:

  • The High Court has jurisdiction to restrain a litigant, in personam, from re-litigating matters in a foreign jurisdiction where it is unconscionable to do so.
  • This does not render all attempts at foreign re-litigation unconscionable: the exercise is case-specific.
  • Breach of an undertaking not to pursue proceedings in a foreign court is neither a necessary jurisdictional requirement for an anti-suit injunction, nor an automatic ground for granting one.

What does this case tell us about the operation of the Matrimonial Causes Act 1973, s37?

As a consequence of the financial order, the husband was ordered to transfer the ownership of a property in England to the wife. Five weeks following the transfer, the wife transferred the property by way of gift to her daughter. The judge granted an injunction under s37(2)(c) setting aside this transfer and made an order under s37(2)(a) restraining her from dealing with the property thereafter. This order was set aside by the Court of Appeal.

In order to come within MCA 1973, s37(2), which applies where an order has already been obtained for financial relief, the applicant must show that the other party has made a reviewable disposition with the intention ‘of defeating the claim for financial relief'.  Such provisions cannot apply where the court has made a final order in financial relief proceedings and provided for the transfer of the relevant property to the other party even where the other party has then gone on to dispose of it. The disposition in this case was made in consequence of an order, rather than in some manner which would defeat the enforcement of the order or defeat the applicant's claim.

How did the court deal with deemed claims? Any best practice tips?

Orders were made by the first instance judge anticipating and dismissing the wife's future applications to re-open or set aside the original financial order. These orders were set aside by the Court of Appeal on the basis that the wife was not present, had not issued such an application but had only alluded to husband's alleged lack of disclosure in previous hearings.

Best practice tips:

  • Do not issue or seek or allow the judge to make ‘otiose' orders.
  • As the Court of Appeal suggested, a more appropriate means of achieving this end would be to include a paragraph in a final order providing: ‘Any application for relief based on an alleged failure of the respondent to make full and frank disclosure be made by notice under the Family Procedure Rules 2010, Part 9 and supported by evidence'.

What are the broader lessons to be taken from this case?

Anti-suit injunctions are rare. However, they can be sought and imposed, if the facts of the case allow, in order to dissuade parties from re-litigating proceedings in a foreign jurisdiction when it would be unconscionable for him/her to be permitted so to do. They also send an important message to overseas courts that the English Court can take a serious and adverse view of a party's conduct in seeking to re-open matters upon which it has already adjudicated. _ This article was first published on Lexis®PSL Family on 27 March 2014._

Michael Gouriet Partner | London

Category: Blog