104: Financial claims and divorce proceedings: Is death final?
That may be a glib question but it is not without significance as explained below.
For many years it has been assumed that, if one party to a marriage dies whilst divorce proceedings are ongoing, any financial claims arising out of the marriage must come to an end. Some existing orders, for example if arrears of maintenance have accumulated under an interim order, may be enforceable against the deceased’s estate but the ongoing, undetermined claims, cease. If the deceased died domiciled within England and Wales and their will fails to make ‘reasonable financial provision’ for the other spouse a fresh claim may be possible but to a large extent that puts the applicant back to square one. Moreover, no claim may be possible if the deceased was resident in England but not actually domiciled here.
Mr Justice Mostyn has recently reviewed the law on this area in Hasan v Ul Hasan (Deceased) & Anor. Whilst determining that he was bound by an earlier decision it is apparent that he was somewhat uncomfortable with that outcome and he gave leave for an appeal to proceed to the Supreme Court.
This is relevant in an international context because the English Court has the ability, in certain circumstances, to make financial awards following a foreign divorce. That may come as a surprise to some who may have thought that, if the divorce was granted elsewhere, and possibly financial matters resolved in that country, it was no business of the English family court to interfere after the event. These are often called ‘Part III Claims’.
There are various matters that the court has to consider when deciding whether or not to accede to a Part III Claim not least the court has to consider ‘whether England and Wales is the appropriate venue for the application’. So there needs to be a connection with England and Wales. In addition the English Court does not presume to simply review any foreign order and replace it with its own view of the right order. The intention behind the legislation is not to allow a simple top-up of the foreign award so as to equate with an English award. Nonetheless, the types of financial orders that can be made on Part III Claims are significant and over the years some very substantial awards have been made. Juffali v Juffali was a truly exceptional case involving a family with enormous wealth but there Mrs Juffali was awarded in excess of £50 million. In MA v SK the wife was awarded the equity in two properties, one in London and one in Cannes, to meet an assessed shortfall in her needs of some £8.8 million.
Hasan v Ul Hasan involved a Part III Claim. The parties were married in Pakistan in 1981, separated in 2006, and the husband obtained a divorce in Pakistan in 2012. The wife commenced her Part III Claim in August 2017 however the husband died in January 2021 aged 81. The ‘core question’ which the judge had to grapple with in June 2021 was whether the Part III Claim survived the husband’s death. As indicated above, Mostyn J found that the answer to that question was ‘no’. A Court of Appeal decision dating back to as long ago as 1957 (Sugden v Sugden), which was binding on the judge, meant that the wife could not continue with her undetermined claim against her husband after his death. However, the judge noted that in other (strictly limited) circumstances it was possible for the court to set aside a financial order made within divorce proceedings after the death of one of the parties to the marriage and then order a full rehearing. He therefore concluded that there was a clash of authorities which was ‘illogical, arbitrary and capable of meting out great injustice’. As a result there was a point of general public importance involved which warranted a leap frog application to the Supreme Court. It will be interesting to see if that is pursued and, if it is, what the outcome is.