Presentation on theme: "Matrimonial Property 1 Introduction 2 Assignment Where There is no Ante-nuptial Contract (a) Movables (b) Immovables 3 Assignment Where There is an Ante-nuptial."— Presentation transcript:
Matrimonial Property 1 Introduction 2 Assignment Where There is no Ante-nuptial Contract (a) Movables (b) Immovables 3 Assignment Where There is an Ante-nuptial Contract (a) The general rule (b) Capacity (c) Formal validity (d) Essential validity 4 Property Rights Arising from Other Adult Relationships (a) Civil Partnership Act 2004 (b) Cohabitation 5 European Proposals for Reform
Introduction The problem that confronts us in this chapter is how to determine what system of law regulates the rights of a husband and wife in the movable and immovable property which either of them may possess at the time of marriage or may acquire afterwards. Important consequences may ensue depending on which law is chosen. For instance, the result of choosing one particular legal system may be that the property of the wife passes entirely to the husband, as was substantially the case in England prior to Again, if an Englishwoman marries a Belgian and Belgian law is regarded as the governing system, it may be that the parties become subject to "community of goods" under which everything that belongs to either spouse at the time of marriage or that is acquired by either afterwards is them jointly. They become joint co-owners of everything by the mere fact of marriage. In deterermining the choice of law rules for identifying the appropriate matrimonial property regime, it will be necessary to look separately at two types of case-first where the parties have not made an ante-nuptial contract and, secondly, where there is such a contract.
Assignment Where There Is No Ante-nuptial Contract (a) Movables (i) Application of matrimonial domicile The primary rule, long-prevailing, was that the effect of marriage on the proprietary rights of the parties in movables should be determined by the law of the husband's domicile at the time of the marriage. In the words of LINDLEY MR: "It is not necessary to cite authorities to show that it is now settled that, according to international law as understood and administered in England, the effect of marriage on the movable property of spouses depends (in the absence of any contract) on the domicile of the husband in the English sense.” Whilst acceptable against the legal background of the unity of domicile principle, it is highly doubtful that the rule in favour of application of the law of the husband's domicile is reasonable in light of the prohibition upon discrimination on the grounds of sex-contained in the Article 14 of the European Convention on Human Rights. Since 1974 a has been capable of acquiring a domicile independent of her husband.
One effect of this is that it is no longer the case that the law of the husband's domicile ought automatically to govern the spouses' rights to movable property. Instead, as a general presumption, the Jaw of the matrimonial domicile ought to apply. The law of the matrimonial domicile should be ascertained thus: in cases where the husband and wife are of the same domicile at the time of the marriage, the law of the common domicile should apply; and in cases where the parties are not of the same domicile at the time of the marriage, the law of the matrimonial domicile should be that of "the country with which the parties and the marriage have the closest connection, equal weight being given to connections with each party". Equal weight, however, should not necessarily be given to each and every connection; the test is a qualitative one, to ascertain the "centre of gravity“ of the marriage.
South African case, Frankel's Estate v The Master. H, whose domicile of origin was German, and W, domiciled in Czechoslovakia, were married in Czechoslovakia in At the time of the marriage the parties had definitely agreed that they would leave Europe for good and settle permanently in Johannesburg. They established their home in that city four months after the marriage. After working there for four years, they moved to Durban with the intention of remaining there permanently. Eleven years later, H died. According to the law of South Africa, the parties had married in community of property, but according to German law the doctrine of community was inapplicable. If South African law applied, as W claimed, death duties were not payable. The Appellate Division of the Supreme Court of South Africa held unanimously that German law applied. Thus the proprietary rights of the parties were subjected to the law of Germany, a country which the parties had abandoned and which, it may be surmised, they would be little inclined to revisit. To this extent, the civil status of a German was indelibly impressed on the husband against his will and, in turn, on the wife, against her will. Indeed, South African courts have applied the law of the domicile at marriage including retrospective changes in that law effected after the spouses had become domiciled in South Africa. On the other hand, reliance on the intended matrimonial domicile does suffer disadvantage, here as elsewhere, that there is no certainty that it will ever be acquired.
Re Egerton's Will Trusts where Roxburgh J stated the law to the effect that there is a presumption that the mutual property spouses are determined by the law of the husband's domicile at the time of marriage. In his Lordship's view, that presumption was capable of being rebutted by an express contract that some other law should apply, or by a tacit contract inferred from conduct of the parties. It was judicially admitted that application of the law of the husband's domicile at the time of the marriage would be ousted if the intention to adopt the law of another domicile could be deduced from the facts of the particular case. A tacit agreement would be sufficient to rebut the primary presumption. It has not been judicially tested whether the presumption in favour of applying the matrimonial domicile of at the time of the marriage is open to rebuttal in like manner. It is submitted that rebuttal should be available in these circumstances, to be inferred from the conduct of the parties if the circumstances justify the inference.
Egerton's case In 1932, the testator domiciled in England married a woman domiciled in France. The parties agreed, before the marriage, to settle in France, but the testator did not acquire a French domicile until some time after September 1934, which he retained until his death. The question to be decided was whether his estate should be administered on the footing that he and his wife were subject to the French regime of community of property at the time of the marriage. ROXBURGH J held that the parties' agreement to settle in France did not render their proprietary rights subject to French law. The equivocal nature of the agreement which contemplated no immediate change of home, but only one that should be effected "as soon as possible"; the long period that in fact elapsed before the new domicile was acquired; the lack of any evidence that the parties even appreciated the difference between the property regimes of the two countries: all these precluded the inference that in the minds of the parties the law of England was to be supplanted by that of France. On the other hand, it is submitted that in Frankel's case the only reasonable intention to attribute to the parties was to sever all links with the German domicile of origin of the husband as quickly as possible.
(ii) Effect of a change of domicile A further question may arise-what is the effect ofa subsequent change of the matrimonial domicile? Are the mutual proprietary rights of the spouses affected by the change? Many legal systems adopt what has been called the doctrine of immutability, according to which the rights of property in movables as fixed by the law of the matrimonial domicile at the time of the marriage are unaffected by the acquisition of a fresh domicile. The established rule in France is that the law of the matrimonial domicile governs the rights of the spouses in movables, whether existing at the time of the marriage or acquired later, and continues to govern them despite a change of domicile. This is so even with respect to movables acquired in the new domicile. The prevailing rule in the USA is not so comprehensive. The law of the matrimonial domicile at the time of the marriage continues to govern movables owned at that time, but movables acquired later are subject to the law of the parties' domicile at the time of acquisition. It has been said that, according to English private international law, if the marriage domicile is abandoned, the proprietary rights of the spouses are governed by the law of the new domicile. It is extremely doubtful, however, whether English law is committed to this doctrine of mutability.
Lashley v Hog. Hog, a native of Scotland, married an Englishwoman at a time when he was domiciled in England. There was no marriage settlement. After living in England for fifteen years the parties acquired a domicile in Scotland. Hog survived his wife and died in After his death, his daughter, Mrs Lashley, brought an action in the Scottish court claiming as the representative of her mother a share in her movables which, according to the then law of Scotland, were subject to the trine of community of goods. The basis of her claim was that, on the domicile from England to Scotland, her father's proprietary rights vis-a-vis his wife became restricted by the Scottish rule of community. The House of Lords held that Scots law governed Mrs Lashley's claim, and that she was entitled in right of her mother to a share of the movables owned by her father at the time of her mother's death. In England, a more decisive authority than Lashley v Hog must be found, before it can be categorically asserted that the proprietary relations between husband and wife change a change of their domicile (the doctrine of mutability).
Immovables Welch v. Tennent (the leading decision regarding to immovables) The husband and wife were domiciled in Scotland. The wife owned land in England which she sold with her husband's agreement and the proceeds of sale were paid to him. Later the parties separated and the wife claimed that the proceeds of sale be paid to her, arguing that under Scots law she was entitled to recall any donation made by her to her husband. Lord HERSCHELL disposed very rapidly of the argument that Scots law might be applied, saying: "The rights of the spouses as regards movable property must, in the circumstances of this case be regulated by the law of Scotland, but it is equally clear that their rights in relation to heritable estate are governed by the law of the place where it was situate.” English law was applied and the husband was entitled to keep the proceeds of sale of the land. It has been suggested that an English court should refuse to follow Welch v Tennent, applying instead, to immovables as well as to movables, the law of the domicile. Whilst this might be acceptable, indeed appropriate, for disputes between husband and wife, on the basis that it would "reflect the values, attitudes and expectations of the parties", it would not be satisfactory in the case of disputes involving third parties.
The choice of law rule now in Scots law rests on a statutory footing. Section 39(1) of the Family Law (Scotland) Act 2006 provides that: "Any question in relation to the rights of spouses to each other's immoveable property arising by virtue of the marriage shall be determined by the law of the place in which the property is situated." Section 39(1), however, is subject to section 39(6)(b), which permits party autonomy to override the choice of law rule set out in section 39(1).
In In re Marriage of Kowalewski, the Supreme Court of Washington held that a Washington court that had in personam jurisdiction over the spouses and subject matter jurisdiction over the marital dissolution action also had the power to determine the spouses' rights to immovables situated in another state (Poland in this case). The court noted that, although a court does not have power "directly to affect title" to real property located outside the state, a court may "indirectly affect title by means of an in personam decree operating on the person over whom it has jurisdiction.“ After explaining why the Washington decree in this case did not purport to directly affect title in the Polish immovables, the court noted that the decree "in no way intrudes upon Poland's sovereign authority over land disputes" because "[ilt remains for the Polish courts to decide what effect, if any, the Washington decree has on the legal ownership of real property in Poland.
In Aleem v. Aleem, the parties were married in Pakistan and, a few years later, moved to Maryland, where they lived for twenty years. During this time, the husband acquired assets that would be classified as marital property under Maryland law and would be subject to the wife's equitable division claims under that law. Under Pakistani law, these assets would be the husband's separate property and would not be subject to any claims in favor of the wife. When the wife filed for divorce and equitable division in Maryland, the husband went to the Pakistani Embassy in Washington and executed a talaq (a unilateral, non-judicial divorce) by signing a document before witnesses stating three times "I Divorce thee Farah Aleem.” Under Pakistani law, a husband has a virtual automatic right to talaq but the wife has a right to talaq only if such a right is included in the written marriage agreement or if the husband otherwise delegates that right to her-neither of which occurred in this case. The husband argued that, because this divorce was effective under Pakistani law, the Maryland court did not have jurisdiction to divorce him and also could not divide marital property because, under Pakistani law, all assets were his separate property. The lower courts rejected both arguments and Maryland's highest court affirmed.
The court held that "the enforceability of a foreign talaq divorce provision.., where only the male, i.e., husband, has an independent right to utilize talaq and the wife may utilize it only with the husband's permission, is contrary to Maryland's constitutional provisions and thus is contrary to the 'public policy' of Maryland.“ The court noted: "Talaq lacks any significant 'due process' for the wife, and its use, moreover, directly deprives the wife of the 'due process' she is entitled to when she initiates divorce litigation in this State.” The court also held that Pakistan's denial of equitable division rights to property acquired by the husband during marriage were "wholly in conflict with the public policy of [Maryland]" and deserved "no comity” in Maryland's courts.
Assignment Where There Is An Ante-nuptial Contract An antenuptial agreement is a written contract created by two people planning to be married. The agreement typically lists all of the property each person owns, as well as their debts, and it specifies what each person's property rights will be after they tie the knot. Antenuptial agreements often specify how property will be divided -- and whether spousal support (alimony) will be paid -- in the event of a divorce. A premarital agreement shall be in writing and signed by both parties. Such agreement shall be enforceable without consideration and shall become effective upon marriage. After marriage, an antenuptial agreement may be amended or revoked only by a written agreement signed by the parties. The amended agreement or the revocation is enforceable without consideration. Advantages of antenuptial agreements for both parties are: (a) Avoiding Litigation Costs, (b) Protecting Family Assets, (c) Protecting Business Assets, (d) Protection Against Creditors, (e) Child Custody and Support Guidelines and (f) Predetermined Disposition of Property.
United Kingdom Prenuptial agreements have historically not been considered legally valid in England. This is still generally the case, although a 2010 Supreme court test case between the German heiress Katrin Radmacher and Nicolas Granatino,indicated that such agreements can "in the right case" have decisive weight in a divorce settlement. Continental Europe Prenuptial agreements have long been recognized as valid in several European countries, such as France, Belgium, the Netherlands, Germany, Switzerland, Sweden, Denmark, Norway and Finland. While in some of these countries there are limits on what restrictions the courts will see as enforceable or valid (e.g. Germany after 2001, where appeals courts have indicated this), a written and properly initiated contract, freely agreed upon, cannot be challenged by, for instance, invoking the circumstances under which the marriage broke down or the conduct of either part. In France and Belgium (as in Quebec, which has the same judicial tradition) prenuptial agreements must be set up in the presence of a notary.FranceBelgiumNetherlandsGermanySwitzerlandSwedenDenmarkNorwayFinland United States Historically, judges in the United States accepted the view that prenuptial agreements were corrupting what marriage was supposed to stand for, and often they would not recognize them. Currently they are recognized, although they may not always be enforced.United States In the United States, prenuptial agreements are recognized in all fifty states and the District of Columbia. Both parties should have lawyers represent them to ensure that the agreement is enforceable.
(a) The general rule When we turn to the situation where the parties have entered an ante-nuptial contract, it must be borne in mind that the choice of law issues which may arise are governed by common law rules. This is because the Rome Convention on the Law Applicable to Contractual Obligations does not apply to contractual obligations relating to "rights in property arising out of a matrimonial relationship". Choice of Law and Pre-Nuptial Agreements by Gilles Cuniberti on October 21, 2010Gilles Cuniberti Nicolas Granatino, a French, married five years earlier Katrin Radmacher, a German paper industry heiress worth more than £ 100 million. They had entered into a pre-nuptial agreement providing that neither party was to acquire any benefit from the property of the other during the marriage or on its termination. After their divorce in 2006, this did not prevent Mr Granatino from getting £ 5.85 million from the High Court, and £ 3.5 million from the Court of appeal. However, the UK Supreme Court upheld the prenuptial agreement. The case was obviously international. Althought they had married in London, the spouses were foreigners. The pre-nuptial agreement had been entered into in Germany, before a German notary, and included a choice of law clause providing for the application of German law. Ms Radmacher now lives in Monaco with the children of the couple.
The Supreme Court found that English law governed. The majority held: 103. In England, when the court exercises its jurisdiction to make an order for financial relief under the Matrimonial Causes Act 1973, it will normally apply English law, irrespective of the domicile of the parties, or any foreign connection The United Kingdom has made a policy decision not to participate in the results of the work done by the European Community and the Hague Conference on Private International Law to apply uniform rules of private international law in relation to maintenance obligations. … … 106. For the purposes of the present appeal it is worth noting that the Hague Protocol allows the parties to designate the law applicable to a maintenance obligation, but also provides that, unless at the time of the designation the parties were fully informed and aware of the consequences of their designation, the law designated by the parties shall not apply where the application of that law would lead to manifestly unfair or unreasonable consequences for any of the parties (Article 8(1), (5)) … … In summary, the issues in this case are governed exclusively by English law. The relevance of German law and the German choice of law clause is that they clearly demonstrate the intention of the parties that the ante-nuptial agreement should, if possible, be binding on them.
De Nicols v Curlier: H and W, French both by nationality and by domicile, were married in Paris without making an express contract as to their proprietary rights. Nine years after their marriage, they came to England, acquired an English domicile and prospered as the owners of the Cafe Royal, in Regent Street. The husband died in 1897 leaving a considerable fortune in movable and immovable property. In his will, he disposed of all of his property without taking account of the wife's entitlement to a half share in the property under the French system of community of property. The issue was whether the spouses' change of domicile from French to English affected their legal position in relation to the property. The position of the movable property was considered first by the Howe of Lords. and separately from that of the immovables. The expert evidence accepted by the court was that according to French law parties who marry without an express marriage contract are bound by a tacit contract to abide by the system of community. Therefore, said Lord MACNAG: "if there is a valid compact between spouses as to their property, whether it be constituted by the law of the land or by convention between the parties, it is difficult to see how that compact can be nullified or blotted out merely by a change ofdomicile“.
In Van Kipnis v. Van Kipnis, the parties were married in France and executed a prenuptial agreement by which they opted out of France's community property system and adopted instead "the marital property system of separation of estates, as established by the French Civil Code.” The agreement provided that "each spouse shall retain ownership and possession of the chattels and real property that he/she may own at this time or may come to own subsequently by any means whatsoever.“ Shortly thereafter, the spouses moved to New York, where they lived together for thirty eight years before the wife filed for divorce and equitable division under New York law. The husband invoked the prenuptial agreement as a defense to the equitable division claims. The New York Court of Appeals upheld the defense. The court noted that, under New York's Equitable Distribution Law, property that a prenuptial agreement designates as separate property is not subject to equitable division claims in favor of the other spouse. The court found that this agreement had this precise effect because it stated that each spouse "shall retain ownership... of... property that he/she... may come to own subsequently.” The court held that this agreement "constitute[d] an unambiguous prenuptial contract that precludes equitable distribution of the parties’ separate property.
In Muchmore v. Trask, the premarital agreement was made in California in 1986, when both parties were domiciled there. Shortly thereafter, the spouses moved to Washington and then to North Carolina where, ten years later, the wife filed for divorce and alimony. The husband invoked the premarital agreement, which contained an explicit waiver of alimony. The wife argued that the waiver was unenforceable in North Carolina because, at the time of the agreement in 1986, North Carolina cases had held such waivers to be against North Carolina's public policy. The court rejected the argument, noting that, unlike this case, those precedents involved intra-state agreements and cases. The court also noted that, like California, North Carolina adopted the Uniform Premarital Agreement Act in 1987, which expressly permits alimony waivers. The court reiterated that, under North Carolina's lex loci contractus rule, California law governed the validity of the premarital agreement and that law did not contravene North Carolina's public policy.
(b) Capacity The combination of circumstances which most neatly raises the question of capacity occurs where a woman, being a minor according to the law of her English domicile, makes a marriage contract in England prior to her marriage with a foreigner, by the law of whose domicile the woman is not subject to any incapacity. In relation to immovables, it is arguable that capacity to enter into a marriage contract should be governed by the law of the situs. Strictly, however, the law of the situs should govern only capacity to convey immovable property, and not capacity to make a contract with regard to such property. It is submitted that the proper law of the agreement is prima facie deemed to be the law of the matrimonial domicile. It is that law which is universally recognised as controlling the personal and proprietary relations of the parties during their marriage. The relevant cases in chronological order are: Re Cooke's Trusts, Cooper v Cooper, and Viditz v o'Hagan.
Re Cooke's Trusts : A domiciled Englishwoman under 21 married a Frenchman in France. Prior to the marriage, she made a notarial contract in France, which excluded the French doctrine of community of goods, and gave her "the entire administration of her property and the free enjoyment of her income". There were three children of the marriage. After having lived in Jersey for eight years separately from her husband, she went through a ceremony of marriage with X in 1853 under the mistaken belief that her husband was dead. She resided with X and with her three children in New South Wales until her death in Her French husband did not die until She made a will leaving all her property to X. It was argued that a notarial contract was valid, and that it precluded the testatrix from depriving her children of the vested interests in her property given to them by French law. STIRLINGJ, after deciding that the woman died domiciled in New South Wales, held that her capacity to make the notarial contract was governed by English law, as being the law of her ante-nuptial domicile. The consequence was that in his opinion her minority rendered the contract "void".
Cooper v Cooper (a Scottish appeal to the House of Lords): A domiciled Irishwoman of 18 made an ante-nuptial contract in Dublin with her intended husband, a domiciled Scotsman, by which she purported to relinquish the proprietary rights that she would be entitled to under Scottish law on the death of her husband. Both parties contemplated, in accordance with what proved to be the fact, that the matrimonial home would be established in Scotland. The husband died thirty- five years after his wife attained her majority. On his death she sued to set aside the contract on the ground that at the time of its execution she was a minor by Irish law. It was held that the woman's capacity must be governed by the law of Ireland, since that country was not only her domicile but also the place where the contract was made. Lord MACNAGHTEN rejected the notion that Scots law, as being the law of the matrimonial domicile, applied, saying: "It is difficult to suppose that Mrs Cooper could confer capacity upon herself by contemplating a different country as the place where the contract was to be fulfilled, if that be the proper expression, or by contracting in view of an alteration of personal status which would bring with it a change of domicile.” In any event the decision is not readily explicable. By Irish law, as well as by English law, a marriage contract was voidable, in the sense that it was to be treated as valid unless repudiated by the minor within a reasonable time after the attainment of majority.
(c) Formal validity Formerly, the traditional view was that a contract must observe the forms required by the law of the place of contracting. However it has been accepted at common law that formalities, like essential validity, may be governed by the proper law. At common law, the form required by the law of the place of contracting is sufficient but not essential. The English cases clearly show that in the case of marriage contracts relating to property it is sufficient to adopt the formalities of the proper law as an alternative to those of the law of the place of contracting. Van Grutten v Digby: Prior to a marriage between an Englishwoman and a domiciled Frenchman, a deed of settlement in the English form and containing the usual English limitations was executed at Dunkirk. The settlement was wholly void by French law, since it had not been executed before a notary public. Five years later the husband claimed that, owing to the formal invalidity of the contract by French law, the settled property was subject to the doctrine of community of goods. Lord ROMILLY held, however, that the contract was binding on both parties: – I hold it to be the law of this country that ifa foreigner and an Englishwoman make an express contract previous to marriage, and if on the faith of that Contract the marriage afterwards takes place, and if the contract relates to the regulation of property within the jurisdiction and subject to the laws of this country, then, and in that case, this court will administer the law on the subject as if the whole matter were to be regulated by English law.
(d) Essential validity The essential validity of a marriage contract is governed by its proper law. In relation to immovable property, at least as regards matters in rem, the law of the situs must surely be the proper law. Otherwise, it seems clear that there may be express selection of the governing law, at least if it is connected with the transaction. In the absence of choice, the proper law will be the law of the country with which the contract is most closely connected. In effect, the principles on which the proper law is to be determined are much the same as those relevant at common law to determine the proper law of a commercial contract. The proper law, once it has been identified in accordance with these principles, continues co govern the marriage contract even though the interested parties may establish their house in a country where a different law prevails. Where there is a marriage settlement creating trusts of that settlement, the essential validity of such trusts falls to be governed by the law determined by reference to the Recognition of Trusts Act 1987.
PROPERTY RIGHTS ARISING FROM OTHER ADULT RELATIONSHIPS (a) Civil Partnership Act 2004 The Civil Partnership Act 2004 introduced the status of civil partnership for same sex couples. The 2004 Act does not lay down express choice of law rules regarding the property rights of civil partners resulting from civil partnership akin to those rights which apply at common law in relation to the property of married persons resulting from marriage. It is submitted, however, that the property rights of civil partners should be determined under English conflict rules in the same manner as those of married persons. The rules and principles set out in this chapter, therefore, should be treated as applying, mutatif mutandis, to civil partners as well as to married persons.
(b) Cohabitation Included in the Law Commission's Ninth Programme of Law Reform is a project to consider the financial hardship suffered by cohabitants 109 or their children on the termination of the cohabiting relationship by reason of breakdown or death, It is recognised that, "when cohabitants separate, the courts use a patchwork of statutory and non-statutory rules to determine what should happen to the couple's property“, The Law Commission's Consultation Paper, in proposing a new scheme for cohabitants, recognised that account must be taken of the international dimension, and so there were proposed in Part 11 new rules ofjurisdiction112 and applicable law relevant to cohabitation, including rules pertaining to cohabitation contracts and "opt-out agreements“. This project is at an early stage and it remains to be seen whether domestic law reform will be introduced. It is possible that the project will be eclipsed by legislative reform now proposed at the European level.
EUROPEAN PROPOSALS FOR REFORM In July 2006, the European Commission published a Green Paper on Conflict of Laws in Matrimonial Property Regimes. Accompanying the Green Paper is an Annex, partially comprising the fruits of an European-commissioned study entitled, "Matrimonial Property Regimes and the Property of Unmarried Couples in Private International Law". The purpose of the Green Paper is to launch a wide-ranging consultation exercise on the legal questions which arise in an international context as regards matrimonial property regimes and the property: consequences of other forms of personal unions, including registered partnerships and de facto unions. The Green Paper, which has been prompted by the increased mobility of persons within the European Union and the "significant increase in all forms of unions between nationals of different member States or the presence of such couples in a Member State of which they do not have the nationality, often accompanied by the acquisition of property located on the territory of several Union countries“, addresses issues of jurisdiction, choice of law, and recognition and enforcement of judgments. The document seeks to explore avenues in which conflict rules across the Member States might be improved, and suggests possible options for future legislative action at Community level. In what is an area of considerable technical complexity, however, it is seriously questionable whether a satisfactory Community-wide solution is attainable.