Prazic v Prazic

Exclusive jurisdiction over immovable property under Regulation 44 of 2001 is confined to actions based on rights in rem. A claim between spouses to establish an equitable or beneficial interest under the Trusts of Land and Appointment of Trustees Act 1996 is personal, not proprietary against the world.

Where related matrimonial and property proceedings involve different causes of action, the court has discretion to stay the latter. The discretion should account for irreconcilable judgments, duplication, cost, stress and the primacy of the matrimonial jurisdiction. A stay was imposed.

The parties were husband and wife. The husband began divorce proceedings in France. The wife’s English divorce proceedings were frozen under Council Regulation No. 2201 of 2003. She then issued proceedings under the Trusts of Land and Appointment of Trustees Act 1996 concerning two London flats and tracing proceeds of the former Essex home.

The husband sought a stay pending the French proceedings. A deputy district judge rejected the wife’s reliance on the exclusive-jurisdiction provision. Pauffley LJ allowed her appeal. On a second appeal, the Court of Appeal considered whether Article 22 applied, whether Articles 27 or 28 governed the proceedings, and how the stay discretion should be exercised.

1. Permission and disposition. The stringent second-appeal test under section 55 of the Access to Justice Act 1999 was satisfied because governing authorities on Article 22 had been overlooked in the earlier hearings. Permission was granted and the appeal was allowed.
2. Article 22. Relying on Webb v Webb [1994] QB 696 and Ashurst v Pollard [2001] Chancery 595, the court construed the exclusive jurisdiction for rights in rem restrictively. It applies only where the action is based on a right in rem, rather than merely involving or being linked to immovable property. The TOLATA claim sought to establish an equitable interest between the spouses and was therefore an action in personam. Its determination did not require on-the-spot investigation or local law and practice. Article 22 did not apply.
3. Articles 27 and 28. The French ancillary-relief proceedings and the English TOLATA proceedings were not proceedings involving the same cause of action. The mandatory mechanism in Article 27 was therefore not engaged. They were related actions, so Article 28 conferred a discretion to stay. Any restriction imposed by Article 28(3) on the Article 28(1) discretion was to be construed narrowly. In any event, there was a risk of irreconcilable judgments.
4. Exercise of discretion. Pauffley LJ had accepted that the English proceedings were complementary rather than competitive. Thorpe LJ held that this characterisation was wrong. The French claim was substantially concerned with the value and ownership of the same English and Swiss assets, while the TOLATA proceedings were a strategic and superfluous attempt to obtain ancillary relief by other means. In contested matrimonial financial proceedings, issues between spouses should ordinarily be determined within the framework of the Matrimonial Causes Act. Parallel proceedings also risked substantial wasted costs and unnecessary stress, contrary to the policy supporting the primary matrimonial jurisdiction.
5. Agreement and order. Laws LJ agreed with Thorpe LJ’s reasons and specifically endorsed the general observations deprecating the TOLATA proceedings. The application was granted, the appeal was allowed and the stay was imposed.

1. Court of Appeal (Civil Division). On 16 March 2006, permission for the second appeal was granted under section 55 of the Access to Justice Act 1999. The appeal was allowed and the English proceedings were stayed.
2. High Court of Justice, Family Division. On 3 February 2006, Pauffley LJ allowed the wife’s appeal from Deputy District Judge Morris and accepted that the Article 22 contention succeeded.
3. Deputy District Judge Morris. On 11 July 2005, rejected the wife’s reliance on Article 22.