Goldstone v Goldstone & Ors

Ancillary relief proceedings remain family proceedings where a preliminary issue determines whether assets legally held by third parties belong beneficially to a spouse. The issue has no independent procedural existence merely because it requires the application of ordinary property law.

A foreign third party may be joined and served where it is a necessary or proper party, a relevant jurisdictional gateway is satisfied, and England is clearly the appropriate forum in the interests of justice. The court must determine third-party property rights according to the same law as the Chancery Division, while retaining the applicable family procedure.

In ancillary relief proceedings, the wife alleged that assets legally held by a group of foreign entities were beneficially owned or controlled by the husband and that an underlying agreement was a sham. The entities were joined so that ownership and sham issues could be tried as a preliminary issue.

Hedley J held that the dispute remained part of the family proceedings, refused to discharge the entities, and concluded that England was overwhelmingly the convenient forum. The entities appealed, contending that the preliminary issue was an independent proprietary claim governed by the Civil Procedure Rules and that their joinder and service abroad were invalid.

The central question was whether the preliminary issue was governed by the Family Proceedings Rules 1991 or the Civil Procedure Rules.

1. Appeal dismissed. The proceedings were family proceedings governed by the Family Proceedings Rules 1991. The preliminary ownership and sham issues arose within the wife’s ancillary relief application and were pendent upon it. They had no independent existence merely because they required the determination of third-party rights or the application of property law.
2. A dispute between a spouse and a third party concerning beneficial ownership may be adjudicated within ancillary relief proceedings. The court must determine that dispute according to the same legal principles that would apply in the Chancery Division. The third party should ordinarily be joined, the ownership issue properly pleaded, and appropriate case-management directions given. Those requirements do not convert the dispute into separate civil proceedings.
3. Per Hughes LJ, with whom Thorpe and Hooper LJJ agreed, the Civil Procedure Rules applied by default to civil proceedings but expressly excluded family proceedings. Gaps in the Family Proceedings Rules 1991 were filled by the Rules of the Supreme Court 1965, with necessary modifications. Consequently, joinder was governed by RSC Order 15 rule 6 and service abroad by RSC Order 11.
4. Where a foreign party is to be joined, the court must address both joinder and service outside the jurisdiction. The applicant bears the burden of satisfying a jurisdictional gateway and showing that England is clearly the appropriate forum in the interests of justice. These requirements were satisfied because determining the husband’s assets was essential to the ancillary relief claim, only the English court could determine that claim, and resolving both issues in one court avoided multiplicity and inconsistent proceedings.
5. The appellate court could interfere with the judge’s discretionary decision on service and forum only if he was plainly wrong. Hedley J was plainly right. The entities’ joinder was therefore maintained, although any ultimate matrimonial order could be made only against the husband.

1. Court of Appeal (Civil Division): The appeal was dismissed unanimously. The court upheld the conclusion that the preliminary issue formed part of the family proceedings and that England was the appropriate forum.
2. High Court, Family Division: Hedley J refused to discharge the foreign entities from the ancillary relief proceedings and held that London was overwhelmingly the convenient forum. No citation for that judgment is stated.