English Law Decides Settlement

When a 43-year-old Spanish-born man and his wife divorced 15 years after their marriage in Spain, having lived in England since 2004 and raised two children (now 12 and 10) here, the question for the court was which matrimonial regime should apply – English or Catalonian law?

The husband argued that the couple had made a ‘tacit’ agreement to separate their property in a certain way when they married and had made an ‘express separation of property agreement’ in Spain in September 2000. He claimed that ‘both these agreements have essentially the same purpose, which is to establish that all property in the marriage is held by each party individually, and that in the event of a break-up, the parties to the agreement expect it to be… binding’.

The ruling of the court involved a lengthy review of the different legal regimes applying to marital property in Europe and led to clear guidance being given by Mr Justice Mostyn on the approach to be taken in similar cases. He said, “It is important to note there is no prospect in a future case of the application of a foreign law in determining rights under a civil law marital property agreement."

“Therefore the issues in this, and indeed in every, marital agreement case are governed exclusively by English law.”

The agreement itself, the court concluded, was not entered into ‘with a full appreciation of its implications’.

Mr Justice Mostyn further commented that, “In my judgment there is a marked difference between a negotiated pre-nuptial agreement which specifically contemplates divorce and which seeks to restrict or influence the exercise of discretion to which the law gives access, and an agreement made in a civil jurisdiction which adopts a particular marital property regime."

“It can therefore be seen that a civil law matrimonial property agreement is different in character and objective to a ‘common law’ pre-nuptial agreement which seeks to abrogate or influence the right to invoke a statutory discretion to redistribute fairly (or equitably) all the resources of the spouses following their divorce.”

As a result, English rules were applied to the financial settlement, which led to the wife being awarded more than £3 million over three years plus a reducing monthly payment.

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