Vardags — Leading solicitors for high net worth individuals

Pensions and Part III of the Matrimonial and Family Proceedings Act 1984

By Kathryn Mason -

Pensions and Part III of the Matrimonial and Family Proceedings Act 1984

Here we explore making a pensions application under Part III of the Matrimonial and Family Proceedings Act (MFPA) 1984.

Establishing jurisdiction

The court will only make an order if it has the jurisdiction to do so. Under Part III of the MFPA 1984, the application must meet one of the following requirements:

  • Domicile
  • Habitual residence
  • Matrimonial home in England and Wales – note, that where jurisdiction can be established only by virtue of a beneficial interest in a house that was the parties’ matrimonial home, the court is confined to making a financial order only in relation to that property. Therefore, pensions would not be dealt with.

Making the application

Assuming jurisdiction is established, the application to the court in England is to the High Court in London. The application is a two-stage process.

Stage One: Application for leave under MFPA 1984 The court will need to grant the application permission to make the application, and will do so only when it considers that there is substantial ground for making an application. Part III does not define the meaning of 'substantial', but the Supreme Court issues guidance in Agbaje v Agbaje  UKSC 13:

The threshold  is… higher than a ‘serious issue to be tried’ or ‘good arguable case’ found in other contexts. It is perhaps best expressed by saying that in this context ‘substantial’ means ‘solid’.

The court will also consider the list of factors under s16(2):

  • Parties' connections, including their connections to England and Wales
  • Financial relief
  • Enforceability of the order
  • Time elapsed since the decree of divorce
  • Overall merits of the case.

There are some practical points to the application:

    • Notice is not required – it is common for the applications to be made by consent
    • The parties do not need to attend court – helpful when they are based overseas
    • The application should be made on a D50E and contain the following information:
      • State that the applicant is seeking leave to apply for a financial remedy under Part III MFPA
      • Brief reasons why the applicant is seeking the order
      • A written statement of support which will include an estimate in summary form of the value of the resources, paint the financial picture of the parties, and set out the grounds on which it is alleged that the court has the jurisdiction to entertain the application.

       

 

Stage Two: The substantive application Once the applicant has been granted permission, the application for financial relief under Part III MFPA 1984 follows the procedure for a financial remedy. Where the parties consent, it is common for Stage One and Stage Two to be truncated. Practicalities include completing a Form D50F and filing it with a statement of support, as well as making relevant financial disclosure in a slim line version of the Form E. The court will then consider a two-stage test in deciding whether or not to make an order:

  • The appropriateness of the order – the court must consider in all the circumstances of the case whether it would be appropriate for the order to be made by a court in this country
  • Whether it is appropriate to make the order under 16(2) of the MFPA.

The court considers ‘appropriate’ ‘broadly’ and having regard to the statutory purpose of the MFPA 1984 – to alleviate hardship in cases of foreign divorce. In Z v A  EWHC 1434 Coleridge J stated that the word 'appropriate' meant 'proper' – when assessing whether an application under MFPA 1984 was being used to address a mischief that MFPA 1984 was designed to address, as opposed to couples using the MFPA 1984 to secure a more favourable outcome.

Other considerations

When the courts are looking at whether to make the order they will consider whether the pension is a modest asset or not. In Schofield, 2011 the court dealt with an army pension. The application was refused at first instant because it would only provide a 'paltry level of income'. However, the Court of Appeal held that in the context of the relatively modest assets and the wife’s modest earnings, the pension was, in fact, significant and allowed the wife’s appeal.

This is an area crying out for reform, particularly because the intention of the act will often be frustrated on the basis that it has not been possible to establish jurisdiction, what with the member of the pension scheme having created a new life overseas. It has been suggested that a sensible reform would be to add ‘interest in pension scheme’ to the jurisdiction criteria and limit it so that the court can only deal with matters of the pension scheme.

If you would like to know more about the issues covered in this article, Vardags offers a free consultation to qualifying individuals.

For high net worth and ultra high net worth individuals or their companies, our confidential enquiry line is staffed 24 hours. Call 020 7404 9390 today.

Kathryn Mason

Kathryn read History at the University of Cambridge before converting to law through the senior status law degree at Queen Mary, University of London. She wo...