Wednesday, December 17, 2008

English Court OKs Post-Nups, Landmark Case

Congratulations to our victorious client, Rod MacLeod, to whom we rendered extensive advice from afar throughout his long-standing divorce case in the courts of the Isle of Man and then in the Judicial Committee of the Privy Council.

The case has resulted in a landmark decision today in favor of our client by the Privy Council, which ruled – for the first time – that post-nuptial agreements are enforceable under English law.

The Judicial Committee of the Privy Council is the court of final appeal for the overseas territories and Crown dependencies, and for some Commonwealth countries.

England’s Daily Mail summarized the facts as follows:

The ruling comes after a millionaire businessman appealed to the Judicial Committee of the Privy Council over a series of agreements before and during his marriage which set out his wife's share of a £13.8million-pound fortune.

Roderick MacLeod, 64, a U.S. businessman living in the Isle of Man, and his wife Marcia, 42, agreed a 'pre-nup' when they married in 1994 in Florida.

The agreement was amended twice during their ten-year marriage which produced five sons.

After their 2004 divorce Mr MacLeod offered his wife about £1million on the basis of their post-nuptial agreement, then he changed his offer to putting about £1.25million in a trust fund for their sons. An Isle of Man court ruled that Mrs MacLeod should receive the extra money in a lump sum.

But yesterday the Privy Council overturned that decision, ruling that there were no circumstances to justify changing the couple's post-nuptial agreement.

Courts currently take 'pre-nups' into account but they are not legally binding. However, as they become more popular, there is pressure for them to be given more force.

So where does this leave prenuptial agreements in England? They are “taken into account” and may be a significant factor in a divorce case to the extent that the English judge feels that it is proper to do so, depending on the circumstances of the case.It also means that if a prenuptial agreement is renegotiated and revised after the parties marry, it will likely be enforced.

With respect to post-nuptial agreements, Baroness Hale said that:

“We must assume that each party to a properly negotiated agreement is a grown up and able to look after him- or herself. At the same time we must be alive to the risk of unfair exploitation of superior strength. But the mere fact that the agreement is not what a court would have done cannot be enough to have it set aside.”

Respectfully, that same argument applies just as much to agreements made before marriage as it does to agreements made after marriage. Indeed, people may well have far more negotiating strength before entering the state of matrimony than after they have married and changed their circumstances. Nonetheless, even as the Court modified the law as to post-nuptial agreements, it left it to Parliament to make the appropriate changes to the law concerning prenuptial agreements.

So how should one advise betrothed international couples with an English connection who wish to know whether a prenuptial agreement is advisable and under whose laws it should be executed? The answer is that they are still in a somewhat murky legal environment as to which experienced and strategic international family law counsel should be consulted.

Sunday, December 14, 2008

Irish court: 6-year old to be heard in Hague Abduction Case

An Irish court has ruled in a Hague Abduction Convention case that a child of just six years of age should be heard by the Court in determining whether to return the child to his habitual residence in another (unnamed) European Union country. N. -v- N. [hearing a child], [2008] IEHC 382.

Ms Justice Finlay Geoghegan held that the issue as to whether or not the Court should give a child an opportunity to be heard is a separate and distinct issue from the appropriate weight, if any, to be given by the Court to the child’s views in determining any substantive issue in the application for the return of the child.
The judge also insisted that the views of the child could be significant not only for the purposes of Article 13 of the Convention – which gives the Court a discretion to refuse to order the return of the child “if it finds that the child objects to being returned and has attained an age and degree of maturity at which it is appropriate to take account of its views” – but also in applying Article 12.

Article 12 is the provision according to which the Court makes the summary order for return. The Court found that a child’s views “on everyday matters as to the circumstances in which he was living before he came to Ireland, or his wishes as to his future care including what should happen on return” might be taken into account by a Court by seeking appropriate interim undertakings when making the order for return pursuant to Article 12 of the Hague Convention.

The ruling was a consequence on several particular aspects of Ireland’s position with respect to the Hague Convention.

The first is that as an EU member an Irish court in a Hague case is subject to EU Council Regulation (EC) No. 2201/2003 (the “Revised Brussels II Regulation”). Article 11(2) of the Regulation reverses the burden of proof as to hearing a child in a Hague case concerning an alleged abduction from another EU country. It provides that, “When applying Articles 12 and 13 of the 1980 Hague Convention, it shall be ensured that the child is given the opportunity to be heard during the proceedings unless this appears inappropriate having regard to his or her age or degree of maturity.”

Second, Article 11(3) of the Brussels Revised Regulation requires that, “the court shall, except where exceptional circumstances make this impossible, issue its judgment no later than six weeks after the application is lodged.” That requirement of great speed makes it far more workable to hear a child and determine the child’s maturity after such a hearing instead of having a psychologist interview the child and prepare a report on the child’s maturity.

Third, the Brussels Regulation “seeks to ensure respect for the fundamental rights of the child as set out in Article 24 of the Charter of Fundamental Rights of the European Union” which provides that “Children shall have the right to such protection and care as is necessary for their wellbeing. They may express their views freely. Such views shall be taken into consideration on matters which concern them in accordance with their age and maturity.”

Finally, the Irish court cited English authority for the proposition that Article 12 of the United Nations Convention on the Rights of the Child must be applied in Hague cases. That article provides that:

“1. State Parties shall assure to the child who is capable of forming his or her own views the right to express those views freely in all matters affecting the child, the views of the child being given due weight in accordance with the age and maturity of the child.
2. For this purpose, the child shall in particular be provided the opportunity to be heard in any judicial and administrative proceedings affecting the child, either directly, or through a representative or an appropriate body, in a manner consistent with the procedural rules of national law.”

In Re. D. (Abduction: Rights of Custody) [2006] U.K.H.L. 51, Baroness Hale in the English House of Lords, stated that,

“Although strictly this only applies to cases within the European Union (over half of the applications coming before the High Court), the principle [that a child should be heard] is in my view of universal application and consistent with our international obligations under article 12 of the United Nations Convention on the Rights of the Child. It applies, not only when a ‘defence’ under article 13 has been raised, but also in any case in which the court is being asked to apply article 12 and direct the summary return of the child - in effect in every Hague Convention case. It erects a presumption that the child will be heard unless this appears inappropriate. Hearing the child is, as already stated, not to be confused with giving effect to his views.”
It must be stressed that the Irish court repeatedly emphasized that one should not confuse the issue as to the weight to be attached to a young child’s views with the issue as to whether the child should be given an opportunity to be heard. “In general, the weight to be attached to views expressed by a six year old as to the country in which he would like to live will be less than that to be attached to the views of say a fifteen year old for, inter alia, the reasons submitted by counsel for the father.”

This author is most concerned that, notwithstanding the caveat stressed by the Irish and English courts, the trend of allowing increasingly young children to “testify” to the issue of their preferred country of residency may well undermine the Hague Convention. While English or Irish courts may weigh the issues dispassionately, practitioners in this field know that courts in many countries refuse to return children who have been abducted by a local national parent if there is even a plausible reason to do so. Allowing very young children to testify on these issues provides an easy way out for many judges who would prefer not to have to send children back to their habitual residence.

Thursday, December 11, 2008

Wednesday, December 10, 2008

Israel Amends Its Divorce Law

Israel has made a significant amendment to its divorce law.

In Israel divorce is in the exclusive hands of the rabbinical courts for all Jewish Israelis – and that will continue to be the case. The amendment is to the 1973 Spousal Property Relations Law which permitted the civil family court to divide the spouses’ assets only after the rabbinical courts had granted a get (religious divorce).

Proponents of the amendment argued that the 1973 law tempted husbands to refuse to grant their wives a get so that the assets, generally in the husband's name, would not be divided between them. The division of assets also gave the husband a means to “blackmail” his wife as a condition for granting the get. The amendment will now allow for the division of spousal property prior to divorce in cases where divorce proceedings last more than one year or if it is proven that a marriage is in irretrievable breakdown, and in cases of domestic violence.

When the Knesset voted to enact the amendment last month, Prof. Ruth Halperin-Kaddari, Director of Bar-Ilan University's Rackman Center for the Advancement of the Status of Women -- who played a leading role in the promulgation of the amendment -- said that, “The Knesset has taken a major step forward in promoting women's status in Israel today. This is a day of celebration for women in Israel, for the advancement of gender equality and for the advancement of human rights in Israel.”

At a conference at Bar-Ilan University this week, Prof. Halperin-Kaddari expressed concern that rabbinical courts might attempt to fight the legislation. The administrative head of the rabbinical courts, Rabbi Eli Ben-Dahan, said that he was concerned that rabbinical courts will be unable to convince one of the sides to agree to divorce after all the property matters have been decided. He said that he was also concerned that if property matters could be settled quickly, there would be no chance to persuade the sides to reconsider the divorce. Finally he argued that secular couples, unlike religious couples, would not bother to finalize the divorce with a get once the property matters had been decided.