61995C0220

1 The essential issue before the Court in this case, which has come by way of reference for a preliminary ruling from the Arrondissementsrechtbank te Amsterdam (District Court, Amsterdam), is how an order for the payment of a lump sum made by the High Court of Justice of England and Wales in the context of divorce proceedings is to be classified for the purposes of the Brussels Convention on jurisdiction and the enforcement of judgments in civil and commercial matters. (1) More particularly, does such an order relate to `rights in property arising out of a matrimonial relationship' within the meaning of Article 1 of the Convention, in which case it may not be enforced pursuant to the Convention, or does it relate to maintenance, in which case it is enforceable thereunder?

Relevant provisions of the Brussels Convention

2 The second paragraph of Article 1 of the Brussels Convention provides that that Convention is not to apply to `(1) the status or legal capacity of natural persons, rights in property arising out of a matrimonial relationship ...'.

3 Article 5 of the Brussels Convention provides:

`A person domiciled in a Contracting State may, in another Contracting State, be sued:

1. ...

2. in matters relating to maintenance, in the courts for the place where the maintenance creditor is domiciled or habitually resident or, if the matter is ancillary to proceedings concerning the status of a person, in the court which, according to its own law, has jurisdiction to entertain those proceedings, unless that jurisdiction is based solely on the nationality of one of the parties; ...'

4 It is clear therefore that the Brussels Convention applies to matters relating to maintenance, including those arising in the context of the dissolution of a marriage. Indeed the reason for including such matters among the exceptions enumerated in Article 5 to the general rule that proceedings must be brought in the State of the defendant's domicile was precisely to enable a married but separated woman to sue her husband for maintenance in courts local to her. (2) In order to effect this, a further exception to the general scheme of the Convention was necessary: Article 5(2) is the only provision in the Convention which offers habitual residence as an alternative criterion to domicile for establishing jurisdiction. Since in most jurisdictions there is substantial overlap between the two concepts, it may be wondered why Article 5(2) so derogates from the general rule. The reason is that in some Contracting States a woman acquires on marriage the domicile of her husband; accordingly conferring jurisdiction solely on the courts of the place where a married but separated woman was domiciled would not always have achieved its objective of enabling the woman to sue in her, rather than her estranged husband's, local courts.

Background to the order sought to be enforced

5 Mr Van den Boogaard and Miss Laumen, who both have Netherlands nationality, were married in 1957 in the Netherlands under the regime of community of property. In 1980, as permitted by Netherlands law, they entered into a separation of goods agreement, thereby dividing their assets in approximately equal shares.

6 In early 1982, the parties settled in the United Kingdom. The marriage was dissolved by the High Court of Justice, London, in 1988; the English court presumably assumed jurisdiction on the basis that one or both of the parties had been habitually resident in England for one year before commencement of the divorce proceedings. (3) The former wife subsequently applied to the High Court for full ancillary relief, namely for financial provision and property adjustment orders in accordance with sections 23 and 24 of the Matrimonial Causes Act 1973. (4) On 25 July 1990 Cazalet J made an order of which the essential elements are that the husband (i) transfer to the wife the matrimonial home and a De Heem painting; (ii) pay the wife a lump sum of £355 000 and (iii) make periodical payments (initially £35 000 per annum pursuant to an order made earlier in the proceedings, subsequently £30 000 per annum) to the wife without interruption until payment of the lump sum and transfer of the home and painting.

7 The order for reference sets out a number of extracts from Cazalet J's judgment, including the following:

`The formal application before me is an application by a wife against her husband for full ancillary relief, including periodical payments for herself and the two youngest children of the family. I have been told that she does not at this stage wish to pursue her claim for periodical payments in regard to the two children; she reserves her right to come back and pursue that claim at a later stage.

She has further told me through counsel that she would wish, if it could be achieved, that there should be a clean break between herself and her former husband. It would then follow that, if and when any appropriate capital sums were to be paid to her, her periodical payments claim could be dismissed. That would then ensure that she was no longer reliant on her husband by way of support.

...

So for the compelling reasons that I have given, (5) I do not consider that the 1980 Dutch separation agreement has any bearing or significance on the decision that I am to make in these proceedings.

...

If one then deducts from the sum total of those figures, that is, the £10 000 she has and the £35 000 which she can find from her chattel sales, £430 000 from 39 Connaught Square and the £60 000 for the De Heem which I order to be transferred to her so that she can sell for that net sum of money, she should be able to raise or have available to her £535 000 towards the total which I consider she requires of £875 000 in terms of cash to provide for herself. A deduction of £535 000 from £875 000 leaves £340 000. From the evidence before me, I am satisfied that the husband has the means to meet this order. Furthermore I am satisfied that he will still thereafter be left with ample funds to provide suitably for his own needs and those of the two youngest children. I also consider that this is pre-eminently a case in which it is appropriate for there to be a "clean break" with the parties' financial obligations to each other terminated.

As to how the order is to be drawn I shall hear further argument, but I envisage her having her full capital sum within three months, again subject to argument that I hear, with the interim payments continuing meanwhile. Also there is to be a further sum of £15 000 added on to the lump sums paid to her to meet the costs of the Swiss proceedings. (6) So that will bring £340 000 up to £355 000.

That is the lump sum order that I propose to make.'

8 The `compelling reasons' for disregarding the Dutch separation of goods agreement mentioned by Cazalet J were mainly that the wife had entered into the agreement fearing that her husband was facing imminent bankruptcy and that the husband had entered into it in the undisclosed knowledge of an imminent and substantial commission payment. As explained further below, (7) under English law an agreement between spouses as to the ownership of their property will not bind the court with power to make financial and property arrangements on their divorce.

9 There are in addition a couple of further matters in the judgment which may be relevant to the issue before the Court and which have not been mentioned by the referring court.

10 First, it is clear from the judgment that Cazalet J's starting figure of £875 000 in the above calculation, being the total which he considered that the former wife required to provide for herself, represents the total of (i) £375 000 to acquire and move into appropriate accommodation and (ii) £500 000 being the capitalized sum, calculated in accordance with English case-law, required to provide annual income of £30 000, considered by Cazalet J to be the appropriate figure for her.

11 Secondly, Cazalet J made the point that the former wife could not properly be regarded as having any earning capacity, being 55 and still being occupied with looking after the three younger of the six children of the marriage.

The enforcement proceedings

12 On 21 May 1992 on application by Miss Laumen, the former wife, the President of the Arrondissementsrechtbank te Amsterdam granted leave to enforce the earlier order and the final order pursuant to the Hague Convention of 2 October 1973 on the recognition and enforcement of decisions relating to maintenance obligations, considered further below. There is some confusion in the terminology employed by both parties: it appears from the national court's file that what was sought to be enforced was not in fact the earlier periodical payments order - which had expired in July 1991 - but the periodical payments part of the final order, which replaced it, and that the reference to the final order means the lump sum element of that order.

13 On 19 July 1993 Mr Van den Boogaard, the former husband, appealed to the Arrondissementsrechtbank te Amsterdam against the grant of leave to enforce in so far as it referred to the final order, apparently on the basis that that order was not a decision relating to maintenance obligations and hence was not enforceable pursuant to the Hague Convention. Before the national court he appears to accept that the earlier annual payment of £35 000 is maintenance and states his readiness to comply. He submits however that the final order (by implication apart from the periodical payments aspect), in so far as it concerns divorce, concerns the status of persons, and in so far as it concerns the division of assets, concerns rights in property arising out of a matrimonial relationship. It is accordingly enforceable neither under the Hague Convention nor under the Brussels Convention.

14 It will be observed that Mr Van den Boogaard's appeal was lodged outside the two-month time-limit for appeals against decisions authorizing enforcement laid down by Article 36 of the Brussels Convention. It is of course in the first instance solely for the national court to determine in the light of the particular circumstances of the case the need for a preliminary ruling in order to enable it to deliver judgment; (8) it may however be noted that, if the national court had considered that the Brussels Convention applied, it would have had (and may still have) to apply Article 36 of its own motion. (9)

15 The Arrondissementsrechtbank tends towards the view that the final order `relates (partly) to "rights in property arising out of a matrimonial relationship" within the meaning of ... Article 1 of the Brussels Convention', in which case the order for enforcement could not have been given on the basis of either the Brussels Convention or the Hague Convention. In reaching that view it stated:

`having regard to the obligations imposed on Van den Boogaard which amount to a transfer of assets - in particular the transfer of the house belonging to Van den Boogaard and of his painting - and, in addition, to the reasoning of the English judge - who expressly stated that he did not consider that the marriage settlement was binding -, the decision has such consequences for the relations as regards property rights between the parties that it cannot be regarded as a "decision in respect of maintenance obligations"'.

16 However, partly because the English legal system diverges from the continental systems and the term `rights in property arising out of a matrimonial relationship' (`huwelijksgoederenrecht') is unknown to the common law, the court referred the following questions for a preliminary ruling:

`Must the decision of the English judge, which in any case relates in part to a maintenance obligation, be regarded as a decision which relates (in part) to rights in property arising out of a matrimonial relationship within the meaning of indent 1 of the second paragraph of Article 1 of the Brussels Convention even though:

(a) the income requirement is capitalized;

(b) an order was made to transfer the house and the De Heem painting which, according to the decision, belong to the husband;

(c) in his decision, the English judge himself expressly stated that he did not regard the marriage settlement as binding;

(d) it cannot be made out from that decision to what extent the factor mentioned in (c) influenced the English judge's decision?'

17 It is not clear from the order for reference precisely what is meant by `the decision of the English judge', which encompassed the orders for the transfer of the house and the painting, the order for the lump sum payment and the order for periodical payments. As indicated above, it appears from the national court's file that what was at issue before it was the enforceability of the lump sum order, and I am assuming that it is that aspect of Cazalet J's order with which the national court is concerned. It also however seeks guidance as to the relevance in determining whether the lump sum order is enforceable of the factors listed in (a) to (d) in the question, including the parallel property transfer orders.

18 Written observations were submitted only by the Austrian Government and the Commission; the parties and the Commission were represented at the hearing.

19 The national court's question is highly specific, referring as it does to the enforcement of the actual order made by Cazalet J. As I shall explain, however, in my view it would be more appropriate for the Court to lay down some general guidelines which could be applied both by the referring court in this case and by other courts faced in future with a similar problem. Before attempting to formulate some guidelines, I propose to review in some detail the history and scope of the relevant provisions of the Convention: this will I hope both illustrate the differences separating the civil law and common law approaches to the issues raised in this case and assist in reconciling them. First however I will consider another issue which has arisen, namely the interrelationship between the two conventions invoked by the parties to the main proceedings.

Relationship between the Brussels Convention and the Hague Convention

20 Although Miss Laumen relied on the Hague Convention in her application for enforcement, the referring court has interpreted the application `as signifying that Laumen also sought to rely in the alternative on the Brussels Convention in so far as it would afford her a more favourable outcome than relying on the ... Hague Convention'.

21 The Hague Convention, which has been in force between the United Kingdom and the Netherlands since 1981, establishes a system for the reciprocal recognition and enforcement of decisions relating to maintenance obligations in respect of adults. Article 1 provides that that convention:

`shall apply to a decision rendered by a judicial or administrative authority in a Contracting State in respect of a maintenance obligation arising from a family relationship, parentage, marriage ... between -

1. a maintenance creditor and a maintenance debtor; ...'

22 The relevant provisions of Articles 1 and 5(2) of the Brussels Convention are set out above (paragraphs 2 and 3).

23 There is accordingly an overlap between the Hague Convention and the Brussels Convention with regard to the enforcement of decisions relating to maintenance, whereas decisions relating to rights in property arising out of a matrimonial relationship are enforceable under neither convention.

24 The first paragraph of Article 57 of the applicable version of the Brussels Convention (10) provides that the Brussels Convention is not to affect any conventions to which the Contracting States are or will be parties and which in relation to particular matters govern jurisdiction or the recognition or enforcement of judgments. Thus the operation of the Hague Convention remains intact notwithstanding the fact that maintenance obligations are within the scope of the Brussels Convention.

25 Article 25(2) of the 1978 Accession Convention (11) provides as follows:

`With a view to its uniform interpretation, paragraph 1 of Article 57 shall be applied in the following manner: ...

(b) ... Where a convention on a particular matter to which both the State of origin and the State addressed are parties lays down conditions for the recognition or enforcement of judgments, those conditions shall apply. In any event, the provisions of the 1968 Convention as amended which concern the procedures for recognition and enforcement of judgments may be applied.' (12)

26 Article 23 of the Hague Convention, however, provides:

`This Convention shall not restrict the application of an international instrument in force between the State of origin and the State addressed ... for the purposes of obtaining recognition or enforcement of a decision or settlement.'

27 The combined effect of those provisions appears to be that, where the same ground is covered by the Brussels Convention and a particular convention, either convention may be relied on for recognition and enforcement, but the procedural framework put in place by the Brussels Convention - simpler and swifter - is in any event available. (13)

28 That interpretation is borne out by the travaux préparatoires of the Hague Convention. It appears from the Report (14) of the Special Commission entrusted by the Hague Conference on private international law to prepare the work of the Twelfth Session on maintenance obligations, the genesis of the Hague Convention of 1973, that Article 23 was designed to enable a maintenance creditor to invoke provisions concerning recognition and enforcement which would be more advantageous to him. The Report states that, as a result in particular of `the impending (15) entry into force of [the Brussels Convention], this rule is of capital importance ... One may assume that Article [23] will be often invoked, especially in private relationships between nationals of Common Market countries.' (16)

29 The Report then sets out the view of the Special Commission that every maintenance creditor retains the right, notwithstanding Article 57 of the Brussels Convention, to opt for the application of the Brussels Convention rather than the Hague Convention, by virtue of Article 23 of the latter Convention. (17)

The background to Article 1 - `rights in property arising out of a matrimonial relationship'

30 The original six States party to the Brussels Convention each had (and have) a distinct legislative framework governing the ownership of matrimonial property (in the broadest sense, including goods and finances). (18) The spouses may opt on marriage for a specific pattern of ownership, ranging from joint ownership of all property to separate ownership of all property with various permutations in between. If no express option is made, the law imposes a statutory regime; in some States moreover there are overriding statutory provisions which apply notwithstanding the specific choice of regime made by the spouses. In some States the initial regime may subsequently be changed: thus for example the former spouses in this case, having been married under the Netherlands regime of common property, subsequently changed the regime to that of universal separation of property.

31 It appears from the Jenard Report (19) that Article 1 of the Convention was intended to exclude from the Convention this mosaic of national rules governing proprietary relationships between spouses. (20) There were two separate but overlapping reasons for excluding such regimes from the Brussels Convention.

32 First, both the substantive laws, including the overriding and default rules and the specific regimes, and the conflict rules, which, in the case of a marriage with an international element, determined which State's matrimonial regime applied, varied significantly between the original Contracting States. It seems to have been regarded as `politically impossible' and `Utopian' to seek to ensure quasi-automatic mutual enforcement of decisions in these matters without a preliminary harmonization of, in particular, the conflict rules. (21) According to the Jenard Report, the extent of the disparity between the various systems of law, in particular regarding the conflict rules, meant that `it would have been difficult not to re-examine the rules of jurisdiction at the enforcement stage [which] would have meant changing the nature of the Convention and making it much less effective'. (22)

33 Secondly, there were public policy considerations. These are of course particularly strong in the often associated context of divorce, where `laws are rooted in different moral and religious attitudes which make it difficult for one country to accept the decisions of another country in these matters'; (23) that was even more so when the Convention was drafted 30 years ago. Including such sensitive matters within the scope of the Convention would surely have encouraged national courts to abuse the notion of public policy by refusing recognition on the basis of the exception on that ground in Article 27(1), intended `to operate only in exceptional cases'. (24) It would obviously have undermined the Convention's aim of automatic recognition and enforcement if, again to borrow the words of Droz, `les situations, jugées choquantes aux yeux du juge requis, [avaient été] purement et simplement éliminées par le moyen de l'ordre public'. (25) By way of illustration of how this could arise in the context of matrimonial regimes, Droz gives as an example a Netherlands judgment based on community of property under Netherlands law concerning a Dutch/Italian couple married after a divorce regarded as non-existent in Italy.

34 The committee of experts which drafted the Brussels Convention was of the opinion that there might possibly be grounds for resuming discussion of the problems which led to the exclusions in the first indent in the second paragraph of Article 1 after the Convention had entered into force. (26) In 1994 a working group on the extension of the Brussels Convention was created through the Council. It is currently engaged in negotiating a new convention, popularly known as `Brussels II'. It appears however that the new convention will be restricted to jurisdiction in the matters of divorce, legal separation, validity of marriage and possibly custody of children and will not attempt to regulate matrimonial property issues. (27)

35 The terminology used in Article 1 of the Brussels Convention posed a particular problem on the accession of the United Kingdom and Ireland. In those jurisdictions, there is nothing equivalent either to the concept of overriding or default legislation regulating property rights between spouses during the currency of the marriage or to the concept of a specific matrimonial regime which may be chosen by the spouses. Although both ante-nuptial and post-nuptial settlements are made, agreements between spouses regulating their property rights are subject to the general law, being treated no differently from agreements with third parties.

36 As a result of the conflict between the approach of the common-law acceding States and that of the original six civil-law States, the concept of rights in property arising out of a matrimonial relationship is considered in some detail in the Schlosser Report. (28) Schlosser analyses in greater depth than Jenard the position in the original six Contracting States, pointing out that the concept does not cover the same legal relations in all the systems concerned. The report states:

`For the purpose of governing the relations between spouses in respect of property, these legal systems do not, or at least not predominantly, employ the legal concepts and institutions otherwise used in their civil law. Instead, they have developed exclusive legal institutions the application of which is limited to relations between spouses, and whose most important feature is a comprehensive set of rules governing property. However, there is not merely one such set of rules in each legal system. Instead, spouses have a choice between several, ranging from general "community of property" to strict "separation of property". Even the latter, when chosen by the spouses, is a special form of "property regime", although special features arising from marriage can then hardly be said to exist any longer. ... If the spouses do not make a choice, one of the sets of rules governing property rights applies to them by law (known as the "statutory matrimonial regime").

...

Some provisions apply to all marriages, irrespective of the particular "matrimonial regime" under which spouses live ... It is within the spirit of Article 1, second paragraph, point 1 of the 1968 Convention to exclude those provisions concerning property rights affecting all marriages from its scope of application, in so far as they are not covered by the term "maintenance claims" ...

These findings raise problems similar to those with which the Working Party was faced in connection with the concept "civil and commercial matters". It was, however, possible to define the concept of "matrimonial regimes" not only in a negative manner ... but also positively, albeit rather broadly. This should enable implementing legislation in the United Kingdom and Ireland, in reliance on these statements, to indicate to the courts which legal relations form part of "matrimonial regimes" ... Consequently, no formal adjustment of the 1968 Convention became necessary.

As a negative definition, it can be said with certainty that in no legal system do maintenance claims between spouses derive from rules governing "matrimonial regimes"; nor are maintenance claims confined to claims for periodic payments ...

The Convention does not apply ... if the subject matter of the proceedings concerns issues which have arisen between spouses ... during or after dissolution of their marriage, and which affect rights in property arising out of the matrimonial relationship. The expression "rights in property" includes all rights of administration and disposal - whether by marriage contract or by statute - of property belonging to the spouses.' (29)

37 Unfortunately the United Kingdom implementing legislation did not take up the invitation to indicate which legal relations form part of `matrimonial regimes', merely setting out the text of the Convention. As explained below, however, English law subsequently developed in a way which did not make it feasible to draw a clear legislative distinction.

The background to Article 5(2) - `maintenance'

38 There is no definition of `maintenance' in the Brussels Convention. Schlosser states that there is no significant difference regarding the concept of maintenance as used in that convention and in the 1973 Hague Convention. (30) That convention similarly contains no definition: the Report of the Special Commission which drafted it explains:

`The Experts recalled that their colleagues meeting in 1956 under the auspices either of the Hague Conference or of the United Nations Organization when confronted with the difficulty of drafting such definitions, had attempted in vain to arrive at a satisfactory text.' (31)

39 The most that can be derived from the travaux préparatoires for the Hague Convention of 24 October 1956 on the law applicable to maintenance obligations towards children and the Hague Convention of 15 April 1958 concerning the recognition and enforcement of decisions relating to maintenance obligations towards children, referred to in the above quotation, is that it was intended that the term should be interpreted broadly. (32)

40 In considering the concept of maintenance under Article 5(2) of the Brussels Convention, one can derive several useful points from the Schlosser Report.

41 First (and as already mentioned), (33) it is not necessary in order for a claim to be for maintenance that it should be for periodic payments. As Schlosser points out:

`The mere fact that the courts in the United Kingdom have power to order not only periodic payments by one spouse to the other after a divorce, but also the payment of a single lump sum of money, does not therefore prevent the proceedings or a judgment from being treated as a maintenance matter. Even the creation of charges on property and the transfer of property as provided on the Continent, for example in Article 8 of the Italian divorce law, can be in the nature of maintenance.' (34)

42 Secondly, it is difficult to distinguish between claims for maintenance on the one hand and claims for damages and the division of property on the other. (35) As Schlosser explains:

`In Continental Europe a motivating factor in assessing the amount of maintenance due to a divorced spouse by his former partner is to compensate an innocent spouse for his loss of matrimonial status. ...

However, English law, which is characterized by judicial discretionary powers and which does not favour inflexible systematic rules, does not make a distinction as to whether the payments ordered by the court are intended as damages or as maintenance.' (36)

The notion of compensating the innocent party must, however, be now regarded as considerably less relevant given the marked trend in European divorce laws away from a fault-centred concept in favour of divorce by mutual consent, which in one form or another was introduced between 1970 and 1978 in Austria, Belgium, France, Germany, Italy, Luxembourg, the Netherlands, Portugal and the United Kingdom. (37)

43 Finally, in the case of a lump sum payment between spouses, a division of property or damages may well be the underlying factor; more particularly, where both spouses are earning well, payment of a lump sum can only serve the purpose of a division of property or compensation for non-material damage, in which case the obligation to pay is not in the nature of maintenance. Schlosser reiterates that the Convention is not applicable at all where the payments claimed or ordered are governed by matrimonial property law and that whether or not Article 5(2) applies depends, in the case of a lump sum payment, solely on whether the payment is in the nature of maintenance. (38)

The case-law

44 The case-law on the interpretation of the relevant provisions of Articles 1 and 5(2) of the Brussels Convention is unfortunately sparse and relatively unhelpful.

45 In de Cavel v de Cavel (`de Cavel I') (39) the Court considered the scope of the exclusion of `rights in property arising out of a matrimonial relationship' in Article 1. That case concerned the enforcement in Germany of a French order `authorizing, as a protective measure in divorce proceedings pending between the parties, the putting under seal of furniture, effects and other objects in the flat [in Germany] belonging to the parties and the freezing of the assets and accounts of the respondent at two banking establishments [in Germany]'. (40)

46 The Court stated:

`The enforced settlement on a provisional basis of proprietary legal relationships between spouses in the course of proceedings for divorce is closely linked to the grounds for the divorce and the personal situation of the spouses or any children of the marriage and is, for that reason, inseparable from questions relating to the status of persons raised by the dissolution of the matrimonial relationship and from the settlement of rights in property arising out of the matrimonial relationship.

Consequently, the term "rights in property arising out of a matrimonial relationship" includes not only property arrangements specifically and exclusively envisaged by certain national legal systems in the case of marriage but also any proprietary relationships resulting directly from the matrimonial relationship or the dissolution thereof.

Disputes relating to the assets of spouses in the course of proceedings for divorce may therefore, depending on the circumstances, concern or be closely connected with:

(1) questions relating to the status of persons; or

(2) proprietary legal relationships between spouses resulting directly from the matrimonial relationship or the dissolution thereof; or

(3) proprietary legal relations existing between them which have no connection with the marriage.

Whereas disputes of the latter category fall within the scope of the Convention, those relating to the first two categories must be excluded therefrom.' (41)

47 That statement echoed the view of Advocate General Warner, who had proposed:

`to give to the phrase a broad meaning, on the footing that, in practice, in few disputes between spouses about property is it likely that the "matrimonial relationship" between them will play no part. ... The upshot is that, in my opinion, a judgment or order relating to a property dispute between spouses should be presumed to be outside the scope of the Convention unless it is apparent on the face of the particular judgment or order in question that it is not.' (42)

48 The Advocate General went on briefly to consider maintenance orders, stating that they `are, in general, orders for the payment of money. They operate in personam and do not affect property rights, except where secured maintenance is ordered, but then the affection of property is of a limited and special kind.' (43)

49 The Court's reasoning in de Cavel I is somewhat opaque. Scrutiny of the ruling suggests that the Court regarded as crucial that the protective measures at issue were of their nature ancillary: since such measures `can serve to safeguard a variety of rights, their inclusion in the scope of the Convention is determined not by their own nature but by the nature of the rights which they serve to protect'. (44) It appears therefore that the ratio decidendi was that, since the measures were ancillary to proceedings which were clearly outside the scope of the Convention (divorce and the consequential dissolution of the matrimonial regime governing the French marriage in question), they were thereby also outside its scope.

50 The subsequent case between the same parties de Cavel v de Cavel (`de Cavel II') (45) concerned inter alia the enforceability of a French court's order for monthly compensatory payments in the context of divorce proceedings. The relevant provisions (Art. 270 et seq.) of the French Civil Code provided that such payments were intended to compensate, so far as possible, for the disparity which the breakdown of the marriage created in the parties' respective living standards and that the amount was to be fixed according to the needs of the spouse to whom it was paid and the means of the other. The specific issue before the Court was whether maintenance orders made in the context of divorce proceedings were within the scope of the Convention: the case was brought before Article 5(2) was amended on the accession of the United Kingdom, Ireland and Denmark so as to make it clear that such orders ancillary to divorce proceedings were included. Unsurprisingly the Court found that the payments were in the nature of maintenance, and concluded that the scope of the Convention extended `to maintenance obligations which legislation or the court places on spouses for the period after divorce'. (46)

51 In its ruling in de Cavel II the Court additionally sought to reformulate the reasoning underlying the earlier judgment. However in the third case on the exclusion of `rights in property arising out of a matrimonial relationship', W. v H. (47) (which needs no further mention since it offers no further guidance on the meaning of the phrase), the Court restated the principle laid down in de Cavel I unaffected by the comments of the Court in the intervening case; the first case accordingly remains applicable.

52 Against the broad interpretation of `rights in property arising out of a matrimonial relationship' endorsed by the Court it may be objected that, as an exception to the `civil and commercial matters' governed by the Convention, the phrase should rather be narrowly construed. It is indicated in the Jenard Report that the expression `civil and commercial matters' is very wide and that the formula of specific exclusion rather than an exhaustive positive definition of the scope of the Convention was adopted with a view to preserving that breadth: `in this respect the Convention should be interpreted as widely as possible'. (48)

53 It should perhaps also be borne in mind that the Court in de Cavel I was not focusing on the frontier between `rights in property arising out of a matrimonial relationship' and maintenance. Where the dividing line between those two concepts is at issue, a broad interpretation of the former will inevitably be at the expense of the scope of the latter. I can see no reason for thus disturbing the equilibrium of two provisions of equal standing.

Financial relief on divorce in England and Wales

54 At issue in this case is whether an order made by an English court in the context of a divorce is excluded from the Brussels Convention by virtue of Article 1. It is obvious that the rules on matrimonial property in the United Kingdom do not dovetail with those in the continental Contracting States: the issue is to what extent they therefore fall outside the exclusion. Before turning to this question, it may first be useful to describe briefly the legislative framework within which an English court will grant financial relief on divorce.

55 Since the enactment of the Married Women's Property Act 1882, which provided that a married woman was capable of acquiring, holding, and disposing of property as if she were a feme sole (49) (unmarried woman), English law has started from a presumption of separate ownership of property in marriage; that presumption may of course be rebutted by actual or inferred intention that specific property is jointly owned.

56 The powers of English courts to order lump sum payments and transfers of property on divorce are relatively recent. The power to order a lump sum payment was first introduced in 1963 (although the power to grant such a sum as secured maintenance may be traced further back via the Matrimonial Causes Act 1950 and the Judicature Act 1925 into the nineteenth century). The power to make transfer of property orders dates from the Matrimonial Proceedings and Property Act 1970: until then, the courts had no power on divorce to transfer the ownership of property between spouses; their powers to make property orders were restricted to reflecting existing patterns of ownership. (50) Most of the 1970 Act survives in the current legislation, the Matrimonial Causes Act 1973. The provisions of particular relevance for the present case are sections 21, 23, 24, 25 and 25A (51) of the 1973 Act; their effect is as follows.

57 On divorce (or nullity or judicial separation), the English courts have a wide discretion to order financial provision, including periodical and lump sum payments between spouses, and property adjustment orders, including transfer of property between spouses. The discretionary power to adjust property rights between spouses is in marked contrast to certain civil-law systems, where a court on divorce has no power to order transfers of property, being bound by existing patterns of ownership which will in turn normally derive from a prior agreement or from overriding legal provisions.

58 In exercising its discretion, the English court is required to have regard to all the circumstances of the case, first consideration being given to the welfare of any minor child of the family. In exercising its powers to make a lump sum order or a property adjustment order in relation to the other spouse (as opposed to a child of the family), the court is required to have regard to each spouse's income, earning capacity, property and other financial resources; their respective financial needs, obligations and responsibilities; the standard of living enjoyed by the family before the breakdown of the marriage; the age of each spouse and the duration of the marriage; any physical or mental disability of either spouse; each spouse's contributions to the welfare of the family, including any contribution by looking after the home or caring for the family; their respective conduct, if it is such that it would in the opinion of the court be inequitable to disregard it; and the value to each spouse of any benefit, for example a pension, which that spouse will lose the chance of acquiring.

59 Beyond these specific guidelines, the Act does not impose an overall objective to be sought by the court in framing its order. Before amendment in 1984, the Act required the court so to exercise its statutory powers `as to place the parties, so far as it is practicable and, having regard to their conduct, just to do so, in the financial position in which they would have been if the marriage had not broken down and each had properly discharged his or her financial obligations and responsibilities towards the other'. (52) That provision was dropped when section 25 was recast in 1984. At the same time, the Act was amended so as to require the court in all cases where it makes an order in favour of a party to the marriage on or after a decree of divorce or nullity to consider whether it would be appropriate so to exercise its powers `that the financial obligations of each party towards the other will be terminated as soon after the grant of the decree as the court considers just and reasonable'. (53) In other words, the court is now under a duty to consider whether to impose a `clean break'.

60 The court's powers under the Matrimonial Causes Act 1973 cannot be ousted by private agreement between the parties. (54) A previous agreement between spouses as to the ownership of their property will therefore not be binding on the court making an order on their divorce, although it will be a circumstance to which the court must have regard. (55) This is again in stark contrast to the position in certain civil-law systems, where the court on a dispute between spouses as to the ownership of their property must give effect to any agreement between them or to the pattern of ownership imposed by the law in default of an agreement.

61 One of the changes wrought by the 1970 Act, the precursor of the 1973 Act, was the abolition of the previous terminology, which had distinguished between alimony, maintenance and periodical payments. All are now described as financial provision and may take the form of periodical payments or a lump sum payment. The term `maintenance' was rejected as suggesting some inferiority on the part of the recipient. (56) Although a lump sum may be for maintenance - indeed on a `clean break', which the court is now directed to impose if it considers it appropriate, it will be the only means of ordering a maintenance payment between spouses - the `more important use of the power ... is to adjust the parties' capital assets. If, for example, the husband owns shares, the court may wish the benefit of a proportion of these to be given to the wife. ... it may do this directly by ordering them to be transferred to her in specie; it will be much more common, however, to order him to make a lump sum payment to her.' (57)

62 Considered as a whole, the provisions summarized above suggest that it may be arbitrary to try to draw a clear distinction with regard to a given order between an equitable division of assets and maintenance. That in turn suggests that, in keeping with the Court's readiness to develop an autonomous interpretation of terms and concepts used in the Convention with a view to its uniform application, (58) it may in some cases be necessary to look for the essential object of the order. I shall return shortly to this crucial point.

Guidelines for the national court

63 In the light of the above, I will now propose some indications to assist the national court to judge whether a lump sum order made by an English court in the context of divorce proceedings relates to `rights in property arising out of a matrimonial relationship' within the meaning of Article 1 of the Convention or whether it relates to maintenance. In the course of formulating these guidelines I will also consider the relevance, for categorizing an order, of the specific matters raised by the national court, namely the capitalization of an income requirement, the parallel transfer of property order and the disregard by the English court of the civil-law matrimonial property agreement.

The status of English orders on divorce in the scheme of the Convention: some general points

64 I would make the preliminary point that the mere fact that there is no separate framework of matrimonial property regimes in English law does not mean that orders on divorce made by an English court will therefore always fall outside the exclusion in Article 1 and hence, by virtue of being a civil matter not expressly excluded, be enforceable under the Convention.

65 First, it appears beyond doubt that it was intended that on the accession of the United Kingdom and Ireland the definition would have some application in those States: see the comments in the Schlosser Report set out in paragraph 36 above, including the invitation to the legislature of those States to frame a definition. That was moreover the understanding of Advocate General Warner, who in de Cavel I (59) stated his view that the accession to the Convention of the United Kingdom and Ireland would increase the disparities in the rules governing proprietary relationships between spouses which were intended to be excluded by Article 1. (60)

66 There is in any event no compelling conceptual reason for treating a legal system characterized by a common-law assumption of separate ownership of property in marriage, subject to a discretionary power on the part of the courts to make adjustments to that ownership on dissolution of the marriage, any differently from a legal system which achieves the same pattern of ownership of property on marriage by the imposition of a legislative rule. That approach also finds support in the Schlosser Report, where it is stated that even strict separation of property, when chosen by the spouses (as it is in England by default), `is a special form of "property regime"'. (61)

67 It may also be added that the reasons for excluding `rights in property arising out of a matrimonial relationship' from the framework set in place by the Brussels Convention - namely public policy and the disparity in substantive law and conflict rules - apply equally to the English system. The public policy issue is clearly of equal force, and the differences separating both the substantive law and the conflict rules from their civil law counterparts are, at least as regards the substantive law, greater than the differences between the various civil law regimes. With regard in particular to the conflict rules, it should not be thought that those applying to matrimonial property rights in the common law jurisdictions are any less complex or multifarious than those applying to civil law regimes: see the response of the United Kingdom to the questionnaire on the conflict of laws in matrimonial property matters prepared by the Hague Conference on private international law. (62)

68 Finally, the alternative view, namely that the English rules do not fall within the definition because they are part of the general law rather than imposed by specific matrimonial property legislation, is difficult to reconcile with the broad interpretation of the term `rights in property arising out of a matrimonial relationship' given by the Court in de Cavel I (63) and in particular with its statement that the term `includes not only property arrangements specifically and exclusively envisaged by certain national legal systems in the case of marriage but also any proprietary relationships resulting directly from the matrimonial relationship or the dissolution thereof'. (64)

The relevance of the prior civil-law matrimonial agreement

69 The referring court has raised the question of the significance of the Netherlands marriage settlement (meaning the regime of universal separation of goods adopted by the spouses while their marriage, originally under the regime of common property, was still current) to the categorization and hence enforceability of the English order. More specifically, the referring court asks whether it is relevant that the English judge stated that he did not regard the marriage settlement as binding on him and that it cannot be made out from the judgment to what extent that view influenced his decision.

70 On an application under the Brussels Convention to enforce this or any analogous order, the sole question is whether - or to what extent - the order is in the nature of maintenance, in which case it falls within the scope of the Convention and is enforceable.

71 I do not see how the English judge's statement that he did not regard the separation of goods agreement as binding on him is relevant to the categorization of the final order. As a matter of English law it was not binding on him, although it is a circumstance to which he was required to have regard. It is clear from his judgment that he considered the agreement and its implications for the issues before him in some depth. He appears in fact to have regarded it as applicable in so far as he assumed that the various matrimonial assets were owned separately by the former husband and wife in accordance with the agreement. He was not however prepared to find that the wife had abrogated any right to further capital provision by virtue of the agreement. The reasons which the judge gave for disregarding it to that extent appear to be solely to do with the fairness of the agreement in the circumstances in which it was entered into.

72 In this case, therefore, I do not consider that the English judge's disregard of that aspect of the agreement is relevant to the issue before the Court, namely the question whether the lump sum order finally made is enforceable as relating to maintenance.

The lump sum as maintenance

73 Turning to the criteria for the categorization of particular lump sum orders, it is clear that, at one end of the spectrum, where the recipient has no earning power and the lump sum is awarded in the context of a `clean break' in lieu of periodical payments for the recipient spouse, at least part of that sum must be in the nature of maintenance. This is expressly recognized by Schlosser; indeed he goes further, and states that the transfer of property on divorce may in certain circumstances be in the nature of maintenance. (65) to the effect that if `a payment fixed in the course of divorce proceedings is intended to ensure the support of the spouse who is in need, this is a matter of a maintenance obligation within the meaning of the 1968 Convention'. (67) The Commission rightly concludes that a lump sum payment or a transfer of property will, if it has that objective, be in the nature of maintenance notwithstanding its form; the Austrian Government similarly considers that a lump sum will be in the nature of maintenance to the extent that the spouses' respective needs and resources have been taken into account in determining the amount. What must be looked at, therefore, are the objectives sought to be achieved by the particular order, and it is to be hoped that national courts when drawing up orders will bear in mind the need for those objectives to be readily ascertainable from the reasoning given by the court.

74 The national court asks whether the fact that the income requirement is capitalized is relevant. That question in fact encompasses two separate issues.

75 First is the question whether a lump sum may in any event be maintenance: I have already indicated my view that that is so.

76 Second is the question of the significance to that categorization of the fact that a lump sum was quantified so as to be capable of generating a pre-determined level of income. In my view, and as the Commission points out, that fact is likely to be strong evidence that the lump sum is intended to generate income rather than redistribute capital; that in turn will suggest that it is in the nature of maintenance notwithstanding its expression as a lump sum: it demonstrates that the court is seeking to provide income without having recourse to periodical payments. In this case, for example, in the context of the sum of £500 000, part of the total awarded, the judge made it clear that the reason for capitalizing the income requirement was to ensure that the former wife was `no longer reliant on her [former] husband by way of support'.

77 Once it is accepted that a lump sum may properly be regarded as relating to maintenance notwithstanding its capital nature, it is obvious that the mere fact that in determining the appropriate amount the court took account of the former spouses' respective ownership of the matrimonial property and, in the same order as that in which it ordered payment of the lump sum, ordered certain adjustments of that property as between the former spouses cannot invalidate that conclusion: the calculation of the appropriate lump sum following dissolution of a marriage will, in order to be both accurate and equitable, require the court to take account of those factors, and there may be circumstances where it is more appropriate to order the direct transfer of property rather than - or as well as - a lump sum payment.

78 It should also be borne in mind that a parallel transfer of property order may - indeed frequently will - lead to a lower lump sum than would otherwise have been the case, since it will enable the recipient to realize part of the total capital sum which the court considers appropriate. That factor is well illustrated by the present case: although Cazalet J started from a total of £875 000 which he considered that the former wife `requires ... in terms of cash to provide for herself', the amount awarded by way of lump sum order was £340 000 since most of the balance was granted to the former wife by means of orders that property directly or indirectly owned by the former husband be transferred to her with a view to their sale to raise cash.

79 Accordingly, since it appears from the judgment of Cazalet J that the £875 000 awarded in total was the amount which he considered the former wife required to provide for herself and since the lump sum of £340 000 whose enforcement is at issue represents part of that total, it would be proper for the referring court to regard that lump sum as in the nature of maintenance and hence enforceable pursuant to both the Brussels and the Hague Convention.

The lump sum as a division of property

80 At the other end of the spectrum, where both parties are earning well an order awarding a lump sum will frequently be intended as a division of assets rather than maintenance in any sense: at that extreme, in my view, it will concern `rights in property arising out of a matrimonial relationship' and hence be unenforceable under the Convention.

Combined orders

81 There will however inevitably be lump sum orders which fall somewhere in the continuum between the extremes of manifest maintenance and manifest property division. Some such orders may well partake of the attributes of both types, with a proportion destined to ensure maintenance and the remainder intended to effect a division of the matrimonial property. Provided that the order is clearly and fully reasoned, the court before which enforcement is sought should be in a position itself to ascertain the intended proportions. In addition to clear reasoning, it is imperative that an order intended to combine maintenance and a division of property be mathematically transparent, so that the court before which enforcement is sought is able to sever the enforceable from the unenforceable. Even where it is not apparent from the face of a lump sum order that it was intended to reflect both the need for maintenance and a division of property, it would in my view be reasonable for the enforcing court to conclude that, in circumstances where a level of maintenance regarded as appropriate has already been assured (for example by a specified level of income to be generated by a capital sum representing part of the total lump sum ordered) the balance of the total sum relates to rights in property arising out of a matrimonial relationship.

82 If a national court in a particular case were to decide that an English lump sum order related in part to rights in property and in part to maintenance, it may, by virtue of the second paragraph of Article 42 of the Brussels Convention, order enforcement to the extent that the order related to maintenance notwithstanding that the order would be unenforceable to the extent that it related to rights in property.

83 Article 42 provides:

`Where a foreign judgment has been given in respect of several matters and enforcement cannot be authorized for all of them, the court shall authorize enforcement for one or more of them.

An applicant may request partial enforcement of a judgment.'

84 The second paragraph is intended to cater for situations where, for example, the judgment whose enforcement is sought orders the payment of a sum of money part of which has been paid since the judgment was given, in contrast to the first paragraph which is intended to cater for situations where a judgment deals with separate and independent heads of claim, the decision on some of which is unenforceable. (68) In my view, there is no reason why partial enforcement under the second paragraph should not also be available, by analogy with the first paragraph, where part of the sum of money in question relates to a matter enforceable under the Convention and the balance to a matter unenforceable thereunder. The question whether the court before which enforcement is sought may order partial enforcement of its own motion, or grant leave to amend the application, will depend on its domestic procedural rules.

85 To conclude, where the judgment, taken as a whole, can be regarded as having maintenance as its essential object, it should be recognized and enforced as a whole. Where it is clearly severable, those parts which can be so regarded should be recognized and enforced in application of the above provision.

Conclusion

Accordingly the question referred by the Arrondissementsrechtbank te Amsterdam should in my opinion be answered as follows:

An order made by a court in the context of divorce proceedings will fall within the scope of the Brussels Convention if it can be regarded as having maintenance as its essential object, notwithstanding its form. Accordingly, an order for a lump sum payment will be enforceable if maintenance is its essential object. The fact that an order for a lump sum payment is accompanied by an order for the transfer of property between spouses does not of itself prevent its being in the nature of maintenance.

(1) - Convention on jurisdiction and the enforcement of judgments in civil and commercial matters of 27 September 1968, as amended by the Convention of 9 October 1978 on the accession of the Kingdom of Denmark, Ireland and the United Kingdom of Great Britain and Northern Ireland, OJ 1978 L 304, p. 77, and by the Convention of 25 October 1982 on the accession of the Hellenic Republic, OJ 1982 L 388, p. 1.

(2) - See the Report by Mr P. Jenard on the Convention on jurisdiction and the enforcement of judgments in civil and commercial matters, OJ 1979 C 59, p. 1 (the Jenard Report).

(3) - Domicile and Matrimonial Proceedings Act 1973, section 5(2).

(4) - See further paragraphs 57 and 58.

(5) - See paragraph 8.

(6) - The judgment here refers to ultimately fruitless proceedings by the wife in an attempt to trace a large commission payment allegedly received by the husband in 1982. Assets worth £237 000 had been removed from the account a week before the Swiss courts granted a freezing order, which when served froze the remaining one guilder in the account.

(7) - See paragraph 60.

(8) - Case C-127/92 Enderby [1993] ECR I-5535, paragraph 10 of the judgment.

(9) - Case 145/86 Hoffmann v Krieg [1988] ECR 645, paragraphs 26 to 34 of the judgment.

(10) - Cited in note 1.

(11) - Convention of 9 October 1978 on the accession of the Kingdom of Denmark, Ireland and the United Kingdom of Great Britain and Northern Ireland to the Convention on jurisdiction and the enforcement of judgments in civil and commercial matters and to the Protocol on its interpretation by the Court of Justice, OJ 1978 L 304, p. 1.

(12) - A provision identical to Article 25(2) of the 1978 Accession Convention was inserted into the Brussels Convention by the 1989 Accession Convention as Article 57(2).

(13) - It may be noted that that procedural framework may be further simplified by the Convention between the Member States of the European Communities on the simplification of the procedure for the enforcement of maintenance payments, signed on 6 November 1990. That convention comes into force 90 days after ratification by the twelve then Member States. To date, only Italy and Ireland have ratified it.

(14) - By M. Verwilghen, published in Actes et documents de la Douzième session - Tome IV - Obligations alimentaires, The Hague, Bureau Permanent de la Conférence, 1975, p. 95.

(15) - The Brussels Convention came into force on 1 February 1973; the Special Commission's Report was prepared in June 1972.

(16) - Paragraph 117 of the Report.

(17) - Paragraph 118.

(18) - See further the Jenard Report, p. 11; the Report by Dr Peter Schlosser on the Convention on the accession of the Kingdom of Denmark, Ireland and the United Kingdom of Great Britain and Northern Ireland to the Convention on jurisdiction and the enforcement of judgments in civil and commercial matters and to the Protocol on its interpretation by the Court of Justice, 1979 OJ C 59, p. 71 (the Schlosser Report), paragraphs 45 to 47, and the Opinion of Advocate General Warner in Case 143/78 de Cavel v de Cavel [1979] ECR 1055, at p. 1073.

(19) - Cited in note 2.

(20) - P. 11.

(21) - See the comment by G.A.L. Droz on de Cavel v de Cavel in Revue critique de droit international privé, 1980, p. 621 at 626.

(22) - P. 10.

(23) - See the observations of the United Kingdom in de Cavel v de Cavel, cited in note 18, p. 1061.

(24) - Jenard Report, p. 44; Hoffmann v Krieg, cited in note 9, paragraph 21 of the judgment and Case C-78/95 Hendrikman and Feyen v Magenta Druck & Verlag, judgment of 10 October 1996, paragraph 23 of the judgment.

(25) - G.A.L. Droz, Compétence judiciaire et effets des jugements dans le marché commun, Paris, Librairie Dalloz, 1972, paragraph 43(2) on p. 34.

(26) - Jenard Report, p. 11.

(27) - See further P. Beaumont and G. Moir, `Brussels Convention II: A New Private International Law Instrument in Family Matters for the European Union or the European Community?', European Law Review, 1995, p. 268 and K.D. Kerameus, `The Scope of Application of the Brussels Convention and its Extension to Matrimonial Matters', La cooperazione giudiziaria nell'Europa dei cittadini situazione esistente prospettive di sviluppo (Speciale documenti giustizia - 1, 1996), cols 69 to 78.

(28) - Cited in note 18.

(29) - Paragraphs 45 to 50.

(30) - Schlosser Report, paragraph 92.

(31) - Report by M. Verwilghen, cited in note 14, paragraph 10 on p. 99.

(32) - Actes de la Huitième session, The Hague, Bureau Permanent de la Conférence, 1957, p. 167.

(33) - See the last paragraph in the quotation in paragraph 36.

(34) - Paragraph 93.

(35) - Paragraph 94.

(36) - Paragraph 95.

(37) - See for a comparative study D. Dumuse, Le divorce par consentement mutuel dans les législations européennes, Geneva, Librairie Droz, 1980.

(38) - Paragraph 96.

(39) - Cited in note 18.

(40) - Paragraph 2 of the judgment.

(41) - Paragraph 7.

(42) - Opinion, p. 1074.

(43) - Opinion, p. 1075.

(44) - Paragraph 8 of the judgment.

(45) - Case 120/79 [1980] ECR 731.

(46) - Paragraph 11 of the judgment.

(47) - Case 25/81 [1982] ECR 1189.

(48) - Pp. 9 and 10.

(49) - Old French.

(50) - Pettitt v Pettitt [1970] AC 777 and Gissing v Gissing [1971] AC 886.

(51) - Sections 25 and 25A substituted by the Matrimonial and Family Proceedings Act 1984.

(52) - Section 25.

(53) - Section 25A(1).

(54) - Hyman v Hyman [1929] AC 601.

(55) - Dean v Dean [1978] Fam. 161.

(56) - Law Commission Paper No 25: Report on Financial Provision in Matrimonial Proceedings, which led to the 1970 Act; quoted by S. Cretney, `The Maintenance Quagmire', Modern Law Review, 1970, 662.

(57) - P.M. Bromley and N.V. Lowe, Family Law, London, Butterworths, 1992, p. 733.

(58) - Case 29/76 LTU v Eurocontrol [1976] ECR 1541.

(59) - Cited in note 18.

(60) - See the Opinion, p. 1073.

(61) - Paragraph 45.

(62) - Actes et documents de la Treizième session, Tome II, Matrimonial property regimes, The Hague, Bureau Permanent de la Conférence, 1978, pp. 65 to 70. That session of the Hague Conference led to the adoption of the Hague Convention on the law applicable to matrimonial property regimes of 14 March 1978; notwithstanding its participation in the drafting, the United Kingdom is not a party to that convention.

(63) - Cited in note 18.

(64) - Paragraph 7 of the judgment.

(65) - Paragraph 93 of the Schlosser Report, quoted in

(66) - Cited in note 45.

(67) - P. 736.

(68) - See the Jenard Report, p. 53. It may be noted that Article 10 of the Hague Convention is to much the same effect as the first paragraph of Article 42.