An £11 million divorce case reached the Court of Appeal last week which highlights an important issue regarding the tussle over which country should deal with divorce proceedings when a couple live an international lifestyle.
The couple, Weng Choy and Lena Tan, have significant wealth including an un-mortgaged £4.5 million property in Kensington, along with homes in Hong Kong and Malaysia. Ms Tan is an investment banker while her husband gave up work to help look after the family.
One of the key issues in this particular dispute is that the husband filed for divorce in the English courts, with his wife disputing that he is legally entitled to do so and launching rival proceedings in Malaysia.
As the couple travelled and own property in three countries, there is some difficulty in clearly pinning down where the divorce case should be heard. For instance, Ms Tan has worked in both England and the Far East and the couple’s sons boarded at a school in England.
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It had been ruled by a High Court judge that Mr Choy had been ‘habitually resident’ in the capital for the year preceding the divorce proceedings and this entitles him to choose to have the case heard in England. However Ms Tan’s lawyer has argued this is incorrect and Mr Choy lived in Hong Kong.
Where to file?
It is not unusual for couples to argue over where to file for a divorce. In some jurisdictions there is a ‘first past the post’ system which means that if an individual meets the criteria to issue a divorce in more than one country they can cherry-pick the country they would like to deal with the divorce proceedings.
For example, if a couple of Spanish nationality had lived in London for five years leading up to the divorce, proceedings could be in England based on ‘habitual residence’ or in Spain based on common nationality. The case would be heard in the country the papers were filed in first.
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As the rules and relationships between countries vary, first past the post is not always enough and the couple (or at least one party) has to justify their decision to want to get divorced in that jurisdiction. The court will examine the couple’s links with each country to ascertain the most appropriate country for the divorce.
This issue has become more pressing in recent years as people’s careers take them across borders, with homes and other assets in different countries. Inevitably this causes disputes, as in this case, if the parties do not agree on where they would like the divorce to take place.
Where’s the best place to divorce?
Widely labelled as the world’s ‘divorce capital’, London’s courts certainly have the experience when it comes to dealing with high-value, complicated divorce claims – last August saw the biggest ever divorce pay-out awarded by a judge – £54 million. A former Miss Malaysia is currently fighting her divorce battle in the London courts and is seeking up to £500 million.
The Prest case last year also saw some complex issues resolved – ruling in favour of Mrs Prest and allowing her to take a share of properties which Mr Prest had previously claimed were owned by his company.
Divorce law can vary massively across the globe – which country hears the divorce impact on the size and scope of the financial settlement. For instance, over the border in Scotland, how much a spouse is entitled to is just based on assets accrued during the marriage – a home inherited before a marriage would not be included in divorce negotiations.
In some European jurisdictions, maintenance payments will only last for a number of years – three or five for example – in this country they can sometimes last indefinitely.
Does the law need to change?
As high net worth individuals increasingly live all over the world, it becomes harder and harder to classify where a couple lives ‘full time’ and therefore where they should divorce. It seems that as the business world becomes more international, disputes over where a couple wants to divorce will become more widespread – the law may well have to evolve to catch up to this social trend soon.
Emma Collins is a Partner in the Family and Private Client team at Weightmans LLP
