Every year the senior courts issue thousands of judgments, which our reporters assess for their legal significance as precedents. Only a few hundred are selected for reporting, and that is because they change or clarify the law in some way. While the other judgments are published, and may be of interest for various other reasons, they do not merit selection as precedents.

In this short series of commentaries our reporters and contributors have each chosen a case that they believe truly changed the legal landscape in 2024.

In the post below, our law reporter Philip Ridd, and David Burrows, a solicitor advocate who contributes regularly to this blog, each comment in turn on the Supreme Court’s decision in Potanin v Potanina [2024] UKSC 3; [2024] AC 1063, SC(E) which is likely to have a significant impact on the way claims for financial relief after a foreign divorce are permitted to proceed in England and Wales.

A correction and a ‘salutary warning’

The Supreme Court is not bound by any previous decision but, for various reasons, there may be a reluctance to overrule a decision which is considered wrong. That reluctance was at the heart of the 3/2 decision in Potanin v Potanina and makes the case an interesting one.

Potanin and Potanina are divorced Russians. The Russian courts awarded a financial provision to Potanina, but that provision, though substantial, represented only a tiny fraction of Potanin’s multi-billion wealth. That stemmed from Russian courts having regard only to assets legally and beneficially owned by one or both parties: much of Potanin’s wealth was not legally owned by him. After moving to England Potanina applied here for further financial provision. The Matrimonial and Family Proceedings Act 1984 had given courts in England and Wales power to grant financial remedies after an overseas divorce, the Act laying down conditions for the exercise of the power.

A filter regime was instituted in order to put a swift end to applications which had no real prospect of success. Rules of court required an applicant to start by making an ex parte application. The judge might make an order that the case could go forward, refuse to make such an order, or convert the hearing to an inter partes hearing. Cohen J [2019] EWHC 2956 (Fam); [2020] Fam 189 made an order in Potanina’s favour; Potanin successfully appealed, Cohen J revoking his original order; the Court of Appeal  [2021] EWCA Civ 702; [2022] Fam 23 allowed an appeal by Potanina in reliance on what may be called “the Agbaje/Traversa practice”. That was a regime fashioned by judges in previous cases to discourage appeals against ex parte orders, instead encouraging the dissatisfied party to wait until the substantive hearing to say his piece. Under the Agbaje/Traversa practice an appellant against an ex parte order would be entitled to succeed only if a “knockout blow”, by way of compelling reason, had been delivered. When Potanin had persuaded the judge to revoke the original order, that had been by something short of a knockout blow. Potanin successfully appealed to the Supreme Court on the ground that the Agbaje/Traversa practice was unlawful, with the consequence that Cohen J’s revocation order should be reinstated.

Shortage of space necessitates a brevity of analysis which might well be criticised as oversimplification. The erudite reasoning of the majority made good the simple proposition that the judges had no business to set up additional obstacles in the path of a litigant, while the minority eloquently took the line that it was too late for it to be appropriate to set aside the Agbaje/Traversa practice.

A final observation is that Potanina lost even though her case was favoured by five judges out of nine, a salutary warning to those contemplating a foray into litigation.

Philip Ridd, Solicitor

Putting right a ‘dystopian’ procedure

The Supreme Court’s decision in Potanina (31 January 2024) derives from an interim application which deals with a narrow area of law, and which comments generally on a much wider procedural point. The narrow point: a spouse applicant seeking permission to proceed under Matrimonial and Family Proceedings Act 1984 Part III (financial provision in the family courts following a foreign divorce). By following procedural principles outlined by the Supreme Court in Agbaje v Agbaje [2010] UKSC 13; [2010] 1 AC 628 judges had been giving the initial permission to an applicant (most often a wife: A); but doing so in a way which was “unlawful”, as Potanina confirmed. They were doing so without telling the respondent (R).

The wider procedural point derives from this “initial permission” and was emphasised by Lord Leggatt for the majority (with Lady Rose and Lord Jones, over the dissent of Lords Briggs and Stephens). Procedure being adopted by family courts under Part III was, he said, “dystopian”. It was contrary to basic principle as summarised (for family cases), by Family Proceedings Rules 2010 rr 18.10 and 18.11. On any without notice hearing rules – and principles of justice – make it clear that if an order is made without notice to R, R must be told of R’s entitlement to set aside any such order. In the case of Part III the order is one giving A permission under s 13 to proceed with A’s application (FPR 2010 r 18.11). In Potanina the order had been permission had been to a wife to proceed with her Part III application; and now the Supreme Court must correct its earlier error in Agbaje.

If a court makes an order granting permission under s 13 and after hearing from A alone and without notice R, R has an absolute unfettered right – or should have had such a right – to apply to have the order set aside: under applications under Part III, or on any other family proceedings application where the court are asked for an order without notice to R. “Rule one” for any judge dealing with a case is “you must give the other party a chance to object.” (see Lord Leggatt, at [1]). This is confirmed in rr 18.10 and 18.11.

David Burrows, Solicitor Advocate

 

Featured image: Photo by Marek Studzinski on Unsplash.