Amsterdam Court of Appeal on the Scope of the Matrimonial Property Regimes Regulation

This blogpost is written by Stichting IJI (The Hague Institute for private international law and foreign law)

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On 13 June 2023 the Amsterdam Court of Appeal addressed the scope of Regulation (EU) 2016/1103 of 24 June 2016 implementing enhanced cooperation in the area of jurisdiction, applicable law and the recognition and enforcement of decisions in matters of matrimonial property regimes (hereinafter: Regulation 2016/1103) (ECLI:NL:GHAMS:2023:1358).

The court had to rule on the matter of jurisdiction regarding the division of real estate located in New Zealand between parties who had agreed upon the exclusion of marital property. In this post, we will discuss the court’s assessment of the substantive scope of Regulation 2016/1103 with regard to the jurisdiction of the Dutch court.

Regulation 2016/1103: Overview

Regulation 2016/1103 entered into application on 29 January 2019 following the objective of certain Member States to establish a more enhanced cooperation between themselves aimed at adopting common rules on jurisdiction, applicable law and the recognition and enforcement of decisions with regard to property regimes of international couples, covering both marriages and registered partnerships.

The Regulation has been adopted under the special regime of enhanced cooperation, as provided for by Article 20 of the Treaty on European Union (TEU) and Articles 326 to 334 of the Treaty on the Functioning of the European Union (TFEU). The territorial scope of the Regulation is therefore limitedly binding for the Member States participating in this cooperation.

According to Article 69 of Regulation 2016/1103 the regulation applies only to legal proceedings instituted, to authentic instruments formally drawn up or registered and to court settlements approved or concluded on or after 29 January 2019.

Its substantive scope should include all civil-law aspects of matrimonial property regimes, both the daily management of matrimonial property and the liquidation of the regime, in particular as a result of the couple’s separation or the death of one of the spouses. For the purposes of the Regulation, the term ‘matrimonial property regime’ should be interpreted autonomously and should encompass not only rules from which the spouses may not derogate but also any optional rules to which the spouses may agree in accordance with the applicable law, as well as any default rules of the applicable law. It includes not only property arrangements specifically and exclusively envisaged by certain national legal systems in the case of marriage but also any property relationships, between the spouses and in their relations with third parties, resulting directly from the matrimonial relationship, or the dissolution thereof (Recital 18).

The Facts

The parties involved in this case got married in New Zealand in 1993. At that time, both parties had the Dutch nationality. Additionally, the woman had also the New Zealand citizenship. The parties lived in New Zealand and three children were born during their marriage.

Before marriage, the parties drew up prenuptial agreements in the Netherlands. The parties chose to apply Dutch law to their marital property and, regarding their marital property regime, decided on the exclusion of community of property in accordance with Dutch law.

On 31 March 1999 the man purchased a house in New Zealand. The parties lived in this accommodation from 2000 to 2008 with their three children. In 2007 the man paid off his mortgage on this property. Before relocating to the Netherlands, the parties drew up a ‘property agreement’ with regards to the house, stating that the parties were now co-owners of the property. This was necessary as the applicable Dutch marital property regime of the exclusion of community of property would not result in co-ownership over the property. In the property agreement the parties agreed on the following:

(…)

BACKGROUND

(…)

1. 1976. The parties wish to record their agreement as to the ownership of the home pursuant to Section 21(2) of the Property (Relationships) Act 1976.

AGREEMENT TERMS

1. 1. The husband declares that the home is relationship property.
   2. As from the date of this agreement the husband and the wife shall own the home as joint tenants and the husband declares that he now holds ownership of the home, as registered proprietor, as trustee for the husband and the wife accordingly.
   3. (…)
   4. Ownership of the home, and any transfer, is subject to all existing registered encumbrances, but the mortgage to the ASB Bank is to be discharged, as it has been repaid in full.
   5. This agreement is made pursuant to Section 21(2) of the Property (Relationships) Act 1976 and is specific to the home and is not attempting to determine ownership of any other property (separate or relationship) which may also be owned by the husband and/or the wife, nor does it otherwise effect the pre-nuptial agreement signed by the parties prior to their marriage.
   6. This agreement is binding on the parties in all circumstances including (…) dissolution of marriage (…).
   7. Each party:

(a) (…)

(b) acknowledges that before signing this agreement he or she has had independent legal advice as to the nature, effect and implications of this agreement.

(…)

The parties eventually got divorced on 18 November 2019 in the Netherlands.

First Instance Judgment

As an ancillary provision to the divorce petition the man requested the Amsterdam District Court to divide the property in New Zealand and to grant him compensation for his private investments in this property. The court retained itself competent to decide on this request based on Article 6 of Regulation 2016/1103. The court recognized the co-ownership of the property and applied Dutch law to the division of the property in line with the choice of law in the prenuptial agreement of the parties.

The court then ordered the sale of the property and ordered the woman to cooperate with that sale. If the woman would not cooperate, the court granted the man the power to act solely with regards to the sale of the property. In addition, the court ruled that both parties would share the revenue and would be held responsible for the costs regarding the sale. The woman appealed the court’s decision on the matter of the court’s competence and the applicable law to the division of the house.

Appeal Request

According to the woman, the Dutch court should have never considered itself competent under Article 6 (a) of Regulation 2016/1103 because that Regulation did not apply to the matter at hand. Accordingly, the Amsterdam District Court could not establish its jurisdiction based on the application of the Regulation.

According to the woman the parties shared no marital property in light of their prenuptial agreement. Therefore, the request regarding the division of the property could not fall within the scope of Articles 1 and 3 of Regulation 2016/1103. Instead, the woman argued that any community of property should be dissolved under “common” property law specifically related to proprietary rights and interests, since the marital property regime stipulated the full exclusion of community of property.

Court of Appeal Judgment

The Amsterdam Court of Appeal stated that with regard to legal claims in the field of international matrimonial property law that are brought on or after 29 January 2019, the Dutch court shall establish its jurisdiction on the basis of Articles 4 to 19 of Regulation 2016/1103. This applies even if the claim relates to a marriage that was concluded prior to this date. Materially, Regulation 2016/1103 covers “matrimonial property regimes” (Article 1(1) of Regulation 2016/1103). This includes all property relationships which, as a result of the marriage or its dissolution, exist between the spouses or in relation to third parties (Article 3 (1) (a) of the Regulation). The Court of Appeal then explained then the scope of the Regulation with regards to the property agreement at hand, as follows:

The parties entered into the Property Agreement in 2008. With this agreement the parties became co-owners of the property in New Zealand. Under subsection D of the Property Agreement, the parties recorded that they entered into the agreement “pursuant to Section 21(2) of the Property (Relationships) Act 1976.” It is further recorded under Section 5 of the Property Agreement that “This agreement is made pursuant to Section 21(2) of the Property (Relationships) Act 1976 and is specific to the home and is not attempting to determine ownership of any other property (separate or relationship) (…) nor does it otherwise effect the pre-nuptial agreement signed by the parties prior to their marriage.”

The Court of Appeal considered that the property agreement refers explicitly to the Property (Relationships) Act 1976. The Property (Relationships) Act 1976 pertains to the division of property of married couples (or cohabitating couples) in the event of divorce or death in New Zealand. In addition, the parties signed the property agreement as “husband” and “wife”. Thus, with the referral to the Act and the signing of the agreement in their official capacity as husband and wife, the parties had chosen to establish proprietary consequences through their marital status. With that in mind, the Court of Appeal established that the request for the division of the property in New Zealand falls within the scope of Regulation 2016/1103. Then, the Court of Appeal concluded that since the spouses were habitually resident in the Netherlands at the time the case was brought before the first instance court, the Dutch court had jurisdiction pursuant to Article 6 (a) of the Regulation. The fact that the property is established in New Zealand does not alter the foregoing.

Conclusion

This decision of the Amsterdam Court of Appeal clarifies the broad scope of Article 1 in relation with Article 3 of the Regulation 2016/1103 and Recital 18 of the preamble. Art 1(1) provides that this Regulation applies to matrimonial property regimes. This Article should be read in conjunction with Article 3(1)(a), which defines the notion of ‘matrimonial property regime’ as ‘a set of rules concerning the property relationships between the spouses and in their relations with third parties, as a result of marriage or its dissolution.’  The Court of Appeal explains in its decision that the Regulation 2016/1103 may apply even in cases where the marital property regime includes an exclusion of community of property. The exclusion of community of property might entail that an issue relating to assets of the spouses does not fall within the material scope of the Regulation. After all, it can be argued that there is no connection with the marriage of the persons concerned. However, if the spouses made an agreement with respect to a certain asset and opt for a property relationship as a result of – or in connection with – their marriage, the provisions of Regulation 2016/1103 may be applied for the division of such property.

As the Regulation is still quite young, it will be interesting to monitor rulings on similar subjects from the courts of the participating countries.