Potanina v Potanin (No. 2): Aligning the Part III Leave Threshold with a “Real Prospect of Success” and confirming (pre‑Brexit) Maintenance Regulation constraints on forum objections

Potanina v Potanin (No. 2): Aligning the Part III Leave Threshold with a “Real Prospect of Success” and confirming (pre‑Brexit) Maintenance Regulation constraints on forum objections

Introduction

This Court of Appeal decision in Potanina v Potanin (No. 2) ([2025] EWCA Civ 1136) is the latest chapter in high-profile litigation under Part III of the Matrimonial and Family Proceedings Act 1984 (the 1984 Act). It follows the Supreme Court’s intervention in Potanina v Potanin [2024] UKSC 3 (Potanina (SC)) which reset the procedural approach to setting aside leave and clarified the leave threshold. The present appeal moves decisively from procedure to substance: what is the correct merits threshold for granting leave under section 13, how should section 16’s “appropriateness” exercise be conducted, and what is the effect—while it still applied—of the EU Maintenance Regulation on a court’s ability to refuse a needs-based claim on forum grounds?

The parties are Russian nationals, formerly married for approximately 30 years and divorced in Russia in 2014. They accumulated vast wealth during the marriage; the husband is among Russia’s richest men. The wife contends that Russian law’s focus on legal rather than beneficial ownership produced a derisory outcome for her—less than 1% of what she says should have been shared—because substantial assets held via companies and trusts were excluded. She moved to England (habitually resident since at least January 2016) and applied in 2018 for leave to seek financial relief under Part III.

Cohen J had initially granted leave without notice (January 2019) but later set it aside and dismissed the renewed leave application (November 2019). The Court of Appeal (2021) restored the grant of leave on set-aside principles; the Supreme Court (2024) corrected the set-aside approach and remitted the wife’s appeal against the refusal of renewed leave back to the Court of Appeal. This appeal therefore squarely addresses the substantive threshold for leave.

Summary of the Judgment

  • The Court of Appeal allowed the wife’s appeal and held that Cohen J was wrong to refuse leave (paras 6, 108).
  • Applying the Supreme Court’s clarification, the section 13 “substantial ground” threshold equates to something akin to a “real prospect of success” (Potanina (SC) at [89]–[92]; see this judgment at paras 73–77, 94).
  • For section 16 factors (appropriateness) and the merits threshold, the court assesses the position at the date of the leave hearing and looks forward to the likely position at trial; by contrast, jurisdictional requirements are assessed at the date of the application (paras 9(ii)–(iii), 10, 85, 110).
  • There is no statutory requirement of a “substantial” connection with England and Wales in Part III; “connection” is unqualified in section 16(2)(a) and must be weighed flexibly with other factors (paras 9(vii), 78–80).
  • Hardship and injustice are relevant (though not prerequisites) to the section 16 exercise and the merits threshold (para 81).
  • Where the EU Maintenance Regulation applied (pre‑Brexit), section 16(3) prevented the court from refusing a needs-based claim on forum non conveniens grounds once Article 3 jurisdiction was engaged; a maintenance creditor had the right to choose the forum (paras 96–105, citing Villiers).
  • On the evidence before the judge in 2019, the wife had a real prospect of obtaining further relief; leave should have been granted and is now granted by the Court of Appeal without remittal (paras 7, 109–116).

Analysis

Precedents Cited and Their Influence

  • Agbaje v Agbaje [2010] UKSC 13:
    • Remains the leading authority on Part III’s purpose and section 16 balancing (para 31).
    • “Substantial” in section 13 means “solid” (para 32). The present court, echoing the Supreme Court in Potanina (SC), treats “solid” as aligned with a “real prospect of success” test rather than the higher “good arguable case” threshold (paras 73–77).
    • Flexibility is central; the court weighs connections with England against foreign connections without importing a “substantial connection” requirement (paras 78–80; citing Agbaje at [52], [70], [73]).
    • Hardship/injustice can justify orders (paras 35(ii), 81; Agbaje at [44], [61], [72], [76]).
  • Potanina (SC) [2024] UKSC 3:
    • Corrected the set-aside approach and clarified the leave threshold: courts should ask whether there is a substantial (solid) basis that the claim has a “real prospect of success” (SC at [89]–[92]; this judgment at paras 74–77, 94).
    • Adopted Lord Hope’s “reverse summary judgment” guidance (Three Rivers) for assessing whether factual issues demand a trial (SC at [91]–[92]; paras 76–77).
  • Three Rivers District Council v Bank of England (No 3) [2001] UKHL 16; [2003] 2 AC 1:
    • Explains when it is improper to resolve disputed facts summarily; complex cases and factual disputes usually require trial processes (disclosure, evidence, cross-examination) (SC at [91]; paras 76–77, 91, 115).
  • Villiers v Villiers [2020] UKSC 30:
    • Describes the Maintenance Regulation’s mandatory jurisdictional structure and the maintenance creditor’s right to choose the most beneficial forum (paras 69–71, 100–103).
    • Supports the conclusion that a domestic court with Article 3 jurisdiction cannot decline it on forum non conveniens grounds (paras 101–104).
  • Zimin v Zimina [2017] EWCA Civ 1429:
    • Affirms Part III cannot be used merely to “top up” to an English award where foreign provision is adequate; but hardship/injustice are not prerequisites (paras 35(i)–(iii)).
  • Unger v Ul-Hasan [2023] UKSC 22:
    • Referenced for the concept of an applicant being a “fully entitled wife” entitled to the full range of financial relief (paras 38, 113).
  • Owusu v Jackson (Case C‑281/02) [2005] QB 801; R v P (Case C‑468/18) [2020] 4 WLR 8:
    • Grand Chamber/CJEU authorities explaining that EU jurisdictional regimes are exhaustive and do not permit forum non conveniens once jurisdiction is conferred (paras 102–103).
  • Dos Santos v Unitel SA [2024] EWCA Civ 1109 and TY v XA [2024] EWFC 96:
    • Referenced for comparative procedural tests and timing points (paras 9(ix), 77; and 9(x)).

Legal Reasoning

1) The Leave Threshold under Section 13: “Real Prospect of Success”

The court confirms, in line with the Supreme Court, that “substantial ground” means a “solid” case which, in practical terms, is akin to showing a real prospect of success—not merely that the claim is non-abusive or not fanciful (paras 73–77, 94; Potanina (SC) at [89]–[92]). The comparison is with the reverse summary judgment standard from Three Rivers: disputed factual issues which are not clearly without substance should not be summarily determined at the leave stage (paras 76–77).

2) Timing: Jurisdiction vs Merits

  • Jurisdictional requirements (section 15) are assessed at the date of the application for leave (paras 9(i), 9(iii), 110).
  • Merits-based considerations (section 13, and section 16 factors including connection) are assessed at the hearing date with a forward look to trial, including the realistic prospect of further material emerging through disclosure (paras 9(ii), 9(x), 85, 115).

3) Connection with England and Wales: Flexibility, not a “Substantial Connection” Test

The court resists importing a “substantial” connection requirement into section 16(2)(a). The statute speaks simply of “the connection,” and Agbaje emphasises flexible weighing of all section 16(2) factors (paras 78–80). A stronger connection will fortify an application, but there is no hierarchy among the factors (paras 9(vii), 80).

4) Hardship and Injustice are Relevant

Although not prerequisites, hardship and injustice can be significant in the appropriateness analysis under section 16 and can support leave (paras 35(ii), 81). Here, the wide disparity between the wife’s receipt and the husband’s retained wealth, against the backdrop of a long marriage and very high lifestyle, was capable of amounting to hardship/injustice (paras 90, 92, 114).

5) The Maintenance Regulation’s (Pre‑Brexit) Effect: No Forum Non Conveniens for Needs Claims

Where the Maintenance Regulation applied at the time of issue, Article 3’s mandatory jurisdiction and section 16(3) meant the court could not refuse a needs-based application (maintenance) on appropriateness/forum grounds once Article 3 jurisdiction was satisfied—here via the wife’s habitual residence in England (paras 96–105, esp. 103–104; Villiers). The judge’s contrary approach was an error of law.

6) Application to the Facts and Errors at First Instance

  • Connection mischaracterised: The judge unfairly downplayed the wife’s connection as “recent and modest,” despite unchallenged evidence of habitual residence since January 2016, property ownership, and a UK investor visa (paras 46, 83–87, 112).
  • “Divorce tourism” label: The pejorative characterisation was unsafe; motivation may be relevant but cannot be resolved summarily or by drawing adverse inferences from privileged consultations with lawyers (paras 62, 64, 88–90; CA (2021) at [67]–[71]).
  • Lacuna and injustice not addressed: The wife’s central contention—that beneficially owned assets were outside the Russian matrimonial pot—required detailed analysis and could not be dismissed summarily; the judge also failed to grapple with the potential injustice/hardship (paras 55–56, 90).
  • Maintenance Regulation misapplied: Section 16(3) should have precluded dismissal of the needs-based limb for forum reasons once Article 3(b) was met (paras 103–104).
  • Summary fact-finding: The judge made adverse findings (including that he had been misled) without oral evidence or cross-examination; the Court of Appeal had already held those findings unsustainable, and the Supreme Court reiterated the proper summary approach (paras 52–54, 91).

Impact

A) On the Part III Leave Stage Generally

  • The leave threshold is now firmly anchored to a “real prospect of success” standard. Parties should expect the court to avoid deciding contested factual issues summarily unless clearly without substance.
  • Applicants may rely on the likelihood that disclosure will yield further material supporting their case; respondents should not expect an evidentially demanding merits trial at the leave stage.
  • There is no overarching requirement to prove a “substantial” English connection. The court will weigh all section 16(2) factors flexibly, including hardship/injustice.
  • Jurisdictional satisfaction at the application date and merits assessment at the hearing date (with a forward look) are now clearly differentiated in timing.

B) Needs-Based Claims and the Maintenance Regulation (Historical/Transitional)

  • For cases issued while the Maintenance Regulation still applied, once Article 3 jurisdiction was satisfied, courts could not decline to hear a needs-based application on forum appropriateness grounds (section 16(3)).
  • Post‑Brexit: the Regulation has no application to new cases, and section 16(3) has been repealed. Nevertheless, the decision provides a careful map of the pre‑Brexit regime, useful for legacy and transitional cases.

C) Substantive Outcomes in High-Net-Worth International Cases

  • The judgment underlines that alleged structural gaps in foreign matrimonial property law (e.g., treatment of beneficial ownership) can, if properly evidenced, found a viable Part III claim, especially where the disparity is stark and needs are not met.
  • Courts will resist characterising applications as mere “top-ups” where section 16 factors—connection, hardship/injustice, enforceability, and prior pursuit of foreign remedies—point toward appropriateness.

Complex Concepts Simplified

  • Part III MFPA 1984: Allows applications in England and Wales for financial relief after an overseas divorce, where jurisdictional requirements are met and it is appropriate to make an order.
  • Section 13 “substantial ground”: Means a solid case with a real prospect of success—above “not totally without merit,” but below the “good arguable case” standard used for certain jurisdictional gateways.
  • Section 15 (jurisdiction): Requirements are assessed at the date of the application for leave. Traditionally through domicile/habitual residence/matrimonial home. While the EU Maintenance Regulation applied, its Article 3 jurisdictional bases superseded section 15 via section 15(1A).
  • Section 16 (appropriateness): A flexible, non-hierarchical checklist (connections, foreign provision, enforceability, available property, prior remedies, time elapsed, etc.). Assessed at the leave hearing date and with a forward look to trial.
  • “Maintenance” vs “sharing”: Needs-based provision (maintenance) can include lump sums or property transfers if aimed at meeting needs. Sharing is the broader equalisation of matrimonial wealth. Under the Maintenance Regulation era, needs claims engaged Article 3; sharing aspects did not.
  • Beneficial vs legal ownership: English law often treats assets beneficially owned (even if held through companies/trusts) as part of the matrimonial acquest; some civil codes focus on legal title. A foreign law’s omission of beneficial interests can create a “lacuna” relevant to hardship/injustice.
  • Habitual residence vs domicile: Habitual residence refers to where a person has their settled, regular life. Domicile is a broader, long-term connecting factor, often of origin or choice.
  • Forum non conveniens and the Maintenance Regulation: Under the pre‑Brexit Regulation, once Article 3 conferred jurisdiction, Member State courts could not decline on grounds that another forum was more appropriate.

Practical Guidance for Practitioners

  • At the leave stage:
    • Focus on demonstrating a realistic prospect that section 16 factors, viewed holistically, will support an order. Evidence of connection (residence, properties, visas), hardship/injustice, and enforceability are key.
    • Identify any structural differences in foreign law (e.g., treatment of beneficial interests) and how they affected the foreign outcome; flag why detailed analysis is needed and cannot be resolved summarily.
    • Do not overplay arguments on “divorce tourism.” Motivation may be relevant, but summarily deciding it without oral evidence is risky and often inappropriate.
    • Emphasise the forward look: explain what disclosure might yield and why full merits should be decided at trial.
  • On jurisdiction:
    • Be precise about timing: section 15 is assessed at the date of application; section 16 and section 13 at the hearing.
    • For legacy cases where the Maintenance Regulation still bites, show how Article 3 jurisdiction removes the court’s discretion to refuse a needs-based claim on forum grounds.
  • On relief sought:
    • Avoid a presentation that looks like a pure “top-up” to an English award. Anchor the claim in need, injustice, and the flexible balance in section 16.
    • Consider targeted relief; as Agbaje notes, leave does not “inevitably trigger a full-blown claim for all forms” of relief.
  • On evidence and privilege:
    • Courts should not draw adverse inferences from assertion of privilege over legal advice. If motivation is at issue, be prepared to test it at trial, not at the leave stage.

Conclusion

Potanina v Potanin (No. 2) is a significant recalibration of the Part III leave exercise. It reaffirms Agbaje but harmonises the section 13 threshold with the “real prospect of success” test, discouraging summary determination of complex factual disputes at the leave stage. The judgment also clarifies key timing distinctions: jurisdictional status at application; merits at hearing with a forward look. It resists importing a “substantial” connection requirement into section 16(2)(a) and emphasises that hardship and injustice remain relevant to appropriateness. Finally, for legacy cases issued while the Maintenance Regulation applied, the court could not refuse to hear a needs-based claim on forum grounds once Article 3 jurisdiction was established; the maintenance creditor’s forum choice had to be respected.

On the facts, the Court of Appeal found that the wife’s established residence and connection with England, the potential lacuna in the Russian approach to beneficial ownership, the striking disparity between her award and the husband’s wealth, and the realistic prospect that disclosure would assist, together created a solid basis for relief. The court therefore granted leave itself and remitted the matter for case management, prioritising procedural economy after years of satellite litigation.

The decision will guide future Part III applications by emphasising flexibility, disciplined timing, and a merits threshold that is meaningful yet not onerous. It is a clear reminder to avoid pejorative shortcuts like “divorce tourism” and to respect the proper role of trial processes where complex facts and comparative legal issues are in play.

Case Details

Year: 2025
Court: England and Wales Court of Appeal (Civil Division)

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