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77 The CJEU's important preliminary ruling over an Anglo-French succession and the application of article 10 Succession Regulation (EU) n° 650/2012.

April 22nd 2022

Following on from recent posts on the application of the Succession Regulation (EU) n° 650/2012 to English and Jersey successions in France by reference to the law of the deceased's nationality or of habitual residence.

The CJEU handed down a preliminary ruling on 7th April, 2022 in case C‑645/20 V A and Z A v TP (French language ruling) on the scope of a subsidiary jurisdiction of EU courts over succession to assets in the EU (here French courts) under article 10 of the Regulation.

Article 10

Subsidiary jurisdiction

1.   Where the habitual residence of the deceased at the time of death is not located in a Member State, the courts of a Member State in which assets of the estate are located shall nevertheless have jurisdiction to rule on the succession as a whole in so far as:

(a) the deceased had the nationality of that Member State at the time of death; or, failing that,

(b) the deceased had his previous habitual residence in that Member State, provided that, at the time the court is seised, a period of not more than five years has elapsed since that habitual residence changed.

2.   Where no court in a Member State has jurisdiction pursuant to paragraph 1, the courts of the Member State in which assets of the estate are located shall nevertheless have jurisdiction to rule on those assets.

On the face of it, the article deals with jurisdiction, but there has always been a concern in issue as to whether it can displace the law of the habitual residence of the deceased for that of the Court taking jurisdiction, whether generally or by indirect reference to the law of nationality. The CJEU has answered that in this Ruling.

It has always been clear that this could upset tr arrangements of deceased individuals and their heirs relying on the a law of nationality or residence of a deceased whose habitual residence was not in a Member State. However its extent, scope and effects were not clear.

After Brexit, there was no doubt that the status of the UK had definitively changed from that of a Member State outside the scope of the Regulation, by choice, to that of a non-Member State, thus removing any doubt as to whether article 10 could apply on that head alone. The CJEU has implicitly confirmed that it can. The death in this case occurred in France in 2015, prior to Brexit and fell therefore within the pre-Brexit regime.

The language of the Case was French. The link to the English version is below. The facts were as follows:

In the request for a preliminary ruling in litigation between the heirs of a deceased who argued that French law applied to their Father's / brother's succession because he had decided to return to live in France two years before his death, after living for a long period in the United Kingdom where he had entered into a second marriage with a British lady. He had children from a previous marriage in France who brought an action there with the brothers of the deceased. Together these potential French heirs were seeking to obtain the appointment of a mandataire successoral to deal with the entire succession, which may not have been limited to the French assets alone.

The British widow argued that the deceased's habitual residence remained British, as his return to France was due to medical reasons. The question was not limited to the place of the ouverture de la succession which is a frequently argued issue. The issues raised became increasingly diversified as the French procedure went on.

The Tribunal de Grand Instance de Nanterre held that the French courts had jurisdiction over the deceased's succession as a whole under article 4 of the Regulation on the basis that the deceased had his habitual residence in France.

On appeal the French Cour d'appel de Versailles agreed with the widow and declared itself incompetent on the basis that the deceased's habitual residence was in Great Britain at the time of his death.

Then the French parties appealed en cassation pleading that article 10 of the Regulation had to be taken into consideration. As set out above, article 10 lays down as subsidiary jurisdiction the courts of the Member State in which the succession's assets are situated. Those courts can rule on the whole of the succession so long as the deceased had the nationality of the Member State concerned (which was the case here, the deceased had French nationality), despite the fact that his habitual residence at the time of his decease was in another State (here within the United Kingdom).

The issue raised by the Cour de cassation for consideration by the CJEU was, given that the French heirs had not raised this before the Cour d'appel, should that court have raised this issue of its own initiative under the wording of article 10?

However, given the issue of competence by reference to nationality, the French Cour de Cassation raised a further difficulty as to which succession law should be applied were it to have article 10 jurisdiction. The question raised was summarised by the CJEU in the following terms:

21      On the other hand, the referring court observes that the jurisdiction provided for in Article 10 of Regulation No 650/2012, which is described as 'subsidiary' therein, derogates from the principle of the unity of jurisdiction and applicable law that informs that regulation. Where the court of a Member State finds that it has jurisdiction under Article 10 of Regulation No 650/2012, it nevertheless has to apply the law of the State where the deceased had his or her habitual residence at the time of his or her death, unless it follows from all the circumstances of the case that, at the time of that death, the deceased was manifestly more closely connected with another State, in accordance with Article 21(2) of that regulation, or had expressly chosen the law of another State, pursuant to Article 22 of that regulation. Thus, it appears difficult to accept that the court of a Member State seised is under an obligation to examine a rule of jurisdiction described as 'subsidiary', even where the parties do not rely on it.

The CJEU replied that article 10. 1 of the Regulation had to be interpreted on the basis that a Court of a Member State is required to consider whether it has competence under this rule of subsidiary competence of its own initiative, when, having been seized on the basis of general competence under article 4, it finds that it is incompetent under that article.

So, when a Member State's courts decide that they are not competent under article 4 holding that the deceased's habitual residence was in another State, they still first have to verify whether they have jurisdiction under article 10, despite that, when the deceased is a national of the Court's Member State and by reference to the presence of assets of the succession being in their jurisdiction.

However, whilst the CJEU held that the French court had to decide whether it had competence or not under article 10, which it clearly did, it was not immediately clear whether French law had to be applied to the succession automatically under article 10, as the law applicable under article 20 and 21 was that of the State (quare nation in the case of the United Kingdom)  in which the decease had his habitual residence. The CJEU held that there was no automatic obligation on the Court taking jurisdiction over the entire succession under article 10 to apply its own law even though the Regulation's general policy was to allow a Court taking jurisdiction to apply its own law in most cases. The CJEU left it that the law governing the succession would be that laid down in the remainder of the Regulation i.e. under articles 21 or 22 rather than requiring the law of the Member State taking jurisdiction under article 10 to be applied.

That law would be that of the law of the habitual residence or of nationality in the case of an option for another nationality (in the case of dual nationals).

Paragraphs 43 44 and 45 of the Ruling read as  follows:

43. En particulier, il y a lieu de relever qu'une déclaration d'incompétence, par la juridiction saisie en vertu de l'article 15 du règlement no 650/2012, nécessite un examen préalable de tous les critères établis au chapitre II du règlement no 650/2012 et que, dans le cadre de cet examen, cette juridiction est tenue d'examiner sa compétence éventuelle à la lumière de toutes les informations dont elle dispose. Dès lors, un tel examen ne saurait être effectué au regard de la seule règle de compétence expressément invoquée par les parties intéressées.

44. Cette interprétation n'est pas remise en cause par l'argumentation de la juridiction de renvoi, selon laquelle l'article 10 du règlement no 650/2012 dérogerait au principe de la coïncidence des compétences judiciaire et législative de sorte que la juridiction saisie serait conduite à appliquer la loi de l'État de résidence habituelle du défunt au moment de son décès. En effet, l'objectif, visé au considérant 27 de ce règlement, de faire coïncider la compétence juridictionnelle et le droit applicable ne revêt pas, comme M. l'avocat général l'a relevé au point 70 de ses conclusions, un caractère absolu.

45. Bien que, selon le considérant 27 du règlement no 650/2012, les dispositions de ce dernier soient conçues pour assurer que l'autorité chargée de la succession puisse appliquer, dans la plupart des cas, son droit national, ce règlement n'impose ni ne garantit la coïncidence entre la compétence juridictionnelle et le droit applicable. Le caractère non absolu de cette coïncidence est corroboré, d'une part, par les termes « dans la plupart des cas » utilisés au considérant 27 dudit règlement et, d'autre part, par le fait que, au considérant 43 du même règlement, le législateur de l'Union a lui-même prévu que les règles de compétences qui y sont énoncées peuvent conduire à des situations où la juridiction compétente pour statuer sur la succession n'appliquera pas sa propre loi.

Or, in the English language version of the Ruling:

"43.      In particular, it should be noted that a declaration of lack of jurisdiction on the part of the court seised pursuant to Article 15 of Regulation No 650/2012 requires a preliminary examination of all the criteria established in Chapter II of Regulation No 650/2012 and that, in the context of that examination, that court is required to examine the jurisdiction it may have in the light of all the information available to it. Therefore, such an examination cannot be carried out having regard to the sole rule of jurisdiction expressly relied on by the interested parties.

44      That interpretation is not called into question by the arguments of the referring court, according to which Article 10 of Regulation No 650/2012 derogates from the principle that the jurisdiction and the applicable law should coincide, so that the court seised would have to apply the law of the State of the deceased's habitual residence at the time of his or her death. The objective, referred to in recital 27 of that regulation, of having the jurisdiction coincide with the applicable law, is not, as the Advocate General stated in point 70 of his Opinion, absolute in nature.

45      Even though, according to recital 27 of Regulation No 650/2012, the rules of that regulation are devised so as to ensure that the authority dealing with the succession may, in most situations, apply its own law, that regulation neither requires nor guarantees that the jurisdiction and the applicable law coincide. The non-absolute nature of that coincidence is corroborated, first, by the expression 'in most situations' used in recital 27 of that regulation and, second, by the fact that, in recital 43 of that regulation, the EU legislature itself stated that the rules of jurisdiction laid down therein may lead to situations where the court having jurisdiction to rule on the succession will not be applying its own law."

So, at the moment, even were a English (or Jersey) spouse to let their French spouse leave the territory of their habitual residence for a short period in France and the spouse died there leaving assets there, that would not compromise the application of English or Jersey law to the French part of their succession. Individuals affected by French or continental notaries insisting on applying their indigenous law to assets in France, if not the whole succession elsewhere under article 10, should seek advice.

The French heirs would still find their rights subject to the law of that part of the United Kingdom where the deceased had his habitual residence, and would not be able to argue French reserved heirship rights. That will change in certain cases after the introduction of the new Frehch Prestation compensatoire.

The issue of whether the English Court of Probate would accept a French court taking jurisdiction and applying French over English assets under article 10 is another matter entirely.

 

Peter Harris

Barrister

peter.harris@overseaschambers.com