The case centres on the acrimonious divorce of Amit Goyal and Ankita Goyal.
The couple married in September 2003, had a daughter in April 2007 and separated in June 2011, with a decree nisi pronounced in August 2013.
In January 2016, Amit Goyal was ordered to transfer, in its entirety, his annuity based in India to his estranged wife.
Amit Goyal successfully appealed the decision on 4 November. James Turner QC, representing Amit Goyal, argued that the legislation on pension sharing was only intended for English pensions.
Judge Lord Justice McFarlane, who heard the appeal, said on Friday: “This appeal, which concerns an application for a pension sharing order within financial remedy proceeding following a divorce, raises the question of what jurisdiction, if any, the Family Court may have to make an order transferring or assigning one spouse’s interest in a pension annuity policy to the other spouse outside the statutory scheme established by the Matrimonial Causes Act 1973.”
All hope not lost
Despite describing the decision as a “blow to spouses who have been counting on being awarded some of their ex-spouses’ overseas pensions pot”, Penny Cogher, pensions partner at law firm Irwin Mitchell believes that “all hope is not lost”.
Speaking to International Adviser, she said: “This judgment is likely to have a significant impact on the division of pensions on marriage breakdown but it’s impact must not be overstated. The decision only applied to pension sharing orders which remain an English law concept.”
She continued: “Other orders are available to judges in relation to pensions on divorce which will allow ex-spouses to access overseas pension pots, for example, requiring an individual to access their pension fund at a particular age and then requiring the proceeds to be shared between the parties at a set level.”
An avenue Cogher is looking into at the moment on behalf of a client.
“The terms of such an order must be capable of being actioned by the trustees under the current rules of the particular international pension scheme involved so the order, although not directed at the trustees, can be actioned by the trustees.
“One danger with this approach, however, which was always the difficulty with the old earmarking orders for English pension schemes, is that the ex-spouse may not be a beneficiary under the scheme rules and so won’t be entitled to anything if the member of the scheme dies before accessing their pension monies,” Cogher said.
Spread betting losses
According to court papers, Amit Goyal had a successful career in banking but developed an addiction to spread betting. By the time the couple separated, it was conservatively believed that he had lost over £500,000 ($621,540, €561.590), which was funded by his earnings and borrowing.
In October 2015, Family Court judge Glenn Brasse’s overall conclusion was that Amit Goyal’s addiction to spread betting led him to dissipate the family finances. He was ordered to sell shares and pay a lump sum, together with maintenance payments, to Ankita Goyal.
Pension policies
At the time of the divorce proceedings, Amit Goyal had two pension policies. One with UBS and the other with Standard Life.
In a consent order in February 2014, which was later set aside, Amit Goyal agreed to a pension sharing order granting 50% of the two pensions to his wife.
He subsequently claimed that he had encashed the two policies in January 2014, before the pension sharing order, and used the approximately £33,000 to pay off debts.
It later transpired that the policies had been converted into an annuity in September 2014, with a cash equivalent transfer value worth over £87,000.
Amit Goyal told the judge that he had transferred all of his interest in his annuity to a third party in India, identified as Mr D. He said that he agreed to assign the benefits under the policies to Mr D in return for Mr D discharging some of his debts.
Amit Goyal claimed that the agreement has been entered into in January 2014 but it was not until September 2014 that he was able to convert the policies into the annuity.
Bare faced lie
At a later court date on 6 January 2016, judge Brasse concluded that there was an agreement to assign the annuity policy and nothing more, as no document formally assigning the benefit of the policy to Mr D had been produced.
The judge declared Amit Goyal’s claim that he no longer had any interest in the policy “a bare faced lie from beginning to end” saying that the “policy is still beneficially owned by Mr Goyal”.
The court ordered Amit Goyal to “transfer/assign to the wife all his interest” in the annuity.
Location, location, location
Amit and Ankira Goyal resided in England throughout their marriage and the UBS and Standard Life pension policies were administered in England.
The annuity policy, however, was based and administered in India.
The court stated that it had “no power to make a pension sharing order against an overseas pension, even if the country concerned would enforce it”.
Claims remains open
According to court documents, the case has been referred back to the Family Court for re-determination.
“It may be that, because of the international element, the case may need to be heard in the High Court or at High Court judge level,” McFarlane said.
“The husband is not in a position to invite us to do more than set aside the judge’s orders; there is no justification for this court going further and actually dimissing the wife’s pension sharing order appliication on its merits.”
As a result, Ankira Goyal’s claim for the pension sharing order remains open and could be resurrected at a later date.
