Potanina v Potanin (No 2) [2025] EWCA Civ 1136

Judgment date: 4 September 2025

https://caselaw.nationalarchives.gov.uk/ewca/civ/2025/1136

Moylan, Falk and Cobb LJJ.

Case history

This is the Wife’s appeal from the order made by Cohen J on 8 November 2019, in proceedings under Part III of the Matrimonial and Family Proceedings Act 1984 (‘the 1984 Act’). By the order under appeal, Cohen J:

• set aside an earlier grant of leave to the Wife to pursue a claim under Part III of the 1984 Act, leave having been granted by Cohen J at an earlier hearing conducted without notice to the Husband on 25 January 2019; and
• dismissed the Wife’s renewed application for leave to pursue an application for financial relief under Part III against the Husband.

Cohen J’s judgment is reported as Potanin v Potanina [2019] EWHC 2956 (Fam); [2020] Fam 189 (hereafter ‘Potanina (FD2)’).

The Wife’s first appeal from the order of Cohen J was considered by the Court of Appeal in January 2021 (King, David Richards and Moylan LJJ), reported as Potanina v Potanin [2021] EWCA Civ 702; [2022] Fam 23 (hereafter ‘Potanina (CA1)’). The Court of Appeal allowed the Wife’s appeal against the order summarised at (i) above (the setting aside of the earlier grant of leave).

That had the effect of re-instating the original grant of leave. In allowing the Wife’s appeal, the Court of Appeal had expressly regarded it as unnecessary to consider whether Cohen J was wrong to dismiss the Wife’s renewed application for leave (the order summarised at (ii) above).

The Husband successfully appealed the Court of Appeal’s order to the Supreme Court, reported as Potanina v Potanin [2024] UKSC 3; [2024] AC 1063 (Lord Lloyd-Jones, Lord Leggatt and Lady Rose; Lord Briggs and Lord Stephens dissenting) (‘Potanina (SC)’). For a summary of decision, see: https://financialremediesjournal.com/potanina-respondent-v-potanin-appellant-2024-uksc-3/.

The Supreme Court remitted the Wife’s appeal against Cohen J’s order dismissing her renewed application for leave (the order summarised at (ii) above) back to the Court of Appeal.

The present appeal before the Court of Appeal therefore focuses upon the threshold test for leave, and specifically whether Cohen J was wrong to refuse the appellant Wife’s renewed application for leave to bring a claim under Part III of the 1984 Act by his order of 8 November 2019. By contrast, the previous appeals had focused upon the procedure which Cohen J had adopted when determining the Wife’s original application for leave under Part III (January 2019), the Husband’s application to set aside that grant of leave (October/November 2019), and on the court’s correct approach to an application for set-aside.

Background

As observed by the Court of Appeal in the present appeal, this was a highly unusual case for one dominant reason: the sums in issue far exceed those considered in any previous application under Part III. It would appear that the closest comparable case was Juffali v Juffali [2016] EWHC 1684 (Fam), and even in that extraordinary case, there was significantly less at stake financially.

The parties are Russian nationals, now in their 60s. They were married for approximately 30 years; they were divorced by court order in Russia in 2014. They have three adult children. Throughout the marriage the couple lived in Russia. The parties were not always wealthy, but they became ‘massively rich’ (per Cohen J in Potanina (FD2) at [4]); indeed, the Husband is said to be one of the richest men in Russia.

There was a ‘blizzard of litigation’ in the aftermath of the divorce. Financial remedy proceedings in Russia were bitterly contested and protracted, with orders appealed to the highest Russian courts. The Wife also launched proceedings, for disclosure and otherwise, in Cyprus and the USA.

By its final financial remedy order, the Russian court divided all of the ‘marital property’ equally between the parties. In this regard, only those assets legally owned by one or both parties were included in that computation and division. Apart from some cash in the Husband’s name, almost all of the wealth which he had accumulated during the marriage was/is held by various trusts and companies; the Husband has acknowledged that he is indeed the ultimate beneficial owner of significant assets held in this way (see Potanina (SC) at [16]). It was the Wife’s case that she received less than 1% of the marital assets and had been denied an award of approximately US$6 billion.

In early 2014, the Wife purchased a property in the USA, where the parties’ youngest child was studying. In June 2014, the wife obtained a United Kingdom investor visa, and later in the same year, purchased a property in London.

At the first hearing of the Wife’s application before Cohen J in January 2019, conducted without notice to the Husband, the judge found on the facts then presented that the Wife had had her principal home in London since at least January 2016. Cohen J added that: ‘I have not asked for any diarisation going further back before that date’ and that ‘[the wife] has plainly established a connection with England and Wales. She did have a strong connection with Russia, but that connection now has been very largely severed’. Notably, these facts were not materially challenged by the husband at the later, on-notice hearing.

The Husband applied to set aside the grant of leave. The application was listed for three days in October 2019. It was accepted that the Wife’s application for leave would be re-considered in the event that the order obtained without notice was set aside. Following the hearing, by an order made on 8 November 2019, Cohen J allowed the Husband’s application to set aside the grant of leave (the order summarised at (i) above); and dismissed the wife’s renewed application for leave (the order summarised at (ii) above).

The Wife’s grounds of appeal

The grounds of appeal in the present appeal were as follows:

(1) Whether the learned judge wrongly dismissed the wife’s application insofar as it related to ‘maintenance’ (i.e. her reasonable needs) given that:

(a) the learned judge misinterpreted and misapplied s 16(3) of the 1984 Act; and/or

(b) even if his interpretation of s 16(3) was correct, the learned judge was wrong to conclude that the factors in s 16(2) that did not relate to the Wife’s connection supported the setting aside or rejection of leave (referred to as ‘Ground 12’).

(2) Whether the learned judge: (a) in deciding not to re-grant leave was wrongly influenced by his findings that he had been materially misled (findings which were erroneous, unfair and/or unnecessary); and (b) was in any event wrong not to re-grant leave (referred to as ‘Ground 13’).

The Court of Appeal judgment (4 September 2025)

The Court of Appeal (Cobb LJ giving the lead judgment, with Falk and Moylan LJJ concurring) allowed the Wife’s appeal on both grounds.

Legal principles

The court began by summarising the legal principles discussed in the appeal, concluding as follows:

(i) In order for an application under Part III of the 1984 Act to be entertained in the English court, the applicant must show that they meet the statutory ‘jurisdictional requirements’ (pursuant to s 15 of the 1984 Act). In this particular case, this required consideration of both s 15(1) and s 15(1A) (then in force when the matter was considered by Cohen J in October/November 2019). At the time, s 15(1A) led to Article 3 of the Council Regulation (EC) No 4/2009 of 18 December 2008 on ‘Jurisdiction, Applicable law, Recognition and Enforcement of Decisions and Cooperation in Matters relating to Maintenance Obligations’ (‘the Maintenance Regulation’).

If the Maintenance Regulation did not apply (and it will not apply to any case issued after 31 December 2020) then (subject to a more limited reservation, namely, article 18 of the 2007 Hague Convention on the International Recovery of Child Support and Other Forms of Family Maintenance), s 15(1) of the 1984 Act will set the jurisdictional requirements. In that event, jurisdiction will be established by either:

1. proof of domicile of either party in England and Wales on the date of the application for leave or on the date on which the divorce, annulment or legal separation obtained in the overseas country took effect in that country;
2. habitual residence of either of the parties to the marriage in England and Wales throughout the period of one year ending with the date of the application for leave or throughout the period of one year ending with the date on which the divorce, annulment or legal separation obtained in the overseas country took effect in that country; or
3. the existence of a matrimonial home in which either party had a beneficial interest in possession in this jurisdiction on the date of the application for leave;

(ii) It may well be that the court is not able to make any final determination of the jurisdictional requirements test at the leave stage, but applying the ‘substantial ground’ test (see below) is sufficiently satisfied to allow the case to proceed, allowing full argument on this issue at the substantive hearing. Indeed, s 14(2) of the 1984 Act contemplates that a final determination of the jurisdictional requirements test may not necessarily be reached at the leave stage;

(iii) The jurisdictional requirements listed above are assessed as at the date of the application for leave under Part III, or the earlier date of divorce (pursuant to s 15(1) of the 1984 Act);

(iv) As to the merits-based threshold test, the applicant must show that they have ‘substantial ground’ for making the application (pursuant to s 13 of the 1984 Act); the word ‘substantial’ is not defined in the statute and, in this context, it is accepted that it means ‘solid’ (per Lord Collins in Agbaje v Agbaje [2010] UKSC 13; [2010] 1 AC 628 at [33], confirmed by Lord Leggatt for the majority in Potanina (SC) at [89]–[92], and endorsed by the minority at [110]);

(v) In considering whether there is a ‘substantial’ or ‘solid’ ground, the court will consider a theoretically unlimited range of factors, including the applicant’s fulfilment of the jurisdictional requirements test, and the matters set out in s 16 of the 1984 Act;

(vi) In this regard, the court will consider the prospect of it being shown to be ‘appropriate’ for an order to be made by a court in England and Wales (pursuant to s 16(1) of the 1984 Act). Section 16(1) expressly requires the court to have regard to ‘all the circumstances’ of the case, including specifically the matters set out in s 16(2), and although not part of the statutory checklist, hardship and injustice may well be relevant.

(vii) There is no hierarchy of factors in s 16(2). Among those factors, the court will consider ‘the connection which the parties to the marriage have with England and Wales’; it is not a statutory requirement that this should be a substantial connection. However, plainly, the stronger the connection, the stronger the application.

(viii) The introductory words of s 16 also provide a clear pointer to its further role in the determination of the application, namely, if the court grants leave and moves on to consider the case substantively (e.g. the section contemplates that the court will have regard to the factors ‘before making an order’). At that point, there is an obvious mutual interplay with s 18 (‘matters to which the court is to have regard in exercising its powers under section 17’). For instance, s 16(2)(e) refers the court to the financial provision which has been made by the foreign court. So also, the direction in s 18(6) to the court, in considering the financial resources of a party, to have regard to whether an order of a foreign court has been complied with, would plainly be relevant in considering whether England is the appropriate venue;

(ix) Overall, the applicant for leave needs to be able to show that they have something analogous to ‘a real prospect of success’ in the substantive claim; this is said to require more than a demonstration that the prospective claim is not totally without merit or an abuse of process, but it is not as demanding a requirement as showing ‘a good arguable case’ for the purposes of the jurisdictional gateways (see for further discussion §77 of the Court of Appeal’s judgment, and Potanina (SC) at [89]–[90])).

(x) In contrast to the position in relation to the jurisdictional requirements, in an application for leave, the court assesses the ‘substantial ground’, ‘connection’, and the other s 16 factors as they exist at the date of the hearing of that application, not as at the date of the application. The court also looks forward to the future in making its assessment, and will consider whether there is a real prospect that further material supporting the applicant’s case would emerge, through disclosure or otherwise, if the case were to proceed to a substantive hearing (see §77 and §85 of the Court of Appeal’s judgment).

Ground 13

The Wife’s appeal on this ground was allowed, for these reasons:

1. Firstly, Cohen J’s dismissal of the Wife’s claim, largely been based on a finding that her connection with England and Wales was ‘recent and modest’, was unfair to the Wife:

(i) Although the Wife’s background and married life had been firmly fixed in Russia with no connection with England, the judge had accepted and recorded the uncontroverted fact that the Wife had been habitually resident in England since, at the very latest, January 2016. In light of this, it was unfair for the judge to find with adverse implication that ‘before 2015/2016’ there was ‘no evidence’ that the Wife had ‘spent any significant time in England’ (Potanina (FD2) at [63]). There was no evidence about her home circumstances in that period one way or another.

(ii) The court should assess the issue of ‘substantial ground’ and ‘connection’ as at the date of the hearing of the application for leave, with a forward eye to the likely situation as at the date of the prospective substantive hearing. It is not assessed as at the date of the application. Section 16 of the 1984 Act is drafted in the present tense (in contrast with s 15 on jurisdiction requirements which specifically references the date of the application). One year had elapsed between the date of the Wife’s application and the date of the hearing under review. The judge’s finding of a ‘recent and modest’ connection took no account of the fact that the Wife had held a UK investor visa for more than five years by the date of the hearing, and only passing mention had been made of her property ownership in London for a similar length of time. The judge was wrong that the Husband had ‘roundly challenged’ the timing of the acquisition of either the visa or the London property.

(iii) The judge had referred to the Wife’s ‘absence of connection with England and Wales’, which suggested a further retreat from what the judge had earlier described in his judgment as a ‘weakness’ of connection. The phrase ‘absence of connection’ revealed a lack of real appreciation of the actual connections to which the Wife could uncontroversially point in support of her case that she satisfied sufficiently the statutory test. In a similar vein, the judge found in November 2019 that the Wife’s links with Russia were ‘infinitely greater’. While historically she did have strong links to Russia, on the evidence before the judge by the time of the hearing in November 2019, there was reasonable cause to believe that the situation had materially changed. Indeed, ten months earlier, the judge had made a directly contrary finding that by the time of her application, the Wife had ‘very largely severed’ her links with Russia, which had not been challenged to any significant degree by the Husband.

(iv) The effect of downplaying the Wife’s connection with England caused the judge erroneously to treat her claim as an attempt to achieve a top-up award through the English courts (which would ‘not be appropriate’ under Part III, per Agbaje).

2. Secondly, at the on-notice hearing, the judge formed an adverse view about the Wife’s motivation for taking up residence in this country, namely in order to make a financial remedy claim. His finding that her application represented a ‘classic example’ of a spouse who had settled here in order to ‘take advantage’ of the ‘more generous approach’ in the English court led him to accept the Husband’s suggestion that to allow the claim would ‘effectively’ place ‘no limit to divorce tourism’. This conclusion is unfair to the Wife and unsound for these reasons:

(i) It is based on the inference which the judge had drawn from the fact of the Wife’s visit to an English matrimonial lawyer in London in 2014, and her reluctance to disclose the attendance note. The judge was not entitled to draw this adverse inference (see King LJ at Potanina (CA1) at [69]/[70]): ‘It is well established that no inferences can be drawn from the assertion of or refusal to waive privilege’; and

(ii) While the Wife’s motivation in coming to England was capable of being relevant to the determination of the application, this was a matter to be considered after hearing oral evidence and cross-examination at trial (see Potanina (CA1) at [67]–[70]). This was not a factual finding which the judge could or should have made at a summary hearing without having the evidence tested.

3. Thirdly, the judge had earlier found the Wife to be a ‘fully entitled wife’. Yet, the Wife had received an award in Russia which was by English standards, in the judge’s own finding, ‘paltry’; to that extent, he accepted that she has suffered ‘hardship’. Moreover, as the judge recognised, the Wife could argue that the award would not meet her reasonable needs (see [91]). King LJ had formed a similar view in this regard (Potanina (CA1) at [16]: ‘a tiny proportion’), as did Lord Leggatt who described the Wife’s award in relative terms as a ‘tiny fraction’ (Potanina (SC) at [17]). The disparity in the Wife’s award compared to the assets retained by the Husband was attributable (on her case) to a lacuna in the Russian law. These points expose two material shortcomings of the judgment:

(i) The judge failed to address the argument that the Wife had suffered an injustice by receiving such an insignificant fraction of the husband’s wealth, which (it was common ground) had accrued during the marriage. As had been made clear in Agbaje, injustice may well be relevant in a Part III claim.

(ii) The judge failed to address the issue of the alleged lacuna; this issue, as King LJ had earlier observed (Potanina (CA1)), required ‘detailed analysis in its own right’ and should materially have informed the judge’s assessment of the wife’s prospects of success.

4. Fourthly, the judge’s finding that he had been misled at the first, without notice hearing, implied that by the end of the second hearing, when considering the Wife’s fresh application for leave, he had reached firm conclusions in respect of particular disputed facts. There was no proper basis for reaching those conclusions at the summary hearing. In any event, the judge’s finding that the Wife had misled him in material respects had, in the view of the Court of Appeal in 2021, been wrongly made.
5. Fifthly, it is difficult to see how the judge could conclude that, having dismissed the Wife’s connection with this country, the other s 16 factors ‘counted heavily’ against her (Potanina (FD2) at [89]). The judge had found that the ‘financial benefit’ (s 16(2)(d)) which she had received in Russia was relatively ‘paltry’. It was therefore unfair for him to suggest that it was only ‘the wife’ who regarded herself as having suffered ‘a very significant injustice’ ([92]), when he himself had found that she had an argument for saying that she had ‘suffered hardship’ and that the Russian award would not, by English court standards, be likely ‘to meet her reasonable needs’. Objectively viewed, there was a reasonable case that the outcome of the Russian proceedings had been unjust to the wife. That the Wife had also sought to pursue her remedies in Russia and elsewhere was a point in her favour when considering s 16(2)(f); moreover, as the Court of Appeal had earlier observed, the Wife could not mount a maintenance (alimony) claim in Russia.
6. Finally, it is difficult to ascertain precisely how the judge had applied the merits-based threshold test from Agbajeto the facts of this case. There was no analysis of the Wife’s case by reference to the threshold test and the caselaw on its interpretation. It was incumbent on the judge to have addressed in full the issues so as to demonstrate why the Wife did not have sufficiently substantial or solid grounds for making the application. He did not do so.

It was for the Wife to show that her prospective claim enjoys something akin to ‘a real prospect of success’ in achieving some measure of further financial relief under Part III, in light of Lord Leggatt’s clarifying remarks in the Supreme Court in this case, which sets the bar to a degree lower than that set by Lord Collins in Agbaje. Furthermore, the Wife did not have to demonstrate that she was entitled to all forms of financial relief.

For the reasons above, the Wife had amply established that there was substantial ground for her claim for some financial relief, even if not a ‘full blown’ award.

Ground 12

The Wife’s appeal on this ground was also allowed. Whilst the Maintenance Regulation has no current impact in domestic law, it applied to the instant case at the time of the decision under review. It was agreed in the instant appeal that:

1. s 16(3) of the 1984 Act and the Maintenance Regulation were applicable only in relation to the Wife’s claim, or that part of her claim, that relates to her reasonable needs; and
2. neither s 16(3) nor the Maintenance Regulation applied to any element of the Wife’s claim in excess of her reasonable needs.

It was uncontroversial that by the time of her application, the Wife was habitually resident in England and Wales. She therefore satisfied Article 3(b) of the Maintenance Regulation. In addition, as she had been habitually resident for at least one year preceding the date of her application for leave, she also satisfied s 15(1) of the 1984 Act. It was not therefore open to the judge to dismiss the ‘maintenance’ aspect of the Wife’s application on forum non conveniens grounds.

Cohen J had wrongly treated s 16(3) as limited to precluding dismissal of the claim solely on the basis of an absence of connection. The error was vividly exposed by his reference to attaching ‘weight’ to the finding that the Wife was habitually resident in this country, notwithstanding that this was jurisdictionally determinative.

The Court of Appeal agreed with the Wife that ‘connection’ is irrelevant once jurisdiction is established by reason of the Maintenance Regulation. The fact that an applicant could apply for maintenance against the other party in another country would also be an irrelevant consideration because a maintenance creditor has ‘the right to choose the jurisdiction most beneficial for them’.

Outcome

The Wife’s appeal was allowed and Cohen J’s dismissal of the Wife’s application for leave under Part III of 1984 Act was set aside.

The Court of Appeal did not consider it necessary or proportionate to remit the Wife’s application to the Family Division for re-determination. Having regard to the evidence which was before Cohen J in 2019, the Court of Appeal had little difficulty in concluding that the Wife had substantial, solid, ground for making an application for financial relief under Part III, for the following reasons.

• Even in 2019, the Wife had a connection with England, which in the court’s judgment was a real and meaningful connection. She had held a UK investor visa, she owned property here, she was habitually resident here, and had been so for at least one year even at that time. Indeed, the evidence before Cohen J (which had not been materially challenged) was that she had made her base here from January 2016 at the latest. Looking forward from November 2019, there was a reasonable prospect of her remaining in this country for the foreseeable future and that the Wife had very largely severed her ties with Russia.
• The Court of Appeal shared Cohen J’s view that the Wife would probably be able to argue that she is/was ‘fully entitled’ to a wide range of financial relief on divorce, without any discount or special factor limiting her claim. In the circumstances, she was well placed to present a persuasive argument in 2019 that the outcome of the Russian proceedings had been unjust to her.
• The sum awarded by the Russian courts was only a ‘tiny fraction’ of the sum which the Wife would have received if the marital assets divided had included assets beneficially owned by the Husband. The discrepancy between her award and the Husband’s retained share was significant; the discrepancy between what she had recovered in Russia compared with what she would have recovered had the case been heard in this jurisdiction was equally significant. The Wife could also persuasively argue that, having regard to the lavish lifestyle which she had enjoyed while married, her reasonable needs would not be met by the Russian award (Cohen J had himself recognised that the Wife ‘could argue that her reasonable needs have not been met’). The Wife was in a strong position to argue in all of these circumstances, that it would be ‘appropriate’ for the court in this country to make an award.
• The Wife’s claim is a potentially complex one, not appropriate for simple or summary disposal. There was a reasonable basis to conclude that the claim is neither highly speculative nor without substance. Moreover, there is a real prospect that further material supporting the wife’s case will emerge, through disclosure or otherwise, if the case proceeds to full hearing.

The Wife was granted leave to bring her claim under Part III. Her application was remitted to the Family Division of the High Court for Peel J to allocate as appropriate to a judge, in the first instance for a case management hearing.