Domicile is the Connecting Factor

There are three different classes of domicile namely, domicile of origin, domicile of choice and domicile of dependence. Every person acquires, by operation of law, a domicile of origin at birth which can never be extinguished. Even if a person obtains a new domicile through choice or by dependence, the domicile of origin is never completely lost, it merely lies dormant in the background should it ever need to revive itself. Any person not legally dependent on another (sui juris) may acquire for himself a domicile of choice at any time by means of physical residence in a place, other than that of his own domicile of origin, and intention to reside there for the foreseeable future. However, anyone not sui juris will rely on derivative domicile which is based on the domicile of those on whom they are legally dependent, this includes children and some persons mentally incapax. (The general rule for mentally incapacitated persons is that they retain the domicile they had before becoming incapacitated).

The law of domicile has developed predominantly through common law rules. In Scots law prior to the Family Law (Scotland) Act 2006 (hereafter ‘the 2006 Act’), and still in English law, domicile of origin was ascribed according to the status of a child as legitimate or illegitimate. A legitimate child took the father’s domicile at birth to be its domicile of origin and an illegitimate (or posthumous) child took the mother’s domicile. [8] As mentioned above, in order to acquire a new domicile of choice, a person must change both their residence and intention. Nevertheless, mere abandonment of one’s domicile of origin is not enough to effect a domicile of choice; there must be a clear acquisition of a new domicile. [9] Length of residence has been held to be irrelevant when evaluating whether or not there has been an acquisition of a domicile of choice. Having the requisite state of mind seems more important as is evidenced by two contrasting cases on subject. In White v Tennant [10] it was held that residence of only a few hours was sufficient after the propositus had left his belongings in Pennsylvania, despite returning to lodge with relatives for the night in his previous domicile of West Virginia and dying there. While in Liverpool Royal Infirmary v Ramsay [11] residence in England for a period of thirty-seven years did not displace the propositus’ Scottish domicile of origin. In the latter case, it was held that the reading of a weekly Glasgow newspaper was evidence that he lacked any intention to become domiciled in England. Some other factors taken into consideration when assessing intention include whether the propositus is lodging, renting or has purchased a house (obviously purchasing a house indicates the most solid intention to reside); whether the propositus has made an attempt to integrate into the community, embrace the customs and exercise political rights; whether the propositus has learnt/is learning the local language; and whether the propositus is a member of any local clubs or societies. [12] However, if there is a clear intention only to reside in a place for a fixed period of time or until the happening of some reasonably anticipated event, domicile of choice cannot be established. This does not include fanciful or highly improbable events such as winning the lottery, but more realistic occurrences such as upon retirement or the death of a spouse. However, intention can be difficult to prove and each case must examined on its own facts. ‘Every conceivable event and incident in a man’s life is a relevant and an admissible indication of his state of mind.’ [13] It is worth noting that unlawful residence does not preclude the acquisition of a domicile of choice. [14] Domicile of choice can be lost by abandonment. This means that one must physically cease to reside in a place without the intention of returning to it as a permanent home; both elements are essential. If a new domicile of choice is not acquired then a person’s domicile of origin will revive. This principle of revival has not been affected by the 2006 Act but s.22 will now be required to ascertain the birth domicile. The revival doctrine has often been criticised in favour of a rule of continuance i.e. the last known domicile continues until it is displaced by a new domicile of choice. It was hoped that this issue would be addressed in the 2006 Act reforms but the matter remains untouched.

In 1987, the Law Commission and the Scottish Law Commission published a joint report which examined whether domicile should be abolished as a connecting factor in the UK and replaced by habitual residence. The report was strongly influenced by the domicile reforms which had already taken place in New Zealand, Australia and Canada. [15] Although the report concluded that domicile should remain as a connecting factor, noting the ‘allegedly undeveloped state’ of habitual residence as a legal concept, [16] the report did highlight some areas that needed to be reviewed and put forward several recommendations in a draft Domicile Bill. In particular, the report indentified inadequacies which included the unnecessary complexity created by three types of domicile; the artificial nature of the doctrine of revival of domicile of origin; the discrimination between legitimate and illegitimate children; and the inability of the law to deal sufficiently with cases regarding abandoned or fostered children or situations where the parents of a child have died. [17] Since the report was published the law on domicile in England, Wales and Northern Ireland has remained unaltered. On 16 January 1996, Jonathan Evans MP put forward a statement on behalf of the government formally rejecting the report’s proposals stating that ‘they do not contain sufficient practical benefits to outweigh the risks of proceeding with them and to justify disturbing the present long-established body of case law on this subject.’ [18] However, there has been some suggestion that the tax advantages inherent in s.267 of the Inheritance Tax Act 1984 played a significant role in reaching the decision they did. [19] Furthermore, ‘although habitual residence is increasingly being used as an alternative connecting factor, it would be wrong to introduce a general substitution of habitual residence for domicile. For the connection between a person and a country provided by habitual residence is not sufficiently strong to justify that person’s affairs always being determined by the law of that country.’ [20]

Nevertheless, Scotland incorporated some of the report’s recommendations into the 2006 Act altering the law of domicile, particularly as it relates to children. One of the key aims of the 2006 Act was to abolish the status of illegitimacy from Scots law, thus s.22(2) now provides that a child shall be domiciled in the same country as the child’s parents or, if not applicable, the child shall be domiciled in the country with which he has for the time being the closest connection (s.22(3)), a child being a person under the age of 16 (s.22(4)). The 2006 Act also repeals s.4 of the Domicile and Matrimonial Proceedings Act 1973 regarding the dependent domicile of a legitimate child whose parents are living apart. While this is a clear step in the right direction, the 2006 Act reveals several shortcomings in that it still very much promotes the idea of domicile of origin revival rather than opting for continuance, and it also fails to address the domicile of those mentally incapacitated or specify what happens when a person reaches 16. It is therefore inferred that upon reaching the age of 16 in Scotland, one can proceed to obtain a domicile of choice (if sui juris), otherwise their under-16 domicile is presumed to continue. Furthermore, the requirement that the child should ‘have a home with’ one or both parents fails to specify whether this takes into account the child’s state of mind or if it is a purely factual test. For example, a child who attends boarding school may ‘have a home with’ his parents although he may not reside there on a day-to-day basis. [21] This requirement seems to add an unnecessary complication that is not really relevant to the finding of domicile based on dependence. Crawford and Carruthers also comment in their book that in seeking equality of treatment for children with regard to allocation of domicile, the Scottish approach has resulted in a loss of certainty. They go on to propose that the ‘ancient pedigree’ of ‘following the maternal line’ from birth would have been a much better solution as this could only be rebutted in very few instances, e.g. the death of the mother during childbirth. [22] Scotland has at least made some attempt to address the inadequacies but a more thorough assessment of the current law on domicile and the proposals put forward in the 1987 report is necessary, especially if a uniform approach is to be adopted across the UK.

Yet, the favoured connecting factor of habitual residence in European conflict rules may mean that domicile is of increasingly less significance and perhaps our focus should now look to establishing a more firm grasp on the concept. The growing application of habitual residence as a connecting factor finds its roots in the 1980 Hague Convention on the Civil Aspects of International Child Abduction, implemented in the UK by the Child Abduction and Custody Act 1985. The Hague Conventions have consistently employed habitual residence as a connecting factor and this has somewhat influenced its use in domestic legislation. Today the concept finds ground in relation to matrimonial causes, tax and social security issues and the Rome Convention (implemented in the UK by the Contracts (Applicable Law) Act 1990) also adopts habitual residence in commercial transactions with regard to the applicable law in contracts in the absence of choice. The rules regarding acquisition and loss of habitual residence are not entirely clear and have been left open for the interpretation of the national courts and the European Court of Justice (ECJ), thereby resulting in a divergence of opinion across different territories, according to context it finds itself in.

In the leading British case of Re J. (A Minor) (Abduction: Custody Rights) [23] Lord Brandon held that residence in a country had to be undertaken with ‘a settled intention’ to remain there and that an ‘appreciable time’ was necessary before a settled intention to reside could be described as habitual. However, there have been varying interpretations as to what constitutes an ‘appreciable time’. In some cases it was considered eight weeks [24] and others a mere month. [25] The dissenting judge in Nessa v Chief Adjudication Officer, [26] Thorpe LJ, was prepared to say that one day was enough. It would appear appreciable time is determined by the person’s state of mind, for example, if the person has clearly made a choice to live somewhere for the foreseeable future, i.e. has ‘a settled intention’, appreciable time may only be a few days. [27] Lord Brandon went on further to establish that the term is to be understood ‘according to the ordinary and natural meaning’ of the two words ‘habitual’ and ‘residence’ and are not a term of art. [28] Therefore, no matter where the term appears, determination of habitual residence should be a straightforward standardised process, notwithstanding the circumstances of the case or the purpose of the statute. However, the reality is rather different. There is a regrettable tendency of the courts, despite their insistence that they are not dealing with a term of art, to develop rules as to when habitual residence may and may not be established. [29] For instance, in Nessa, a Bangladeshi woman who had recently moved to the UK was not considered habitually resident here for the purpose of claiming income support the day she arrived. The House of Lords held that residence for an appreciable period of time was necessary in order to establish habitual residence. Furthermore, if a court considering a case under the Child Custody and Abduction Act 1985 cannot establish a habitual residence, the child will not benefit from protection under the Act. [30] This highlights some manipulation of the term to suit specific purposes, in the case of Nessa, to limit the number claiming income support. Doing such only helps to solidify rules for its application and promote inflexibility- a feature of domicile which habitual residence was originally alleged to combat. That said, in order for habitual residence to function as a connecting factor, standards must be set for its acquisition and loss in certain contexts so that precedent can be set and ensure fair application of the rules. Pippa Rogerson states that ‘the earnest desire to keep the concept of habitual residence free of judicial intervention is misplaced and impossible in practice.’ [31]

In contrast to domicile, habitual residence can be established quite easily. One can acquire habitual residence in a place where there is only an intention to reside there for a specific purpose or until the happening of some event, and even where there is no particular intention to make it ones permanent home. Furthermore, it has been noted that even a complete lack of consent or voluntariness will not preclude a finding of habitual residence. Clive commented in his article ‘The Concept of Habitual Residence’ [32] that he had not come across any case which did not find a person, who had lived in a country for at least a year, habitually resident. [33] Eventually, residence as a matter of fact, becomes conclusive. The case of Re A [34] involved the children of a family whose father had been posted by US air force to a base in Iceland. The fact they were physically present there for two years gave way to a finding of habitual residence despite the fact the posting was only to last for a limited period and the children had no other connection to Iceland. A serviceman is, by the very nature of his job, regarded to be voluntarily resident wherever he is stationed as it is reasonably foreseeable when joining up to the armed forces that you may be posted. Having made a home wherever stationed, a serviceman and his family will establish habitual residence there. [35] Finding someone habitually resident in a jurisdiction after a year, as a matter of objective fact and regardless of their reason for being there, would bring about a degree of clarity and predictability. However, this would conflict with the concept of having a ‘settled’ or voluntary intention which cannot always be objectively determined. Unlike domicile, habitual residence cannot be established through unlawful residence but it can still be acquired where one has resided for over a year even though their right to reside is restricted by immigration controls. [36]

It would appear that the concept of habitual residence is not as simple as it first seems. Why it is then that such familiar terms have become so troublesome in their legal interpretation? Rogerson believes that it has something to do with the subjective nature of the term which involves an investigation ‘into the minds of men’, as the word residence usually has connotations of one’s home. [37] Conversely, the court must be objective when evaluating if habitual residence has been established. She goes on to comment that the only objective fact we can determine with certainty is that of presence in a jurisdiction, yet it is not always appropriate for allocating jurisdiction as this could mean that British courts begin considering cases which have very little connection to the country. [38] It is important that residence is distinguished from presence, she says, as it is something ‘different from and more than mere presence’ [39] and the term must be adhered to as such.

It has often been questioned whether there is any difference between habitual and ordinary residence. The UK is no stranger to the concept of ordinary residence and it has been used as a connecting factor in taxation laws; for the purposes of immigration and social security; and as a basis in determining the payment of university fees, amongst others. As with habitual residence, there has been some difficulty ascertaining the precise meaning of ordinary residence. It was held in Shah v Barnet London Borough [40] that residence must be voluntary and for settled purposes, which can include for the purposes of ‘education, business or profession, employment, health, family or merely love of the place’. [41] The Shah court emphasised that the words should retain their natural and ordinary meaning unless otherwise indicated. The word habitual denotes something more stable and long-lasting than simple ordinary residence. [42] While in the Nessa case it was held that an ‘appreciable time’ was required to determine habitual residence, ordinary residence has no such time requirement, however, it has been argued that ordinary residence requires a degree of permanence [43] notwithstanding temporary absences. [44] This is very similar to the ‘appreciable time’ and ‘settled intention’ requirement of habitual residence, therefore making it extremely difficult to separate the two. It is generally accepted that there is little fundamental difference between the two concepts. Yet what constitutes a degree of permanence with regard to ordinary residence has varied considerably, particularly for taxation purposes. In Commissioners of Inland Revenue v Lysaght, [45] a taxpayer who had moved from the UK to Ireland but returned usually once a month and stayed hotels was still found to be habitually resident in the UK. Similarly, Levene v Commissioners of Inland Revenue [46] involved a man who moved from England to Monaco but returned to England for up to five months of the year, staying in hostels and was found to be ordinarily resident here for tax purposes. In contrast, in the case of Goodwin v Curtis [47] it was held that the propositus who lived in a house for five weeks before selling it was not ordinarily resident in the UK for the purposes of claiming Capital Gains Tax exemption. In the latter case the propositus’ residence was deemed insufficiently permanent. It would seem, therefore, that a limited purpose is sufficient to establish habitual or ordinary residence where a temporary purpose is not. [48] Yet, even in habitual residence cases which involved an intention to reside for only a limited purpose, it took considerably longer to establish residence than in the above examples. [49] Perhaps it is desirable in some circumstances to establish residence quickly e.g. to avoid tax evasion and for this reason ordinary residence, which is much looser in its definition, is favoured to habitual residence. However, this does mean that the rules surrounding tax cases must be used explicitly for these purposes only as they are clearly not suitable for the purposes of allocating jurisdiction or choice of law.

So far, the rules surrounding findings of habitual residence are tailored towards establishing jurisdiction but a connecting factor for choice of law is different to that of jurisdiction and the same rules cannot be applied. If the rules were to be applied, there is a strong possibility of the wrong choice of law being selected. The main problem lies in the fact that all states define habitual residence differently therefore a person can have more than one habitual residence or none at all. Ikimi v Ikimi [50] involved a wife who had spent 161 of the preceding 365 days in England and was deemed to be habitually resident there, as well as in Nigeria where she had a second home. Conversely, in the Goodwin case, the propositus had no residence, ordinary or habitual, during his temporary stay of five weeks. This is where choice of law becomes complicated. For jurisdictional purposes, it makes no odds that two courts have overlapping jurisdiction, although admittedly, there is more of a problem when no court is found to have jurisdiction. [51] But choice of law requires identification of a single habitual residence only. Where two jurisdictions are identified, then renvoi can be used to determine which choice of law rules should be applied but where no legal system is found, the problem remains unresolved. To avoid this happening it might be that the possibility of being found habitually resident nowhere or in multiple jurisdictions is scrapped. It would therefore begin to resemble features of domicile, i.e. that no person can be without one or have more than one. Pippa Rogerson has suggested several solutions that would aid in the determination of a single habitual residence. Firstly, a rule of continuance could be introduced meaning that the previous habitual residence carries forward until a new one is established. Another option would be to put a time limit on this so that the previous habitual residence continues for say three months until a new one takes over by matter of objective fact. [52] Alternatively, where there is more than one habitual residence or none for that matter, there must be rules to discriminate in favour of one, or for establishing which the person has the closest connection. That is to say, there must be some way of finding their chief or principle residence. [53] This might be done arithmetically, working out where the person spends most of their time. However, the problem here is that this could only be calculated after the event and would not work for choice of law. [54] On the other hand, one could simply look at the intention of the propositus in each case to evaluate which is their principle residence. However, each case will have to remain examined on its own facts. Rogerson is somewhat reluctant about the use of these solutions in practice, declaring them to be ‘artificial’ [55] but nevertheless they would undoubtedly provide some certainty for choice of law and are perhaps necessary.

Domicile is indeed a difficult concept to get your head around. Nonetheless, while the Law Commission felt that some aspects of the law on domicile were in desperate need of reform, the definite structure of the rules produced greater certainty and predictability which was lacking from the concept of habitual residence. The contrasting idealism of leaving habitual residence open to judicial interpretation, however, was never going to work in practice and legal principles evolving were inevitable. By continuing to complicate the rules for its application, we will ultimately end up with domicile by another name. That said, while there are similarities between to two, there are also some striking differences. Both theories of domicile and habitual residence specify that there must be intention whether that is an intention to remain permanently or indefinitely or a ‘settled intention’. Along with intention, both domicile and habitual residence requires one to be physically present in the jurisdiction. However, where the propositus only has an intention to remain in a country for a specific purpose and/or limited period of time, domicile of choice will be much harder to establish compared with habitual residence, which is likely to be found without much difficulty at all. While a domicile of choice can be lost, domicile of origin will always be there to fill the gap giving rise to its description as ‘limpet-like’ which is further merited due to the difficulty of discharging it in the first place. [56] Habitual residence, on the other hand, can leave a gap between habitual residence in one state and acquisition in another, which may take some time. [57] Unlawful residence will not preclude a finding of domicile, it will, however, habitual residence, but this is now in doubt following the unanimous decision in Mark. A person can never be without domicile but they can be without habitual residence which complicates matters when it comes to choice of law. Maybe we should be more willing to embrace ordinary residence as a connecting factor. It could perhaps bridge the gap between being found resident nowhere and habitually resident. But there has always got to become a point that by no other fact than being resident in a county for a period of time, you will become habitually resident there. The one year rule provides some guidance on the matter but where one has been in a country for less than a year, the answer is less definitive (especially since reliance subjective elements is necessary where there has been residence for less than a year and subjective elements are always going to be less precise). [58] Personally, I support the idea that habitual residence should replace domicile as a connecting factor. It has proven to be very effective in allocating jurisdiction, although it is accepted that some amendment is needed with regard to overlapping jurisdictions or where no jurisdiction has been found at all, particularly for choice of law purposes. In order to clear up the current divergence a uniform set of rules will also need to be established for acquisition and loss etc, to ensure fair application and bring about a degree of certainty. In any case, European conflict laws are increasingly adopting habitual residence as a connecting factor and domicile is slowly being becoming a thing of the past.

Bibliography

Books:

Anton A E, Private International Law: A treatise from the standpoint of Scots law, 2nd edn (Edinburgh: W. Green, 1990)

Cheshire, North & Fawcett, Private International Law, edited by JJ Fawcett and JM Carruthers, 14th edn (Oxford: Oxford University Press, 2008)

Crawford E B and Carruthers J M, International Private Law: A Scots Perspective, 3rd edn (London: W. Green, 2010)

Dicey, Morris & Collins, The Conflict of Laws, edited by L Collins, 14th edition (London: Sweet & Maxwell, 2006)

Hayton D J (ed), European Succession Laws, (Jordan Publishing Ltd, 2002)

Articles:

Michael Parkinson (2010). Domicile Reform in the United Kingdom. Private Client Business, 1, pp 39-47

Pippa Rogerson (2000). Habitual Residence: The New Domicile?. International and Comparative Law Quarterly, 49, pp 86-107

Cases:

Re A [1996] 1 FRL 1

In re Annesley [1926] Ch 692