IESC 68 · Supreme Court

THE SUPREME COURT

FAMILY LAW

Keane C.J.

Denham J.

Murphy J.

Murray J.

Fennelly J.

Appeal No. 031/2002

Record No. 2000/30M

IN THE MATTER OF THE FAMILY LAW (DIVORCE) ACT, 1996

BETWEEN

D. T.

Applicant/Appellant

and

C. T.

Respondent

JUDGMENT delivered on the 14th day of October, 2002 by FENNELLY J.

I agree with the Chief Justice that this appeal should be dismissed except to the specific and limited extent described by him. I agree

with him also in that respect.

I wish, nonetheless, to address some general questions concerning the interpretation of this important legislation.

By voting in 1996 to pass the Fifteenth Amendment of the Constitution, the people voted to make a fundamental change in the law

relating to marriage. The Constitution now permits a Court designated by law to grant a decree dissolving the marriage bond with the

consequence of permitting each partner to remarry. The amendment substituted the following provision for the former prohibition of

divorce in subsection 2 of section 3 of Article 41 of the Constitution:

“A Court designated by law may grant a dissolution of marriage where, but only where, it is satisfied that -

i at the date of the institution of the proceedings, the spouses have lived apart from one another for a period of, or

periods amounting to, at least four years during the previous five years,

ii there is no reasonable prospect of a reconciliation between the spouses

iii such provision as the Court considers proper having regard to the circumstances exists or will be made for the

spouses, any children of either or both of them and any other person prescribed by law, and

iv any further conditions prescribed by law are complied with.”

Article 41 of the Constitution was not, however, otherwise altered. The text retains provisions pursuant to which the State still:

“recognises the Family as the primary and fundamental unit group of Society, and as a moral institution possessing

inalienable and imprescriptible rights, antecedent and superior to all positive law.” (Article 41.1);

“recognises that by her life within the home, woman gives to the State a support without which the common good

cannot be achieved.” (Article 41.2);

“pledges itself to guard with special care the institution of Marriage, on which the family is founded, and to protect

it against attack.” (Article 41.3, paragraph 1).

The Constitution, in the new provision adopted in 1996, circumscribes the power which it confers on the designated Court, by obliging

it, before it may grant a decree of divorce, to be satisfied of certain matters. It specifies four preconditions. There can be no doubt

that these matters form an essential element in the new constitutional regime upon which the people cast their votes. The first two

relate directly to the core of the marriage bond itself. The spouses must not only have lived apart for the requisite period but there

must be no reasonable prospect of reconciliation. The court must, if it is to act constitutionally, satisfy itself that the evidence

proves these matters. The consent of the marriage partners cannot confer upon the court the power to dissolve their marriage so as

to absolve it from this duty.

The present case is concerned with the third constitutional requirement, namely that relating to proper provision for the divorcing

spouses and their children. In the nature of things, the issue of proper material provision will normally be subsidiary to and

consequential upon the existence of conditions which unhappily render it no longer possible for the parties to the marriage to continue

as married persons. It enjoys the same level of constitutional importance as the first two in the sense that the Court is obliged to see

that it is satisfied. Otherwise, the court is not empowered to grant the order dissolving the marriage. On the other hand, it is evident

that parties may well be able to compose their material and financial differences by agreement. Agreement is, in its nature, to be

encouraged, a matter which is recognised in the legislation, in particular, by requiring the Court to have regard to the terms of any

existing separation agreement.

Article 41.3, subsection 2 (iii) enunciates the duty of the Court in very general terms. The “provision” is “such as the Court considers

proper in all the circumstances …” emphasis added). In the Irish version (“cibé socrú is dóigh leis an gCúirt a bheith cuí”), uses the

word, “socrú”, which may be equated with “arrangement.” (see Micheál O’Cearúil, Bunreacht na hEireann: A Study of the Irish Text,

published by the All-Party Oireachtas Committee on the Constitution 1999 at page 601.) The word “cuí” is used at several points in

the Constitution in the sense of “due.” (see the Preamble and Articles 40, sections 1 and 3.3; 42, sections 4 and 5 and the

declaration prescribed to be made by each judge by Article 34, section 5, subsection 1. The Court must do what is “proper” in the

sense of “appropriate.” I would have thought that this is also synonymous with what is “fair” or “just.” In the moral sense, this is a

clearly stated objective. In practice, it requires the Court to weigh in the balance the infinite variety and complexity of the elements

of human affairs and relationships and to arrive at a just result.

The Family Law (Divorce) Act, 1996 (“the act of 1996”) provides the Court with a range of statutory powers designed to enable it to

fulfill its constitutional function. Most materially for present purposes, it may, “on granting a decree of divorce or at any time

thereafter ...:” make orders for periodical payments or lump sum payments (section 13), property adjustment orders (section 14);

various ancillary orders (section 15); financial compensation orders (section 16); pension adjustment orders (section 17); provision for

one spouse out of the estate of the other (section 18). The power which the High Court exercised was that specified in section 13,

which states, in relevant part:

“On granting a decree of divorce or at any time thereafter, the court, on application to it in that behalf by either of the

spouses concerned………during the lifetime of the other spouse,…………make one or more of the following orders, that is

to say:

(c) (i) an order that either of the spouses shall make to the other spouse a lump sum payments of such amount

or amounts as may be so specified, …

The expression, “as may be so specified,” refers to the antecedent expression, “as may be specified in the order.” The section does

not otherwise indicate the objective to be achieved. The Court must seek its guidance in section 20, interpreted in the light of the

applicable constitutional provisions.

The relevant guidance is furnished to the Court by section 20 of the act of 1996, in a case when it has to consider the exercise of

any of these powers. It has already been set out fully in the judgment of the Chief Justice and I will not repeat it.

Sub-paragraphs (a) to (j) are an almost verbatim restatement of the corresponding provisions in section 20 of the Judicial Separation

and Family Law Reform Act, 1989 (“the act of 1989”). The Oireachtas, in choosing the approach it enshrined in section 20 made a

considered decision to confer upon the Court a duty of a particularly broad discretionary character, one already enshrined in our

family law, prior to the constitutional amendment. This requires the Court to pass judgment on the presence and, where they are

present, the weight it attributes to an extremely wide range of specified considerations. It reflects, in this respect, the constitutional

provision. Thus also the legislature eschewed any more prescriptive model such as has been said to exist in the divorce laws of some

countries (such as Scotland and New Zealand).

It is also the fact that the act of 1996 incorporates, like the act of 1989, and, subject

to some important qualifications, not merely the essence but large parts of the wording of the provisions of the present divorce

legislation of England and Wales. The parties have drawn attention to certain departures form that model whose relevance needs to

be considered and to which I will shortly refer.

It is common ground between the parties that the financial resources that are available in the present case for the purpose of making

provision for the respondent spouse, the wife, and the children of the marriage are very substantial indeed. For that reason, the case

is quite

untypical; thus it may be of comparatively limited value in the much more normal but more difficult cases where “proper provision” has

to be made from meagre resources. I share the Chief Justice’s preference for the description “ample resources” over the less

attractive expression, “big money.”

Happily, the level of co-operation between the parties in the High Court and the quality of the financial expertise available to the

parties was such that there was a large measure of agreement as to the gross and net and the realisable value of the relevant

assets. The only major are of disagreement concerns the treatment of those assets, constituting at the date of the High Court

hearing, the great bulk of their value, acquired by the husband after the parties ceased to live together. That, however, is a matter

of principle and of interpretation and of law.

A simple and broad approach can be taken to the value of the available assets. The learned trial judge decided to make provision for

the wife in the form of an order for the payment to her, by instalments, of a sum of £5 million. The parties are in agreement with this

approach, but not the amount of the lump sum. All values were expressed in Irish pounds and it is not necessary to convert them to

Euro values. The husband says, however, that the provision is excessive. Both parties, in addition, agree that this court should

exercise the statutory and constitutional discretion de novo, in the event that it is of opinion that the High Court was in error in its

approach.

In this light, it is sufficient to refer, firstly and briefly, to the extent of the assets and to their nature. It was agreed in evidence that

the gross value of the assets held by the husband is of the order of £25 million. They were acquired, however, with the assistance of

substantial bank borrowing. The value, net of liabilities, is agreed to be between £18 and £19 million. The order is not one for the

transfer of assets or interests in assets. Hence, the parties accept also that, in order to make provision in the form of a lump sum for

the wife in accordance with the law, assets will have to be realised. This, in turn, necessarily entails the incurring of realisation costs

and expenses in the form of legal and other professional expenses and tax liability, in particular capital taxes. On this last basis, it is

accepted that the relevant value of the assets is reduced to approximately £14 million.

I need to say very little more about how such wealth came to be acquired by these parties. I am happy to adopt the account given in

the judgment of the Chief Justice.

The spouses in this case are from fairly normal reasonably comfortable middle-class background. The husband is a solicitor, the wife a

medical doctor. They did not set out on their married life with any substantial capital resources, though the wife owned a house in

Dublin. They expected to live from the earnings of their respective professions. The husband, of course, prospered spectacularly. The

wife, on the other hand, contributed to the husband’s capacity to build up his practice in ways which may now appear modest, but

which were undoubtedly crucial, in the important early stages, to the capacity of the husband to build up his own independent

practice as a solicitor. She did unpaid secretarial work and used to clean the office. She also provided some office furniture.

The wife also limited the pursuit of her own career as a medical doctor. She devoted herself to maternal and household duties at the

expense of her own career for the benefit not only of her husband but for the welfare of the entire family.

The striking imbalance between the resources of the two spouses does not result only from the comparatively traditional adoption of

the respective roles of breadwinner and homemaker. In the case of this model of marriage, it has been commonplace that the husband

becomes the owner of the great bulk of the family property, the wife being in a dependant position. The present case is exceptional.

Firstly, the husband has been able to benefit from the very high level of earnings in recent years of solicitors in Ireland in the practice

of personal injury litigation. Secondly, he was able, to avail of the profits of and the cash resources available to him through his

practice as a solicitor to borrow very large amounts of money. The principal bone of contention on the appeal has been the fact that

the husband, after the parties commenced to live apart, acquired an office block, which constitutes some eighty per cent of the

value of his assets. Thus over a small number of years, he became a man of great wealth.

The task of the learned High Court judge was to make proper provision for the wife and the children of the marriage in the light of the

statutory provisions and “having regard to the circumstances.”

The matters listed in the twelve sub-paragraphs of section 20(2) of the act of 1996 are designed to ensure that the Court will have

regard to all the wide variety of circumstances which should, in the interests of justice, be weighed in the balance when considering

what is “proper provision.”

The starting point in that regard must be, on the one hand, to the resources and on the other to the needs, obligations and

responsibilities of the parties. There is no stated limitation on the financial resources or on the “financial needs, obligations and

responsibilities ...” to be considered by the Court and which may be available for the purpose of making provision. They may extend to

resources or to needs, obligations or responsibilities which either spouse “is likely to have in the future.” (sub-paragraphs (a) and (b)

respectively).

This suggests that any property, whenever acquired, of either spouse and whenever and no matter how acquired is, in principle,

available for the purposes provision. Thus, property acquired by inheritance, by chance, or the exclusive labours of one spouse does

not necessarily escape the net. I lay emphasis on the term, “in principle.” On the other hand, not all such property is automatically

available either. It is easy to think of cases where such a result would not be just. A short-lived marriage by a fortune hunter to a

wealthy heiress comes to mind. Other sub-paragraphs are designed to ensure that the Court has a very broad discretion. It may

consider “the standard of living enjoyed by the family …before the proceedings were instituted or before the spouses commenced to

live apart from one another as the case may be ...” (sub-paragraph (c). This provision appears to have been taken verbatim from

the act of 1989 (section 20(2)(c) ). In the case of divorce, the parties will necessarily have been living apart for at least four of the

five years preceding the issue of proceedings. Regard is also to be had to the “age of the spouses, the duration of their marriage and

the length of time during which the spouses lived with one another …” (sub-paragraph (d)).

On the facts of this case, I think the learned High Court judge was entitled, in the light of the relevant circumstances, to have resort,

for the purposes of making a lump-sum order, to the full range of the husband’s resources. In particular, I think there was a close link

between the acquisition of the office block and the resources of the husband’s solicitors practice. I think the wife was entitled, by

reason of her contributions to the family generally and her direct and indirect contributions to the capacity of the husband to build his

great fortune to have those assets considered for the purposes of provision. It is the fact that it actually passed into his ownership

between the date of the separation of the parties and the hearing of proceedings in the High Court; but none of the sub-paragraphs

excludes it for that reason. On the contrary, both the Constitution and the act of 1996 envisage the Court considering the issue of

“proper provision” at the same time as the divorce decree. The use of the present tense in sub-paragraph (a) further supports this

view. So also does the point made by the Chief Justice in his judgment that it would be unjust to require a spouse to make provision

from resources which he formerly had but no longer has at the date of the proceedings or whose value had fallen greatly in the

interim.

Sub-paragraphs (f) and (g) are also of particular relevance in this case:

“20(2)(f) the contributions which each of the spouses has made or is likely in the foreseeable future to make to the

welfare of the family, including any contribution made by each of them to the income, earning capacity, property and

financial resources of the other spouse and any contribution made by either of them by looking after the home or caring

for the family.

(g) the effect on the earning capacity of the spouses of the marital responsibilities assumed by each during the period

when they lived with one another and, in particular, the degree to which the future earning capacity of a spouse is

impaired by reason of that spouse having relinquished or foregone the opportunity of remunerative activity in order to

look after the home or care for the family,”

The first of these sub-paragraphs, in particular, obliges the Court to give due weight and consideration to the respective roles of the

breadwinner and the homemaker. By that, I mean such weight as is appropriate in all the circumstances. Once more, it is important to

note that the sub-paragraph does not erect any automatic or mechanical rule of equality. Nor does it institute any notion of family

resources or property to be subjected to division. Several considerations militate against the adoption of such rules of thumb. The

children of the marriage have to be considered and their provision by one spouse may mean that property should not be equally

divided. One or both of the parties may have entered into new relationships, possibly involving children. The supposed “breadwinner”

or “homemaker,” as the case may be, may not, depending on the circumstances deserve to be placed on an equal footing.

It is only with the greatest care, therefore, that one should formulate any general propositions. The judge must always and in every

case have regard to the particular circumstances of the case. In this connection, I would cite one passage from the speech of Lord

Nicholls of Birkenhead in White v White [2001] 1 AC 596. Before doing so, I should say that we should be careful not to follow English

cases uncritically. Murphy J has dealt with this matter some in detail by in his judgment. Nonetheless, I find Lord Nicholls persuasive in

one respect. When, referring to the provision corresponding to sub-paragraph (f) at page 604 he says:

“If, in their different spheres, each [spouse] contributed equally to the family, then in principle it matters not which of

them earned the money and built up the assets. There should be no bias in favour of the money-earner and against the

home-maker and the child-carer.”

It is fair to say that Lord Nicholls, in the ensuing passage, proceeded to advocate a “yardstick of equality.” The act of 1996 does

not, in my view, warrant the introduction of a yardstick in those terms. It certainly does not ordain an approach based on the division

of assets. Nonetheless, I would adopt the language of Lord Nicholls to the extent that he argues for equal recognition of the value of

the contributions that may have been made during the marriage, in their respective roles, by the money-earning spouse and the

home-making spouse.

In this connection, it should be noted that the underlined words in the expression, “including any contribution made by each of them

to the income, earning capacity, property and financial resources of the other spouse …” in sub-paragraph (f) were added by

the Oireachtas to, originally in 1989 but repeated in the act of 1996, to a provision otherwise closely modelled on the English version.

These words demonstrate that the Court should have regard to the possibility that the efforts of one spouse may contribute, directly

or indirectly, to the resources of the other.

Furthermore, sub-paragraph (g) appears only in the two acts of the Oireachtas; the English legislation contains no corresponding

provision. The legislator has taken care to include provision not only for the possible contribution, both direct and indirect, by one

spouse to the material resources of the other, but also for the corresponding detriment suffered by that spouse in terms of his or her

own resources.

I approach the case, as does the Chief Justice in his judgment, on the basis that the provision that is to be made for the wife should

be made by way of lump sum. The parties agreed both in the High Court and at the hearing of the appeal that this was the most

desirable way of making provision. I am in full agreement with the Chief Justice, for the reasons he gives, that the absence of specific

statutory machinery for the making of “clean break” provision should not preclude the Court from seeking to do so in appropriate

cases. In the present case, where the amplitude of resources makes it possible, the desire of the parties for financial finality should

not be frustrated. The act expressly empowers the Court to make orders at any time after the divorce, but that fact does not

preclude to Court from taking note of a provision already made in the form of a lump sum intended to facilitate a clean break.

I do not consider that the Court should have regard to the legal right to which a surviving spouse may become entitled pursuant to

the Succession Act. It is not one of the statutory matters. The Court might well, of course, arrive at a result of a similar kind based

on the general considerations in section 20.

I have emphasised the breadth of the discretion conferred on the trial judge by the Constitution and by the act of 1996. This Court is

required, on the appeal, to consider whether the trial judge made any error in law. In particular, he should have given consideration to

the matters to which the statute requires him to have regard and he should not have regard to matters which are beyond the scope

of his discretion. Subject to that, this Court must be conscious of the fact that this important and far-reaching statutory and

constitutional power is to be exercised by the judge granting the decree of divorce, in this case the judge of the High Court. It is for

the High Court judge to decide on the weight to be accorded to each of the statutory matters. This Court should be very slow to

substitute its own view.

I turn then to consider the judgment of the learned trial judge. Given the scale of the assets and the divergence between the parties

as to the level of proper provision, it would have been preferable if the judgment had set out precisely the judge’s conclusion on the

valuation of assets of the husband. At times, he appears to have treated them as being valued at £20 million. On the other hand, he

refers to the wife’s argument which was based on a net value, after the expenses of realization, of some £15 million and which sought

provision in the range £4.3 to £7 million. I conclude from the fact that the lump sum payment ordered was a total of £5 million that he

must have been working on a value of some £14 to £16 million.

The learned trial judge was correct to hold that the assessment of assets must be made at the date of the trial, for the reasons I

have set out above. This proposition may require some refinement in the light of the circumstances of other cases. It is not simply a

question of assessing the value of the assets at the date of the trial and making an appropriate division. A more systematic

consideration of the weight of the different statutory matters will be very desirable for future cases. On the facts of this case, it is

clear that the learned trial judge regarded the office block, which constituted some eighty per cent of the value of the husband’s

assets, as being part of his resources out of which it was “proper” for him to make provision. I believe he was entitled to come to

that view, in the light of the particular history of the acquisition of that asset and the origin of the financial resources, based on the

solicitors’ practice, which enabled the husband to acquire it and the wife’s important contribution to the laying of its foundations.

At one point, the learned trial judge stated that the wife “has made an overall greater contribution to the marriage than the”

husband. He went on to say that he was “mindful of the need for care and discretion when dividing a fortune as substantial as that

with which [he was then] dealing.” The first of these statements appears designed to consider some at least of the statutory

matters. It is regrettable that the judge did not consider the matter more precisely in relation to the respective contributions of the

parties to the property and financial resources in question. The judge was mistaken in speaking of dividing a fortune. That is not a

correct description of the Court’s function in making proper provision.

Nonetheless, I think that in reality the learned judge reached the conclusion that the wife had contributed very substantially to the

financial resources in question. If one substitutes the notion of “provision” for “ division,” the ultimate question is whether he was

entitled, in the exercise of his discretion, and, having regard to the relevant circumstances, to make provision for the wife in the form

of a lump sum of £5 million to be paid by her husband. In my view, he made a decision which fell within the range of the permissible

exercise of his discretion. Accordingly, this court should not alter that decision.

Accordingly, I would dismiss the appeal except to the extent proposed by the Chief Justice.