High Court allows appeal to transfer divorce ancillary relief hearing from High Court to Circuit Family Court.

APPROVED

REACTED

FOR PUBLICATION

[2025] IEHC 683

Record No. H.CAF.2025.72

THE HIGH COURT

FAMILY LAW

IN THE MATTER OF THE FAMILY LAW (DIVORCE) ACT 1996 AND IN THE MATTER OF THE FAMILY LAW ACT 1995

BETWEEN:

M.K.

Applicant

AND

B.K.

Respondent

Ex Tempore Judgement of Ms. Justice Nuala Jackson delivered on the 1st December 2025

BACKGROUND

1. The Applicant issued a Civil Bill seeking a Decree of Divorce and ancillary reliefs on the 1st November 2022. Pertinent to the application which I am now considering, the Civil Bill references the occupations of the parties and their places of residence. It also indicates that a Deed of Separation was entered into by the parties in 2018 and certain of the terms of this Deed are referenced. A copy of the Deed of Separation in annexed to the Civil Bill.

2. Prior to the Deed of Separation, the family home of the parties was held in the joint names of the parties as joint tenants. Pursuant to the terms of the Deed of Separation, the joint tenancy was severed, and the Applicant transferred his half interest to trustees to hold same as joint tenants. The trust provided that the Respondent would have the benefit of the property for her lifetime with the children of the marriage to have the benefit of the property thereafter as tenants in common in equal shares. As part of the said Deed of Separation, the mortgage on the property was redeemed leaving it unencumbered. The Applicant contends that this was achieved by way of personal loan to the Applicant from his father. The Respondent believes that this transaction ought to be interrogated. The mortgage balance at that time was in the sum of €191,016.

3. The Applicant’s Civil Bill would appear to be drafted on the basis that the Deed of Separation terms constitute proper provision in the context of divorce as the only ancillary reliefs sought are mutual section 18(10) orders pursuant to the Family Law (Divorce) Act, 1996 (‘the 1996 Act’).

4. The annexed Deed contains the terms indicated above as well as dealing with, inter alia, arrangements for the children, maintenance and renunciation of Succession Act entitlements. There are some unusual clauses contained in the Deed including provision for maintenance for the Respondent and the children without indication of the division of the sum payable as between them and there is a clause which states:

“The Husband and the Wife HEREBY AGREE that this Agreement shall remain in force for a period of four years from the date hereof and shall be subject to review at the end of the said four-year period.” It is unclear if this review relates to maintenance or to all of the terms of the Deed. There are also some notable matters not referenced in the Deed. First, there is no full and final settlement clause and there is no clause indicating that there was financial disclosure prior to the execution of it.

In the context of this application, the Respondent submitted that disclosure at the time the Deed of Separation was negotiated and concluded was entirely inadequate. These are matters which will obviously have to be considered in determining proper provision in the context of the current divorce proceedings and particularly so having regard to the provisions of section 20(3) of the 1996 Act.

AFFIDAVITS OF MEANS

5. The Applicant has sworn a number of Affidavits of Means in the within proceedings.

The first is dated the 13th October 2022. This Affidavit indicates an uncomplicated financial situation. There is a house (not the family home) with relatively modest encumbrance, a chattel of modest value, relatively modest cash sums held in a bank account, a weekly salary and a modest pension. There is reference to a loan from the Applicant’s parents, which would appear to relate to the discharge of the mortgage on the family home. The vouching is annexed to the Affidavit and consists of bank statements and a payslip and some miscellaneous expenses documentation. It can be definitively stated that there is nothing in this Affidavit of Means which would indicate that there is any reason why this litigation could not be comprehensively and appropriately dealt with by the Circuit Family Court. The second Affidavit of Means of the Applicant of the 16th January 2024 is in similar terms (there is little change save that bank account, loan and pension balances have altered slightly).

6. The third Affidavit of Means of the Applicant of the 4th September 2024 is deserving of some comment. The bank balances of the Applicant have increased by in or about €150,000 and it is indicated that he has no income. There has been modest, unremarkable decrease in the mortgage balance and the loan to his parents remains.

The circumstances of these changes have been explained and will be considered further below.

7. An Affidavit of Means was sworn by the Respondent on the 22nd June 2023. There is likewise nothing in this document which indicates a financial circumstance supportive of a transfer of jurisdiction to the High Court.

8. A Defence and Counterclaim was filed on the 5th October 2023. In this, the Respondent claims that the Applicant has a beneficial interest in Company A. The Respondent asserts that the Deed of Separation was entered into in circumstances in which she had left the family home with the children and was anxious to return to it.

She seeks clarification of the loan agreement between the Applicant and his parents, which would appear to be the agreement which resulted in the discharge of the mortgage attaching to the family home.

MOTION TO TRANSFER

9. It is with this background that the motion which I am currently considering comes before me, on appeal from the Circuit Family Court. The Motion seeks the transfer of the proceedings to the High Court. The jurisdictional basis upon which such transfer is sought is not specified. The Circuit Family Court acceded to the relief sought by Order of the Circuit Family Court of the 29th July 2025. The Applicant has appealed this Order.

10. The Motion is grounded upon the Affidavit of James Walsh, the Respondent’s solicitor, sworn on the 1st October 2024. This Affidavit indicates that the within proceedings have been listed for hearing on three occasions (17th January 2024; 16th April 2024; and 1st August 2024) and on each such occasion had to be adjourned due to deficiencies in vouching on the part of the Applicant. Mr Walsh avers that these vouching deficits arose “especially regarding Company A”. The Affidavit states that the shareholders in that company at the time of the institution of the proceedings were the Applicant’s parents. He avers that “The Applicant worked in the company all his working life and was a director thereof.”

11. A forensic accountant’s report by John Healy of Kirby Healy is exhibited. From this and from other exhibits (including newspaper articles) it is clear that Company A was sold to a third-party company in or about August 2024. There was some corporate restructuring in this context. Details of this sale are not known to me. However, it would appear to be uncontested that:

1. Company A is a business founded by the Applicant’s father/family.

2. The Applicant has worked in the said business at all material times up to August 2024 and at his remuneration from this enterprise was his sole source of income.

3. The Applicant has never been a shareholder in the said business. He has been a director of it and received director’s emoluments.

4. The Applicant’s sister is also involved in the said business. She has never been a shareholder in it but was a director of it and received director’s emoluments.

12. It does not appear to me that much turns on the re-structuring but for completeness I will reference this. Company A is a [REDACTED] specialist company. It appears that a company B operates as a holding company for Company A, with the Applicant’s parents being the shareholders in the former company. Prior to Company B selling the Company A shares to a third party, the real property held by Company A was transferred to a further company, Company C. Company C is also owned by Company B and, through it, by the Applicant’s parents. Therefore, the operating part of Company A was sold to the third party and the properties held previously by Company A were transferred to Company C. In consequence, the Applicant’s parents’ shareholdings in Company B gave them the benefit of the sale of the Company A shares by that company all the while retaining the property interests. It would appear that Company A (through its new owners) continues to operate from Company C properties thus generating an income. It would appear that the Applicant is now gainfully occupied by Company C and is, again, in receipt of income. I do not have details of his new terms and conditions in this regard.

13. It should be stated that, in the context of the sale to the third party, the Applicant received an ex-gratia payment1 of €200,000 (comprised of a car and a cash payment).

This payment is not exceptional in the context of the sale of the Company A business in which the Applicant had been involved for many years.

14. It is clear and agreed that the legal ownership of the shareholdings in Company B (from which all benefits derived from Company A now come) are held by the Applicant’s parents. The evidence and pleadings presented by the Respondent in relation to the beneficial ownership of the said shareholdings are a little confused.

15. The Defence and counterclaim assert a beneficial interest on the part of the Applicant in Company A. Mr. Walsh’s Affidavit also so avers (paragraph 14).

16. The forensic accountant’s report states:

“6.2 The ultimate shareholder and managing director of [Company A] is the Applicant’s father.”

The Respondent queries the true nature of this payment.

“6.6 I acknowledge that the Applicant is not a shareholder of [Company A], but I note from recent filings at the CRO that there was a restricting exercise carried out that might potentially lead to the Applicant becoming a shareholder in time. There are significant tax reliefs available from a transfer of shares from the Applicant’s father to the Applicant and his sister.”

17. It was accepted at the hearing of this appeal that the restructuring was in the context of separating the trading company and the property company and the establishment of the holding company. None of these steps alters the position of the Applicant in any respect.

18. A letter from Messrs Arthur Cox, solicitors for Company B, is exhibited in Mr.

Walsh’s Affidavit and states that the legal owners of Company B are the Applicant’s parents, and that the Applicant’s father is the beneficial owner of that company.

Importantly, this letter states that the firm is not aware of the Applicant having any beneficial interest in Company B, Company C or Company A.

19. Further Affidavits in respect of the motion were filed. These are:

The Affidavit of Dermot Byron sworn on the 14th October 2024. This Affidavit deposes in support of the Applicant’s position but does reference the absence of application for third party discovery.

The Affidavit of Applicant of the 18th February 2024 deposes to the lack of evidence adduced by the Respondent in respect of the averments made on her behalf by Mr.

Walsh. Importantly, at paragraph 7 of this Affidavit, the Applicant avers:

“For the purpose of clarification, I say that the firms of [Company A, Company B and Company C] are legally and beneficially owned by [the Applicant’s parents] and are not “the family business” as stated at the said paragraph 14 and further stated in the [newspaper] article exhibited in the said Affidavit.”

20. A further Affidavit was sworn by Mr. Byron on the 18th February 2025.

21. A Supplemental Affidavit was sworn by Applicant on the 9th May 2025. This is a very comprehensive affidavit setting out the history and background of the Deed of Separation and his involvement with the Company A business. He references that no assertion of beneficial interest was made by the Respondent in the context of the negotiations for the Deed of Separation or thereafter, prior to this matter being raised in the divorce proceedings. He again denies any beneficial interest in the relevant companies. He references the additional costs which have been incurred based upon the matters being raised by the Respondent. Documentation is exhibited from the companies’ auditors and from Company B’s solicitors to support the absence of beneficial interest on his part. The support of the Register of Beneficial Interests corroborating the Applicant’s position was also referenced in argument before me.

22. The Respondent swore an Affidavit on the 22nd July 2025. She avers to a belief that the Applicant has a beneficial interest in the companies concerned. She references the important role of the Respondent in the businesses concerned and her support of him in this role. She avers:

“It was always discussed throughout our marriage that the Applicant’s parents would settle the business on the Applicant and the Applicant’s sister who were employed by [Company A] and associated companies all their working lives.”

23. This is somewhat inconsistent with the averment of a present beneficial interest. She avers to behaviour on the part of the Applicant consistent with having no financial concerns for the future and that he

“stated to me on numerous occasions that he was going to be a millionaire by virtue of inheritance.”

24. She continues on to aver:

“The Applicant made it very clear to me throughout our marriage that money was never going to be an issue for us as he was in no doubt about inheriting a very successful family business.”

25. These averments are also inconsistent with the averment of a present beneficial interest; indeed, they are directly contrary to such averment indicating a future expectation rather than a current entitlement. She continues on to state that the assertion by the Applicant that he received an ex-gratia payment is “a bare assertion” and that non-party discovery will be required. Of course, this “bare assertion” is supported by the exhibited correspondence from the solicitors for Company B. It would not appear, from the evidence and submissions before me, that any non-party discovery has been sought.

26. An Affidavit was sworn by Justin Spain of Spain Toomey, solicitors for the Applicant, on the 24th July 2025. This avers that proper, full and appropriate vouching has been provided.

27. The final Affidavit is that of [REDACTED], sworn on the 24th July 2025.

[REDACTED] is the Applicant’s father. Inter alia, he avers:

“3. I say that I confirm that the Applicant is not and never was a legal or beneficial owner of any shareholding in any company owned by me or my wife or in respect of which I was a shareholder, or my wife was a shareholder. Further, I also confirm that the Applicant is not and has never been a beneficial owner of any of my assets or my wife’s assets.

4. I further confirm that this Deponent and my wife do not hold any assets in trust for the Applicant and further we do not hold any assets either directly or indirectly for the Applicant. The Applicant, my son, is an employee of one of my companies.”

28. It is clear from the Affidavits of Means of the parties that the value of the case as averred therein is well below the mandatory transfer value. Mr. Walsh avers (paragraph 13):

“I say and believe that the assets including real property exceeds a Market Valuation of €3,000,000.”

29. There is no evidence before me to support this averment.

30. The basis for transfer up being asserted appears to be:

1. That the assets including real property exceeds €3,000,000.

2. That the corporate entities in which the Respondent asserts that the Applicant has a beneficial interest are complex and substantial discovery will be required. It is averred that “I say and believe that the value of the Applicant’s beneficial share is substantial and further that the Applicant’s (sic) is presently in receipt of a significant dividend/remuneration therefrom.”

3. At the hearing herein, it was further submitted that the unorthodox arrangement in relation to the family home, as contained in the Deed of Separation, being the trust established in respect of the Applicant’s 50% share therein, added further complexity which supported transfer. Arguments relating to the application of section 14 of the 1996 Act may arise.

4. There may be a novel legal argument to be addressed at the hearing relating to the extent to which potential future inheritances or asset acquisition should be taken into account in making proper provision in the context of the 1996 Act. This may involve consideration of “circumstances” in section 20(1) of the 1996 Act and “foreseeable future” in section 20(2)(a) of the 1996 Act.

THE LAW

31. It is not for me to determine any of these arguments. These are matters which will have to be pursued at the hearing herein. The matter before me is whether the proceedings should continue before the Circuit Family Court where they were commenced or whether they should be transferred to this Court for hearing. The 1996 Act confers concurrent jurisdiction upon this Court and the Circuit Family Court (section 38(1)). There are two alternative bases for transfer up which I must consider.

The first is pursuant to section 38(2) (as amended) of the 1996 Act. This provides that proceedings “shall” be transferred to the High Court if either party so requests if they concern land with a market value exceeding €3,000,000. On the evidence before me as set out in the Affidavits (eight of them) filed in relation to this motion and the Affidavits of Means of the parties, I am not satisfied that these proceedings concern land with a market value in excess of the sum specified in the statute. The Affidavits of Means of both parties set out asset values which are significantly less than this sum. There is no evidence of the valuation of the alleged beneficial interest of the Applicant in corporate shareholdings, which beneficial interest is, in any event, strongly contested by the Applicant and, additionally, does not relate to land, as specified in the legislation.

32. It was accepted by both Counsel that I have a discretion to transfer the proceedings to the High Court. Section 22 of the Courts (Supplemental Provisions) Act, 1961, as amended by section 21 of the Courts Act, 1971 provides:

22.—(1) (a) Subject to paragraphs (b) and (c) of this subsection, the Circuit Court shall, concurrently with the High Court, have all the jurisdiction of the High Court to hear and determine any proceedings of the kind mentioned in column (2) of the Third Schedule to this Act at any reference number.

…

(8) Any party to an action commenced in the Circuit Court and pending therein may at any time apply to the judge of the Circuit Court before whom the action is pending to have the action forwarded to the High Court and thereupon, in case the action is one fit to be tried in the High Court and the High Court appears to be the more appropriate tribunal in the circumstances, the said judge may send forward the action to the High Court upon such terms and subject to such conditions as to costs or otherwise as may appear to him to be just, and an appeal shall lie under section 38 of the Act of 1936, as applied by section 48 of this Act, from the decision of the judge granting or refusing any such application. (underlining added)

33. It is clear therefore that in deciding the application before me, I must consider

(a) Whether this action is one fit to be tried in the High Court and

(b) Whether the High Court is the more appropriate tribunal in the circumstances?

CONCLUSION

34. I must have regard to the fact that the legislature has determined that there is to be concurrent jurisdiction between the Circuit Family Court and the High Court in divorce matters and that the legislature has specified a circumstance in which there is a mandatory entitlement to transfer to the High Court. Such circumstance; I have determined does not apply here. The Circuit Family Court is hugely experienced in the hearing of divorce applications and in the application of the legal principles (legislative and caselaw based) applicable to the appropriate ancillary reliefs to be granted.

As there is concurrent jurisdiction, I am of the view that it cannot be said that this matter is not fit to be tried in the High Court. However, I cannot conclude on the evidence before me that the High Court is the more appropriate tribunal in the circumstances. This case will involve a consideration of the previously executed Deed of Separation. Such consideration is not uncommon before the Circuit Family Court. Issues of non-party discovery may or may not arise – no such application has yet been made – but, if such application is made, the Circuit Family Court has ample jurisdiction and procedural rules to deal with this.

There are assertions of beneficial property ownership which has not been disclosed. These assertions are strongly contested and will, ultimately, be a matter for evidence at the hearing. Such contests are not uncommon before the Circuit Family Court and may be appropriately dealt with at that jurisdictional level. There will, obviously, be a right of appeal in respect of any determination, procedural or substantive, made by that court. It is clear that this matter has previously had three listings for hearing. Delay in court listing does not appear to be an issue of significance.

Indeed, there would appear to have been delay on the part of the Respondent herein, the Defence and counterclaim being dated in excess of 11 months after the issuing of the Civil Bill and the papers furnished to me include three separate Orders of the County Registrar extending the time for the filing of same. There may well be arguments to be made concerning the manner in which the family home was dealt with in the Deed of Separation and there may be legal arguments as to the manner in which future asset acquisitions should be dealt with in the context of the circumstances to which a court must have regard pursuant to section 20 of the 1996 Act.

However, there is no reason why such arguments cannot be addressed before the Circuit Family Court. Having regard to all of these factors, I do not consider the High Court to be the more appropriate court in the circumstances.

35. I will, therefore, allow the appeal. In doing so, I am mindful of the delays which have occurred to date in these proceedings which are now in excess of three years in being.

This Motion has delayed matters by in excess of one year. It first issued in January 2025 but is grounded upon an Affidavit sworn on the 1st October 2024. I would ask that the Circuit Family Court would be requested to provide such expedition as possible, whether in relation to disclosure applications or the substantive hearing or both, to enable resolution. I will list this matter on a date convenient to Counsel to hear any applications which may arise from this decision.