Supreme Court dismisses appeal where State is not liable for property adjustment orders in divorce proceedings.

THE SUPREME COURT

[Appeal Nos: 34/2013 & 76/2013]

Clarke J.

Laffoy J.

Charleton J.

Between/

L. B.

Plaintiff/Appellant

and

Ireland, The Attorney General and P. B.

Defendants/Respondents

Judgment of Mr. Justice Clarke delivered on the 15th day of January, 2015

1. Introduction

1.1 This appeal raises one straightforward question. Is it arguable that a person who is required to transfer property to a spouse, as a

result of orders made in matrimonial proceedings for divorce, is entitled to sue the State on the basis of an uncompensated

appropriation of property? The High Court held that such a claim was bound to fail and, on that basis, allowed a motion brought by

the first and second named defendants/respondents ("the State") to dismiss. The plaintiff/appellant ("Mr. B") has appealed to this

Court against that finding.

1.2 While it will be necessary to set out the lengthy history of the relevant proceedings involving Mr. B in a little more detail in due

course, it is sufficient for present purposes to note that Mr. B was initially involved in matrimonial proceedings, also involving the third

named defendant/respondent ("Ms. B"), as a result of which adjustment or transfer orders were made in relation to certain lands and

pension rights. There can be no doubt but that the effect of those court orders has been to deprive Mr. B of property rights which he

would otherwise have had in the relevant lands and pension. Those orders were made in the context of matrimonial proceedings which

were the subject of hearings both in the Circuit Court and, on appeal, in the High Court. The orders were made within the jurisdiction

of those courts as conferred by the Family Law (Divorce) Act, 1996 ("the 1996 Act").

1.3 Thereafter, Mr. B brought proceedings in which he challenged the constitutionality of part of the 1996 Act including the provisions

which permitted such orders to be made. Those proceedings were determined in the High Court by MacMenamin J. in L.B. v. Ireland

and the Attorney General and by order P.B. [2008] 1 I.R. 134. That decision was affirmed on appeal by this Court in July, 2009.

1.4 Thus, the legislation under which the relevant property and pension adjustment orders were made has been held to be consistent

with the Constitution and the specific orders made in Mr. B's case must, therefore, be taken to have been validly made in accordance

with constitutionally valid legislative provisions.

1.5 It is against that backdrop that the State brought its application before the High Court asserting that Mr. B's claim in these

proceedings was bound to fail. In substance the State argued that this was, under the guise of a claim in damages against the State,

an attempt to relitigate the issues which had already been determined in the previous constitutional proceedings. Hogan J. concluded,

at paras. 20 and 21 of his judgment, that Mr. B's claim was bound to fail and thus should be struck out under the court's inherent

jurisdiction and further held that the proceedings amounted to an attempt to relitigate matters already determined and, thus, if it

were necessary to do so, that the proceedings could also be struck out on the basis of res judicata.

1.6 Finally, it should be noted that the trial judge made no order for costs against Mr. B notwithstanding dismissing his claim. The

State has filed a notice of cross appeal against that refusal of the trial judge to award costs in their favour. The cross appeal has

been left over until the substantive issue raised on this appeal has been determined.

1.7 In order to place Mr. B's appeal against the substantive ruling in context, it is necessary to say a little more about the various

proceedings in which Mr. B has been involved.

2. The History of Proceedings

2.1 Mr. B was married in 1964. He is now retired. There are a number of adult children of that marriage who are not financially

dependent on their parents. In June, 1996 Ms. B commenced judicial separation proceedings against Mr. B under the Judicial

Separation and Family Law Reform Act 1989. Judgments of the Circuit Court and the High Court on appeal (Kinlen J.) were given

which, amongst other things, directed the sale of the family home with each side to receive 50% of the proceeds.

2.2 Later Mr. B brought proceedings in the Circuit Court seeking a decree of divorce and other ancillary reliefs. The Circuit Court,

amongst other things, ordered that the family home be sold with 35% of the net proceeds to go to Mr. B and the balance to Ms. B. In

addition a pension adjustment order in respect of 20% of Mr. B's pension was made in favour of Ms. B. For reasons which were not

clear to the High Court judge and are not clear to me, the original judicial separation proceedings order relating to the sale of the

family home and a 50/50 division, was never implemented.

2.3 The divorce proceedings were appealed to the High Court and determined on appeal by Finlay Geoghegan J. on the 10th June,

2004. The High Court upheld the decision of the Circuit Court in substance but made some changes to the precise details of the

relevant property and pension adjustment orders. The property was directed to be divided as to 40% to Mr. B and the pension

adjustment order in favour of Ms. B was changed to 25%. Ultimately, the detail of those orders is no longer of any relevance to the

issues which are before this Court. What is relevant is that Mr. B was subject to orders both in respect of his lands and his pension

which had the effect of transferring a part of his property interest in both of those items to his wife.

2.4 Mr. B asserts in these proceedings that his estranged wife had no direct property interest in either of those items on the basis

that he had provided all of the funds which were used to acquire them. As this appeal arises out of an application to dismiss as being

bound to fail, it follows that the court must, of course, accept that Mr. B will be able to establish that fact at trial. For the purposes

of the argument on this appeal, therefore, I must assume that the relevant assets were the sole property of Mr. B and that he was

required, on foot of the property and pension adjustment orders to which reference has already been made, to transfer the relevant

portions of those assets to Ms. B. He is, of course, at a loss as a result of having so to do.

2.5 The real issue which arises is, however, as to whether there is any basis on which it is arguable that he can claim for that loss

against the State. Before turning to that issue, I should briefly note two matters which occurred at the hearing of the appeal before

this Court.

2.6 First, Mr. B (who appeared in person) submitted that the appeal should be heard before a Court consisting of five judges on the

basis that he wished the court to review a previous decision made by this Court in T.F. v. Ireland [1995] 1 I.R. 321. In that context,

Counsel for the State drew attention to the fact that Mr. B had the opportunity, when arguing for the unconstitutionality of the 1996

Act, in his own proceedings in L.B. v. Ireland & Ors., to invite this Court to revisit any aspects of its previous decision in T.F. v.

Ireland which he considered warranted review. Counsel noted, and Mr. B accepted, that no such attempt had been made. In those

circumstances, Counsel for the State argued, and the court agreed, that any question of revisiting T.F. v. Ireland had now been

overtaken by events being the failed challenge by Mr. B to the constitutionality of the 1996 Act in L.B. v. Ireland and the judgment of

both the High Court and this Court in those proceedings. The Court, therefore, ruled that it was unnecessary to reconstitute the

formation of the court as a five-judge panel.

2.7 Finally, it should be noted that, at the commencement of the hearing, Counsel appeared on behalf of Ms. B to indicate to the

court that Ms. B did not require to participate in the hearing. It is then necessary to return to a discussion of the arguability of the

claim made by Mr. B in these proceedings.

3 Discussion

3.1 Much of the submissions put before this Court by Mr. B, both in writing and at the oral hearing, were concerned with establishing

that his property rights had been interfered with. First, he asserted, correctly so far as it goes, and as has already been noted, that

he had a property interest in both the relevant lands and pension benefits. That there was an interference with his property rights

cannot, therefore, be doubted. I did not understand counsel for the State to argue otherwise.

3.2 Second, Mr. B addressed the jurisprudence of both this Court and the High Court which establishes that the appropriation of

property by the State in the absence of compensation will normally amount to a breach of the property rights of the individual from

whom the appropriation is taken. At the level of general principle there can be little doubt but that it would require very extreme

circumstances for it to be constitutionally permissible for the State to take property without compensation. See for example Buckley

v. Attorney General [1950] I.R. 67 and E.S.B. v. Gormley [1985] I.R. 129. Again, I did not understand counsel for the State to

disagree.

3.3 Mr. B is, therefore, correct up to a point. He has property rights. Those property rights cannot be interfered with except where it

is constitutionally permissible so to do and, ordinarily, if his property rights are to be interfered with by the appropriation of his

property by the State, it will not be possible so to do in a constitutional fashion without the payment of compensation.

3.4 But, as the trial judge correctly pointed out, to look at the issues which arise in this case without also having regard to the

constitutional provisions concerning divorce is to ignore a vital, and on the facts of this case highly relevant, aspect of the

constitutional framework. As the trial judge noted, in In Re Article 26 and the Matrimonial Homes Bill, 1993 [1994] 1 I.R. 305, the

Supreme Court, on a reference by the President, found aspects of the Matrimonial Homes Bill to be inconsistent with the Constitution

because they required a certain division of matrimonial property in every case. However, to ignore what the Constitution itself says

about the consequences of divorce would be to ignore a central part of the constitutional regime which applies in circumstances such

as those which have affected Mr. B. Article 41.3.2º specifies the conditions which must be met before a decree of divorce can be

granted. That Article provides:-

"2° 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 part 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."

3.5 Sub-clause (iii) requires that there be proper provision and sub-clause (iv) permits further requirements for divorce to be included

in law. Thus, it is the constitutional regime itself which requires proper provision for a spouse in the context of a divorce and which

permits the Oireachtas, by law, to lay down any further conditions which must be met in order for a divorce to be granted. All of the

general provisions of the Constitution concerning property rights and the proper role of the courts and the Oireachtas must be seen in

the light of these express provisions of the Constitution. I am far from convinced that it is appropriate to characterise a property

transfer as an expropriation of property where it arises as a result of orders made in matrimonial proceedings. Even if it were arguable

to so characterise matrimonial property orders, the general requirement which would normally render the uncompensated expropriation

of property unconstitutional would have to give way, in the context of divorce, to the specific constitutional entitlement of a spouse

on divorce.

3.6 If the argument put forward before this Court by Mr. B is correct, then it would follow that the State itself would have, in

substance, to bear the burden of making proper provision under the Constitution for all divorced spouses, and, indeed, although not

relevant to this case, for the children and other persons specified in Article 41.3.2 (iii). This is so because the Constitution itself

contemplates divorce but, in enabling divorce as a matter of law, requires proper provision. The Constitution, therefore, necessarily

requires that there be some mechanism for determining proper provision and confers on the courts the role of determining what that

proper provision should be. When the courts have determined the level of proper provision, who then is it to make such provision?

There is nothing in Article 41 of the Constitution to suggest that the substance of that provision is to come from the State rather

than from the resources available to the spouses whose divorce is under consideration. The clear meaning of Article 41.3.2º.iii is that

the courts are to be given the task, under the Constitution, of requiring one spouse to make proper provision for the other spouse in

the context of a divorce. All of the rights to property under the Constitution must now be seen to be qualified by that provision. While

it is true that the Constitution does not transfer any property rights within marriage from one spouse to another, the Constitution

does, in express terms, require a spouse to a failed marriage, which is the subject of a divorce, and who is, having regard to all the

circumstances including the resources available to both spouses, in a position to contribute to making provision for the other spouse,

to give up such part of their property rights as may be necessary to ensure that their spouse has proper provision made for them.

3.7 As noted by MacMenamin J. in Mr. B's previous proceedings and as reiterated by the trial judge in this case, the requirement for

proper provision is not merely permitted by the Constitution but is required by the Constitution. The Constitution itself, therefore,

requires Mr. B to make proper provision if it is appropriate in the circumstances of his case. Whether that be so and to what degree is

for the courts to decide. To the extent that the requirement to make such proper provision may interfere with Mr. B's property rights

then the making of that proper provision, and that interference with his property rights, is expressly required by the Constitution. In

those circumstances it seems to me to be fundamentally misconceived to suggest that the making of a property adjustment order

amounts to an appropriation by the State of Mr. B's property. Rather, it amounts to a court complying with the constitutional

mandate given to the court to ensure that proper provision was made for Ms. B.

3.8 That analysis would, in itself, be sufficient to uphold the judgment of the trial judge and dismiss the appeal. However, in

deference to the detailed arguments advanced by Mr. B concerning the separation of powers, the role of the courts and the role of

the Oireachtas, I propose to touch briefly on those questions before concluding.

4 The Separation of Powers

4.1 Here again much of the submissions made by Mr. B are correct at the level of general principle. He draws attention to the

constitutional requirement that the sole power of making laws is conferred on the Oireachtas (Article 15) and that the sole judicial

power is conferred on the courts (Article 34). It would indeed, as he points out, be a breach of the principle of the separation of

powers which is to be found in our constitutional regime if the courts were to take on a lawmaking role or if the Oireachtas were to

interfere in the decision making function of the courts.

4.2 However, it is clear that neither of those principles are breached by the regime which has been put in place in this case. The way

in which, in the ordinary way, the respective roles of the Oireachtas and the courts, in determining the rights and obligations of

individuals or bodies, is played out is that the Oireachtas makes the law and the courts apply that law to the facts of any individual

case. There is nothing either surprising or controversial in such a regime. It is, of course, also the case that the courts can play a role

in the evolution of the common law within the bounds of what is constitutionally permissible (see my judgment in M.R. and D.R. & ors

v. An tArd Chláraitheoir & ors [2014] IESC 60), although nothing turns on that question on the facts of this case. Furthermore, it is

also, of course, the case that the courts play an important role in scrutinising legislation for consistency with the Constitution.

Indeed, that is just what the courts did in relation to the 1996 Act in the previous proceedings brought by Mr. B. I will return briefly

to that point at the end of this judgment.

4.3 Mr. B asserts that a court does not have any jurisdiction (inherent or otherwise) to vary the ownership of the beneficial interest

in property. On that basis it is said that the courts, in making property adjustment orders, exceed their constitutional powers.

However, it is the Constitution itself which places a duty on the courts to ensure that proper provision is made in the context of

divorce. Therefore, the Constitution itself requires the courts, in an appropriate case and in the context of divorce, to interfere with

the property rights of a spouse to the extent that it may be necessary to ensure that there is proper provision for the other spouse in

accordance with the terms of Article 41. Thus, the entitlement of the court to make a property adjustment order expressly arises

under the Constitution itself and is not concerned with any inherent or other power of the courts. Mr. B argues (at para 15.2 of his

written submissions) that the relevant provisions of the 1996 Act, which permit the making of property adjustment orders, "confer on

the court the power to determine the possession and ownership of property and to extinguish rightful ownership". It is said that

such a power does not lie in the Oireachtas and cannot be conferred by the Oireachtas on the courts. However, that argument is to

entirely miss the point. The Constitution requires (not just permits) the court to make proper provision. The Constitution also permits

the Oireachtas to make laws imposing conditions on the circumstances in which a decree of divorce can be granted. Whatever may

be the general position, the Constitution does confer power on the courts in relation to determining proper provision even to the

extent that proper provision may interfere with the property rights of the other spouse.

4.4 The other leg of Mr. B's complaint is that the Oireachtas has interfered in the proper role of the courts through specifying the

matters which are to be taken into account by the court in dealing with the consequences of a successful application for divorce.

This raises one of the issues which seemed to me to be at the heart of Mr. B's overall complaint. Mr. B has, in would appear, always

felt that the blame for the breakdown of his marriage was to be laid squarely on his wife's side. It would be wholly inappropriate for

me to make any comment on whether that belief is correct. In the course of his submissions, Mr. B drew attention to the decision of

this Court (given by Hamilton C.J.) in T.F. v. Ireland in which the judicial separation regime was under consideration. Attention was, in

particular, drawn to a passage from the judgment at p. 375 which notes that a party who wished to withdraw from a marriage "for

selfish or irrational reasons" was still entitled to obtain a decree of judicial separation. A similar regime applies in respect of divorce

under the 1996 Act provided that the criteria for separation are met. In that sense our divorce (and, indeed, judicial separation)

regime may be said to be "no fault". In deciding whether to grant a decree of divorce or judicial separation the court is not concerned

with determining whether, and if so to what extent, fault for the breakdown of the marriage lies on one or other side. The granting of

a decree of judicial separation or divorce simply amounts to an acknowledgement that the marriage concerned is at an end for

whatever reason.

4.5 It is not, however, the case, as Mr. B suggested, that the court is precluded from placing some reliance on the conduct of the

parties in determining the level of proper provision to be made. The overall statutory provisions in respect of the various forms of

financial and property orders which can be made under the 1996 Act is to be found in s.20 of that Act. It is important to note that

s.20(1) is the overarching provision and is expressed in exactly the same terms as the Constitution itself by specifying that the court

"shall ensure that such provision as the court considers proper having regard to the circumstances" is to be put in place. Thus,

section 20(1) does not in any way interfere with the broad constitutional remit which is given to the courts by Article 41.3.2. The

provisions of s.20(2) are expressly specified to be "without prejudice to the generality of subsection (1)". Thus the specific matters

which the court is required to have regard to, under subsection (2), are expressly stated to be subject to the general obligation of

the court under subsection (1) which is expressed in identical terms to the Constitution itself. In addition, and of particular relevance

to the issue which Mr. B raises, one of the criteria specified (at item (i)) is "the conduct of each of the spouses, if that conduct is

such that in the opinion of the court it would in all the circumstances of the case be unjust to disregard it".

4.6 While the granting of a decree of divorce is, therefore, no fault, the provision for financial orders can take into account conduct if

the nature of that conduct is sufficiently serious that the court would consider it unjust to disregard it. It is not, therefore,

appropriate to characterise the financial adjustments specified by the legislation as operating solely on a no fault basis. The justice of

the case is part of the court's consideration.

4.7 In addition, the Oireachtas has not purported to interfere in any way with the role of the court in either assessing such conduct

or in determining whether any conduct established is sufficiently serious to warrant it being taken into account to the extent of

leading to a change in the financial orders which might otherwise be made. The Oireachtas has left it entirely up to the court to

decide whether conduct is such that it would be unjust to disregard it. There is just no basis, therefore, for Mr. B's assertion that the

Oireachtas has, in that regard, in any way interfered with the constitutional remit of the courts. The remainder of the provisions of

s.20(2) of the 1996 Act are simply concerned with specifying the kind of common sense matters which any court would have to take

into account in deciding on the relative abilities of the spouses to make financial provision. Those provisions are also, as has already

been pointed out, specified as being without prejudice to the general requirement found in subsection (1) which is identical to the

requirement in the Constitution itself. There can be no basis, therefore, for suggesting that the Oireachtas has in any way interfered

with the proper role of the courts under the Constitution in determining the level of proper provision which is to be made in the

context of a divorce.

4.8 Two final points under this heading should be made. First, and at a very general level, it is the case that any law may restrict the

scope of a court's inquiry in any proceedings. Courts are not at large. Courts are obliged to apply the law. Subject to any law being

consistent with the Constitution, a court is bound by its provisions just as much as anyone else and the provisions of a constitutional

law will necessarily, in very many cases, reduce the scope of the court's inquiry in proceedings to which that law relates.

4.9 For example, if a constitutionally permissible piece of legislation creates an absolute criminal offence (and there is ample authority

for the proposition that such offences can, subject to certain limitations, be created) it necessarily follows that a criminal trial

involving such an offence will not involve the court in assessing the intent or extent of knowledge or awareness of the accused. The

law will have narrowed the scope of the court's inquiry by excluding such matters. But that is what law does. The suggestion that a

law which narrows the scope of a court's inquiry involves an impermissible interference by the Oireachtas in the court's role is simply

wrong. It is inherent in the law making power of the Oireachtas, which is expressly conferred by the Constitution, that laws will

necessarily limit the scope of the court's inquiry in cases to which the law in question applies. If the law does so in a manner which is

constitutionally impermissible then the courts can, of course, invalidate that law by declaring it to be inconsistent with the

Constitution. However, provided it be valid under the Constitution, such law, duly enacted by the Oireachtas, may limit the scope of

the court's inquiry.

4.10 I then turn to the specific provisions of the 1996 Act which were relied on to make the property and pension adjustment orders

in Mr. B's case. I have already dealt with what those provisions say and why same do not, in any way, interfere with the court's

proper role in divorce proceedings under Article 41.

4.11 Finally, it should be noted that Mr. B made significant submissions on the extent to which the rule of res judicata applied to this

case in the light of the fact that both MacMenamin J., and this Court on appeal, have upheld the constitutionality of the relevant

provisions of the 1996 Act. It is unnecessary to go into the precise issues which were raised by Mr. B concerning the question as to

whether the rule of stare decisis or the principle of res judicata applies fully in the constitutional context. As this appeal arises out of

a motion to dismiss on the basis of being bound to fail, I am prepared to accept as arguable the proposition that a court may be

invited to reconsider a previous decision to the effect that legislation is constitutional. However, on any view, a party seeking, within

a relatively short period of time, to rerun a constitutional case again on the same grounds as that party itself had recently argued and

failed, could only be permitted so to do, if at all, in the most extraordinary circumstances.

4.12 To rule otherwise would be to countenance a situation where parties could simply litigate and relitigate the same points ad

infinitum. Such a situation would not be consistent with any principles of reasonable constitutional certainty. It must be recalled that

the constitutionality of the 1996 Act was upheld, in a case brought by Mr. B himself, in proceedings which were finally determined by

this Court just over two years before these proceedings were commenced. No legitimate basis, let alone extraordinary circumstances,

has been put forward to suggest that it would be appropriate or permissible to allow the same issues to be relitigated again.

4.13 For those reasons I am also satisfied that Hogan J. was correct in adding to his judgment an addendum to the effect that he

would have also been prepared to dismiss the proceedings as being in breach of the principle of res judicata if that were necessary.

The substance of Mr. B's case is that his constitutional property rights were interfered with by property adjustment orders made

under the 1996 Act. He has already tried, and failed, to challenge the constitutionality of the 1996 Act on precisely the grounds that

it fails to vindicate his property rights. The case which he now makes can only be distinguished from the case which he made in those

previous proceedings if Article 41 of the Constitution were to be interpreted as meaning that the State was to bear the burden of

making proper provision for spouses in the context of divorce. That proposition is unstateable.

5 Conclusions

5.1 For the reasons set out in this judgment I am satisfied that the Constitution itself requires that, in an appropriate case, the court

interferes with the property rights of a spouse in the context of divorce where that interference is necessary to ensure that the other

spouse involved in the divorce in question has proper provision made for them. There is no basis for suggesting that the Constitution

requires that the burden of making such provision lies on the State. The claim that the State is obliged to compensate spouses who

are constitutionally required to make such proper provision is, therefore, unstateable and the proceedings brought by Mr. B are,

therefore, bound to fail.

5.2 It would be wholly inappropriate, in addition, to allow Mr. B to commence, within just over two years of having lost a challenge to

the constitutionality of the relevant provisions of the 1996 Act, a fresh constitutional action whose substance involves an attempt to

cause the court to revisit constitutional issues so recently decided in proceedings in which he was, himself, a party. If, and to the

extent that, it may be possible to revisit constitutional issues notwithstanding a previous decision of this Court, that facility does not

arise in the circumstances of this case where the same issues have so recently been determined in litigation involving the same party.

5.3 I would, therefore, dismiss the appeal and affirm the order of the trial judge