C.C. v N.C.

• Jurisdiction: Ireland
• Judge: Mr. Justice Gerard Hogan
• Judgment Date: 26 October 2016
• Neutral Citation: [2016] IECA 410
• Date: 26 October 2016
• Court: Court of Appeal (Ireland)
• Docket Number: Neutral Citation Number: [2016] IECA 410 2014 Nos. 619 and 622 [Article 64 transfer]

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

BETWEEN /

C.C.

APPELLANT / RESPONDENT

- AND –

N.C.

RESPONDENT / APPELLANT

[2016] IECA 410

Hogan J.

Birmingham J.

Irvine J.

Hogan J.

Neutral Citation Number: [2016] IECA 410

2014 Nos. 619 and 622

[Article 64 transfer]

THE COURT OF APPEAL

Family proceedings – Divorce – Costs – Appellants/respondents seeking to appeal against High Court order – Whether High Court erred in the manner in which proper provision was assessed

Facts: The parties were married in October 1987 and separated in December 2003. The wife appealed to the Court of Appeal against the decision of the High Court (Abbott J) delivered on 2nd March 2012 in divorce proceedings (CC v NC [2012] IEHC 615). She maintained that the High Court erred in the manner in which proper provision for her was assessed. There was also a cross-appeal taken by the husband against aspects of the High Court order, specifically, the making of any divorce decree conditional on the payment of certain legal costs incurred by the wife.

Held by Hogan J that there were essentially three issues for consideration by the Court on this appeal: 1) has adequate provision already been made for the wife by reason of the capital payment made by the husband following an order to this effect by the High Court in the judicial separation proceedings in 2005?; 2) what is the appropriate amount of maintenance for the wife?; 3) was the High Court entitled to make an order for divorce subject to the husband discharging an earlier order for costs?

Hogan J held that he could not say that the original capital sum of €3.3m which O’Higgins J directed the husband should pay to the wife was inadequate as proper provision in the circumstances, particularly when it is viewed in light of the generous maintenance order which was then made; the fact that all of that money had been effectively lost by reason of the improvident business dealings of the wife was not in itself a reason as to why that capital payment should be adjusted or revised. Hogan J held that, in the unusual circumstances of this case, the maintenance payments directed by Abbott J should be upheld; this was conditional on the husband undertaking to the Court that the existing arrangements whereby he ensured that the wife continued to receive €50,000 net of all other payments continued, the attachment order made in favour of the Bank of Ireland notwithstanding. Hogan J held that once the High Court concluded that the four constitutional requirements (including proper provision) set out in Article 41.3.2.iii of the Constitution were fulfilled, the husband had in effect a constitutional right to a divorce decree. Hogan J held that in those circumstances the High Court had no jurisdiction to impose a further pre-condition prior to the taking effect of any such divorce decree, namely, that the husband discharge his wife’s taxed costs from the 2005 judicial separation proceedings and pay a figure of some €1m on account in respect of the costs of the divorce proceedings. Hogan J held that even if the order of the High Court was wrong in form for the reasons he suggested, it was nonetheless correct in substance. Given the huge legal costs which the litigation had generated, Hogan J held that proper provision for the wife within the meaning of Article 41.3.2 required that the 2005 costs order would be discharged by the husband and that he pay €1m in respect of the wife’s costs for the divorce proceedings; once those costs had been discharged by the husband, then – and only then – would the four conditions specified in Article 41.3.2 be satisfied and the divorce decree could issue.

Judgment approved.

JUDGMENT of Mr. Justice Gerard Hogan delivered on the 26th day of October 2016

1 The parties to this appeal in family law proceedings were married in October 1987 and there are four children of the marriage, all of whom have now attained their majority. The parties separated in December 2003 and it is plain that the marriage has irretrievably broken down. I shall for convenience refer to the parties as the ‘husband’ and the ‘wife’ respectively.

2 This is an appeal taken by the wife against the decision of the High Court (Abbott J.) delivered on 2nd March 2012 in divorce proceedings: see CC v. NC [2012] IEHC 615. She maintains that the High Court erred in the manner in which proper provision for her was assessed. There is also a cross-appeal taken by the husband against aspects of the High Court order, specifically, the making of any divorce decree conditional on the payment of certain legal costs incurred by the wife.

3 There are essentially three issues for consideration by this Court on this appeal. First, has adequate provision already been made for the wife by reason of the capital payment made by the husband following an order to this effect by the High Court in the judicial separation proceedings in 2005? Second, what is the appropriate amount of maintenance for the wife? Third, was the High Court entitled to make an order for divorce subject to the husband discharging an earlier order for costs? All other grounds of appeal were abandoned and the issue before this Court essentially reduced itself to questions of proper provision for the wife and whether the husband was entitled to a decree of divorce.

4 While I will presently address these issues in turn, it is first necessary to set out the background facts.

The background facts

5 The couple were at one stage enormously wealthy. Unfortunately, a good deal of that wealth has been dissipated by the massive costs generated by two sets of family law proceedings of staggering complexity; the erosion of property values following the 2008 – 2009 crash and, it must be said, improvident spending on certain capital assets by the wife. Despite all of this erosion of wealth, the husband nonetheless remains a person of very considerable means.

6 The length and complexity of both sets of these proceedings bring the adversarial system of family law litigation little credit. Huge amounts of judicial time and resources have been devoted to this family law litigation and this litigation – with its heavy financial and emotional costs – has dominated the lives of this couple and their children for well over a decade. Indeed, when this appeal first came before the Court in May 2016, the Court was prompted to urge the parties to consider mediation as a possible solution with a view to bring this protracted litigation to an end. The parties agreed to this suggestion and the appeal was adjourned to facilitate this. In the end, a mediated solution did not, unfortunately, prove possible and the appeal resumed on 31st July 2016.

7 The husband's principal asset is a large estate which has been in the possession of his family for several hundred years. The estate is a major tourist attraction which generates a significant income for the husband (and, by extension, the wife). Prior to the separation, this was treated by the parties as being in the nature of the family business and the wife helped out to some limited extent by, for example, assisting with the running of the souvenir shop and the farm. In the course of his very detailed judgment in the judicial separation proceedings in 2005 O'Higgins J. stated that while he did not wish to take from her efforts as a devoted wife, mother and homemaker, he was not satisfied that the wife had made any appreciable financial contribution to the husband's financial situation. Nothing has emerged in the course of the subsequent divorce proceedings to gainsay that conclusion.

8 Following the breakdown of the marriage in December 2003 the husband lived at a farm (which was the former family home of the parties) until December 2005. In that month the husband moved into a manor house on the estate and the wife then rented accommodation until she purchased a property in April 2006.

9 Lengthy judicial separation proceedings ensued in the aftermath of the marriage break-up. After some fifteen days of hearing in a judgment delivered in July 2005 O'Higgins J. made an order of judicial separation pursuant to the Judicial Separation and Family Law Reform Act 1989. The Court also made ancillary orders providing for a sizeable capital payment from the husband to the wife and providing for maintenance for the wife and the children. The order declared that the husband had sole title to the estate and the associated companies.

10 A key feature of the 2005 judgment was that the husband's assets were then valued as being in the order of €30m., with a net (after tax and disposal costs) valuation of almost €24m. It is important to repeat that these properties were the principal source of revenue for the husband and, by extension, the wife. If, for example, the husband's principal asset (namely, the estate) were to be sold, it would significantly diminish his revenue earning capacity which in turn would have implications for the level of any maintenance payments to be made to the wife.

11 At all events, the effect of the orders made by the High Court in 2005 was that a capital sum of €3.3m. was to be paid by the husband to the wife. The husband was also ordered to provide for maintenance of €240,000 net per annum to the wife; payment of €20,000 per annum per child; the discharge of annual school fees (totalling €125,000 per annum) and the payment of some €628,000 in respect of the wife's legal fees. An appeal was taken to the Supreme Court against this decision, but it was struck out by agreement in March 2009.

12 In the course of his judgment O'Higgins J. expressly rejected the argument that a one-third capital payment should generally be made in those cases where the spouses were wealthy and had ample assets. Drawing on the comments of Denham J. in D.T v. CT. [2002] 3 I.R. 334, 384-395 to this effect, O'Higgins J. stated:

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