D (B) v D (J)

JurisdictionIreland
JudgeMr. Justice William M. McKechnie
Judgment Date05 December 2003
Neutral Citation[2003] IEHC 106
CourtHigh Court
Date05 December 2003

[2003] IEHC 106

THE HIGH COURT

83m/2002
D (B) v. D (J)
FAMILY LAW
IN THE MATTER OF THE JUDICIAL SEPARATION OF FAMILY LAW REFORM ACT 1989 AND IN THE MATTER OF THE FAMILY LAW ACT

BETWEEN

B.D.
APPLICANT

AND

J.D.
RESPONDENT
Abstract:

Family law - Judicial separation Ancillary financial orders - Proper provision - Valuation of companies owned by husband - Proper approach to be adopted in valuing private company - Roles played by parties in establishment and development of business - What financial orders in respect of wife of marriage should be made in circumstances - Family Law Act 1995, section 16.

Facts: the applicant applied and was granted a decree of judicial separation. She then claimed for various financial orders as against the respondent, in which she stated that she wanted, in cash, 50% of the assets of the company the respondent was involved and a shareholder in, which represented the most significant assets in relation to the proceedings. She said that in effect both she and her husband were de facto partners and that she was entitled to an equivalence of return thereon which contention was disputed by the respondent. She had become a director of the company in 1993. The resources of the parties in the litigation included not only the business conducted through the group of companies but also the family home, certain untied linked funds, pension policies, quoted shares, bank accounts and other ancillary items. For all practical purposes, save for the pension policies and the company, the balance of the assets was and could be regarded as being in the joint ownership of the parties.

Held by McKechnie J in directing that the unit linked funds, the quoted shares and all bank accounts, whether in joint names or in individual names had to be terminated or otherwise so managed that the value of each of these assets would be divided equally between the parties and that that the pension arrangements in place would stand unaltered and, in placing a value of €€0 million on the company, that the respondent pay to the applicant the sum of €€ million on or before the 28th February, 2004, the sum of €€ million on or before the 28th February, 2005 and a further sum of €€ million on or before the 28th April, 2006, 1, that when deciding what provision to make between the spouses, neither spouse was discriminated against and was made in the context of judicial separation proceedings and with the courts inability to achieve asset finality between the parties in mind.

2. That the applicant's contribution to the company was not equal to that of her husband.

3. That the fact that the applicant had three children, which never had a serious impact on her ability to work outside the family home and into the future, given the parties ages and her independence, was immaterial to her future work and working capacity.

4. That as the applicant's relationship with the business was beyond redemption the court could not grant any relief which would involve her continuation either in practice or in paper with this company.

5. That there was no acceptable scientific way of approaching the task of valuing a private company and the undertaking could not be carried out as a matter of art.

Reporter: P.C.

1

JUDGMENT of Mr. Justice William M. McKechnie dated the 5th day of December, 2003 .

2

1. In these judicial review proceedings the applicant, who is the wife of the respondent, seeks, in the special summons issued on her behalf:-

3

1. A decree of judicial separation pursuant to section 2 (1) (b) and/or section 2 (1) (f) of the judicial Separation and Family Law Reform Act, 1989, and

4

2. Orders, over 20 in number, including relief under sections 6, 7, 8, 9, 10 (1), (a) (i) (ii), (b), (c), (e), 11, 12, 13, 14, 15, 15 (a), 17 and 35 of the Family Law Act, 1995.

5

In the replying affidavit Mr. D.. counterclaims for a similar decree but does so not only under the said section 2 (1) (b) and (f) of the Act of 1989, but also under paragraph (a) and (c) of that said sub-section. In addition a variety of consequential orders are also claimed by him.

6

2. The applicant wife was born on 10 th May, 1954, with her husband born on 6 thOctober, 1956. They both married according to the rights of the Roman Catholic Church on 8 th September, 1978. Of that marriage they had three children. Their eldest son was born on 27 th August, 1979; their second child on 16 thOctober, 1980, and their third on 10 th November, 1981. It can therefore be seen that all these children have reached their majority and it can also be noted that none are "dependent members" of the family as defined in section 2 of the Family Law Act 1995.

7

3. Since 1991, approximately, the current family home has been located in the South East of this country. On 7 th November, 2001, Mrs. D. vacated that home and presently lives in rented accommodation nearby.

8

4. Section 2 (1) of the said Act of 1989, insofar as is relevant to this application reads as follows:

"2-(1). An application by a spouse for a decree of judicial separation from the other spouse may be made to the court having jurisdiction to hear and determine proceedings under Part III of this Act on one or more of the following grounds:-"

(a) that the respondent has committed adultery;

(b) that the respondent has behaved in such a way that the applicant cannot reasonably be expected to live with the respondent

(c) subject to subsection (2) of this section, that there has been desertion by the respondent of the applicant for a continuous period of at least one year immediately preceding the date of the application;

(d) ...

(e) ...

(f) that the marriage has broken down to the extent that the court is satisfied in all the circumstances that a normal marital relationship has not existed between the spouses for a period of at least one year immediately proceeding the date of the application."

9

Accordingly, if I am satisfied on the balance of probability that any of the said grounds have been established, then in accordance with section 3 (1) of the Act "the court shall, subject to subsection (2) of this section and sections 5 and 6 of this Act, grant a decree of judicial separation in respect of the spouses concerned."

10

5. In deciding whether to make any or all of the orders which are sought in this case the court must have regard to section 16 of the Family Law Act, 1995as amended by section 52 of the Family Law (Divorce) Act, 1996. Without prejudice to the generality of subsection (1) of section 16, one of the matters which must be considered under subsection (2) is: "(i) the conduct of each of the spouses, if that conduct is such that in the opinion of the court it would in all of the circumstances of the case be unjust to disregard." This conduct was therefore potentially relevant to the grounds upon which a decree was sought and also to many of the consequential orders which were prayed for. That being so, evidence of conduct was led in the direct examination of the applicant. That same evidence was hotly denied and contested in cross-examination where also the applicant's own conduct was strongly put in issue. At this point, in quite a distraught condition, Mrs. D.. wondered aloud as to why this line of cross-examination was required. In response I queried the parties as to whether either or both of them intended to rely upon conduct or misbehaviour for the purposes of section 2 of the Act of 1989 or section 16 of the Act of 1995. Having taken instructions neither party wished to so rely. Accordingly it became unnecessary to pursue the allegations by the applicant or to further consider her own conduct.

11

6. This course was one with which I respectfully agreed. However, it should be expressly recorded that what was suggested in this regard by the applicant against her husband, rested, for the reasons above stated, at mere allegation state only; with it being unnecessary in the circumstances for Mr. D. to fully explore these allegations to finality. He did, of course, on oath deny all such allegations. It is important therefore to stress, not only to the parties in this litigation but also to their children, if this should ever become an issue, that this court has made no findings whatsoever on the allegations so made. In addition, it is also, I think, appropriate that I should say nothing of a specific nature about the applicant's own conduct as that emerged during the course of cross-examination.

12

7. Subject to these observations I am satisfied that the statutory requirements above mentioned have been complied with and accordingly I propose on the grounds specified at section 2(1)(f) of the Act of 1989 to grant a decree of judicial separation to the spouses in question.

13

8. The assets the subject matter of the litigation include a business conducted through the medium of a group of companies. A major question arises as to the respective parts played by Mr. and Mrs. D.. in the establishment and development of that business. Being by far the most important item in terms of material value, a decision on this issue becomes necessary. On that point and on the overall factual and legal situation the following submissions were made on behalf of the parties.

14

9. On behalf of the applicant, Mr. David Hegarty S.C. suggests that the amendment made by the Act of 1996 to the wording of subsection (1) of section 16 is significant in that it has raised the threshold which must be satisfied before it can be said that the court has made "proper provision" for the spouses of the marriage. In his opinion the evidence in this case would demonstrate that from the very beginning both parties to the marriage conducted their affairs effectively on a partnership basis. Whilst there was nothing in writing to that effect, nonetheless, the de factoway in which decisions were taken, consultations engaged in, monies used and withdrawn,...

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