D (M) v D (N)

• Jurisdiction: Ireland
• Judge: Mr. Justice Clarke and Mr. Justice MacMenamin
• Judgment Date: 26 February 2015
• Neutral Citation: [2015] IESC 16
• Court: Supreme Court
• Date: 26 February 2015

D (M) v D (N)

In the Matter of the Judicial Separation and Family Reform Act, 1989 and

In the Matter of the Family Law Act, 1995

Between/

M.D.

Applicant/Respondent

and

N.D.

Respondent/Appellant

[2015] IESC 16

Denham C.J.

Clarke J.

MacMenamin J.

[Appeal No: 323/14]

THE SUPREME COURT

Family law – Matrimonial proceedings – Division of assets – Whether error in approach by trial judge in allocating the combined assets of the parties on the basis of equality – Costs – Discrepancy with written judgment and Court order actually made – Sale of lands – Delay in sale – Shortfall in sale price owing to conduct and delay – Notional rent – Recommendations concerning good practice

Facts The case concerned the division of matrimonial assets. The High Court judge made an order in respect of the management of the sale of the relevant farmlands and thereafter a division of the assets of the parties on the basis of equality. He ordered a lump sum payment of €848, 863 to be made by the respondent/appellant, Mr. D, to the applicant/ respondent, Ms. D. Mr. D sought to appeal said order. All other issues were taken to have been determined as a result of the original decision of the High Court. The only substantive issue left to be determined was whether it had been demonstrated that there was an error in the approach of the trial judge in allocating the combined assets of the parties on the basis of equality. In addition, costs of the High Court rehearing were subject of the appeal; however, this issue was left over until the appeal on the substantive questions had been determined. Judgment was delivered in the sum of €807,621.50 yet the order actually made was for €848.683. Therefore, the Court needed to address the discrepancy between the written judgment of the trial judge and the Court order actually made. The trial judge was of the view that the conduct of Mr. D had contributed both to a delay in the sale of the lands, which were required to be sold as a result Court orders, and had also led to a diminution in the price achieved for those lands when they were ultimately sold. On that basis, the trial judge included a sum of €180,000 as an additional asset attributable to what he found to be the shortfall in the price realised. Furthermore, the trial judge included a sum for what might be described as notional rent, referable to the delay in sale of the lands and, thus, the delay in Ms. D receiving the lump sum to which she was entitled.

Held The trial judge was entitled to conclude that all of the parties involved in opposition to the sale (including Mr. D) were collectively responsible for the diminution in the sale price in the sum determined and that, in those circumstances, it was appropriate to attribute a value to the lands which was €180,000 greater than that achieved. The judge said it must be made clear that any party who acts in a way likely to diminish the value to be achieved in the sale of matrimonial assets, in the context of matrimonial proceeding, is exposed to the risk that the Court will place any shortfall in the sale price achieved on their side of the ledger. The judge concluded that both the appeal and the cross appeal raised at least some points which required the amount of provision to be adjusted. The judge would allow the cross–appeal and substitute, for the amount specified in the High Court order of €848,683, an amount of €900,000.

1. Introduction

2 1.1 The consequences of marital breakdown can be difficult enough for parties without complex, protracted and consequently expensive litigation. Unfortunately, the matrimonial litigation with which this judgment is concerned ticks each of those boxes. Against that general background we have taken the opportunity, in the course of this judgment, to make some general comments on good practise in matrimonial proceedings involving significant assets and other resources. It should immediately be understood that those comments are intended to be of a general nature, and do not necessarily reflect on what occurred in this case. We have commented, where we consider it appropriate, on the history of this case, but only where it is necessary to understand and deal with the specific issues with which the court is now concerned.

3 1.2 It will be necessary to address certain aspects of the course of these proceedings to date in a little more detail. However, for present purposes, it is important to note that this matrimonial dispute has already been the subject of a determination in the High Court, an earlier appeal to this Court as a result of which certain issues were remitted back to the High Court, a further decision of the High Court and this appeal. In addition, there have been a number of other interlocutory applications, which themselves required significant court time and must necessarily have involved in significant time and expense for the parties. It is necessary to reiterate two simple truths; numerous court applications and especially appeals in family law cases worsen already frayed relationships, but additionally and necessarily will diminish the assets available for apportionment between the parties. There is a strong public interest, therefore, in achieving the highest degree of certainty and clarity in courts of first instance dealing with these sensitive cases.

4 1.3 As a result of the earlier decision of this Court to which reference has been made, very narrow questions were remitted back to the High Court for decision. The matter was previously before this Court on the 11 ^th April, 2011, resulting in a judgment and order on the 7 ^th June of that year. (See D. v. D. [2011] 2 I.L.R.M. 385). First, this Court affirmed the previous order of the High Court directing the sale of certain farmlands. Thereafter, Denham J., speaking for the court, said that the matter should be remitted "to the High Court so that any further orders in relation to the sale may be made by that court. On the sale being completed, the High Court may apply the principle of equality to the assets so that each party achieve an equal share, including a lump sum for the respondent. It will be for the High Court to determine how the assets are divided so as to achieve that equal share; this is a matter for the learned High Court judge".

5 1.4 Thus, what was remitted to the High Court was the management of the sale of the relevant farmlands and, thereafter, a division of the assets of the parties on the basis of equality. There were some difficulties concerning the sale of the relevant farmland (on which it will be necessary to touch) but, in any event, as a result of a further significant hearing, the High Court ordered that a lump sum payment of €848,683 be made by the respondent/appellant ("Mr. D.") in favour of the applicant/respondent ("Ms. D."). It is against that order that Mr. D. has now appealed to this Court. It should, however, immediately be recalled that the only matter which was before the High Court when these proceedings were remitted back was the question of distributing the assets of the parties on the basis of equality. All other issues between the parties, insofar as they arose, must be taken to have been determined as a result of the original decision of the High Court and the earlier decision of this Court on appeal. The only substantive issues which, therefore, arise on this appeal are as to whether it has been demonstrated that there was an error in the approach of the trial judge in allocating the combined assets of the parties on the basis of equality. In addition, the costs of the High Court rehearing are subject to appeal, but that question has been left over until the appeal on these substantive questions has been determined.

6 1.5 In addition to the appeal brought by Mr. D., Ms. D. has also cross-appealed on the basis of alleging other errors on the part of the trial judge. Thus, the specific set of issues with which the court is concerned on this appeal involves a range of individual points made respectively by both of the parties designed to suggest.that.the lump sum payment directed by the trial judge did not reflect the equality determined by this Court. There is also an appeal against the High Court order in respect of costs, but that issue has been left over until the substantive issues have been determined. However, before going on to consider the specific substantive issues raised by the parties, it is necessary to identify the starting point which, as will become apparent, is itself a matter of some difficulty.

7 1.6 in a schedule attached to his judgment delivered on the 4 ^th July, 2014, Abbott J. identified a balancing sum of €807,621.50 as being necessary to bring about equality between the assets of the parties. The order actually made was, as already noted, for a sum of €848,683 to be provided. One of the first matters which must be addressed is, therefore, the discrepancy between the written judgment of the trial judge and the court order actually made.

2. The Adjustments

2 2.1 We include with this judgment, as Schedule 1, the schedule which was attached to the judgment of Abbott J., to which reference has already been made. As can be seen from that schedule, the method adopted by the trial judge was to list, under each heading, the total assets and, where appropriate in respect of each heading, what are described as the wife's assets. The total assets as per that schedule came to €2,921,409, and the wife's assets, without any balancing sum, to €553,083, thus appearing to require a balancing sum of €807,621.50 to bring about any equal division of assets.

3 2.2 It should first be noted that there is an error of calculation in that schedule for, on the basis of the figures therein contained, the balancing sum should actually be €907,621.50. That is no more than a mere error...