D v D

• Jurisdiction: Ireland
• Judge: Mr. Justice William M. McKechnie
• Judgment Date: 04 May 2005
• Neutral Citation: [2005] IEHC 154
• Docket Number: [No. 83 M/2002]
• Court: High Court
• Date: 04 May 2005

B.D. -v- J.D.

FAMILY LAW

IN THE MATTER OF THE JUDICIAL SEPARATION AND FAMILY LAW REFORM ACT 1989

AND

IN THE MATTER OF THE FAMILY LAW ACT 1995

BETWEEN

B.D.

APPLICANT

AND

J.D.

RESPONDENT

[2005] IEHC 154

[No. 83 M/2002]

THE HIGH COURT

Abstract:

Family law - Practice and procedure - Appeal - Case remitted back for rehearing - Scope of rehearing - Procedure to be adopted - Factors to be considered - Proper provision - Family Law Act 1995, section 16.

Facts: the High Court granted a decree of judicial separation to the applicant, placed a value of Eur10 million on the family business and when endeavouring to make proper provision for the parties, inter alia, directed the respondent to pay to the applicant Eur2 million before February, 2004, Eur1 million before February, 2005 and Eur1 million before April, 2006, granted the respondent an option of acquiring the applicant’s interest in the family home which had been valued at Eur1 million and directed the respondent to make a contribution of Eur100,000 to the applicant’s costs. The respondent appealed that part of the order to the Supreme Court. The case was remitted back to the High Court to consider and make findings in the issues of what mechanisms could be used for the extraction from the company of any funds ordered to be paid to the applicant and the tax effects on the companies or on the respondent of the extraction of the relevant funds. The valuations of the family business and home were not interfered with and were not referred back. The applicant issued a notice of motion seeking directions as to the mode and manner in which the High Court should conduct the rehearing as directed by the Supreme Court.

Held by McKechnie J in that the task of determining the scope of the rehearing had to be approached by considering what was the proper interpretation of the Supreme Court’s intention as found in and gathered from a reading of its judgement. That the Supreme Court did not direct a rehearing on all matters as suggested by the applicant, particularly in respect of the valuation to be placed on the family business and home. However, within the confines within which the case was remitted back, the trial court was obliged to make proper provision for the parties having regard to section 16 of the Family Law Act 1995 and the amongst the factors relevant to that assessment were the transaction costs and tax liability involved in implementing the provisions of the court order. The value of the family home was also a factor to be considered when making proper provision. Costs awards should always be available as a matter of discretion to the trial court in family law cases.

Reporter: P.C.

Mr. Justice William M. McKechnie

1 On the11th December, 2003 this court delivered judgment in these family law proceedings between the applicant wife and the respondent husband. Having granted a decree of judicial separation and having placed a valuation of €10 million on what I might term, purely for descriptive purposes, as the family business, the court, when endeavouring to make "proper provision" for the parties under s. 16 of the Family Law Act,1995inter alia:-

(1) directed the respondent to pay to the applicant:-

2 (a) the sum of €2 million net on or before the 28th February, 2004;

3 (b) the sum of €1 million net on or before the 28th February, 2005 and;

4 (c) the sum of €1 million net on or before the 28th April, 2006,

5 with the 2005 and 2006 payments carrying simple interest at the rate of 4% from the 1st March, 2004 until the dates of payment.

6 (2) Granted the respondent an option of acquiring his wife's interest in the family home, in respect of which a valuation of €1 million had been placed, which option, if exercised carried the financial obligation of paying a further sum of €500,000 on or before the 30th April, 2004.

7 (3) Directed the respondent, in the event of his defaulting on or declining to exercise this said option, to transfer his interest in the family home to the applicant and in that event the above payment which fell due on the 28th April, 2006 was to be reduced by, and to a sum of €500,000, and;

8 (4) directed the respondent to make a contribution of €100,000 to the applicant wife in respect of her costs.

9 These provisions were contained in paragraphs (ii) and (viii) of the court's order, which apparently was perfected on the 5th April, 2004.

10 2. By Notices of Appeal dated the 20th April, 2004 the husband appealed against the aforesaid judgment and the resulting said order.

11 3. On the 8th December, 2004 the Supreme Court gave judgment in this case and having allowed the appeal in part, set aside the aforesaid paragraphs (ii) and (viii) of the High Court's order and remitted the proceedings back to this court for the purposes specified in that judgment, which purposes were reaffirmed in the court's order of the same date.

12 4. The applicant wife has now issued a Notice of Motion seeking inter alia directions as to the mode and manner in which this court should conduct the hearing as directed by the Supreme Court. She also seeks other orders relative to that re-hearing including an order appointing a single tax expert for the purposes of advising on the most tax efficient and tax neutral consequences of complying with s. 16 of the Family Law Act, 1995. Affidavits were sworn by both parties and submissions made on their respective behalf. This court now gives a ruling on the issues raised in that Notice of Motion.

13 5. In his arguments addressed to the Supreme Court, Mr. Durcan S.C., who appeared on behalf of the husband, submitted that the trial judge should have, but failed, to make appropriate findings on the following matters:-

14 a "(a) Whether it was possible to remove the sums of money in question from the company over a two year period;

(b) what mechanism could be used for extracting such funds,

15 (c) what would (be) the commercial effects of the extraction of the funds on the viability and future of the business and

16 (d) what would be the tax effects of the extraction of the funds".

17 Mr. Justice Hardiman, who gave the unanimous opinion of that court upheld these submissions insofar as paragraphs (b) and (d) were concerned but came to the conclusion that the High Court's judgment must be regarded as having resolved the position which underlined both paragraphs (a) and (c). The case was thus remitted back so that this court "may consider and make such findings as it considers appropriate in the issues of:

18 (1) what mechanisms could be used for the extraction from this company of any funds ordered to be paid to the applicant;

19 (2) the tax effects on the companies or on the respondent of the extraction of the relevant funds". See the order of the 8th December, 2004.

20 That court also set aside the contribution for costs as provided for by the High Court and made no order as to the costs of the appeal.

21 6. On the hearing of the aforesaid motion Mr. David Hegarty S.C. made a number of submissions on behalf of the wife. His principal argument was that in determining what a "new lump sum" should be, the trial judge must approach that task on the basis of making "proper provision" for the applicant as well as the respondent. In order to so do it is necessary to carry out a further full valuation of the entire assets available to the parties and to conduct that exercise by reference to the date of re-hearing. No other approach would be meaningful. He said that to try and endeavour to make "proper provision" on historical figures "that included estimates of management accounts which subsequently transpired to be grossly inaccurate" (see paragraph 10 of the applicant's grounding affidavit) would be, in his opinion to burden his client with a great injustice. He believes therefore that the respondent husband should not be permitted to "pick and choose" from those parts of the High Court judgment and order which he favours and yet at the same time to insist upon a rigid curtailment of the re-hearing. Accordingly he submits that the family business should be re-valued as of the date of the re-hearing. He also makes a similar submission with regard to the family home, notwithstanding the fact that the respondent has exercised the option given to him by the High Court order. As a result he asserts that both of these assets, each with an up to date valuation, should be available for the purposes of making "proper provision" under s. 16 of the 1995 Act. Finally, he also submits that the setting aside of this court's contribution of €100,000 towards the wife's costs was not in anyway indicative of an intention by the Supreme Court to lay down a general rule as to how costs should be dealt with in family law matters. Rather it was a decision peculiar to the facts of the instant case.

22 7. Mr. Durcan S.C. appears on behalf of the respondent. In his submission he argues that the approach suggested by the wife is fundamentally at variance with the Supreme Court order and that in any re-hearing this court is strictly confined to consider such matters only as are necessary to "make such findings as it considers appropriate" on the two issues referred back to it. It has no jurisdiction to go further. In particular, he submits that the valuation of €10 million on the family business was not interfered with on appeal and has not been referred back. Moreover, he says that the applicant did not appeal the provision dealing with the family home and likewise the Supreme Court has not asked the High Court to further enquire into this matter. Therefore there can be no question of this court either revaluing the business or of taking the family home into account, when, having made such findings as directed, it should come to apply s. 16 to the facts as so found. Consequently the re-hearing should be restricted in the manner submitted. Finally I also think...