F.J.W.T.-M. v C.N.R.T.-M.

Judgment Date22 June 2004
Docket Number[2000 No. 28 M]
Date22 June 2004
CourtHigh Court
[2004] IEHC 247

High Court

[2000 No. 28 M]
F.J.W.T.-M. v. C.N.R.T.-M
In the matter of the Judicial Separation and Family Law Reform Act 1989 and in the matter of the Family Law Act 1995. F.J.W.T.-M.
C.N.R.T.-M., Respondent and Trustcorp Services Limited, Notice Party

Cases mentioned in this report:-

Bosworthick v. Bosworthick [1927] P. 64; [1926] All E.R. 198.

Brooks v. Brooks [1993] Fam. 322; [1993] 3 W.L.R. 548; [1993] 4 All E.R. 917 (H.C); [1994] 3 W.L.R. 1292; [1994] 4 All E.R. 1065 (C.A.); [1996] A.C. 375; [1995] 3 W.L.R. 141; [1995] 3 All E.R. 257 (H.L).

C.F. v. J.D.F. (Unreported, High Court, O'Sullivan J., 16th May, 2002).

Chaine-Nickson v. Bank of Ireland [1976] I.R. 393.

Chestvale Properties Ltd. v. Glackin [1993] 3 I.R. 35; [1992] I.L.R.M. 221.

E. v. E. (Financial Provision) [1990] 2 F.L.R. 233.

Gartside v. Inland Revenue Commrs. [1968] A.C. 553; [1968] 2 W.L.R. 277; [1968] 1 All E.R. 121.

Howard v. Howard [1945] P. 1; [1945] 1 All E.R. 91.

Inland Revenue Commissioners v. Plummer [1980] A.C. 896; [1979] 3 W.L.R. 689; [1979] 3 All E.R. 775.

J.D. v. D.D. (Judicial Separation) [1997] 3 I.R. 64; [1998] 3 Fam L.J. 17.

Lort-Williams v. Lort-Williams [1951] P. 395; [1951] 2 All E.R. 241.

Milne v. Milne (1871) L.R. 2 P & D 295; 40 L.J. P. & M. 13; 23 L.T. 877.

N.(C.) v. N.(R.) [1995] 1 Fam L.J. 14.

O'H. v. O'H. [1990] 2 1.R. 558; [1991] I.L.R.M. 108.

Prinsep v. Prinsep [1929] P. 225.

T v. T (Joinder of Third Parties) [1996] 2 F.L.R. 640.

Thomas v. Thomas [1995] 2 F.L.R. 668.

Young v. Young (No. 1) [1962] P. 27; [1961] 3 W.L.R. 1109; [1961] 3 All E.R. 695.

Family law - Judicial separation - Proper provision - Post-nuptial settlement - Certain assets subject to discretionary trust - Trust created during currency of marriage - Whether trust constituted post-nuptial settlement - Whether fact trust created for purpose of tax efficiency precluded its being considered post-nuptial settlement - Date from which court should apply statutory provisions - Family Law Act 1995 (No. 26), s. 9(1)(c) and s. 16.

Equity - Trust - Settlement of land - Settlement executed after marriage of parties - Purpose of settlement - Whether settlement constituted post-nuptial settlement.

Preliminary issue

The facts have been summarised in the headnote and are more fully set out in the judgment of McKechnie J., infra.

By special summons dated the 6th March, 2000, the applicant sought a decree of judicial separation together with certain ancillary reliefs.

By motion on notice dated the 21st December, 2001, the applicant sought, inter alia, an order that the trustee of the trust be joined as a notice party to the proceedings and an order allowing amendment of the special summons to include a claim pursuant to the provisions of s. 9(1)(c) of the Act of 1995 varying, for the benefit of the applicant and the dependent members of the family, the terms of the settlement made by the respondent. On the 13th June, 2002, the High Court (Abbott J.) ordered that the said trustee be joined as a notice party for the purpose of determining as a preliminary issue whether the trust came within the provisions of s. 9(1)(c) of the Act of 1995 and, if so, whether the trustee should be joined further in the proceedings.

The preliminary issue was heard before the High Court (McKechnie J.) on the 15th and 16th January, 2004.

Section 9 of the Family Law Act 1995 provides, inter alia, as follows:-

"On granting a decree of judicial separation, the court, on application to it in that behalf by either of the spouses concerned or by a person on behalf of a dependent member of the family, may, during the lifetime of the other spouse, or, as the case may be, the spouse concerned, make a property adjustment order, that is to say, an order providing for one or more of the following matters … (c) the variation for the benefit of either of the spouses and of any dependent member of the family or of any or all of those persons of any ante-nuptial or post-nuptial settlement (including such a settlement made by will or codicil) made on the spouses; (d) the extinguishment or reduction of the interest of either of the spouses under any such settlement."

Section 16(2)(a) of the Act of 1995 provides that in endeavouring to ensure that proper provision is made for each spouse and dependents, the court shall have regard to "the income, earning capacity, property and other financial resources which each of the spouses concerned has or is likely to have in the foreseeable future".

The applicant instituted proceedings claiming a decree of judicial separation against her husband, the respondent, and seeking a variety of reliefs, including property adjustment orders.

Among the assets, potentially the subject of such orders, was a house and estate, which was subject to a discretionary trust executed in 1987. Under the instrument creating the trust, the settlor was the respondent. Among the potential beneficiaries was the "widow" of the respondent. In 2001, the respondent was added to the list of potential beneficiaries. As a preliminary issue, the High Court (McKechnie J.) was required to determine whether the trust came within the provisions of s. 9(1)(c) of the Act of 1995 and, if so, whether the trustee should be joined to the proceedings.

Counsel for the applicant submitted that the trust was a post-nuptial settlement within the meaning of s. 9(1)(c) of the Act of 1995, and that this phrase should be interpreted broadly. Counsel for the notice party contended for a variety of reasons that the trust did not come within the provisions of s. 9(1)(c). The potential beneficiaries merely enjoyed contingent interests in the trust property, whereas any interest had to be one in possession or reversion. Furthermore, the trust was not "made on the spouses" because,inter alia, the applicant was not identified as a beneficiary. Insofar as the instrument referred to the "widow" of the respondent, the identity of such person could only be definitively ascertained on the respondent's death. There was no nuptial element as the trust was created for the purpose of tax efficiency. Since the trust preceded the enactment of the Act of 1995, retrospectively applying the Act to it was unjustified. Counsel for the respondent broadly adopted the submissions of counsel for the notice party.

Held by the High Court (McKechnie J.), in holding the trust was a post-nuptial settlement made on the spouses and came within the provisions of s. 9(1)(c) of the Act of 1995, 1, that although the trust instrument referred to the "widow" of the respondent, such person would have to have been the respondent's wife and at the time of the creation of the trust. This was to be taken as referring to the wifequa wife and at a time within the continuance of their marriage. It was irrelevant that the applicant had only a contingent interest thereunder. Furthermore, the husband was also a potential beneficiary under the trust.

Bosworthick v. Bosworthick [1927] P. 64;Brooks v. Brooks [1996] A.C. 375;Lort-Williams v. Lort-Williams [1951] P. 395;N.(C.) v. N.(R.) [1995] 1 Fam L.J. 14;Prinsep v. Prinsep [1929] P. 225;Young v. Young (No. 1) [1962] P. 27 considered.J.D. v. D.D. (Judicial Separation)[1997] 3 I.R. 64 distinguished.

Obiter dictum: That even if the respondent was not a potential beneficiary, this would not be fatal to the conclusion that the trust was a post-nuptial settlement.

2. That the fact that the trust was created for the purpose of tax efficiency was irrelevant.

3. That the correct date for applying the relevant statutory provisions was not the date of the creation of the trust or the date of the institution of proceedings, but the date upon which the court must decide in favour of or against the grant of a decree of judicial separation.

Cur. adv. vult.

McKechnie J.

22nd June, 2004

1 The applicant and the respondent in these proceedings were lawfully married to one another on the 21st October, 1970, at the Royal Hospital chapel in London. Of that marriage there were born two children, A.L.T.-M. whose date of birth was the 21st July, 1977 and their son R.C.R.T.-M. who was born on the 27th October, 1978. For reasons not immediately relevant to this application, the marriage of Mr. and Mrs. T.-M. has irretrievably broken down with the result that the applicant wife on the 6th March, 2000, issued the within proceedings against the respondent. She claims a decree of judicial separation pursuant to the Judicial Separation and Family Law Reform Act 1989 and also several other reliefs including a variety of what may conveniently be termed "property adjustment orders", all under the Family Law Act 1995. The seeking of these reliefs has, of course, brought into play the assets of both the applicant and the respondent. One of these assets, indeed by far the most significant, is B. House and its estate of approximately 750 acres of land together with the agricultural machinery, equipment and stock which is used for the farming and cultivation of the said lands. The accommodation consists of a period house which was first occupied by the applicant and the respondent in 1976/1977 and, according to the applicant, has been their family home since then. There is also a house on the estate which is let to a tenant as well as other household items and objects of considerable value. However, because of the legal structure by which this property is held, it became evident during the course of the pleadings that, in the judicial separation proceedings, an issue might arise as to whether the court of trial could have regard to the B. Estate when considering what proper provision should be made for each spouse under the relevant provisions of the Act of 1995.

2 In short, this estate is the subject matter of a discretionary trust,"The R. trust", established many years ago against the background and in the circumstances hereinafter more fully set forth. As a...

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