J.D. v D.D. (Judicial Separation)

• Jurisdiction: Ireland
• Judgment Date: 14 May 1997
• Date: 14 May 1997
• Docket Number: [1995 No. 660 Sp.]
• Court: High Court

High Court

[1995 No. 660 Sp.]

J.D. v. D.D. (Judicial Separation)

J.D.

Applicant

and

D.D.

Respondent

Cases mentioned in this report:—

B. v. B. (Financial Provision) [1990] 1 F.L.R. 20.

Duxbury v. Duxbury [1987] 1 F.L.R. 7.

F. v. F. (Judicial Separation) [1995] 2 I.R. 354.

Gojkovic v. Gojkovic [1990] 1 F.L.R. 140.

H.D. V. P.D. (Unreported, Supreme Court, 8th May, 1978).

Hodgson v. Trapp [1988] 3 W.L.R. 1282; [1988] 3 All E.R. 870.

Howard v. Howard [1945] 1 All E.R. 91; [1945] P. 1; 114 L.J.P. 11; 172 L.T. 38; 61 T.L.R. 189.

Milne v. Milne (1871) L.R. 2 P & D 295; 40 L.J.P. & M. 13; 23 L.T. 877; 19 W.R. 423.

Minton v. Minton [1979] A.C. 593; [1979] 2 W.L.R. 31; [1979] 1 All E.R. 79; (1978) 122 Sol. Jo. 843.

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

Wachtel v. Wachtel [1973] 2 W.L.R. 366; [1973] 1 All E.R. 829; (1973) 117 Sol. Jo. 124; [1973] Fam. 72.

Family law - Judicial separation - Maintenance - Trusts - Whether court should make orders affecting trusts - Whether court should only take existence of trusts into consideration - Whether trust was reviewable disposition which reduced monies for distribution - Judicial Separation and Family Law Reform Act, 1989 (No. 6) - Family Law Act, 1995 (No. 26), s. 16, sub-s. 2 and s. 35.

Family law - Judicial separation - Maintenance - Finality - Whether court order should effect a "clean break" - Whether lump sum order appropriate - Intention of Oireachtas - Judicial Separation and Family Law Reform Act, 1989 (No. 6) - Family Law Act, 1995 (No. 26) - Family Law (Divorce) Act, 1996 (No. 33).

Special summons.

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

By special summons issued on the 24th October, 1995, the applicant sought a decree of judicial separation and ancillary orders.

The special summons was heard by the High Court (McGuinness J.) on the 4th, 5th, 26th, 27th and 28th February, 1997.

Section 16, sub-s. 2 (a) of the Family Law Act, 1995, provides that in the making of financial orders and determining the provision of such orders the court shall in particular 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".

Section 35, sub-s. 2 (a) (ii) of the Family Law Act, 1995, empowers a court to order the setting aside of a disposition "if it is satisfied that the other spouse or other person has, with that intention, made a reviewable disposition and that, if the disposition were set aside, relief or different relief would be granted to the applicant…"

The applicant and respondent were married in 1966 and had always been domiciled in the State. Throughout their marriage the applicant worked in caring for the home and family and was, in the main, financially dependant on the respondent. The respondent was a prominent businessman and the family had ample financial resources. Since 1991, he ran his own auctioneering business. In March, 1996, the applicant became aware that the respondent was having an extra-marital affair.

The applicant instituted High Court proceedings against the respondent seeking a decree of judicial separation and ancillary orders regarding financial relief, including maintenance.

The family home was valued in the region of £150,000 to £175,000 in January, 1996. After the breakdown of the marriage, the applicant left the family home and borrowed monies in order to purchase a new house for £110,000. The respondent, despite the fact that the family home was in his sole name, accepted that the applicant was a joint owner and stated in evidence that he was willing to pay all monies owing on the applicant's new house.

There was in existence a trust, ("the D. family trust"), the beneficiaries of which were the respondent and the applicant, their five children, the respondent's sister and her husband. While monies had been paid out of the trust to the other beneficiaries, the applicant never received any monies and was told by the trustee that she would get none. The assets of the D. family trust were worth approximately £600,000. There was also in existence a trust in the family of the applicant, ("the L. family trust"), the beneficiaries of which included the applicant. The assets of the L. family trust were worth £285,230.

During the course of the proceedings, both parties swore affidavits of means, however, the affidavit of the respondent was incomplete in several matters. It failed to disclose that subsequent to the issuing of the proceedings, he had transferred certain monies to the Isle of Man for the purpose of establishing a trust, ("the Isle of Man trust").

In the High Court, the applicant contended that the respondent should be ordered to pay a lump sum of £400,000 to her which would provide a satisfactory income for her lifetime. The applicant contended, inter alia, that she was desirous of a "clean break" situation where she would have her own income and would not be continuously dependant on the respondent for maintenance. She contended that the court, when assessing the assets of the respondent, should take into account the existence of the D family trust and its possible benefits to the respondent. In relation to the Isle of Man trust, she sought an order pursuant to s. 35 of the Family Law Act, 1995, setting aside the disposition and bringing the relevant monies into the general pool of assets available for distribution.

The respondent accepted that the breakdown of the marriage seemed irretrievable and that a decree of judicial separation should be granted. He contended that the court should order payment of a lump sum of £200,000 to provide for the cost of the applicant's new house and for furniture together with periodic maintenance in the sum of £20,000 per annum. He contended that to provide by way of lump sum would deprive him of his right to vary the maintenance downward should his income decrease. In relation to the D. family trust the respondent contended that the parties were equal beneficiaries, that the trust was discretionary and that it should not be taken into account.

Held by McGuinness J., in granting a decree of judicial separation, ordering the payment of lump sum maintenance of £200,000 and periodic maintenance of £20,000per annum, 1, that, in regard to the family home, since the respondent had undertaken to pay all monies owed by the applicant in the purchase of her new house, the court need not make a property adjustment order transferring the family home into the joint names of the parties.

2. That, since the court should not put pressure on trustees in the exercise of their discretion, it could only make orders which dealt with property to which the beneficiary was entitled in possession or in reversion.

Howard v. Howard [1945] 1 All E.R. 91 approved: Milne v. Milne [1871] L.R. 2P. & D. 202 considered.

3. That, accordingly, in the instant case orders should not be made either directly affecting the D family trust or the L family trust or putting pressure on the trustees in the exercise of their discretion.

4. That the existence of the trusts and the comparative likelihood of either spouse to benefit from them, should be considered in relation to the court deciding whether to make a periodical or lump sum maintenance order, since s. 16, sub-s. 2 (a) of the Family Law Act, 1995, directs the court to have regard to "other financial resources which each of the spouses concerned has or is likely to have for the foreseeable future".

5. That, in the instant case, the Isle of Man trust was clearly a reviewable dispositionper s. 35 of the Family Law Act, 1995. It was an effort by the respondent to reduce the monies available for distribution to the applicant and, accordingly, an order pursuant to s. 35, sub-s. 2 (a) (ii) should be made, setting aside this disposition.

6. That by the enactment of the Family Law Act, 1995, and the Family Law (Divorce) Act, 1996, the Oireachtas had made it clear that a "clean break" situation was not to be sought and that financial finality was virtually to be prevented.

• F. v. F. (Judicial Separation) [1995] 2 I.R. 354 considered.

7. That, where considerable family assets existed the court was not limited to providing for the dependent spouse's actual immediate needs through a periodic maintenance order, but may endeavour through the making of a lump sum order to ensure the applicant will continue into the future to enjoy the lifestyle to which she was accustomed.

Duxbury v. Duxbury [1987] 1 F.L.R. 7 and Gojkovic v. Gojkovic[1990] 1 F.L.R. 140 approved.

8. That, accordingly, in the instant case considerable reliance should be placed on lump sum provision while periodic maintenance should also play an important part.

Cur. adv. vult.

McGuinness J.

In the proceedings before the Court the applicant wife seeks a decree of judicial separation together with ancillary orders. The special summons was issued on 24th October, 1995, pursuant to the Judicial Separation and Family Law Reform Act, 1989. The matter was first listed for hearing in July, 1996, but, for reasons to which I will refer later, was adjourned and subsequently came on for hearing before me on the 4th February, 1997, and on a number of other days during that month.

The Family Law Act, 1995, which was enacted on the 2nd October, 1995, came into force on the 1st August, 1996. Under s. 3 of that Act, Part II (other than s. 25) and ss. 39 and 40 of the Judicial Separation and Family Law Reform Act, 1989, were repealed. Part II of the Act of 1989 deals with ancillary financial, property, custody and other orders to be made on the granting of a decree of judicial separation under ss. 2 and 3 of that Act. Sections 39 and 40 are not relevant to the present proceedings.

The provisions of Part II of the Act of 1989 are re-enacted, with some important amendments, in Part II of the Family Law Act,...