MD v ND

• Jurisdiction: Ireland
• Judge: Denham J.
• Judgment Date: 07 June 2011
• Neutral Citation: [2011] IESC 18
• Court: Supreme Court
• Docket Number: [Appeal No: 299/09
• Date: 07 June 2011

D (M) v D (N)

Between/

M.D.

Applicant/Respondent

and

N.D.

Respondent/Appellant

[2011] IESC 18

Denham J.

Macken J.

McKechnie J.

[Appeal No: 299/09

THE SUPREME COURT

FAMILY LAW

Proper provision

Division of assets - Intention of High Court to divide assets equally - Fall in property values - Devaluation of assets - Whether financial provision unfair - Whether provision in keeping with intention of trial judge - Whether requiring appellant to pay lump sum in light of devaluation amounted to equal division of assets - Time at which assets valued - New evidence without special leave - Whether intervening events could be relied upon - Nature of appeal - Meaning of proper provision - Whether appeal court could consider fall in value of land since trial - Lump sum order - Order incapable of performance - Whether new evidence relevant - Weight to be given to new evidence - Hay v O'Grady [1992] 1 IR 210 and Hughes v O'Rourke [1986] ILRM 538 applied - Courts of Justice Act 1936 (No 48), s 37 - Family Law (Divorce) Act, 1996 (No 33), s 20 - Rules of the Superior Courts 1986 (SI 15/1986), O 58, r 8 - Constitution of Ireland 1937, Article 34.4.3 - Appeal allowed (299/2009 - SC - 7/6/2011) [2011] IESC 18

D(M) v D(N)

Facts: A decree of judicial separation had been granted to the parties in 2008 and an order had been made directing the appellant to pay to the respondent the lump sum of Eur. 2853,0000 relating to the sale of agricultural lands, which the appellant sought to appeal. The grounds of the appeal were that "proper provision" had not been made for the parties pursuant to the Family Law (Divorce) Act 1996 and the drop in agricultural land values since the date of the making of the order was relevant.

Held by the Supreme Court per Denham J. (Macken, McKechnie JJ. concurring) that the Court would allow the appeal and set aside the order of the High Court requiring the appellant to pay to the respondent a lump sum of Eur 2,853,000. While the Court would accept that there had been a severe drop in the value of the agricultural lands, the Court was not in a position to determine the current value of the lands. The Court would affirm the order for sale of the farm lands and order that sale to proceed. The matter would be remitted to the High Court. On the sale being completed the High Court could apply the principle of equality to the assets so that each party achieved an equal share. It would be for the High Court to determine how the assets were divided.

Reporter: E.F.

JUDICIAL SEPARATION & FAMILY LAW REFORM ACT 1989 S3

COURTS OF JUSTICE ACT 1936 S37(2)

FAMILY LAW (DIVORCE) ACT 1996 S20(1)

FAMILY LAW (DIVORCE) ACT 1996 S20(2)(A)

FAMILY LAW (DIVORCE) ACT 1996 S20(2)(B)

FAMILY LAW (DIVORCE) ACT 1996 S20(2)(C)

FAMILY LAW (DIVORCE) ACT 1996 S20(2)(D)

FAMILY LAW (DIVORCE) ACT 1996 S20(2)(E)

FAMILY LAW (DIVORCE) ACT 1996 S20(2)(F)

FAMILY LAW (DIVORCE) ACT 1996 S20(2)(G)

FAMILY LAW (DIVORCE) ACT 1996 S20(2)(H)

RSC O.58 r8

CONSTITUTION ART 34.4.3

HAY v O'GRADY 1992 1 IR 210

HUGHES v O'ROURKE 1986 ILRM 538

Denham J.

Denham J [nem diss]

1 The parties married in 1984, they are now in their fifties and have three children. At the time of the High Court order the third child had just completed secondary school, was entering college and was the only dependent child.

2 The applicant/respondent, the wife, M.D., referred to as "the respondent" brought a claim for judicial separation. She is a solicitor and employed in the public service. The respondent/appellant, the husband, N.D., referred to as "the appellant", is a farmer and businessman.

3 In a judgment delivered on the 22^nd July, 2008, and by order dated the 11^th December, 2008, the High Court (Abbott J.) granted a decree of judicial separation pursuant to s.3 of the Judicial Separation and Family Law Reform Act, 1989. Further orders were made as to the Succession Act, 1965 and to properties owned by the parties.

4 The learned High Court judge sought to achieve an equal division of assets between the parties. The High Court intended to divide the assets equally between the parties, subject only to the appellant retaining a portion of assets over 50% if he was in a position to pay the respondent a lump sum of €2m by the 22^nd July, 2009.

5 This appeal raises issues arising from the devaluation of assets since the order of the High Court which, it was submitted, makes the financial provision unfair to the appellant and not in keeping with the intention of the learned trial judge.

6 The appellant filed a notice of appeal appealing the following aspects of the judgment of the 22^nd July, 2008, and the order of the 11^th December, 2008, which was perfected on the 3^rd February, 2009:-

7 i) The order directing the appellant to pay to the respondent the lump sum of €2,853,000.00.

8 ii) The order directing the sale of so much of the lands owned by the appellant in a specific folio in County Tipperary as might be necessary to pay a lump sum of €2,853,000.00 to the respondent.

9 iii) The order that the County Registrar for the City of Dublin execute such deeds as might be necessary to give effect to the orders for sale of the appellant's lands in County Tipperary.

10 7. The grounds advanced in the appeal were that proper provision had not been made for the parties. It was submitted that requiring the appellant to pay to the respondent the lump sum of €2,853,000.00 would not effect an equal division of the net assets owned jointly and/or severally by the parties. In the alternative, it was advanced that matters have occurred since the date of the judgment which so affect the basis on which the learned High Court judge made his decisions that the orders do not constitute proper provision. In particular it was stated that the orders of the High Court were premised on the basis that the single largest asset in the ownership of either party was the farmland situated at L. in Co. Tipperary, having a value of €28,000 per acre and that the said lands could be sold for about that valuation, which valuation is significantly in excess of the value of the lands or any price which could be achieved now by the sale of the lands. Further, that the order directing the appellant to pay to the respondent the lump sum of €2,853,000.00 would not, in light of the valuation of the lands at L., constitute an equal division of the assets. Further, that the order directing the appellant to pay to the respondent the lump sum of €2,853,000.00 is not capable of being complied with by the appellant either through the sale of the farmland at L. or at all.

11 8. Thus a significant aspect of this appeal arises because of the dramatic fall in the value of property since 2008.

12 9. Initially the appellant had appealed on the issue as to whether a 50/50 division of property was proper provision. This is no longer an issue. At the hearing of this appeal it was indicated on behalf of the appellant that he would be satisfied with a 50/50 division of the property. Thus the decision in principle of the learned High Court judge to divide the assets equally is not under appeal.

13 10. The most valuable asset in these proceedings is a farm, owned by the appellant, which came from his family. However, it is important to note that no issue arose on this appeal as to the nature of this asset as a family farm.

14 11. The appellant sought that further evidence be given on this appeal in respect of matters which have occurred after the date of the High Court decision. He deposed that fundamental assumptions common to both parties at the hearing in the High Court in respect of the net value of the assets of the parties, have been falsified by subsequent events. He deposed that to effect the orders of the High Court in their present form would wholly frustrate the intention of the trial judge to divide the assets of the parties equally between them, further to do so would not constitute proper provision between the parties. He deposed that it was agreed in the High Court that the largest single family asset, being the 205 acres of farmland owned by the appellant at L., was worth €28,000 per acre, giving a total gross value of €5,740,000.00. Also that the further tranche of 32 acres owned by the respondent was valued by expert witnesses called by the respondent and the appellant at €20,000.00 and €28,000.00 an acre respectively. Based on the assumption that those values were correct, the trial judge held that the total net family assets was €7,835,000.00, and that allowing for assets attributable to the respondent to the value of €819,000.00, the balancing figure payable by the appellant to the respondent to achieve equality of assets was €2,853,000.00. The appellant deposed that there was an assumption by the learned High Court judge, as appears from the judgment of the High Court, that the appellant could raise that sum of money by selling part of the farmlands. The appellant deposed that both assumptions have proved incorrect. He deposed to difficulty in selling lands, of the respondent not agreeing, and of an offer of €7,000.00 an acre for the sale of a 60 acre folio, being a total of €420,000.00, to which the respondent did not agree, and that the proposed purchaser had withdrawn anyway. He deposed that the current value of the 205 acres of farmland at L. is approximately €1,600,000.00, which is just over €7,800.00 per acre. He deposed that the current gross value of the house at L. and the 6 acres that goes with it is approximately €390,000.00 to €420,000.00 and that the approximate value of the 32 acres in the respondent's name, including the bungalow on it, is approximately €280,000.00 to €285,000.00. The appellant deposed that, at this juncture, it is unclear whether the farmlands can realistically be valued at...