MP v AP

• Jurisdiction: Ireland
• Judgment Date: 03 March 2000
• Neutral Citation: 1999 WJSC-SC 7046
• Date: 03 March 2000
• Court: Supreme Court

1999 WJSC-SC 7046

THE SUPREME COURT

KEANE C. J.

DENHAM J.

McGUINNESS J.

359/94

P (M) v. P (A)

BETWEEN:

M.P.

Respondent

and

A.P.

Appellant

Citations:

P (M) V P (A) UNREP COSTELLO EX-TEMP 19.10.1994

GUARDIANSHIP OF INFANTS ACT 1964

JUDICIAL SEPARATION & FAMILY LAW REFORM ACT 1989 S26

FAMILY LAW (MAINTENANCE OF SPOUSES & CHILDREN) ACT 1976 S24

FAMILY LAW ACT 1995 S37

FAMILY LAW (DIVORCE) ACT 1996 S31

FINANCE ACT 1983 S3(2)(a)

JUDICIAL SEPARATION & FAMILY LAW REFORM ACT 1989 S40(1)

FERGUSON V INLAND REVENUE COMMISSIONERS 1970 AC 442

WRIGHT, IN RE 1952 2 AER 698

RIORDAN SMITH LINE LTD V HANSEN-TANGEN 1976 1 WLR 989

Synopsis

- [2001] 1 ILRM 51

The parties to the dispute had entered into an agreement by consent. The agreement provided for maintenance of £1,800 to be paid per month “nett of income tax”. A dispute thereafter arose as to the precise meaning of the phrase “nett of income tax”. On behalf of the wife it was contended that that the husband was obliged to pay her a gross sum which having paid her income tax would leave her with a sum of £1,800. The husband claimed that the phrase in question meant that the tax payable on the sum of £1,800 was to be deducted by him and paid to the Revenue with the balance being paid to his wife. In the High Court Costello J found in favour of the wife and the husband appealed. Keane CJ held that the phrase in question was ambiguous and it was not clear that the husband was obliged to pay the sum in question. The appeal of the husband would be allowed. The matter would be remitted to the High Court for the further admission of evidence to determine whether the agreement in question should be rectified to reflect the contention of the husband.

1 JUDGMENT delivered the 3rd day of March 2000 by Keane C.J. [NEM DISS]

2 This is an appeal from a judgment of Costello J., as he then was, delivered on the 19th October 1994. The facts, in so far as they are not in dispute, can be shortly stated.

3 The plaintiff (hereafter "the wife") instituted proceedings against the defendant (hereafter "the husband") under the Guardianship of Infants Act 1964and the Judicial Separation and Family Law Reform Act, 1989. The proceedings were compromised on the terms set out in a consent which was annexed to an order of the High Court (Budd J.) dated the 19th May 1992. Clause 5(a) of the consent was as follows:-

4 "Maintenance of £1,800 nett of income tax per month. £1,400 attributable to Mrs. P. £200 p.m. attributable to each of the children. Same to be increased annually on the basis of the CPl for 1993 and annually thereafter."

5 Clause 10 of the consent was as follows:-

"Mrs. P. will be liable for income tax and any income she may have from whatever source in addition to the maintenance of £1,800 net of tax per month as adjusted hereafter."

6 The High Court order provided at paragraph 5

"That the husband do pay to the wife for maintenance the sum of £1,800 per month nett of income tax being the sum of £1,400 in respect of the wife and two equal sums of £200 each in respect of the said infant children respectively the said sums to be adjusted annually in line with variations if any in the Consumer Price Index using mid-August 1992 as a base date."

7 A dispute subsequently arose between the wife and the husband as to the meaning of these clauses in the consent and the High Court order. It was claimed on behalf of the wife that they meant that the husband was obliged to pay the wife a gross sum which, after deduction of the income tax payable by her, would leave her with the net sum of £1,800 per month. It was claimed on behalf of the husband that it meant that the tax payable by the wife in respect of the sum of £1,800 was to be deducted by him and transmitted to the Revenue and the balance paid to the wife.

8 When this dispute arose, the wife brought a notice of motion in the High Court seeking inter alia

"An order determining the gross maintenance to be paid to the plaintiff by the defendant"

9 The notice of motion was grounded on an affidavit of the wife and a replying affidavit was sworn by the husband. The parties in these affidavits set out their contentions as to the meaning of the consent and the High Court order already summarised.

10 In an ex-tempore judgment, Costello J., rejected the submission on behalf of the husband and concluded that the words "nett of income tax" meant that the wife was entitled to be paid the sum of £1,800 and to be under no liability to income tax in respect of that sum.

11 Under the provisions of the Family Law (Maintenance of Spouses and Children) Act, 1976(s. 24), a periodical payment of money pursuant to a maintenance order is to made without deduction of income tax. Section 26 of the Judicial Separation and Family Law Reform Act, 1989provides that payment of money pursuant to an order under the part of the Act which deals inter alia with maintenance orders is to be made without deduction of income tax. There are similar provisions under s. 37 of the Family Law Act, 1995and s. 31 of the Family Law (Divorce) Act, 1996. These provisions in the relevant family law statutes are mirrored in s. 3(2)(a) of the Finance Act, 1983which provides that

"the person making the [maintenance]payments shall not be entitled, on making the payment, to deduct and retain thereout any sum representing any amount of income tax thereon."

12 The consent which was annexed to the order of Budd J. in the present case expressly notes at clause 5(a) that the periodic maintenance provisions for the wife and children are made under s. 40(1) of the 1989 Act and...