Court ruling could set benchmark for cases

For most people whose marriages break down there will be difficulties in ensuring that both parties, and any dependent children…

For most people whose marriages break down there will be difficulties in ensuring that both parties, and any dependent children, can live in any degree of comfort after the separation or divorce.

But the issues are different where the family's assets well exceed what is needed for a comfortable standard of living, and they received very little consideration when divorce legislation was brought in. It has fallen to the courts to decide what should happen in these cases.

The English courts have been dealing with this for many years, and for much of this time the principle of "reasonable provision" for the dependent spouse, usually the wife, applied. Under this, she was provided with a lump sum that would give her somewhere to live, often with the children, and with sufficient maintenance for her and them to live comfortably. Where the man's fortune was considerable, the bulk was left intact.

It also meant such a man could use the "millionaire's defence" to any demand for discovery of his assets. He could argue that he was able to make reasonable provision for his wife and children and there was no need for discovery.

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That has begun to change in England, with two decisions in the House of Lords this year. It was felt that the "reasonable provision" yardstick was discriminatory, in particular against wives who fulfilled the traditional role of wife and mother throughout a long marriage, and that instead, the yardstick of equality of division should be considered, with reasons given for departing from it.

In the two recent major English cases where this was discussed, the wife was awarded about 40 per cent of the total family assets.

However, Irish divorce law differs from English law in that there is no allowance for a "clean break". Instead the law allows for the provision to be altered if circumstances change. In addition, even before the introduction of divorce, the Irish courts made allowance for the contribution of the wife and mother in the home, and the necessity of compensating her for the resulting loss of independent earning capacity.

This provided the background for the consideration of those "big money" cases that have come before the Irish courts..

The High Court awarded between 25 and 30 per cent of the total assets to the wife in the McA case, which did not go to appeal. The award of £1.5 million, along with 50 per cent of the husband's income, in the MK v JP (otherwise SK) case by Mr Justice Lavan earlier this year was overturned by the Supreme Court.

However, this differed from the case decided by the same judge in recent weeks, in that the marriage had ended more than 20 years ago, and there had been a separation agreement in place, which had made provision for the wife and children. That agreement was concluded after both parties had taken legal advice.

In addition, the bulk of the husband's wealth had been acquired after the separation and was held jointly with his second partner, who was also a partner in business.

In the K case, the Supreme Court said Mr Justice Lavan had not explained the reasons for his decision in the light of the provisions of the Family Law (Divorce) Act. This lists considerations which have to be taken into account in making "such provision as the court considers proper having regard to the circumstances".

Among the list are the financial resources that either party has, or is likely to have, in the future; their needs, obligations and responsibilities; the standard of living each enjoyed before the break-up; the contribution each made to the family's welfare and the effect on their earning capacity of sacrifices made to care for family-members; and the terms of any separation agreement entered into.

These and other considerations are likely to be looked at again if this latest case goes to the Supreme Court. There Mr Justice Lavan has already given the reasons for his decision, dwelling on the recent English cases, in allocating approximately a third of the family assets to the wife.

It remains to be seen if this decision will be confirmed by the Supreme Court. If it is, it will become the benchmark for "big money" cases in the future.