Rich businessman wins appeal in key divorce judgment
Published 20/10/2011 | 05:00
A WEALTHY businessman whose assets once topped €21m -- but have suffered a dramatic fall since the downturn -- has won a Supreme Court appeal to stop him from being forced to pay out more money to his ex-wife.
Last night, experts said the ruling was significant and could lead to former high-net-worth husbands seeking to have their divorce agreements reduced in light of the downturn.
The Supreme Court refused to uphold High Court orders that the man give €1m to his ex-wife -- from whom he legally separated in 1996 -- to buy a new home and make other payments to her.
The ruling, the first major edict on divorce by the Supreme Court since the onset of the financial crisis, had been keenly awaited by family lawyers seeking clarity on the status of "full and final" settlement clauses.
Ireland does not have a "clean break" divorce system, where a court orders a settlement that ends all financial claims.
This led to many Celtic Tiger wives going back to the courts during the boom as their ex-husbands' wealth soared.
But in an important clarification of Ireland's divorce law, the Supreme Court has ruled that a deed of separation stated to be in full and final settlement is "a significant factor" in any amendments made later.
The court also ruled that there was no right to an automatic increase for a person whose spouse's wealth has increased after a separation.
"Irish law does not establish a right to a clean break," said the Supreme Court. "However, it is a legitimate aspiration."
Two years ago, the businessman, who can not be named for legal reasons, was ordered to buy his ex-wife a second house for €1m near her existing home.
He was also ordered to buy a €600,000 annuity for her lifetime; make a €600,000 payment to her by December 2011 for her own use; pay €300,000 into a pension fund for her; pay €100,000 towards her legal fees; maintenance of €54,000 annually, index-linked; and €65,000 for VHI.
But yesterday, the Supreme Court found that the overall level of provision ordered for the ex-wife by the High Court was "excessive".
It said that its duty was to make proper provision, not enter into "a re-distribution of wealth", and the case will now go back to the High Court to make provision "in a just manner".
The couple married in 1977. They later parted and reached a separation agreement in 1996 with an agreed "full and final settlement" clause.
But there has been a "radical change" in circumstances for both, including a "dramatic" fall in the value of the man's assets and the woman being unable to work due to illness.
Under the original 1996 agreement, the man provided a house for the woman, a IR£70,000 lump sum and her VHI costs. He was also required to pay IR£100 weekly for two years and then IR£50 weekly.
Under the terms of Ireland's divorce laws, divorce is not immediate and a divorce can only be finalised after a minimum period of four years.
She later took proceedings to make her divorce final and sought an increase in payments to her -- but the husband had argued that proper and permanent provisions had been made under the 1996 agreement.
She went back to the courts in 2002. As a result, her weekly payment was increased to €70. And in 2004, the man agreed to pay interim maintenance of €1,200 monthly pending maintenance proceedings, which resulted in that sum rising to €2,500 in 2009.
However, the Supreme Court ruled the woman's needs "would be met by increased maintenance and provision of a pension".