‘Dishonest’ man forced to pay ex-wife €2.26m

Judges say concealment in divorce case of assets worth €5.3m was ‘outrageous’

Mr Justice William McKechnie described as “entirely justified” a High Court judge’s finding the man had been consciously and deliberately dishonest. Photograph: Getty Images

Mr Justice William McKechnie described as “entirely justified” a High Court judge’s finding the man had been consciously and deliberately dishonest. Photograph: Getty Images

Fri, Aug 1, 2014, 01:00

A businessman whose concealment of assets valued at some €5.3 million from his wife when divorcing her was described by judges as “outrageous” and “consciously and deliberately dishonest” must pay her at least another €2.26 million, the Supreme Court has ruled. This is in addition to whatever provision was agreed under an earlier settlement of family law proceedings

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The issue whether he must pay a further €240,000 depends on the outcome of High Court proceedings, to be heard later, concerning whether he would have gained a personal benefit from a €650,000 cash bond included in the €5.3 million valuation.

Mr Justice William McKechnie described as “entirely justified” a High Court judge’s finding the man had been consciously and deliberately dishonest, committed perjury and deceit and had done so knowingly and intentionally.

Despite several years as a family law judge, he had “never known of, or come across, a case where a party has so blatantly acted and where nothing short of utter contempt has been shown to the court”, the judge said. “These matters should not simply be let rest here.”

The three-judge Supreme Court unanimously ruled, despite the man’s material non-disclosure and consequent failure to make “proper provision” for the first wife in the earlier family law proceedings, the decree of divorce could stand as the High Court had jurisdiction to make orders for proper provision in the first wife’s later proceedings.

Reservations

Mr Justice Frank Clarke said he would have “very grave” reservations about overturning the decree, especially as the interests of others, including the man’s second wife who married him “in good faith” on the basis of a court order he was divorced, were significantly affected.

The court retained discretion, at least in divorce cases, to decide appropriate procedures whereby any issue concerning a deliberate failure to disclose assets can be resolved, he said.

The Supreme Court decision, given by Mr Justice Clarke and Mr Justice McKechnie rejecting the man’s appeal against High Court orders in favour of his first wife, is significant concerning the courts’ jurisdiction to address proper provision and other remedies in family law proceedings where there has been material non-disclosure of assets.

The Supreme Court upheld the 2009 High Court decision that, given the material and deliberate non-disclosure of the man’s assets during earlier family law proceedings settled several years earlier, during which the trial judge described the man’s conduct concerning asset disclosure as “outrageous”, it had jurisdiction to address proper provision.

Jurisdiction

Mr Justice Clarke said the High Court had jurisdiction to make proper provision for the first wife without interfering with the divorce decree. He rejected the man’s arguments the settlement of the earlier family law proceedings prevented her seeking further provision on the basis of a deliberate failure to disclose assets.

The first wife had argued the divorce should be set aside on grounds of the man’s deliberate failure to disclose the full extent of his assets during earlier proceedings.

She had brought judicial separation proceedings against him which, after a 23-day hearing, ultimately settled on terms involving him later instituting divorce proceedings. A decree of divorce was granted and financial provision was made under a settlement of both sets of proceedings made in 2001.

After the divorce, the man married again. His first wife brought her further proceedings after discovering he had allegedly not disclosed significant assets in the proceedings leading up to divorce.

She sought a variety of orders which raised the possibility the entire order made in the earlier proceedings, including the divorce decree, would be set aside and also sought additional financial provision to reflect “proper provision”.

Impact

The second wife was joined to those proceedings due to the possible impact on her should the first wife succeed.

In her judgment on those proceedings in 2009, Ms Justice Mary Irvine ruled the man had been consciously and deliberately dishonest and committed perjury in failing to disclose four specific substantial assets valued at €5.3 million. The judge inferred further assets had also not been disclosed.

She directed a payment of €2.5 million should be made to the first wife as her share of the value of the undisclosed assets, including €500,000 to reflect the court’s inference it was likely there were more undisclosed assets worth more than €1 million.