F -v- F, Neutral citation (2007) IEHC 317
High Court
Judgment was given by Mr Justice Henry Abbott on July 4th, 2007. It was posted on the Courts Service website this month.
Judgment
In divorce proceedings many years after a judicial separation with a “full and final settlement” clause, Mr Justice Abbott ordered that the husband sell a property to cover the nursing home costs of his former wife.
Background
The couple married in 1968 and had three children, none of whom were dependent at this stage. During their marriage they lived on the farm inherited by the husband. In 1991 they received a decree of judicial separation providing for the maintenance of the wife and the one child still dependent. Following some years of litigation, the husband ceased paying maintenance which, had it been paid, would have amounted to €59,000.
A property adjustment order was made at the time of the judicial separation, giving the family home and four acres to the wife. Seventy acres of farmland remained with the husband, who converted some outbuildings into a dwelling house for himself.
A full and final settlement clause was included, and mutual succession rights were extinguished.
He subsequently sold the farm and invested in various business interests, eventually building up a small property portfolio, with two properties in Ireland and two in South America, together worth approximately €1 million after realisation costs.
The wife sold the house. After this she moved several times, each time selling and buying a house, until she sold the last house and lived in rented property. Had she not done so, she would have had a property worth about €700,000. After the multiple moves she had cash reserves of about €100,000.
At the time of the divorce hearing in 2007, the wife suffered from a Parkinson’s-type disease leaving her wheelchair-dependent. She was in a nursing home. After evidence from medical specialists, Mr Justice Abbott found she would need even higher levels of care in the future, and her life expectancy was between five and seven years. She was in her 70s and was seeking further provision for her needs from her husband’s assets.
Decision
Mr Justice Abbott said the full and final settlement clause related to the capital asset provision, not the husband’s obligation to pay maintenance.
Referring to the requirement that the court should have regard to any prior settlement when making provision under the 1996 Divorce Act, he said that on a strict view and following the decision of Mr Justice Adrian Hardiman in WA -v- MA, given the wife had “thrashed” the assets she had acquired in the judicial separation, the case should be dealt with on the basis only of maintenance provision into the future.
However, he was not taking such a strict view for two reasons. The fact the husband now had such a valuable property portfolio may be attributed, in part, to the cost to the wife of foregoing her rights to maintenance payments and, secondly, he felt the wife should have some capital over and above the maintenance payments to hold out to her children the possibility that they may succeed to some part of her estate.
He said he was greatly moved by her apprehension of being confined to a nursing home without respite. Ordinarily it was close relatives who provided such diversion, often in the expectation they may get some recompense in a will. He was therefore dealing with the case on a need basis.
He took account of the fact the wife’s life expectancy might be longer than estimated, as the estimate was based on averages for those with her condition in the population.
Summarising the assets, he said the wife now had about €100,000 on deposit. Her nursing home cost €2,846 a month and she had incidental expenses of about €300. She got deserted wife’s benefit of €189.70 a week.
The husband’s assets, after allowing for capital gains tax, were in the region of €1.1 million. He had a rental income of €3,550 and expenditure of approximately €2,410. He also had some earnings as a property facilitator.
Mr Justice Abbott said the husband’s surplus of income over expenditure would not be enough to provide for the maintenance of the wife in a nursing home. He ordered him to sell one of the Irish properties, worth €600,000, to cater for all contingencies for the wife’s care into the future, and to lodge €400,000 on deposit. He could only draw down the interest after Dirt tax, the capital to be available to meet the needs of the wife.
In addition, he ordered him to pay a lump sum of €60,000 to wife as a “cushion” and ultimately as an inducement to her family to provide her with care and diversion outside the nursing home. He acknowledged that the husband, now in his 60s, also suffered from poor health, as he had arthritis and might require nursing home care in the future. If this was not met by his income, it may require realisation of his capital.
He referred to the lengthy litigation resulting in the husband discontinuing his maintenance payments. “One wonders if the husband obtained success in that litigation as a result of an under-declaration of his capacity to earn money, by reason of the fact that the court has discovered that recently at least he was doing some moonlighting as a property facilitator . . . and he had now surfaced with a significantly valuable investment portfolio.”
While this was not a major factor, his failure to pay maintenance was an “opportunity cost” to the wife.
One of the prime objectives of the case had been to ensure there would be no further unnecessary expense on litigation, especially in the light of the possibility of the wife becoming a ward of court due to her deteriorating health. He said the court was willing to consider the appointment of a person with enduring powers of attorney.
The full judgment is on www.courts.ie
Cormac Corrigan SC and Lynn Fenelon BL, instructed by Donal Reilly Collins, for the plaintiff; Bronagh O’Hanlon SC and Nuala Jackson BL, instructed by Fagan Bergin, for the respondent