Today I will continue with my monthly legal news brief by discussing a recent landmark case involving proper provision in divorce where there is a prior separation agreement.
G. v G. involved a couple who married in 1977. They lived in a house which the husband inherited from his aunt and uncle. The wife had £3,000 savings when they married and they ran a garage and farm at the start of their marriage. The husband pursued property development, building and selling houses developed by a company called C.P. Ltd. They separated in 1995. A separation agreement was entered into in 1996 and a “full and final settlement” clause was a feature of it.
In 2002 the maintenance was increased. The wife continued to live in the house and had spent the £70,000 lump sum without any investment. She claimed she incurred debts until her maintenance was increased in 2007 and sought divorce.
In 2009 the High Court granted a divorce. The former husband was directed to provide extensive further provision including purchasing a €600,000 annuity, €300,000 for a pension fund, €100,000 to his former wife’s solicitors, maintenance of €54,000 to increase annually, part payment of the maintenance per month until the full maintenance is annuitized, €1,000,000 for the purchase of accommodation, VHI payment, insurance policy of €500,000, €600,000 for the former wife’s own use and benefit and to pay half the costs of the former wife in this case.
He appealed the High Court order.
Appeal to Supreme Court
The weight given to the separation agreement was firstly considered. The husband submitted that he made proper and permanent provision which was intended to be in full and final settlement. Denham CJ set out general principles such as: for that, a separation agreement should be given sufficient weight; that a clean break is a legitimate expectation in Irish law; proper provision is not redistribution of wealth; if the circumstances of the spouses have changed significantly and this should be considered by the court. Examples of a change in circumstances to be considered include an illness or a change in the value of assets. If a spouse acquires wealth after separation and the wealth is unconnected to an investment/project during their marriage the other spouse is not automatically entitled to a share in the wealth or further money. The length of time since the separation agreement will be considered. The standard of living of the spouse seeking funds should be judged on the standard of living before they lived apart. Inherited assets will not be treated as assets obtained by both parties in a marriage.
Denham CJ allowed the appeal and sent the case back to the High Court with the comment that the level of provision ordered by the High Court was excessive, particularly the order of €1million for the purchase of an additional house and the order for the sum of €600,000 for her use and benefit.
This case is a very important judgement dealing with a very important issue. Over the last number of years there have been many cases involving what has been commonly known as “the second bite of the cherry” cases. The court has handed down some very interesting guidance to anyone involved in such cases and will no doubt be the subject of much debate over the next number of months. It certainly appears that the Supreme Court is not in favour of what was the common practice over the last number of years of redistributing wealth, which was acquired after separation. It is also significant that the court considered that inherited assets were not to be treated as assets obtained by both parties in a marriage.