K -v- K High CourtJudgment was given by Mr Justice Abbott on October 31st 2008
Judgment
A lump sum ordered to be paid in 1996 by a wife for her husbands share in the family home should be paid, with interest, notwithstanding that the value of the house had increased since.
Background
The case came as an appeal from an order made by the Circuit Court on December 13th 2005.
The couple was married in August 1973 and had five children, one of whom remains dependent. A decree of judicial separation was granted by Judge McGuinness, as she then was, in the Circuit Court in June 1996. She also gave orders that the husband transfer to the wife his interest in the family home on payment of £10,000, dispensing with his consent for its sale in the future, and granting the wife the right to live in it exclusively for her lifetime.
The husband explained that he did not seek the £10,000 (now €12,700) in 1996 as that would have enforced the sale of the house, making his children homeless. In the meantime, his former wife has had another child by a new partner, whom he believed to be living in the house.
He was unemployed. Initially he had lived in his mothers house, but had to leave following a dispute with his brother, and was homeless for a time. He was now living on social welfare and in a hostel. He said that the net equity in the family home at the time of the McGuinness order was about £30,000, and the £10,000 represented about a third of this.
Accordingly he considered he was entitled to a third of its value if it was now sold. The wife explained in an affidavit that she was unable to get a mortgage in 1996, but had saved and could have paid the £10,000 in 2002. She had an income of €335 a week from part-time employment and lone parents' allowance.
She said the net equity in the house was set by the court at £38,800, and the £10,000 represented about a quarter of this.
Around 2003 the husband indicated he was reconsidering his consent to the transfer. The wife said that her husband had never worked during the marriage, had shown no inclination to work, and had made no contribution to the household budget. If the house was sold it would render her children homeless. She had asked the Circuit Court to order the transfer of the house, on payment of the £10,000. The Circuit Court judge said that the husband may have an application to make and his counsel was now before the High Court. The counsel acknowledged that there was no jurisdiction to vary the property adjustment order in relation to the family home, but argued that this did not prevent her client seeking a sale of the property and a new lump sum.
Counsel for the wife argued that Judge McGuinness had to take account of the possibility that property values could rise, yet she made an order for a lump sum payment without time limit. She had given the wife the right of residency, giving due consideration to her obligations to pay the mortgage and raise the children.
Replacing her orders with an order for the sale and a percentage payout would be to effectively vary Judge McGuinness's order, which was prohibited by Section 18 of the 1995 Family Law Act.
Decision
Mr Justice Abbott said the husband could not have sought the sale of the family home, given the wife's right of residency. That could be eliminated in the event of variation of the right of residence, which was possible under Section 18 of the Act. The making of further lump sum orders or property adjustment orders was also not precluded by the Act.
The best way of ensuring that "proper provision" was made for both parties was to consider whether it would be unfair and unjust to ignore the changes in circumstances that had taken place.
Considering the difference between the value of the equity in the house now and the value represented by the £10,000 lump sum in 1996, it would be unfair and unjust to consider the change in circumstances and therefore consider a re-entry of the proceedings. Mr Justice Abbott then went on to consider the merits of the arguments in the light of this.
He said that the income of both parties was taken up with their basic survival. The wife's borrowing capacity was non-existent, and that of the husband was even worse because of his employment record and his lack of interest in taking up employment. It is likely that, following an adjustment of the lump sum order and a property adjustment order, neither party would be in a position to establish a home.
He did not think that any allocation of resources would put the husband in a position where he could buy housing for himself and, having regard to his track record, any additional lump sum could be frittered away. He had made no contribution to the family home over the past 12 years, and his contribution in obtaining social welfare contributions towards the mortgage in the early years had been accounted for in the McGuinness order. The notional percentage of the value to which he was entitled had reduced over the past 12 years. He had foregone nothing, but the wife had foregone the opportunity for full-time employment to care for two remaining dependent children.
Considering the accommodation needs of both spouses, he said that if the husband received the equivalent of £10,000, topped up by the court's interest of 8 per cent, he should be in a position to put a deposit on rented accommodation. When he had relinquished his interest in the family home he would be eligible for consideration for local authority housing.
The wife would not be in a position to buy another home if she was forced to sell her present one and give a substantial proportion to the husband, especially in the present uncertain times. This could result in not only one but two of the parties being even more heavily dependent on the means- related social welfare payments.
All this weighted the court towards the wife holding on to the family home, subject to the payment of the lump sum ordered by Judge McGuinness, with court interest adjustments. The order of Judge McGuinness should not be varied either under Section 18 of the 1995 Act or on the basis that a new order should be made. It was manifestly in the interest of justice that this application should be refused.
He postponed the making of final orders to enable the parties to pay over the lump sum with up to date court interest.
The full judgment is on www.courts.ie
Dearbhla ní Griofa BL, instructed by the Blanchardstown Law Centre, for the wife; Jane Barron BL, instructed by the Brunswick St Law Centre, for the husband