J. C (applicant/responsent) v M.C (respondent/applicant)
Family law - Divorce - Ancillary relief - Financial relief - Periodical payments order - "Full and final settlement" clause in consent order - Whether order deemed to be full and final settlement precludes parties from re-litigating financial compensation aspects of divorce settlement - Whether "clean break" possible in respect of ancillary reliefs in divorce proceedings - Whether court having jurisdiction to vary periodical payments order stated to be in full and final settlement of divorce proceedings - Family Law (Divorce) Act 1996, section 22.
The High Court (before Mr Justice Abbott); delivered January 22nd, 2007.
Sections 12 to 18 of the Family Law (Divorce) Act 1996 provided for broad strategic options for relief available to a court during consideration of proper provision during the course of a divorce hearing, whereas section 22 of the Act provided for post-divorce fine tuning of orders made under those sections rather than strategic options. Full and final settlement clauses contained in divorce orders excluded the court from making further orders in the future in relation to a provision which had already been executed and performed. Such clauses had to be construed strictly however and they should not apply to a periodic payment or other provision which could be varied in the future unless there were specific provisions expressly providing alternative provision in substitution for the right to vary those future periodic payments or other like provision into the future.
The High Court so held in finding that it had jurisdiction to vary under section 22 of the Act of 1996 the periodical payments order in favour of the respondent.
Mary O'Toole SC and Marion McDonald BL for the applicant/respondent; Colman Fitzgerald SC and Maura King BL for the respondent/applicant.
Mr Justice Abbott said that an order had previously been made by the High Court granting a decree of divorce and annexed thereto was a consent agreement which contained a clause which recited that its terms were in full and final settlement of all disputes and claims by the parties. Two weeks after the settlement, the applicant husband's assets increased significantly with the sale of a company of which he was director and substantial shareholder. At the time of the settlement, the financial provisions reflected the financial reality of the parties' situation. Accordingly, the respondent wife claimed that the financial provisions in the settlement were inadequate in light of the subsequent change in the applicant's circumstances. An unrealisable asset had now become liquid and the wife claimed that the maintenance prescribed by the order was no longer proportionate to the applicant's means. An application was made by the respondent wife by way of notice of motion to vary the order of the High Court to increase the periodical maintenance payable by the applicant husband and/or for a new lump sum order.
As a preliminary issue, the court was required to determine whether it had jurisdiction to grant a varied maintenance order and/or a new lump sum order. Mr Justice Abbott said that the preliminary issue concerned the interpretation of the Family Law (Divorce) Act 1996 governing ancillary relief, including section 13. Section 22 of the Act set out orders, including periodical payment orders, which could be varied by the court on application to it "if it consider [ ed] it proper to do so having regard to any change in the circumstances . . ."
Lump sum payments could only be varied thereunder in so far as they had been directed to be paid by way of instalment. Counsel for the husband submitted that the existence of a full and final settlement clause brought an end to any prospect of seeking a further lump sum application. Counsel also submitted that the existence of a full and final settlement clause on one view of the authorities brings to an end periodic payments; however this was not asserted as strongly as was submitted in relation to the lump sum provision. It was submitted that where parties consent to a full and final settlement they cannot come back unless they are seeking to set aside the judgment that was obtained in the first instance, which was not the situation here. Counsel accepted that whilst there are not clean break provisions in our legislation or Constitution a clean break is not precluded especially where the parties with the benefit of legal advice, as in the instant case, agreed to a clean break. Counsel referred to the judgment of Hardiman J. in WA v MA 1 IR 3 to support the argument that considerable weight must be given to the intention of the parties at the time of entering into their separation and that a full and final settlement clause must be given serious consideration in that the parties choose it.
Mr Justice Abbott said that the respondent wife was seeking a variation of the periodical maintenance under section 22 of the 1996 Act and a further lump sum order under section 13 of the 1996 Act. Counsel for the respondent wife submitted that the effect of the wording of the 1996 Act contemplates that the parties are entitled to return to the court post-divorce on any number of occasions that they wish to seek further ancillary relief. Counsel submitted that the Act of 1996 must be construed in the context of the Constitution. It was submitted that the basis under which the Irish people voted for the amendment was the fact that there would not be a clean break under Irish law. Counsel submitted that in respect of the most relied upon case by the husband, T v T 3 IR 334 only goes so far as to express a desirability of finality in certain circumstances and this may be appropriate to bring about encouraging avoidance of further litigation. Counsel submitted that an agreement between the parties cannot oust the jurisdiction of the court, because if the court has the jurisdiction under the Act to vary a maintenance order and a periodical maintenance order, that cannot be ousted by any agreement of the parties.
Mr Justice Abbott said that section 13 of the Act provided that a court could grant an order for maintenance "on granting a decree of divorce or at any time thereafter". If there was an order for maintenance made at the time of divorce then any further application in respect of that had to be by way of variation under section 22. From a consideration of T. v. T., Mr Justice Abbott said that certainty and finality could be desirable goals in divorce arrangements but that logically implied that parties were not precluded from revisiting financial relief orders and there was no statutory provision allowing for a clean break under Irish law. Whilst the primary rule of construction for legislation was the interpretation of the plain meaning of the words as they appeared in the statute, Mr Justice Abbott adopted Bank of Ireland v. Smith IR 646 as authority for the proposition that, in relation to the construction of particular provisions of a statute of a relieving or social nature, the court had to have regard to the scheme of the legislation - to take a schematic approach. In terms of layout of the scheme of the Act of 1996, the provisions of sections 12 to 18 provided for broad strategic options for relief available to a court during consideration of proper provision during the course of a divorce hearing. Many of those options provided by these sections (but not all) could be varied on an application under section 22 of the Act. Section 22 therefore provided for fine tuning options rather than strategic options. What distinguished fine tuning and strategic in that context was that the fine tuning could only apply to an order made in favour of a particular spouse within the status quo of the relationship of the marriage at the time of the hearing of the application for divorce. In the context of the instant case, it was noteworthy that section 22(1)(a) allows variation of a periodical payments order (otherwise known as a maintenance order) but does not allow the variation of a lump sum order unless the order providing such lump sum orders payments by instalments or requires the payment of such instalments to be secured.
Mr Justice Abbott said that the identification of the two broad streams of relief, which were termed strategic and fine tuning, within the 1996 Act and indeed the further definition of the scheme of the Act posed the central question in relation to the issue in the instant case as to whether a strategic application (including an application for a lump sum order) may be made after the conclusion of the proceedings. The secondary question on the preliminary issue was if the answer to the foregoing was in the negative, does the addition of a full and final settlement clause of the kind contained in the divorce decree, preclude the court from granting such fresh strategic relief or indeed a variation under section 22 of the 19996. In Mr Justice Abbott's opinion there was nothing in the plain wording of the Act of 1996 in relation to the provision of strategic relief to another party after the conclusion of the proceedings in the event of a change of financial circumstances. However, divorce proceedings could not be viewed just in the context of ample resources cases. Most cases involved circumstances where the resources were such that both parties suffered a severe reduction in their standard of living where their assets were divided and where they were dependent on their earning capacity or maintenance provisions continuing into the future. It was inconsistent with the relieving nature of the legislation and the constitutional imperative underlying same that for proper provision to be made for the parties in such situation the court would not be able to relieve a catastrophe by granting an application for a lump sum even where the original divorce decree or settlement did not contain an order for such relief.
Mr Justice Abbott was of the expressed view that the ample resources reasoning in T. v. T. was not applicable to the instant case and that the jurisdiction of the court to grant a lump sum order was not lost by reason only of the provision of a lump sum order in the previous divorce proceedings. Still less so was the jurisdiction of the court hindered by reason of the maintenance order granted in the proceedings as the provisions of section 22 of the Act of 1996 allowed an increase of maintenance such as sought by the respondent. The question as to whether a second maintenance order is permitted by statute was academic or moot in the instant case as the essence of the relief being sought by the wife maybe covered in an application under section 22.
However, Mr Justice Abbott said that the second part of the preliminary issue raised the question as to whether the jurisdiction of the court was ousted by the provisions of the full and final settlement clause in the consent which became part of the order granting the divorce. Mr Justice Abbott considered that such clauses had a meaning and purpose in divorce decrees insofar as they constituted an attempt by the parties to have certainty and either a full or partial clean break in relation to some or all of the issues which arose during the case. There was no reason why clean break provisions could not apply to cases of less than ample resources. The parties in cases of relatively scarce assets had no less interest and entitlement to at least a limited degree of certainty and predictability following a divorce than were the richer classes. To suggest otherwise would constitute an invidious discrimination not permitted by the Constitution. Therefore, such clauses excluded the court from making further orders in the future in relation to a provision which had already been executed and performed. However, such clauses did not prohibit the making of further applications to the court to have orders in respect of ancillary financial relief varied. Rather, they were to be considered in terms of proper provision under the Constitution and the Act of 1996. Such clauses had to be construed strictly and they should not apply to a periodic payment or other provision which could be varied in the future unless there were specific provisions expressly providing alternative provision in substitution for the right to vary those future periodic payments or other like provision into the future. Mr Justice Abbott thus found that the court had jurisdiction to vary under section 22 the periodical payments order in favour of the respondent.
Solicitors: Larkin Solicitors (Galway) for the applicant/respondent; O'Connor Bergin (Dublin) for the respondent/applicant.
Paul Christopher, barrister