M (applicant) v M (respondent).

Family Law - Divorce - Property - Division of assets - Concept of matrimonial property - Extent to which assets owned by spouses before marriage can be distributed by court in subsequent proceedings - Judicial Separation and Family Law Reform Act 1989 - Family Law Act 1995 - Family Law Divorce Act 1996.

The Circuit Court (His Honour Judge John F. Buckley); judgment delivered June 18, 2001.

In considering the division of property in a matrimonial case there were a number of issues to consider. The court had to consider the extent to which assets that a spouse owned before marriage could be distributed in subsequent matrimonial proceedings. There was no concept of "matrimonial property" in Irish law as there was in other jurisdictions. In addition Irish family law legislation did not place any limits on the extent to which the Irish courts could have recourse to the assets of spouses in making orders. Under Irish law it was clear that all the assets of the parties were available for distribution by the court. In the absence of guidelines the court must use its discretion. In the circumstances it would not be equitable to divide the proceeds of sale of the asset in question equally. The Circuit Court so held in awarding the applicant 25 per cent of the proceeds of sale of the asset in question.

Mary O'Toole SC and Catherine Forde BL for the applicant; Anne Dunne SC and Catherine Lucey-Neale BL for the respondent.

Judge Buckley outlined the kernel of the case. The issue was whether the applicant in the proceedings was entitled to a share of the sale proceeds of a substantial piece of agricultural property which had been inherited by the respondent and had been licensed out for farming purposes during the marriage. The net proceeds of the sale were in the order of £1,400,000.

Judge Buckley referred to the argument put forward on behalf of the respondent that the property did not form part of the "matrimonial property" and thus the respondent should retain the entire proceeds of sale. However Judge Buckley stated that that there were difficulties with this proposition as there was no concept of matrimonial property in Irish law as there was in other legal systems. In addition the relevant legislation (the Judicial Separation and Family Law Reform Act 1989, the Family Law Act 1995 and the Family Law Divorce Act, 1996) did not put any limits on the extent to which the court can have recourse to the assets of the spouses when making orders such as periodical or lump sum orders, property adjustment orders, financial compensation orders or pension adjustment orders.

Judge Buckley then made reference to a number authorities on the subject. Paul A. O'Connor in his book Key Issues in Irish Family Law had shown there were a number of different types of matrimonial property regimes. These ranged from one where all the assets of the spouses, whether owned before the marriage or acquired by either or both spouses during the course of the marriage went into a single pool, to one where only the property which the spouses agreed should be regarded as matrimonial property was to be so categorised. Alan Shatter in the fourth edition of his book Family Law in the Republic of Ireland (at pages 832 ff) had stated that the trend in Irish legislation regarding the protection of the interests of married women had been a policy of increasing the entitlement to separate property. Mr Shatter had referred to the Reports of Committees on the Status of Women which had advocated enacting legislation providing for a community of property regime. Mr Shatter pointed out that an attempt was made to implement one of the recommendations of the Committees on the Status of Women in the Matrimonial Homes Bill of 1993. This provided for the application of automatic ownership as joint tenants to every dwelling occupied as a married couple. The fact that the Supreme Court had found the Bill to be unconstitutional had without doubt discouraged governments from tackling the more general issue of matrimonial property. On this basis Mr Shatter had expressed considerable doubt as the likelihood of legislation being enacted by government providing for a regime of community property.

Judge Buckley referred to the proposition put forward at a recent Judicial Studies Institute seminar on family law that a judge should consider that whatever assets one spouse brought into a marriage should be given to that spouse on judicial separation or divorce. Judge Buckley was of the view that while recognising that such an approach, particularly in the case of a farm or family business, might well be appropriate, it was clear that under Irish law all the assets of the parties were available for distribution by the court.

Counsel for the applicant had drawn attention to the recent decision of the House of Lords in White v White 3 WLR 1571 which had altered long established case law in England and Wales on the entitlement of a wife in a "big money" case. Judge Buckley was satisfied that, although the case was in many ways not relevant, there were nonetheless a number of passages in the judgments (particularly that of Lord Cooke) which were of interest in showing how the law had developed in New Zealand and Australia. In New Zealand, legislation had been introduced to impose guidelines on the trial judges and in Australia the High Court had introduced such guidelines. Judge Buckley stated that in each of these jurisdictions, and in addition in England and Wales, judges were now required to take a number of factors into account in distributing assets. These factors were not dissimilar from those contained in section 16 of the Family Law Act 1995.

Judge Buckley held that however desirable it might be to have guidelines none had been laid down in this jurisdiction and the court must use its own discretion. It had been agreed by the parties that the family home should be sold. Custody of the two children had been given to the respondent and the respondent would have to spend a substantial sum on the purchase of suitable accommodation for himself and the children. The respondent had a modest income and no present entitlement to any pension. The respondent would be required to invest the proceeds of sale partly to provide an income to supplement his own earnings, but also to provide for a more substantial pension for himself. As against that the applicant would have to fund the purchase of an alternative residence of sufficient size to enable the children to stay with her on access visits.

Judge Buckley did not believe that the respondent should be entitled to retain the entirety of the proceeds of sale but an equal division of this substantial sum would not be equitable.

The net sale price would probably be in the region of £1,400,000 and he proposed to award the applicant approximately 25 per cent of the proceeds. He said "approximately" because he proposed that the applicant would receive the entire sale price of the family home of which she was a 50 per cent owner and which had been valued at £500,000, and that the respondent would discharge all encumbrances on the family home. In addition the respondent would be directed to make a payment of £100,000 to make up the approximate 25 per cent share.

Solicitors: Eugene Davy (Dublin) for the applicant; Irwin (Dublin) for the respondent