High Court of Ireland Decisions

Judgment Title: F-v-F

Neutral Citation: [2007] IEHC 317


High Court Record Number: 2005 15 M

Date of Delivery: 07 April 2007

Court: High Court

The applicant wife was married to the respondent husband on 3rd October, 1968. There were three children of the marriage none of whom are dependent. The parties lived on the family farm inherited by the husband and it appears that they ceased residing together in 1985.

On consent an order was made by the Circuit Court on 29th day of January, 1991 pursuant to the Judicial Separation and Family Law Reform Act 1989 granting a decree of judicial separation and providing for the maintenance of the wife and one dependent child.

The following property adjustment order was made in favour of the wife pursuant to s. 15 of the 1989 Act

“(a) that the family home free of all encumbrances and approximately four acres be transferred into the plaintiff’s sole name as soon as practicable.

(b) That the plaintiff accepts the said transfer in full and final discharge of the defendant’s liability to provide accommodation for herself (and the dependent children) now and in the future.

(c) That the plaintiff shall sell the said premises and shall be entitled to dispose of the said premises and to retain the net proceeds of sale.”

The farmland had been part of a greater farm area but the farming did not go well for the husband and it had been reduced by sale. After the settlement in 1991 farming did not seem to suit the husband anymore and he subsequently sold the farm and reinvested the proceeds to pursue business interests( it seems, sometimes, with no more success than in the farming). However in recent years the husband has built up a small but valuable property portfolio.

Since the date of settlement the wife has sold the family home, and with some or all of the proceeds of the family home subsequently and successively bought at least five new homes, on the sale of the last of which the wife retained the proceeds and commenced to rent a home. While the plaintiff explained that the change of home and frequent sales were caused by her wishing to establish contact with her own family and live beside them (either her extended family or on other occasions with her children), it is clear from the evidence that she did not act prudently from a financial point of view in relation to so many frequent changes. While a monetary gain was probably made in the case of all sales, as would be expected from a series of sales in a time of generally property rising values, it appears that the end result of the process of sales amounted to what in insurance parlance might be referred to as “churning” insofar as the equity or money now available to the wife is very significantly lower than the equity which would have been available in the family home originally transferred to her by the court order of 1991. As appears from this judgment, the husband may have net assets in the region of €1 million and I accept the submissions made that the price of the original family home and four acres, if retained by the wife, would now be a sum in the region of, and certainly not less than, a net €700,000.

After the court order of 1991, the wife experienced considerable difficulty in getting the husband to pay her maintenance. There followed a considerable amount of litigation arising from the wife seeking to enforce payment of maintenance and the husband’s alleged inability to pay, resulting in five orders as follows:

1. Circuit Court order of 11th November, 1991 - Devally J.

2. High Court order of 4th February, 1993 – Costello J.

3. High Court order of 15th August, 1994 – Flood J. granting a mareva injunction and

4. High Court order of 25th November, 1994 – Costello J. dismissing the mareva injunction

5. Ultimate order of McGuinness J. discharging the order of maintenance by reason of the husband’s inability to pay same.

I find that in strictly legal terms, having regard to the litigation history, this sum of €59,000.00 is not due as a debt, but I nevertheless bring it into consideration when considering all the matters required by the provisions of the 1996 Act.

The wife now suffers from a Parkinson’s type disease leaving her quite immobile and partially dependent on a wheelchair. She is very liable to fall and needs assistance. Her speech is slurred and she is sometimes prone to fast speech. Prior to the hearing of the case (which commenced in January of 2007) the plaintiff had been in a nursing home for some months, and I am satisfied that she is likely to continue to require the services of a nursing home. By reason of the progression of her disease, leading to difficulty in swallowing, immobility, and progressive difficulty with speech, she will need even higher levels of care in the nursing home context. After a series of questions and correspondence by the parties to her medical advisor, it seems that her life expectation is reduced to between five and seven years. I have had the benefit of a number of careful and detailed medical reports from her specialist medical advisor dealing with her Parkinson’s type disease, from which it appears that the life expectation figure is based on median expectations over a whole population.

Full and final settlement clause
The full and final settlement clause in this case relates only to living accommodation. However, it is significant that in the settlement under the 1989 Act Succession Act rights were mutually extinguished. The settlement was thus to be regarded as full and final in relation to the capital asset provision but not in relation to the obligation of the husband to pay maintenance to the wife and remaining dependant children.

The 1996 Act requires that the court would have regard to any prior settlement when making provision under the 1996 Act. I am very strongly influenced by the decision of Hardiman J. in W.A. v. M.A. insofar as I consider that the settlement was a fair distribution of the physical assets of the family, and that had the wife not thrashed these assets she would now be in a position to have a house and lands the value of which would be more than sufficient to provide the equity required to fund her likely expenses for her lifetime. On a strict view, following the decision of Hardiman J. in W.A. v. M.A., this case should be dealt with on the basis only of a maintenance provision into the future. However, I do not propose to take such a strict view for two reasons – first the fact that the husband now has a small valuable property portfolio may be attributed, to some degree, to the opportunity cost to the wife of foregoing her rightful maintenance payments from in and about the time the husband was discharged from paying same by order of McGuinness J., and secondly I consider that the wife should, as the years go by, have some capital over and above mere maintenance so that she may be in a position to hold out to her children (or such of her children as may be a comfort to her in the long days in the nursing home), the possibility that they may succeed to some part of her estate by Deed or Will. The provision of such a cushion was strongly contested by the husband’s counsel Ms. O’Hanlon S.C. on the basis that has not been provided for by the legislation. The provision of this cushion is considered by me not in the usual light of such sums earmarked for possible inheritance in a distribution of assets between husband and wife, but as a supplementary provision in relation to the current needs of the wife, as I have been greatly impressed and moved by the evidence which she gave of her apprehension of being confined to a nursing home without let-up or diversion. In ordinary life, it is the close relatives who provide such let up or diversion for elderly people to a greater or lesser extent and in the ordinary circumstances these close relatives very often have an expectation that they may get some recompense or at least recognition in terms of a gift by Deed or Will. My conclusion in relation to the influence of the settlement is that I shall deal with the case on a need basis, from the point of view of the quantitative distribution of the assets of the husband.

There is a further and important matter in regard to which the husband has submitted that the settlement should be given weight, and that relates to the timing and cash flow aspects of such payments. The husband is now in his 60’s and the wife is in her 70’s. The wife has a life expectation of between 5 to 7 years but, like anyone else, she may die before that and, of course, may survive longer. From the husband’s point of view the allocation of an actuarial or arithmetically calculated figure to cover a life expectation of 7 years would not be fair, if she were only to survive for 1 or 2 years having regard to the fact that there has already been a full and final settlement on the capital side. Conversely, regardless of the settlement, from the point of view of provision on a needs based system, if the wife were to survive longer than the estimated 7 year period then the capital allocation would run out and would not be sufficient to cater for continuing nursing care not to mention the contingencies for further, more specialised care, which might be implied by a longer survival. Added to these complications might be the necessity to apply to court for a further provision of some sort necessitating wasteful duplication of costs in addition to anticipated difficulties in that litigation by reason of the likely inability of the wife to communicate or, perhaps, even reflect on her plight. While I first considered that the husband was somewhat callous and insensitive in putting forward his case based on a principally periodical payment of maintenance related to the wife’s needs, I now see, as a result of the foregoing analysis, that the wife, in certain circumstances, has an interest in such a provision to cater for a longer than predicted survival and possibly exceptional contingencies. As regards the callousness of the husband’s calculations, they must be considered in the light of the fact that pension and insurance companies deal with this type of calculation on a day to day basis with individuals over whole populations and I see no objective reasons why the court would not do likewise even in the more sensitive situation between the husband and the wife in this case. I am strengthened in this view by reason of the fact that I received an agreed note from the Society of Actuaries in Ireland obtained by the parties indicating that life expectancy may be significantly underestimated in individual cases. Quite apart from saying that research has shown that people themselves underestimate their life expectancy, the note also indicates that it is important to emphasise that actuarial life expectancies are average figures, and many people will live until much later ages. The risks of depending too much on average life expectancies have been highlighted by the risks involved in drawing down an annual income from an approved retirement fund rather than purchasing annuity. The drawing down of an approved retirement fund based solely on actuarial average life expectancies gives rise to the risk that the fund will be exhausted before the person dies. While this type of thinking does not inform the manner in which the courts usually decide the award of compensation in civil cases or, indeed, the provision for spouses under family law legislation, I consider that it is a matter to be given some weight in view of the fact that the wife has very little capacity, within the sum allocated, to budget or provide for the further risks within her own resources and by reason of the fact that the purchasing of an annuity for the wife would be too costly and would not be fair to the husband for the reasons advanced above.

The assets of the parties
The assets of the wife consisted at the time of the hearing of a sum on deposit in the bank of €120,000. By now, having regard to what she would have spent on nursing home costs she may not have any more than €100,000.

The husband’s assets

1. Premises at 23 BA valued €650,000.

2. Premises at 11 PP value €600,000.

3. Premises at 28 P, South America - €70,000.

4. Premises at 204145 AP, South America - €75,000.

5. One-seventh share in mother’s estate valued at a greater sum but which the court will order the husband to settle for a sum of not less than €75,000.

6. Miscellaneous cash deposits.

The wife’s income is as follows: deserted wife’s benefit - €189.70 (not subject to means test). She may also be entitled to some interest and tax refund on DIRT but these matters were not canvassed in the case and are of little consequence.

The income of the husband is a s follows:

1. rental income from 11 PP - €1,750 per month

2. rental income from 23 BA - €1,550 per month

3. income from apartment 28 AP South America - €250 per month

The husband does not appear to have a tax existence at all and this matter will have to be addressed by him and no doubt will be prompted by the orders of this Court in relation to disposal and dealing with some assets.

The income of the husband on the basis of his affidavit of means sworn on 15th January amounts to an expenditure of €2,410 per month. The expenditure of the wife amounts to nursing home fees of €2,846.13 per month, together with incidental items rounding up at €300 per month.

Statutory factors regarding provision
Section 20 of the Family Law (Divorce) Act, 1996 provides:

“1. In deciding whether to make an order under s. 12, 13, 14, 15(1)(a), 16, 17, 18 or 22 and in determining the provision of such an order, the court shall ensure that such provision as the court considers proper having regard to the circumstances exists or will be made for the spouses and any dependent member of the family concerned.”

(a) While the husband has a small surplus of about €700 per month over and above his expenditure, this is not enough to provide for the maintenance of the wife which will be in the region of €3,146.13 per month. It will be thus necessary to sell PP to provide a fund that will have the capacity to augment the wife’s funds to cater for all contingencies over and above an actuarial assessment into the future. The income of the wife is confined to her deserted wife’s benefit but, perhaps uniquely among such benefits, this benefit by agreement of the parties seems not to be means tested. The lack of a means-testing provision relating to such benefit was available only for a short time when the wife qualified for same. It is thus likely to continue regardless of the provision made by this Court and may be regarded as a matter which may be used to net out the contribution of the husband to the wife’s needs.

(c) As regards the standard of living this is to be measured by nursing home standard with incentive to close family to look after the wife and by the reasonably modest standard of living of the husband.

(d) The advanced age of the husband and the wife indicates that the court should have a special regard to the imminence in various degrees of nursing home type care for both. The couple lived long enough with each other for both to acquire the expectation of care and provision under the Family Law legislation. But the fact that the parties have lived apart from each other for over 20 years is a factor to be given small but significant weight in reaching the conclusions in relation to the relevance of the full and final settlement clause.

(e) I have dealt with the physical and mental disabilities of the wife and they are primarily in focus in this case. While I have stated that the court must have regard to the contingency for the husband of nursing home care by reason of his disabilities, arising from arthritis and three existing artificial joints, with a likelihood of more such operations, he nevertheless (notwithstanding an inability to stand for long periods of time, or do any significant physical work, and a tendency to fall) is very much “a man about town” as evidenced by his international existence and ability to act to some degree as a property facilitator in addition to his other interests.

(f) The contribution which the wife has made is as a homemaker and support for her husband during the currency of the marriage, which was reasonably long, and during the existence of the marriage and after the separation to take care of the children and dependent children of the marriage. The contribution of the husband was made during the course of the marriage but afterwards he fell down on the maintenance, and, (worse again), caused serial litigation which has worked against the interests of the wife. While he asserts that litigation is now a matter for court record, and not subject to be set aside, 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, by reason of the fact that notwithstanding his avowed difficulties during the course of the multiple litigation, he has now surfaced with a significantly valuable investment portfolio.

(g) This is not a major factor except that the maintenance foregone by the wife by reason of the successful litigation of the husband and his failure to pay maintenance was an opportunity cost to her of the husband accumulating his present investment portfolio to a significant but unascertained degree.

(h) The court clearly takes into account the wife’s deserted wife’s benefit. It was suggested by the husband’s counsel that the wife should have manipulated or engineered a situation whereby she should buy a further property jointly with one of her daughters and thereby become entitled to subvention under the Health Board Subvention Scheme for the costs of the nursing home. I do not hold the fact that the wife did not avail of this stratagem against her for the purpose of this action as I have some doubts, (based on considerations of public policy), that the court should look sceptically at such stratagems with a view to declaring a trust for the donor so that the State is not needlessly mulcted for funds which are available within a family.

(i) On the basis of the T. v. T. case conduct in this case does not arise.

(j) I have dealt with the accommodation needs of the wife which centre mainly around the nursing home with the hope of let up or respite by sympathetic relatives. The husband lives for a large part of the year in one of his apartments in South America and seems to have Irish based accommodation in BA in one of the flats/apartments there. The provisions of the court do not seem to threaten the accommodation in either case.

(k) As Succession Act rights have been cancelled by the judicial separation settlement, and as I have decided that I am not allocating a significant capital sum to the wife on a once off basis from which she might provide for the balance of her nursing home care I can see no reason for a suggestion made during the course of the hearing that if some such sum were made that there would be a claw back for the husband under reinstated succession rights for his benefit in the event of a untimely and premature death of the wife.

(l) The rights of any other person in this case are irrelevant, notwithstanding that I have considered the wife should have some cushion for the purpose of motivating/thanking her relatives who show an interest in her during her nursing home stay. Such provision (if any), is primarily derived from the needs of the wife rather than the rights of any person who might benefit thereby.

This will provide a fund in the region of €400,000 which is more than sufficient to cater for all the contingencies of life expectation and increased nursing home care costs for the wife in the future. It will also (perhaps on a diminishing scale) provide through a net 4% earning after DIRT, a good supplement to the husband’s rental income so that his current lifestyle is not prejudiced.

In addition to the maintenance periodical payments (which should be paid monthly by standing order arranged with the wife or her representatives) the husband shall pay a lump sum of €60,000 as a capital cushion to the wife as explained in this judgment within one year of today’s date.

The periodical payment shall be increased by 15% per annum to cater for cost of living increases and to provide a cushion against likely intensifying and increasing nursing costs.

The periodical payments of maintenance as above described are to continue for the life of the wife or further order of the court, but the intention of the court in this judgment is that further court applications will not be necessary save in the most exceptional circumstances, both from a point of view of cost saving in a family of modest assets, and for the other reasons already advanced in this judgment.

As the matter has received some discussion during the course of the hearing I direct that both parties pay their own costs on the basis that the wife has now an estimated sum of €100,000 to cover her nursing home costs until the provision from her husband kicks in in one year’s time, with a sum left over to cover likely costs. The husband is to have recourse to the proceeds of sale of PP only with liberty of the court after exhausting other moneys on deposit or available to him for the discharge of his own costs. This decision on costs is tentative on the basis that the parties may wish to address the court further in relation to modulation of same in the interests of justice. The counsel for both parties are at liberty to address the court in relation to the exact form of the order to be made to carry out the intentions of this judgment and in the event of any undertakings being necessary by the husband, to fully carry out the intentions of the court in relation to matters outside the parameters of the orders available to the court. If such arrangements are not possible, then the court will make a default order directing the net proceeds of sale of PP as described above to be paid to the wife’s solicitors to be held on trust by them, with power (after deduction of reasonable trustee fees of 2% service charge together with outlay) to pay out of same the sums ordered by the court in this judgment to be paid to the wife during the life of the wife and thereafter to hold the balance on trust for the husband absolutely and to be paid over to the husband in such event.

As it has been clearly stated in this judgment that one of the prime objectives of the judgment is to ensure that there will be no further unnecessary expense in litigation, I consider that there is a risk having regard to the medical evidence relating to the wife, that she might in certain circumstances have to become a ward of court not only for the purpose of litigation in relation to any dispute but also for the purpose of administering her affairs relating to nursing home medical care pursuit of VHI medical card authorities for medical expenses etc. The alternative to that course is appointing a person with enduring power of attorney, and this is a matter which the court is willing to consider at this stage. Accordingly I invite the parties (if they find such a course to suit the circumstances of the case) to address me in relation to this aspect when addressing the finalisation of the order consequent upon this judgment.