The Supreme Court has upheld an order directing a wealthy semi-retired Irish businessman, who held a senior position with a US multinational firm, to pay a lump sum of €510,000 and annual maintenance of €40,000, to his former wife as part of a divorce settlement.
The businessman is also now facing a legal costs bill, which could amount to some €500,000. The action had centred on the meaning, within the Family Law (Divorce) Act 1996, of "proper provision" for a dependent spouse.
The man had separated from his first wife, with whom he had several children, in 1980 and entered a separation agreement in 1981. He remarried in the US in the 1980s after what the High Court described as "the dubious stratagem" of arranging a divorce in Haiti without any notice to his then wife. A divorce decree was obtained here in 2000.
The man and his second wife have since lawfully married here but live in the US.
While rejecting the man's appeal yesterday against the High Court's orders on the lump sum payment and maintenance for his first wife, the three-judge Supreme Court did uphold the man's claim that he should not have to pay the full costs of the case which he had estimated as around €880,000 but which figure his former wife had disputed.
Mr Justice Brian McCracken said the Supreme Court would substitute the High Court's order directing the man to pay the costs of two High Court hearings of the case with orders directing the man and his first wife to pay their own legal costs of the first five-day High Court hearing. In relation to the second seven-day High Court action, the man was directed to pay his first wife her costs of that hearing. The second High Court case arose after the man appealed the outcome of the first High Court case to the Supreme Court.
In that first case before Mr Justice Vivian Lavan, the Supreme Court ruled the judge had erred in applying English "clean break" legal principles to the Irish case when considering the issue of an equal division of assets and had also erred by not expressly dealing with the separation agreement. It ruled that the correct test for the division of assets was "fairness", not equality, and that the case be reheard by the High Court.
The second High Court case was before Mr Justice Iarfhlaith O'Neill who ruled the man must make a lump sum payment of €450,000 to his first wife and also transfer the entire beneficial ownership in the family home to her, effectively making a lump sum payment of €510,000. He also directed the man pay €40,000 a year maintenance to his first wife and her legal costs of both High Court hearings.
The sum of €510,000 represented about one third of the man's joint share of assets worth some $3 million and did not include the capitalised value of a number of pensions held by the man, the judge noted. The annual maintenance of €40,000 represented slightly less than one quarter of the man's current pension income and, in light of the man's future earning capacity as a non-executive director or consultant, a much smaller proportion still of his overall foreseeable future income.
Yesterday, in dismissing the man's appeal against Mr Justice O'Neill's payment orders, Mr Justice McCracken said the man contended the lump sum and maintenance payments should be in dollars, not euro. While the husband had clearly suffered as a result of the decline of the dollar, the trial judge had accepted evidence of the first wife that she intended to use most or all of her lump sum payment to buy a house in Dublin and he had effectively awarded her a sum which would allow her do so.
Mr Justice O'Neill had noted the first wife, after the last child had grown up, had rented out the modest family home and moved to live in a bedsit so as to pursue third-level education. She could have developed a good career but instead took on the role of homemaker He also held that the role the man's first wife adopted was an integral part of his ultimate success.
