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High Court of Ireland Decisions |
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You are here: BAILII >> Databases >> High Court of Ireland Decisions >> M. v. M. [2000] IEHC 181 (23rd May, 2000) URL: http://www.bailii.org/ie/cases/IEHC/2000/181.html Cite as: [2000] IEHC 181 |
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1. I
gave judgment in this matter on 21st January, 2000 dealing with most of the
issues between the parties, but left outstanding all questions relating to
pension rights and the rights to certain policies of assurance which had not
been fully argued. I have now been furnished with all the relevant documents
and heard evidence from an expert in the field on behalf of each party. In
addition, several practical matters arose out of my earlier judgment and I now
propose to deal briefly with the outstanding points.
2. There
are two sets of proceedings, the earlier having been initiated by the wife
seeking judicial separation, and the later having been initiated by the husband
seeking divorce. In my earlier judgment I ruled that the husband was entitled
to a decree of divorce, but many of the issues which arose were common to the
two sets of proceedings. Unfortunately there has been no fixed practice as to
the proper procedure when a party against whom judicial separation is sought
wishes, in effect, to counterclaim for divorce, as the nature of the pleadings
in such circumstances do not allow for a counterclaim as such. I certainly
would take the view that where the respondent to the judicial review
proceedings subsequently issues new proceedings seeking divorce as in the
present case, the two proceedings ought then to be consolidated. I realise that
this could have an effect on the costs issue, but I believe that any such
effect can be dealt with by directions on costs to be given by the Trial Judge.
Accordingly, I propose to make an order consolidating the two proceedings in
this case, but I emphasise that this will not effect my ultimate decision on
costs.
3. Over
the years it had been the practice of the company to discharge many of the
wife’s outgoings such as motor expenses. In more recent times these items
have been segregated into what was called a Director’s Loan Account as
being monies owed by the wife to the company. It is accepted that the husband
will accept responsibility for these items, but agreement has not been reached
as to the date from which the wife should herself become liable. As the husband
has in fact commenced making the maintenance payments provided for in my
earlier judgment as of 1st March, I will direct that the husband shall be
responsible for so much of the Directors Loan Account as has accrued at that
date, and the wife is to be responsible for the balance.
4. The
wife has for some years been running a small shop at 27/29 C., and it is agreed
that she may continue to do so in her own right. I have already intimated that
I will make a Property Transfer Order in relation to the premises, but the
issue of the stock in trade was not addressed. The stock in trade has been
valued at some £48,000 as of 31st December last. As the various financial
provisions which I made in my earlier judgment were based upon the assumption
that the wife would have an income from this shop, I think she should have the
benefit of the stock in trade and effectively have the shop transferred to her
as a going concern. There may be some doubt as to the actual ownership of the
stock in trade, and I will discuss with Counsel whether I can extend the
Property Adjustment Order in relation to it, or whether I should deal with it
in the same way as the Directors Loan Account.
5. I
have already valued the wife’s shares at £1,200,000, and it is
common case that she must dispose of these shares. One solution is that I
should make a Property Adjustment Order vesting the shares in the husband, and
order a lump sum payment by him of £1,200,000. However, the reality of
this is that he would probably have to raise that money from the company, which
would have horrendous tax implications for him. It is agreed that the most tax
efficient solution is that the wife should sell the shares back to the company,
but even this will leave her with a capital gains tax liability of some
£240,000. I cannot order her to sell the shares to the company, and she is
not prepared to do so if it involves this liability. She is, however, prepared
to sell them to the company for such sum as will realise a net £1,200,000
to her, and she is further agreeable to that sum being paid in two moieties,
half being payable now and half on 1st November next. She rejects a proposal
that capital gains tax should be shared equally between the parties. It would
be quite unfair to impose the tax liability on the husband, and accordingly, in
order to secure the wife, I propose to make a Property Adjustment Order
transferring the shares to the husband, and an order for a lump sum payment of
£1,200,000 by the husband to the wife, on the basis of an undertaking by
the wife to transfer the shares to the company on or before 1st June next and
an undertaking by the husband to ensure that the company will pay her half the
purchase price as defined below on or before 1st June upon the transfer of the
shares and will pay her the balance of the purchase price on or before 1st
November, but to stay such order until 1st December next and a permanent stay
thereafter in the event of the transfer being completed in this manner. The
purchase price shall be such sum as will result in a net payment to the wife of
£1,200,000 after she has discharged capital gains tax.
6. The
husband has a private pension trust governed by a deed of trust dated 9th
December, 1996 which trust has assets as of 30th November, 1999 valued at
£7S6,906. The husband also a small pension policy with the Norwich Union
with the value of some £27,485, but in order to simplify matters I propose
to ignore this latter fund and assume that it will be retained in its entirety
by the husband. The husband also has a number of life assurance policies which
mature at various stages in the future. Five of these policies are with
Hibernian Insurance and expire in the Year 2010. The husband is prepared to
give an undertaking to the Court to continue to pay the premiums on such of
these policies as I may order to be assigned to the wife.
7. It
is submitted on behalf of the wife that I should calculate the percentage of
the trust fund to be held for her benefit in such a way as to ensure that it
will produce an amount equivalent to the maintenance payments to her. When this
sum became payable her husband would, of course, have to be relieved of his
liability of his maintenance payments. It is further submitted that the pension
should be of an amount, not of the current maintenance, but
8. There
are of course a number of imponderables involved. At the moment both parties
have substantial assets, but I cannot foresee their circumstances in later
years, which means that I do not know whether the maintenance order would
subsequently be varied. I also do not know whether the wife might re-marry, nor
do I know whether she may get a substantial benefit from the transfer of life
insurance policies. All in all, I do not think it would be correct for me to
assume that she is entitled to a permanent income increasing in accordance with
the cost of living, or indeed increasing on any other basis such as a fixed
percentage increase. I also have to take into account that I intend to transfer
five policies which, if the husband should die before the year 2010, would
result in a large lump sum payment to the wife independent of any pension
rights. On the otherhand, I think there must be some increase in cost of living
allowed for. Taking all this into account I would propose to order that 75% of
the retirement benefit accrued from the commencement of the private pension
trust to date be paid to the wife, but that none of the retirement benefit
accrued under the Norwich Union policy be paid to her. With regard to life
assurance policies, I propose to