THE SUPREME COURT

								Appeal No. 302/00

Murphy J.
Murray J.
McGuinness J.

BETWEEN

M.K.

							Applicant/Respondent

and

J.P. (otherwise) S.K.

							Respondent/Appellant

Judgment of Mrs Justice McGuinness delivered the 6th day of November 2001 [Nem. Diss.]

	This is an appeal arising from divorce proceedings brought by the Applicant wife pursuant to the Family Law (Divorce) Act 1996 (“the 1996 Act”).  The Respondent husband has appealed against the judgment and orders of Lavan J. made on the 21st November 2000 and the 28th March 2001.

The Facts
	The parties were married in England on the 21st September 1963, both being of Irish origin but living in England.  There were six children of the marriage born between 1964 and 1975, none of whom is now a dependant child within the meaning of the 1996 Act.  
	In or about the year 1972  the parties returned to Ireland where the husband had obtained employment in a provincial town.  They purchased a family home in that town which is acknowledged to be jointly owned by them.  In the late 1970s unhappy differences arose between the parties, of which there is no need to give details here, and they began to 
live separate and apart in or about the year 1980.  On the 1st January 1982 they entered into a deed of separation which provided that the wife should continue to reside in the family home and to have custody, care and control of the children, the husband to have reasonable access to the children and to spend specified times on holiday with them.  The husband was to pay maintenance to the wife both for herself and for the children until they completed secondary education or reached the age of 18.  This maintenance was to be increased periodically in accordance with increases in the Consumer Price Index, and there was a clause allowing for variation of maintenance if a fundamental change in the circumstances of either party arose.
	The husband was to provide V.H.I. insurance for the wife and children and to make all mortgage repayments on the family home.  It was provided that the wife’s maintenance would cease if she remarried.  There was a mutual renunciation of rights under the Succession Act 1965.  There were also a number of standard and customary clauses not relevant to the present proceedings.
	The parties have continued to live separate and apart to date and the deed of separation remained in force until the commencement of the wife’s divorce proceedings.  On the evidence before the High Court (the transcript of which was provided to this Court) the husband fulfilled the financial provisions of the separation deed.  He also, by direct arrangement with the children, made provision for their third level education.  Since the separation of the parties the wife has had some periods of part-time employment but has in the main been fully involved in her role as a mother to her children.  At the time of the issue of the proceedings the wife had moved to reside in rented premises outside Dublin.  She later  returned to the family home.

	Since the separation of the parties the husband has entered into a long term relationship with M.B.  The timing of the beginning of this relationship is in issue between the parties, but this is irrelevant to the matters to be decided by this Court.  In  February 1995  the husband applied for and was granted a decree of divorce in the Courts of the Republic of Haiti and shortly thereafter he went through a ceremony of marriage with M.B. in the United States.   The husband and M.B. have continued  to live together as husband and wife and hold the vast majority of their property and financial assets jointly.  In evidence the husband stated that M.B. made substantial direct and indirect contributions to the acquisition of these assets and this evidence was in effect unchallenged.  
	At the time of the parties’ separation the husband was in steady employment in a senior post in the provincial town in which they lived.  He had what was at the time a good salary but was by no means a wealthy man.  He had invested in a development scheme to build a new family home and a few other houses in the neighbourhood of the town.  Unfortunately shortly after he had begun to live separate and apart from his wife, the firm by which he was employed closed down through lack of business and he lost his employment.  In addition, due to economic conditions at the time, his housing development scheme failed with resulting financial loss to him.
	Following his separation from his wife and the loss of his employment the husband moved to another part of Ireland where he obtained employment at the European headquarters of an international firm based in the United States.  He has been remarkably successful in his career in this employment and has become firstly Vice-President and now President of the entire international undertaking.  As a result he and his partner M.B., have resided since 1993 in the United States where they jointly own a family home.  They also jointly own a house in Ireland.  

On account of the Appellant’s success in his career he has accumulated considerable wealth, the vast majority of which is held jointly with his partner M.B.  In addition he is paid a high salary by his employers and may also be paid a bonus of up to one hundred per cent of his salary each year.
	During the course of the proceedings before this Court senior counsel for the Appellant informed the Court that subsequent to the granting of the decree of divorce by the High Court (against which there is no appeal) the Appellant and M.B. had married in a civil ceremony under Irish law on the 31st August 2001.

The Proceedings
	The Respondent wife issued her divorce proceedings by way of Family Law Civil Bill in the Circuit Court on the 3rd June 1998, seeking a decree of divorce together with a number of ancillary financial orders including periodic maintenance, a lump sum order, a property transfer order and a pension adjustment order.  By an interim application to the Circuit Court she sought maintenance pending suit, and on 14th July 1998 the Circuit Court made an order directing the husband to pay a sum of£86.00 per week in addition to the maintenance which he was already paying under the terms of the 1982 separation deed.  On 15th February 1999 the wife applied to the Circuit Court to have her proceedings transferred to the High Court.  This application was refused by the Circuit Court but on the 23rd April 1999 was granted on appeal by the High Court.
	The substantive proceedings came on for hearing before the High Court on the 13th November 2000 and were at hearing before Lavan J. for a total of five days.  At the close of the evidence submissions in regard to the law were made by senior counsel on both sides.  Following these submissions, on the 20th November 2000, the learned trial judge gave judgment ex tempore.  On the following day (21st November) he made an order granting a decree of divorce and made ancillary orders as follows:

	1.	That the Respondent do transfer to the Applicant his entire legal and beneficial interest in the family home situate at (address) in the county of (name).
	2.	That the Respondent do pay to the Applicant for maintenance backdated to the 1st day of May 1999 a sum equal to one half of his annual salary including bonuses.
	3.	That the Respondent do pay to the Applicant a lump sum of £1,500,000.

	This lump sum represented approximately one half of the assets held  by both the Respondent and M.B.  A number of matters including the making of a pension adjustment order were adjourned for later hearing.  A counterclaim made by the Respondent husband was dismissed and the husband was ordered to pay the costs of the proceedings.
	The matter of the pension adjustment order was dealt with following further application to the Court in March 2001.  On  the 28th day of March 2001 the learned trial judge made an order directed to the trustees of the husband’s Irish pension fund providing that 80% of the husband’s Irish pension when it fell due was to be paid to the wife.

The judgment of the High Court
	In his judgment the learned High Court judge described the respondent husband, on his view of the evidence, as having become in or about 1985 a man of corporate mentality whose actions and attitudes towards the Applicant wife were determined by “the questionable morality emanating from this mid-American company which is located in Galway”.  The judge laid considerable stress on the manner in which the husband had obtained the Haitian divorce and later his remarriage in the United States and described him as having “driven a coach and four through Irish legislation”.  He stated that his marriage in the United States was bigamous.  He rejected the husband’s evidence concerning the divorce and remarriage but acknowledged that there had been adultery “on both sides”.
	In reference to the law regarding financial provisions ancillary to the granting of a divorce the learned trial judge expressed his views as follows:
	“Accepting the submissions made by Ms Clissman in relation to the Law Lords’ view of how to deal with these circumstances in their judgment in White v White, I am happy that in current phraseology the Court may use the term ‘equality’.  In my view, however, the Court should continue to adopt the fundamental rules that had been in existence for nearly two hundred years in determining whether a wife is entitled to be maintained according to the style of her husband.”

	This appears to be the key passage, and indeed the only passage, in which the learned judge indicated the basis in law on which he exercised his discretion.  The learned judge went on to outline the orders which he proposed to make, stating that the Applicant was entitled to 50% of her husband’s income and awarding her a lump sum payment of £1,500,000.  He adjourned the question of the making of a pension adjustment order and a number of other questions which need not be considered by this Court at this stage of the Appellant’s appeal.

The Notice of Appeal
1	The Respondent husband appealed the ancillary orders made by Lavan J. by a notice of appeal dated the 27th November 2000.  Twelve grounds of appeal are listed including the ground that the learned High Court judge’s findings of fact in relation to the Respondent/Appellant’s evidence were unsupported by the evidence adduced or the reasonable inferences to be drawn therefrom, and were against the weight of the evidence.  However, the main and principal ground of appeal is that the learned High Court judge erred in law and in fact in failing to have any or any due and sufficient regard, pursuant to Section 20(3) of the Family Law (Divorce) Act 1996, to the deed of separation executed by the parties on the 1st January 1982 and that the learned High Court judge failed to have any regard, or any proper regard, to the period of the parties’ separation of in excess of twenty years.  In addition it is alleged that the learned High Court judge failed to consider and balance properly or at all the matters set out at Section 20(2)(a) - (l) of the Act of 1996.  A subsidiary ground is that the learned High Court judge misdirected himself as to the legal principles applicable and as to the authorities opened to him in submission.
	The Respondent husband also appealed the pension adjustment order made by Lavan J. on 28th  March 2001 by notice of appeal dated the 9th July 2001.   On account of the approach taken by this Court at its hearing of the appeal proceedings it is unnecessary at this stage to consider the issue of the pension adjustment order.

The Supreme Court Proceedings
	The Appellant/Respondent’s appeal came on for hearing before this Court on the 2nd October 2001.  At an early stage in the opening of the Appellant’s case by his senior counsel, Mr Hegarty, it became clear that the primary issue before the Court was whether the learned trial judge had erred in failing to have regard to the terms of the separation agreement which had been entered into by the parties and which was still in force in accordance with the terms of Section 20(3) of the 1996 Act.  Mr Hegarty submitted that the trial judge had also failed to have sufficient regard to many of the relevant factors set out in Section 20(2) of the 1996 Act.  It was clear that this issue was fundamental to the outcome of the appeal.  If the Appellant were to succeed on this point there would be no need to proceed in a complex and costly two day hearing on the evidential and other points raised in the notice of appeal.
	Counsel, therefore, in accordance with the directions of this Court, made submissions on this primary ground of appeal as a preliminary issue.  Senior Counsel for the Appellant, Mr Hegarty, submitted that the learned trial judge had made no reference whatsoever in his judgment to Section 20(3) of the 1996 Act or to any regard he might have had to the fact that the parties had not lived together for the past twenty years and that in 1982 they had regulated their affairs by a deed of separation which was still in force.  Both parties had received full and competent legal advice at the time they entered into the deed.  Section 20(3) of the 1996 Act was mandatory in form, providing that in deciding whether to make an order under a provision referred to insub-section (1) and in determining the provisions of such an order, the Court “shall have regard to the terms of any separation agreement which has been entered into by the spouses and is still in force”.  Counsel submitted that in exercising his discretion the learned judge had relied solely on his own interpretation of the judgment of the House of Lords in White v White [2000] 3 WLR 1571 [2001] 1 All E.R. 1 and on “fundamental rules” that had been in existence for nearly two hundred years.  Mr Hegarty argued both that the judge’s interpretation of thejudgments of the House of Lords in White v White was erroneous and that the so-called rules of two hundred years standing referred to him were unknown to the law.  Central to the application of the constitutional and statutory principles in the consideration and determination of the issue of proper provision for a spouse on divorce was the reliance on judicial discretion.  Section 20 of the 1996 Act set out the statutory guidelines to be followed by the Court in the exercise of its discretion in making ancillary orders.  In the instant case the learned trial judge had totally failed not only to follow but even to consider these statutory guidelines.  
	Senior Counsel for the Respondent/Applicant, Ms Clissman, argued that, although the learned judge did not make explicit reference to Section 20(3) and other provisions of Section 20 in his judgment, it was clear from the  whole course of the proceedings that he had in fact had regard to the matters set out in the statute.   The law, including the statutory provisions, had been opened to him by her when she opened her case.  The learned judge had given a courteous, careful and patient hearing to all the evidence over a period of five days.  Both counsel had made full legal submissions to him at the close of the evidence.  It was, counsel submitted, implicit in his judgment that he had proper regard to the matters set out in Section 20(2) and Section 20(3) of the 1996 Act.  In a judgment given ex tempore it was not to be expected that the judge would set out in explicit detail all the factors which he had considered in reaching his decision.  Ms Clissman also submitted that in making reference to the principle of equality as set out by the House of Lords in White v White the learned trial judge was using the correct principle, a principle which was also found in this jurisdiction of the High Court in J.D. v D.D.[1997] 3 I.R. 64.  

The Law
	Section 5 of the Family Law (Divorce) Act 1996 provides as follows:
	“5(1)  Subject to the provisions of this Act, where, on application to it in that behalf by either of the spouses concerned, the Court is satisfied that -
			(a)	at the date of the institution of the proceeding, the spouses have lived apart from one another for a period of, or periods amounting to, at least four years during the previous five years, 
			(b)	there is no reasonable prospect of a reconciliation between the spouses, and 
			(c)	such provision as the Court considers proper having regard to the circumstances exists or will be made for the spouses and any dependant members of the family, 
		the Court may, in exercise of the jurisdiction conferred by Article 41.3.2 of the Constitution, grant a decree of divorce in respect of the marriage concerned.
	   (2)	...”

	Other sections of the 1996 Act give the Court power to make a variety of financial and property orders ancillary to the granting of a divorce decree so as to ensure that proper provision is made for the spouses and for any dependant children of the marriage.
	Section 20 provides as follows:
	“20(1)	In deciding whether to make an order under Section 12, 13, 14, 15(1)(a), 16, 17, 18 or 22 and in determining the provisions 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 dependant member of the family concerned.
	    (2)  Without prejudice to the generality of subsection (1), in deciding whether to make such an order as aforesaid and in determining the provisions of  such an order, the Court shall, in particular, have regard to the following matters:
		(a)	the income, earning capacity, property and other financial resources which each of the spouses concerned has or is likely to have in the foreseeable future, 
		(b)	the financial needs, obligations and responsibilities which each of the spouses has or is likely to have in the foreseeable future (whether in a case of the remarriage of the spouse or otherwise), 
		(c)	the standard of living enjoyed by the family concerned before the proceedings were instituted or before the spouses commenced to live apart from one another, as the case may be,
		(d)	the age of each of the spouses, the duration of their marriage and the length of time during which the spouses lived with one another,
			(e)	any physical or mental disability of either of the spouses,
		(f)	the contributions which each of the spouses has made or is likely in the foreseeable future to make to the welfare of the family, including any contribution made by each of them to the income, earning capacity, property and financial resources of the other spouse and any contribution made by either of them in looking after the home or caring for the family,
	(g)	the effect on the earning capacity of each of the spouses of the marital responsibilities assumed by each during the period when they lived with one another and, in particular, the degree to which the future earning capacity of a spouse is impaired by reason of that spouse having relinquished or foregone the opportunity of remunerative activity in order to look after the home or care for the family,
		(h)	the conduct of each of the spouses, if that conduct is such that in the opinion of the Court it would in all the circumstances of the case be unjust to disregard it,
			(i)	the accommodation needs of either of the spouses,
		(j)	the value to each of the spouses of any benefit (for example, a benefit under a pension scheme) which by reason of the decree of divorce concerned, that spouse will forfeit the opportunity or possibility of acquiring,
		(k)	the rights of any person other than the spouses but including a person to whom either spouse is remarried, 
	  (3)	in deciding whether to make an order under a provision referred to in sub-section (1) and in determining the provisions of such an order, the Court shall have regard to the terms of any separation agreement which has been entered into by the spouses and is still in force.
		  (4)	...
	  (5)	The Court shall not make an order under a provision referred to in sub-section   (1) unless it would be in the interests of justice to do so.”

	Sub-section (4) deals solely with the making of orders in favour of dependant members of the family and is thus not relevant to the instant case.
	The terms of Section 20(2) are similar to the provisions contained in Section 20 of the Judicial Separation and Family Law Reform Act 1989 and also Section 16 of the Family Law Act 1995.  Section 20(3) is, however, a new provision specifically included in the legislation dealing with divorce.
	The matters listed in Section 20 of the 1989 Act, Section 16 of the 1995 Act and Section 20 of the 1996 Act have been considered specifically and in some detail in a number of judgments both in the High Court and in the Circuit Court.  These include decisions in cases where large sums of money were involved - see, for example, J.D. v  D.D.[1997] 3 I.R. 64 and McA. v McA. [2000] 1 I.R. 457  and (unreported 23rd May 2000).  The situation where a prior separation deed was in force has also been considered both in the High Court in J.C.N. v R.T.N. (unreported 15th January 1999) and in the Circuit Court by his His Honour Judge Buckley in M.G. v M.G. (Irish Times Law Report 2nd October 2000).   This Court has been informed by counsel that these authorities were opened to the learned High Court judge in argument but no reference is made to them in his judgment.  
	In the course of his judgment the learned High Court judge refers to the decision of the House of Lords in White v White [2000] 3 WLR 1571.  This case had been opened to him by Ms Clissman in her submissions to the Court.  White v White marked a turning point in the jurisprudence of the English Courts in their approach to the division of matrimonial property in what are often described as “big money cases”.  Previously the English Courts, led by the Court of  Appeal, had adopted a system whereby, in a situation where the family assets were large and a “clean break” solution was deemed desirable, the wife would be granted a lump sum large enough to provide for her “reasonable requirements” until the date of her death.  The remainder of the family assets went in general to the husband.  This was certainly the general rule in a case where the wife’s role had been that of a stay-at-home wife and mother.  This “reasonable requirements” system had been followed originally in the High Court in the White case.  The Court of Appeal considerably increased the amount of the family assets to be paid to the wife, largely on the grounds that the parties had operated a farming partnership in which the wife played a very large part.  Both parties appealed to the House of Lords.  The House of Lords upheld the decision of the Court of Appeal, but took the opportunity in their opinions to reject the “reasonable requirements” guideline and to hold that, as stated in the headnote, there was no legal presumption of equal division when awarding ancillary relief, but a judge exercising his statutory discretion should, before making his final decision, check his tentative views against the yardstick of  equality of division and depart from equality only if, and to the extent that, there was good reason for doing so.   A claimant’s financial needs or “reasonable requirements” should not be regarded as determinative in arriving at the amount of an award, and the assessment of financial needs should be treated only as one of several factors to be taken into account, particularly when the financial resources of the parties exceeded their financialneeds.  In particular the value of a woman's work in the home as a wife and mother was stressed. 
	 The decision in White v White gave rise to a considerable level of legal and academic commentary in England.  It was analysed at some length in the judgments of the Court of Appeal in the subsequent case of Cowan v Cowan [2001] E.W.C.A. Civ. 679 (14th May 2001) to which I shall make some reference later.

Conclusion
	In making his decision as to the proper provision to be made for the parties in this case, the learned trial judge has relied on a principle of equality, directing that the Appellant is to pay to his wife both half his income and approximately half his capital assets.  In thus deciding he explicitly relied on“the fundamental rules that had been in existence for nearly two hundred years in determining whether a wife is entitled to be maintained accordingly to the style of her husband”.  Given  the orders which he made one must presume he understood these fundamental rules to prescribe an equal division of both income and assets between divorcing or separating spouses.  While I would of course accept that the wife of a rich man (or the husband of a rich woman) could always expect a substantially greater award both in income and in capital than the parties to the average marriage, I very much doubt that a policy of equal division of assets between husband and wife has prevailed under common law rules since the beginning of the 19th century, or even the 20th century, either in this jurisdiction or in England.  In both jurisdictions the division of matrimonial assets on separation or divorce has, since the mid 20th century at least, been governed by statute.  Explicit mandatory guidelines for the Court have been set out in these statutes.
	The learned trial judge also referred with approval to the use of the term “equality” in the case of White v White, which had been opened to him by Ms Clissman in the course of her submissions.  While Lord Nicholls of Birkenhead in his speech in that case certainly stressed the importance of equality as a check or yardstick, he was not suggesting that the individual circumstances of each case, or the statutory guidelines, should be ignored.  It should be noted that the husband and wife in the White case were not a couple with traditional roles but were business partners in a large farming enterprise.  Throughout his speech Lord Nicholls stressed that the overall objective of the Court should be fairness.  
	It should also not be forgotten that in their judgments in the White case the members of the House of Lords were reacting to the “reasonable requirements” yardstick which had prevailed in big money cases in the English Courts for many years.  As was pointed out by Lord Nicholls, the “reasonable requirements” standard was discriminatory in its nature, in particular against wives who fulfilled the traditional role of wife and mother throughout a long marriage.  Thus White v White  may be seen as a useful corrective in English matrimonial law.  This was acknowledged in the judgments of the Court of Appeal in the later case of Cowan v Cowan [2001] E.W.C.A. Civ. 679.
	In that case Lord Justice Thorpe, one of the most distinguished and experienced family law judges in the English judiciary, provided a survey both of the history of the relevant legislation and of commentary on the White case by leading academics.  He went on to consider in detail the judgments in White v White and the application of the principles set out in that case.  At page 15 (paragraph 53) of his judgment Thorpe L.J. states:-
	“The decision in White v White clearly does not introduce a rule of equality.  The yardstick of equality is a crosscheck against discrimination.  Fairness is the rule and in its pursuit the reasons for departure from equality will inevitably prove to be too legion and too varied to permit of listing or classification.  They will range from the substantial to the faint but that range can be reflected in the percentage of departure.”

	The concept of a single capital payment to the wife to meet her “reasonable requirements” for the remainder of her life has never in fact formed a part of Irish family law.  There are two main reasons for this.  Firstly, such a capital payment is inevitably a part of a “clean break” settlement in divorce proceedings.  In this jurisdiction the legislature has, in the Family Law (Divorce) Act 1996, laid down a system of law where a “clean break” solution is neither permissible nor possible.  Secondly, the approach of the Irish Courts, in accordance with both Article 41.2 of the Constitution and the statutory guidelines, has been to give full credit to the wife’s contribution through her work in the home and as a mother to her children.  (See, for example, J.D. v D.D. [1997] 3 I.R. 64).    In this jurisdiction the overriding requirement of a fair outcome is governed by Section 20(5) of the 1996 Act:-
	“The Court shall not make an order under a provision referred to in sub-section (1) unless it would be in the interests of justice to do so.”

	The provisions of the 1996 Act leave a considerable area of discretion to the Court in making proper financial provision for spouses in divorce cases.  This discretion, however, is not to be exercised at large.  The statute lays down mandatory guidelines.  The Court must have regard to all the factors set out in Section 20, measuring their relevance and weight according to the facts of the individual case.  In giving the decision of the Court, a judge should give reasons for the way in which his or her discretion has been exercised in the light of the statutory guidelines.  In hisjudgment in the instant case the learned trial judge has notably failed to do this.  
	This is not an ordinary or average case;  it raises many difficult questions.  In deciding what is proper provision for the wife the Court must take into account the separation deed entered into by the parties, the fact that they have lived apart for some twenty years, the wife’s financial needs and the role which she has played in caring for the children, and the fact that the entire of the husband’s wealth has been accumulated subsequent to the separation of the parties.  These questions and others, and their relation both to the statutory guidelines and to the facts of the case should be set out in the judgment of the Court.
	As an appellate Court, this Court is charged with the task of deciding whether the judge in the Court below has correctly exercised his discretion under the statute.  Such a task is rendered impossible if, as in this case, no indication is given in the judgment of the High Court judge as to what regard he had to the various factors set out in Section 20 of the 1996 Act.  In particular despite the mandatory requirement of Section 20(3), no reference whatever is made to the effect of the 1982 Deed of Separation.
	Unfortunate though it undoubtedly is for both parties, in my view this Court has no choice but to return this matter to the High Court so that the question of proper provision for the parties to the divorce may be considered in the light of the mandatory provisions of the statute.  I would allow the appeal and return the case to the High Court.