A “disproportionate” order requiring a wealthy businessman to pay lifelong €10,000 monthly maintenance to his ex-wife has been overturned by the Court of Appeal.
However, the three judge CoA upheld the High Court’s discretion to make other orders on the basis that a roughly 50/50 split of the parties’ considerable assets constituted proper or “fair” provision for each of them in divorce proceedings.
The assets include a substantial family home; two mortgaged investment properties; a mortgage-free holiday home abroad; about €921,000 cash deposits in various banks; pensions; and shares and share options held by the man which the woman claimed had a value of about €1.4 million.
The main difference between the two, aged in their sixties, concerned the net value of their assets.
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The High Court orders included that the woman get the family home, valued at about €1 million with a mortgage of less than €100,000; the holiday home; a €360,000 sum to equalise their incomes until the man retires; one of his pensions; and other cash sums.
The man will retain a mortgaged investment property, a substantial pension and valuable shares and share options.
The man appealed over the €10,000 monthly maintenance and some other orders, including a €191,000 pension equalisation order, made by the High Court’s Mr Justice Max Barrett when granting a decree of divorce.
He argued the maintenance order and orders for other lesser sums were “unfair and unjust”, saying he had made substantial capital and pension provision for the woman, with the capital provision comprising most of their real assets being transferred to her.
The maintenance order was the core issue in the appeal.
Ms Justice Mary Faherty, giving the CoA judgment, held the maintenance order was made in the absence of evidence as to how €10,000 monthly maintenance payments would be funded by the man after he retires.
Having divided a “relatively ample pot” as evenly as it could, and making provision for the woman via maintenance lump sum payments until his retirement, the High Court “lost sight” of the fact that provision meant both would be more or less in “the same comfortable circumstances” when the man reached retirement age.
The effect of ordering ongoing maintenance after his retirement was to require him to continue working beyond his retirement age, or otherwise force him to come back to court to seek to vacate the maintenance order, all against a backdrop where “substantial” provision had already been made for the woman, she said.
The maintenance order was “disproportionate” in the absence of any concrete evidence he was likely to be in receipt of employment related income after retirement and when the other provision for the woman was fashioned, at least in part, to ensure she was the recipient of future income generating assets such as an investment property and one of his pensions, she said.
As the now owner of the family home, the woman has an option in the future to release the equity in that property, which would have no tax liability, by trading down to a smaller dwelling, leaving her with a further cash resource, Ms Justice Faherty said.
Other orders provide that each will pay their own legal costs.
The man and woman married more than 30 years ago, have adult children and separated a few years ago, the judge noted earlier in the judgment. The man was the principal earner and the woman the homemaker during the marriage.
The woman argued his maintenance offer of €240,000, payable in instalments of €60,000 over four years, did not include his future salary earnings until his retirement at 65.
She proposed he pay her a lump sum of €240,000 over two years and thereafter pay her €10,000 monthly maintenance. He had potential to work beyond retirement and had paid her €10,000 monthly up to autumn 2019 when he unilaterally reduced it to €8,500, she said.
The High Court noted his monthly income in 2021 was about €31,000. It considered his proposed maintenance of €8,500 monthly until he retired would see an “unjustifiable” reduction in the woman’s income given the total assets available.
The woman’s efforts as a homemaker had “freed” the man to pursue the career that led to his current relative financial wealth, Mr Justice Barrett said.
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