Changing Financial Circumstances and Complex Family Law

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Changing Financial Circumstances

In Ireland, there is no such thing as a clean break in separation or divorce and it is possible for a spouse to return to court at a later date to look for additional financial support. Where there has been a divorce, the spouse can seek to change the maintenance arrangements. Where there is a Judicial Separation, all issues can be revisited.

Where there is an application before the Court to have the financial terms of a divorce changed, the following are some useful tips;

  • The Court will keep in mind the terms of the previous Agreement.
  • The financial circumstances of each spouse at the time of the prior Agreement will also be taken into consideration.
  • The Court will be less likely to intervene in changing the financial arrangements where there has been little change in financial circumstances.
  • The Court will be less likely to intervene if adequate or generous arrangements were made for the less wealthy spouse at the time of the prior Agreement.

CO’C –v- DO’C (2009) is a case that deals with these issues. Those involved had settled Judicial Separation proceedings in February 2008. A number of orders were made by the Court at that time including the transfer of a property to the wife while she agreed to transfer the family home to the husband. A lump sum payment and a maintenance agreement were also put in place. The wife later brought the husband to court again as a result of his failure to comply with the Orders. The husband argued that there had been a dramatic deterioration in his financial circumstances since February 2008 and that it was not possible for him to comply with the terms reached. The husband also argued that the bank had a mortgage over the property which was to be transferred to the wife and would not allow the transfer. The husband applied to the Court to set aside the Orders made or alternatively to review the Orders. The Court accepted that the husband’s financial circumstances had deteriorated significantly and that he was now not in a position to follow through with the original agreement. The Court also noted that the husband’s assets were now in negative equity.  While the Court did not set aside the entire of the previous provisions, it did make an Order transferring the family home to the wife which previously was to have been the husband’s asset.

Changing Financial Circumstances and how this affects a family business

If you are seeking a divorce and you are concerned about it affecting a family business, the best advice is to deal with any disputes as quickly and amicably as possible. It is important that all difficulties are dealt with rapidly with the minimum disruption to the business. It would be a good idea to seek family law, business and taxation advice from the start to help narrow those difficulties.

BD –v- JD (2005) is a case that illustrates what can happen when changing financial circumstances and family law affect the family business. Here the husband and wife had been married for 23 years and the wife wanted an equal division of the assets. The main asset in this case was a group of companies which were owned by the husband and were valued in the region of €10 million. The Court awarded a “financial package” of approximately €3.4 million in favour of the wife, to include lump sum payments and a contribution towards her pension fund. The High Court believed that this could be achieved without substantially affecting or interfering with the company structure. However, the husband failed to comply with the Order, and as a result the wife applied to have him declared as bankrupt in another court case in 2008. In defending the application for bankruptcy, the husband referred to his difficult financial circumstances and argued that the application by his wife was solely designed to punish him, rather than to obtain any funds for her. Judge Dunne noted that the High Court had made its Order in light of the husband’s financial circumstances at that time. The Court did not accept the husband’s argument and the Court ultimately decided that the husband should be declared bankrupt.

Helen Coughlan heads our Family Law Department and she is a qualified mediator, collaborative practitioner and family law solicitor. She has extensive experience in litigating family law matters through the courts. If you have any queries please contact Helen on 045 431542.

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