High Court dismisses husband's application to vary divorce decree due to litigation misconduct and lack of trust.

Neutral Citation Number: [2011] IEHC 228

THE HIGH COURT

2004 63 M

BETWEEN

U. APPLICANT

AND

U. RESPONDENT

JUDGMENT of Mr. Justice Henry Abbott delivered on the 2nd day of June, 2011

1. This is a judgment following from a Decision made by this Court on the 22nd July, 2010, in relation to what effectively was an

application on behalf of the applicant wife for an order of the court dismissing in limine an application by the respondent husband for

variation of an order granting a decree of divorce on the 11th June, 2007.

2. The application for variation of the provisions in the divorce decree arose by way of response by the husband to an application by

the wife to have him committed for contempt by reason of his failure to comply with the order and, in particular, the removal of

mortgages on 4..H – a property which was intended by the divorce decree to be left free of encumbrances to the wife.

3. The basic structure of these proceedings was sidetracked by two applications on behalf of the husband. First, an application was

made to the court to dismiss the committal application on the basis that committal did not lie to enforce maintenance payments in

family law proceedings. This application was refused by the Court on the grounds that whatever arguments might be made about the

inadequacy of committal for the purpose of enforcing maintenance, the compliance with the divorce decree involved the performance

of acts quite apart from the payment of maintenance. The second application by the husband related to his claim of legal professional

privilege on certain documents passing between his conveyancing solicitors and a financial institution in relation to a mortgage on

4..H, which was not disclosed prior to the proceedings (hereinafter referred to as the second mortgage on 4..H). This application was

refused by the Court. The hearing of this application took place on the 19th, 20th, 21st and 22nd of July, 2010.

4. It is important to understand the circumstances in which the application was made. The husband’s application to vary was brought

by way of notice of motion seeking variation pursuant to s. 22 of the 1996 Act. However, by the time the hearing took place, the

Court had heard numerous applications arising from committal applications seeking to have the Court reconsider provision at large in

relation to both husband and wife in the case of a judgment in the course of execution – or executory judgment – in circumstances

where the decree of the court, whether by way of judgment or approved consent, became impossible to operate by reason of the

impact of the great recession and disastrous fall in Irish property prices following Lehman’s collapse in 2008 as set out in the principles

in a judgment of this Court in A.K. v. J.K. [2008] IEHC 341. While the wife made an application for committal of the husband for

contempt, the reality of such cases was that such application for committal for contempt would be stayed if the husband were

allowed to pursue his application for variation untrammelled by the strict provisions of s. 22, but in the broader context of variation of

a judgment in the course of execution A.K v. J.K [2008] IEHC 341.

5. Ms. Clissmann’s proposal on behalf of the husband was that in relation to the wife’s claim to dismiss the extended variation

application by the husband, Mr. Grant, the respected forensic accountant, would be called to give evidence in relation to the existing

state of the husband’s financial affairs and explain details of his finances which were of concern to the wife.

6. Ms Clissman submitted that the affidavits disclose six cases of non-disclosure by the husband, both before and after the divorce

decree of June, 2007, the most grievous of which involved the failure to disclose a mortgage of €640,000 on 4..H and the ownership

of a magnificent sports car (hereinafter referred to as MSC) costing €410,000. She calculated the value of the total of these non-

disclosures as amounting to the sum of €1.4m approximately.

7. While Ms. Clissmann in reply asserted that she had been instructed that the wife’s solicitor had made some queries in relation to

the existence of the MSC with Mr. P, an insurance broker, and hence, knew about the vehicle, I am satisfied that were was a non-

disclosure of this property by reason of the failure to insert same in the affidavit of means. I was reminded by Ms. Coughlan that in

the case management preparation for the hearing which culminated in the divorce settlement of the 11th June, 2007, Mr. Hayden,

S.C. on behalf of the wife, had to make a number of aggressively contested applications for details of insurance documents which

turned out to reveal further properties which had not been disclosed, and that the fever of contention between the parties in relation

to disclosure and having the matter come on for trial was exhibited by the outrage of Mr. Hegarty S.C. on behalf of the husband, at

the suggestion that there might be any lack of disclosure by the husband in preparation for the trial and by the fact that the wife

was penalised by an order for costs by reason of her delay. For the same reasons I do not hold (as not proven in any affidavit) that

the two forensic accountants had discussed the existence of the second mortgage on H..P., prior to settlement in June 2007

8. Ms. Coughlan submitted that her case for dismissing the husband’s application for variation, as described, was based on the

jurisprudence arising from a judgment of Ms. Justice Irvine in a case which, for redaction purposes, will be referred to as L.E. v. U.F.

on the 10th June, 2009, the effect whereof was to establish the principles that a lack of disclosure in the court processes could bar a

claimant from relief. Ms. Coughlan opened the decisions of the English Courts relied upon by Ms. Justice Irvine, and I have considered

same. Ms. Coughlan stated that in the L.E. v. U.F. case the application was to set aside a divorce for non-disclosure and/or fraud or

in the alternative, to have compensation for non-disclosure/information deficit loss. She clarified that in her application she did not

wish to have any compensation paid for information deficit loss, she merely wished to have enforcement of the benefits her client wife

had obtained in the divorce settlement. While Ms. Clissmann argued that the L.E. v. U.F. decision related to setting aside of a divorce

for fraud and hence was not applicable to an application for variation. I am satisfied that the principles set out in detail by Irvine J. in

her judgment are applicable to all forms of family law litigation leading to a subsequent to a divorce decree. Irvine J. accepted at

para. 10.6 of her judgment that:-

“If there has been a history of evasion and equivocation on the part of the spouse in respect of their financial

affairs in family law proceedings that the courts are not prepared to permit the spouse to benefit from that

conduct.”

Ms. Coughlan submits that to allow the husband to continue his application to vary would be to allow him to benefit from the most

gross and obvious misconduct in the conduct of the litigation. While Ms. Clissmann argued that the misconduct was to be judged in

the context of a contempt application by the standard of proof of beyond reasonable doubt, I am satisfied that the proper approach

is to judge the misconduct in the context of a dismissal in limine of an application for variation on the basis of the civil standard of

proof of the balance of probabilities, (provided of course that the court must be satisfied that the misconduct in the litigation is of

the most serious kind). I am satisfied that the husband’s conduct in terms of disclosure in this litigation, both before and after the

divorce decree, amounted to litigation misconduct of the most serious kind. Furthermore, the husband exhibited a serious lack of good

faith with the Court. The experience of the Court during the course of, and following, various applications for sale of the MSC and

payments out arising from same and, in particular, the application for payment out allegedly for the benefit of an infant child of the

husband made during the vacation of 2009 amounted to serious litigation misconduct.

9. The judgment of Irvine J. in L.E. v. U.F. clearly sets out the English judgments which indicate that the power of the court to bar

the access of a litigant to pursue a remedy for relief should be exercised very sparingly. This guide is reinforced in this jurisdiction by

reason of the consideration of the constitutional right of access for a litigant to the court. However, this constitutional right of

access must be viewed in the light of the inherent power of courts established under the Constitution and Statute to prevent the

abuse of the courts own process. Without relying on any English authorities as opened to the court it is possible to deduce a power

of the court to dismiss an application such as being made by the ex-husband in this case for review of maintenance pursuant to s. 22

of the 1996 Act, by reason of his conduct which could be regarded as contempt of court in the civil sense insofar as he has flagrantly

broken the order which he now seeks to have reviewed and has, by his conduct, destroyed the confidence of the Court that he is

prepared, or has taken steps to, properly engage in the detailed forensic process as exemplified by the Family Law Practice Direction

in a way to ensure that justice may be done in the case. Indeed, an examination of the Family Law Practice Direction points to the

right of the High Court to declare a claimant’s right to proceed in separation or divorce proceed as an undefended action in the event

of the egregious non-compliance by a party with the Practice Direction. It is clear that Irish courts can and do protect themselves

from an abuse of process. The Practice Direction is also to be viewed in the context of the underlying jurisdiction of the court

provided by O. 19, r. 28 of the Rules of the Superior Courts to strike out pleadings which disclose “no reasonable cause of action or

answer for being frivolous or vexatious”.

10. Against this background the English authorities cited on behalf of the wife are particularly helpful and clarify circumstances in

which the inherent power to dismiss in limine ought to be used. As appears from all the Irish cases in relation to the subject as, for

instance O’Riordan v. Ireland (No.5) (O’Caoimh J.) [2001] 4 I.R. 463, and D.K. v. A.K. (Costello J.) [1993] ILRM 710, the exercise of

this type of inherent power would be extremely rare.

11. I accept Ms. Coughlan’s submissions that it is entirely unsatisfactory to propose at the last minute that an albeit esteemed

accountant such as Mr. Grant may give evidence to explain all matters of concern on the morning of the hearing without having first

meaningfully set up a matrix of disclosure to enable justice to be done such as would be required by the Practice Direction. Ms.

Coughlan asked the rhetorical question “how could I possibly be expected to react to much of the detail which has never been

disclosed or vouched by the husband or examined by experts on behalf of the wife?”, and I agree that she could not possibly be

expected to do so.

12. Having set out the reasons for the decision to dismiss the husband’s application to call Mr. Grant in limine, the question remains in

relation to what course the disputes between the former husband and wife in this case will take. Ms. Coughlan has suggested that

the way is now cleared for her to proceed to apply to have the husband committed for contempt but she is also, and possibly more

practically, was interested in having assets identified and sold which can satisfy her monetary claims arising from the divorce decree

as in the case (for example) of unencumbered property in Spain and similarly unencumbered property at S.

13. However, the position is not as simple as that. Even where the court makes a decision such as it has made on the 22nd July,

2010, in this case, the constitutional and statutory imperative on the court to make proper provision for parties in the case of a

divorce continues to knock on the door of the court to allow the defaulting party to come in to court on better terms more

acceptable to the court, and which will ensure that the litigation misconduct will not occur again. The question arises - what are the

practicalities in this case arising from such a principle? During the course of the submissions and discussions, Ms. Coughlan suggested

that unless the husband radically changed his approach to the litigation she could proceed to have him committed or his property sold

without further ado. To avoid this outcome and to regain the protection of the constitutional and statutory imperative to the court to

make proper provision, not only for the wife but for the husband, the husband in this case must make some techtonic gesture and

assurance to the court in relation to his future conduct backed up by a programme of action to allow the court to open the door

again to the prospect of a variation. Such gesture and programme might involve the agreement by the husband to put in place an

overall Board of Management or supervising manager to effectively run his business to the point of controlling the finances and

ensuring proper business records and returns are kept to the standard of assuring the court that his business is being run honestly,

prudentially and without any concealment of assets or income such as has occurred to date to the detriment of the conduct of the

proceedings. A further step might be to have an independent financial expert report to the court with the consent of the husband and

his business partners pursuant to s. 47 of the 1995 Act. A further alternative (although not suitable in this case by reason of the

involvement of partners through corporate or joint venture business) would be for the husband to consent to a property adjustment

order made pending further consideration of the variation application to the wife so that ultimately further property adjustment orders

might be made to effect provision, not only to the wife but back to the husband as well, in accordance with the 1996 Act. Other

solutions may apply but there must be a radical departure from the pattern of litigation misconduct and bad faith already exhibited,

and they must above all, engender the trust of the court to allow a reengagement by the husband with the normal litigation process.