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The Practical Implications of the Advent of Divorce in Ireland

As a result of the passage of the amendment of the Constitution, the Family Law (Divorce) Act 1996 was entered on to the statute books on the 27th November, 1996.

This new piece of legislation is for many people a most eagerly awaited legal development. It is important for these people to understand the underlying Government policy in this area, the criteria for entitlement to a divorce, the types of orders which a court may make in relation to property, and some other practical points also.

1. Government Policy:-

As commentators on recent Irish social history will no doubt confirm, the passage of divorce legislation was adopted not with the hurly burly or furore of radical social change, but rather with a note of resignation. This is quite apt given the personal pain and trauma that is involved in acknowledging the failure of a marriage. For all of us, the decision to marry is the most important decision that we make in our lives. Seeking a divorce is an acknowledgement of the party seeking the divorce that he or she has failed in this fundamental part of their lives. The emotional and psychological damage that this can cause is harrowing in many instances.

The children of such unhappy unions are invariably the victims, especially when used as pawns. Regrettably this often occurs.

Part two of the new legislation seeks to address these problems by imposing on the solicitor the humane duty of advising his Client of the options of counselling and mediation, and furnishing his Client with a list of names of appropriate professionals to assist.

Counselling is sought where the spouses feel that discussion with a third party may help in effecting a reconciliation so that the marriage can subsist. Mediation may assist where both spouses believe that the marriage has irretrievably broken down, but that discussion in a calm atmosphere with a third party may assist in alleviating the trauma of the pending divorce, and also may open the opportunity to agree the terms on which the divorce may proceed.

The value of deliberations with a mediator or counsellor is enhanced by a provision which ensures the total confidentiality of the discussions with this third party. In the event of the breakdown of discussions, or where a successful agreement with a mediator is subsequently recanted, the mediator or counsellor cannot be compelled to give evidence in court in relation to any communications with the parties seeking a divorce.

There can be no doubt that appropriate recourse to either of these processes can only help parties to cope with the sensitive situation in which they find themselves. Naturally there are acrimonious, intransigent or even violent situations where third party assistance is utterly futile.

In addition, the solicitor acing for both parties is obliged to discuss with his Client the possibility of a separation, whether by Deed of Separation or by judicial separation, as an alternative to divorce.

These provisions recognise that the decision to dissolve a marriage is weighty, and all opportunity should be given to the parties to reflect and if possible reconsider the merits of proceeding with a divorce.

2. The Criteria for Divorce:-

However, for many people whose marriages have irretrievably broken down, and especially for those people who find themselves in secure and happy second relationships, the passing of this legislation offers the chance to regularise their personal lives.

A Court may grant a decree of divorce where three requirements are met:-

1. When proceedings seeking a divorce are initiated, the spouses must have lived apart from one another for four years during the previous five years.

2. There must be no reasonable prospect of a reconciliation between the spouses.

3. Appropriate provision must be made for the spouses and any dependants which they may have.

In most cases spouses will establish that they have lived apart from one another by proving that they have resided at different addresses for the requisite period. However, this is not necessarily the only manner of proving this. Spouses may reside under the same roof but still be deemed to be living apart if there is evidence that the parties have ceased to live as man and wife, and effectively live separate lives.

The criterion of requiring four years separation prior to divorce proceedings removes the application for divorce from the realm of attribution of fault for the breakdown of the marriage. While it will remain necessary to a certain extent for the judge to enquire into the marital history, this will be more limited than heretofore, and the trial should consequentially be less distressing.

There is no need for the parties to have a formal Deed of Separation or and Order for a judicial separation in order to proceed to obtain a Decree of divorce. It is possible to apply directly for a divorce, once the four year separation criterion has been met.

The requirement of proper provision for spouses and dependants is of course necessary, but disguises the sad fact that in most cases it is inevitable that all the parties will suffer a diminution in the overall standard of living. The necessity of two separate residences to be maintained and two separate households to be provided for makes this an inescapable consequence.

Property Orders which the Court may make:-

A) Maintenance Pending Suit:-
The Court is empowered in an interlocutory application to make an order requiring one spouse to make periodic payments or pay a lump sum to the other spouse to assist the spouse pending the hearing of the action.

B) Periodical Payments Order:-
A periodical payments order can be made by the Court in favour of either a spouse or a dependant family member. This order ceases to have effect if the spouse in whose favour it is made remarries. This is in effect maintenance by a different name. The court has power to make an attachment of earnings order (where the maintenance debtor's employer is obliged to deduct the maintenance from the earnings of the maintenance debtor, and pay this sum into court for the maintenance creditor to collect) there and then, and does not now have to wait for maintenance debtor default. The maintenance debtor is entitled to make representations as to why an attachment of earnings order should not be made.

B) Secured Periodical Payments Order:-
This type of order is the same as a periodical payments order save that the obligation to make maintenance payments is secured on specific property of (the person ordered to pay the maintenance). This means that in the event that the maintenance debtor fails to meet maintenance payments, it is possible to have recourse to his property, sell it and meet the defaulted payments. Again, this order ceases to have effect if the spouse in whose favour it is made remarries.

C) Lumps Sum Payment or Lump Sum Payments Order:-
The Court has power to order a lump sum payment order or orders in favour of a spouse or a dependant family member. The main reason for the making of such an order is to adjust the capital assets of the parties, where they exist, in order to achieve a distribution of the assets.

D) Property Adjustment Orders:-
These orders can be fourfold:-

a) the transfer of property by one spouse to the other spouse to a dependant child or to a specified person for the benefit of the child.

b) settlement of specified property for the benefit of the spouse an / or a dependant child.

c) variation in favour of either spouse or a dependant child of any ante-nuptial or post-nuptial (eg. separation agreement) agreement made by the spouse.

d) extinguishment or reduction of an interest of either spouse under a settlement.

Property order are made most frequently in respect of the family home and contents, and it is usual for the courts to ally the order with an exclusion order preventing the spouse from entering the former family home.

The court may not make a property adjustment order in favour of a spouse who has remarried.

E) Additional Orders Relating to the Family Home:-
a) The Court may order that one spouse has a right to a life interest in the family home, ie. she shall own the family home for her life, and when she dies, ownership of the property shall revert to the other spouse.

b) A Court may also order that one spouse has a right to reside in the family home to the exclusion of the other spouse.

c) A Court may order that the family home be sold subject to directions in relation to the disposal of the proceeds of sale.

These provisions do not apply in the case of a family home in which either of the spouses, having remarried, ordinarily resides with his or her subsequent spouse. In short, the first spouse can't look to the family home of the second spouse.

F. Pensions in the Context of Marital Breakdown :-
The provisions in relation to pensions apply equally to judicial separation as to divorce, but for simplicity I shall only refer to divorce.

Apart from the family home, very often a spouse's pension entitlement is his most valuable asset. Take for example, a married couple with a family home which, once you take away the value of the mortgage, has a nett value of £60,000. A spouse may have been contributing to a pension scheme for a period of ten or fifteen years and may have an accumulated fund value of £50,000. Up to 1995 the courts had no power to make any orders in relation to a spouse's pension scheme. This has now altered, and the 1995 provisions have been extended to the new divorce legislation.

The new provisions are quite complex and difficult to explain simply. Effectively the legislature have adopted a tack of attempting to put a capital value on the pension scheme, and then reallocating this capital value equitably between the spouses. However, a distinction is drawn in the legislation between a defined benefit scheme and a defined contribution scheme. The former envisages a situation where a retirement benefit is promised, and is calculated by reference to final salary multiplied by years of service. The latter scheme does not promise a specific retirement benefit. Rather the employer promises to contribute a specific amount each year towards the ultimate retirement benefit. Common variations of these schemes depend on whether:-

1. employees are required to contribute to the scheme, and

2. the employee's State pension is taken into account.

The legislation permits an order to be granted which, to use legal parlance, "ear-marks" or "splits" the benefit. "Ear-marking" means that a portion of the accrued pension benefit is re-allocated to the non-member spouse, but within the same pension scheme. There is no separation of assets, but rather when the designated benefit for the non-member spouse will be paid to the non-member spouse when the pension comes into payment in the future. "Splitting" means that either:-

1. a separate pension entitlement is granted to the non-member spouse under the existing pension arrangement, or

2. the designated benefit is transferred out of the existing pension arrangement and into another approved pension arrangement of which the non-member spouse is a member, or

3. the designated benefit is transferred out to an approved insurance policy or contract.

The court must order the "ear-marking" of the designated benefit, but if the non-member spouse should later wish to "split" the pension, there is no need to go to court once more, as the application can be made direct to the trustees of the pension arrangement.

The decision on whether to split or to earmark a pension benefit is then a decision whether to leave the designated benefit in the existing pension arrangement of the member spouse or whether to have the benefit transferred ab initio to the non-member spouse. The pros and cons of whether to split or to earmark a pension benefit will obviously need to be teased out in each individual case.

Having said this though, in general terms, a non-member spouse would be generally better served to leave the designated benefit as "ear-marked" where the pension arrangement is a defined benefit scheme. This is because the pension entitlement in this scheme is dependent on the final salary.By leaving the designated benefit in the member spouse's pension scheme, the non-member spouse will get the benefit of the member spouse's salary increases up to the date of the final salary.

However, where the member spouse's pension scheme is a defined contribution scheme, generally the non-member spouse will be better off proceeding to "split" the designated benefit, as there is no need for her already accrued benefit to be subject to the vagaries of whether the member spouse will continue in service until the date of retirement or whatever.

Reference is made in the legislation to Pension Board Guidelines. These are not available as yet, but will be soon. The guidelines will clarify much of the procedural requirements for this novel aspect of family law jurisdiction.

It should be noted that the court may order a spouse to effect a policy of life insurance in favour of the other spouse in lieu of her foregoing the opportunity of acquiring a benefit (eg. under a pension scheme), or otherwise to secure the spouse's financial security.

Relevant Factors:-

While the court is generally empowered to take into account the circumstances that exist or will exist in the foreseeable future in respect of the spouses and their dependants, a number of useful indicators are listed in the legislation which assist in assessing the probable attitude of the courts in a set of given circumstances:-

a) the income, earning capacity, property or other financial resources of both spouses presently and into the future.

b) the financial needs, obligations and responsibilities of both spouses now and into the future.

c) the standard of living enjoyed by both spouses before the proceedings were instituted, or before they commenced to live apart.

d) the age of the spouses, and the length of time they lived together.

e) any relevant physical or mental disability.

f) contributions each of the spouses has made or will make in the future to the welfare of the family (including looking after the family home or caring for the family).

g) the effect on future earning capacity of the spouses due to assuming marital responsibilities (eg. where a spouse may have given up his or her employment in order to care for the family).

h) statutory income or benefits to which either of the spouses is entitled.

i) conduct of each of the spouses, if it would be unjust to disregard it.

j) accomodation needs of the spouses.

k) value of a benefit to a spouse which by virtue of the divorce the spouse will forfeit.

l) rights of third parties (including persons to whom the spouses may have remarried).

Many of these considerations also apply in the case of order which the court may make in favour of a dependant.

A problem which many initial applicants will face is the extent to which a court will take into account the provisions of a Deed of Separation or the terms of a judicial separation that already exist between the spouses.

The courts are already obliged to take into account the terms of a Deed of Separation, and no doubt will also carefully consider the terms of a judicial separation, given that judicial separations have already received careful consideration of the court. However, divorce, unlike separation, has an increased importance, as it is enshrined in our Constitution, which is the pinnacle of the legal hierarchy. Courts now have the heavy duty to read through settlements to ensure they adequately protect the interests of the children and spouses. Having said that, in most circumstances, the court will be quite happy merely to rubber stamp the previous arrangements.

However, what will the situation be, for instance where one of the spouses has hit on hard times since the time of the judicial separation? Undoubtedly, the court will be inclined to give assistance where possible to such persons, and the terms of an existing deed of Separation or judicial separation will be readily altered.

To turn this matter on its head, what of the unlikely and rare situation where on of the spouses' financial position has improved since the time of the separation? Looking at the above factors, one's attention is drawn to the factor that the court must have regard to the standard of living enjoyed by both spouses while they were living together. This would seem to place a cut-off date for consideration on when the spouses commenced to live apart. It is likely, provided that both spouses enjoy reasonble standards of living, that unforeseeable good fortune by one spouse will not enure to the benefit of the other spouse where that increased wealth arose after the date of separation.

In circumstances where the application to Court is made without a prior Deed of Separation or a judicial separation, the Court will take the opportunity to examine all the circumstances. Previously, the court was more inclined to examine the contributions which each spouse made, financially or otherwise to the family, in making its orders. In light of the trend away from examining the history of the marriage, the courts are more likely now to look at the whole situation in an equitable light, and to share out the property available as seems fair in the circumstances, and regardless of contributions made.

It is interesting to note that the Court is entitled to look at the conduct of the parties. However, given the coloured views of both parties, and the high emotions that are involved in divorce applications, usually the courts are loathe to examine the history of the parties as this accords with attributing fault for the breakdown of the marriage. However, it is equally true to say that the court would not like to be seen to reward reprehensible conduct, and where there is evidence of such conduct, it will take it into account in its orders.

Other Practical Matters:-

A. Taxation:-
In relation to income tax, formally separated spouses have had the right to elect to be assessed separately or jointly. A divorced spouse will not have this option, save for the tax year in which the decree of divorce is granted, and must be assessed for income tax separately. Maintenance paid on foot of a court order in a divorce action is tax deductable by the person who is paying it, and is assessed as income in the hands of the person who receives it.

Insofar as they arise from the order of the court in a divorce case, any liability between spouses to capital gains tax, capital acquisitions tax, and stamp duty is not chargeable. However, any other transfer of assets giving rise to capital taxes problems will not attract any spousal exemptions. This will be unfortunate for those spouses who, though they may be divorced, remain on amicable terms, and may wish to make provision for each other as time passes on.

B. Court Procedures:-
Court Procedures for the bringing of divorce actions have not been agreed, but are due to be published soon by the Circuit Court Rules Committee. No doubt, they will not differ substantially from the provisions for judicial separation.

C. Social Reports:-
The Court has the power to order the procuring of a report on any question affecting the welfare of a party to the proceedings (ie. spouse) or of any person to whom they relate (eg. child). The report can be prepared by a probation and welfare officer, a person nominated by the health board, or any person who may be specified in the court order. The report when prepared is shared amongst the parties to the proceedings and any person to whom it relates. The costs for preparing the report are at the discretion of the Court. This is a jurisdiction to order that a social report is prepared, and has been with us since the Family Law Act 1995. Prior to that legislation, the Court could only order a social report concerning the welfare of a child in guardianship proceedings. Interestingly, now, the Court may also order that a social report be prepared in respect of a spouse. The person whose welfare is to be assessed has the right to make submissions to the Court prior to the ordering of a report. One suspects that the objections of a spouse to a report being prepared on him would weigh somewhat heavily on the Court, and it would be slow to order a report over the wishes of that spouse, save in persuasive circumstances.

This provision is a very necessary safeguard in assisting the Court to protect the welfare and interests of the spouses and issue of a marriage. However, this provision, as with the provisions in relation to counselling and mediation, falls short of real assistance. Frequently, the very cases which require counselling, mediation or social reports, are the cases where the parties involved do not have the resources to pay for them. There is a real and pressing need for this cost to be provided out of public funds.

D. The Relevance of Deeds of Separation and Judicial Separation:-
While most people would be anxious to be able to apply directly for a divorce, there is substantial continued relevance to Deeds of Separation and judicial separation. It must be remembered that the spouses must have lived separately for four years before an application can be made for divorce. Most if not all spouses will require some provision to made in their favour at least until this period has elapsed.

Deeds of Separation allow for an agreed settlement of the grounds on which the spouses can choose to live apart. It is binding on both paties, and in the case of maintenance provisions, arrears can be sued as contract debts. Obviously amicable resolution of difficulties is best.

However, in the absence of agreement, judicial separation allows recourse to all of the above property orders. It should be noted that different grounds apply for the application for a judicial separation, but the ususal ground is that there has been an irretrievable breakdown of normal marital relations for a period of at least one year.

E. Legal Aid:-
The Legal Aid Board provide legal aid and advice in civil cases to persons who satisfy the requirements laid down in the Civil Legal Aid Act 1995. These criteria are basically twofold. Firstly, you must satisfy a means test. Secondly, the Legal Aid Board must be convinced that there is a reasonable prospect for the success of the case.

The Board makes the services of solicitors and barristers available to people of moderate means at little cost. The service includes anything from writing a solicitor's letter on your behalf to representing you in court proceedings. Most of the Legal Aid Board's work concerns family law matters.

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