Does a ‘full and final settlement’ in a deed of separation or on Consent Terms in a judicial separation actually mean what it says?
In other words, can either party get a ‘second bit of the cherry’ at the time of divorce?
Firstly, the Courts are obliged under section 20(3) of the Family Law (Divorce) Act, 1996 to ‘have regard’ for any separation agreement entered into:
(3) In deciding whether to make an order under a provision referred to in subsection (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.
However, this does not prevent Courts from making further additional provision to ensure ‘proper provision’ for spouses and dependent children as has been seen in various decided cases and the Supreme Court has found that Courts have ‘very broad discretion’ in these cases.
Section 14 of the Family Law (Divorce) Act, 1996 allows for property adjustment orders to set aside the terms of previous agreements to ensure proper provision at the time of divorce.
Courts have been seen to vary in what weight they attach to previous agreements but the following general points can be made:
- Courts will have regard to prior agreements and the circumstances of that time;
- Courts’ ability to make proper provision for spouses and dependent children cannot be ousted by a deed of separation or consent terms in judicial separation;
- The court will consider the financial resources of both parties at the time of divorce;
- More recent settlements will have greater weight than older ones as the circumstances of both parties are less likely to have significantly changed;
- A full and final settlement reached at the time of divorce will have greater weight than one reached on judicial separation;
- Courts may be less likely to intervene where generous provision was made for the less wealthy spouse in a prior settlement;
- Prior settlements are more likely to be revisited where proper disclosure was not made at the time
- The source of assets of the marriage, for example inherited assets introduced by one spouse to the marriage, will carry some weight.
All of these cases tend to be decided on the particular circumstances of each case so hard and fast guidelines or rules are difficult to arrive at.
Supreme Court, G v G Case
The Supreme Court made a significant ruling in 2012 when it decided the “G v G” case. This case looked at the question of how much weight or regard should be given to a previously agreed deed of separation when it comes to divorce time.
The Supreme Court made the following determinations:
- A deed of separation should be given significant weight when it comes to making provision for the parties at a later divorce hearing, especially when the deed of separation contains a “full and final settlement clause”; exceptional circumstances would be needed for a court to upset the separation agreement freely entered into-for example, substantial change such as the illness of one of the parties
- A clean break is a legitimate aspiration in Irish law, but it is not a guaranteed right and “proper provision” may see a change in circumstances being reflected in the final divorce ruling provisions
- Inherited assets should not be seen as assets obtained by both parties in the marriage
“Second bite of the cherry” cases have become more difficult as a consequence of this Supreme Court decision and parties can enter into deeds of separation which contain full and final settlement clauses with greater confidence that they will not be overturned later on.