D v D(3) (Approved)

Factual and Procedural Background

This judgment arises from proceedings under the Judicial Separation and Family Law Reform Act 1989 and the Family Law Act 1995, concerning an application for variation of maintenance made by the Applicant ("Mr D") against the Respondent ("Ms D"). The original judgment was delivered in January 2023 following a hearing where the Applicant gave evidence found to be patently false. The case involves serious concerns regarding the Applicant's conduct as a director of Company A, including unauthorized use of company funds for personal entertainment, irregular accounting, and failure to regularize tax and corporate governance matters in his home country.

Following the original judgment, the Applicant declared bankruptcy in his home country, a process which involves self-reporting of assets and liabilities to an insolvency service. The court has noted discrepancies and deficiencies in the Applicant's financial disclosures and expressed concern about the Applicant's use of the in camera nature of these proceedings potentially to conceal wrongdoing. The Respondent disputes the Applicant's claims, alleging non-compliance with court orders, failure to pay maintenance and vouched expenses, and ongoing frustration of the court's orders, including failure to cooperate with bankruptcy trustees.

The court is now considering whether to vary the maintenance order in light of the Applicant's bankruptcy and current financial circumstances.

Legal Issues Presented

1. Whether the Applicant's adjudication of bankruptcy in his home country constitutes sufficient ground to vary the existing maintenance order under section 18 of the Family Law Act 1995.
2. Whether the Applicant's financial disclosures are adequate and reliable to justify a variation of maintenance.
3. Whether suspension (as opposed to extinguishment) of maintenance obligations is appropriate during the bankruptcy process.
4. The extent to which the court should consider the Applicant's past untruthfulness and ongoing conduct in assessing the application.
5. The court's discretion regarding publication of judgments and disclosure of court records in light of the Applicant's presumption of innocence in his home country.

Arguments of the Parties

Applicant's Arguments

• The Applicant contends that his adjudication of bankruptcy in his home country justifies a variation of the maintenance order, asserting that compliance with the existing order is impossible under his current financial circumstances.
• He asserts that he has made best efforts to comply with the court orders.
• The Applicant disputes allegations of non-cooperation with bankruptcy trustees and denies wrongdoing in the bankruptcy proceedings.
• He suggests that some of his prior financial conduct involved director loans rather than unauthorized personal expenditures.
• The Applicant expresses a desire for a consensual resolution with the Respondent, albeit implying that such resolution might overlook regulatory breaches.

Respondent's Arguments

• The Respondent argues that the Applicant has wholly failed to comply with the court's maintenance orders, including payments for vouched expenses related to the children’s educational and dental needs.
• She contends that the bankruptcy process in the Applicant's home country is a self-referral procedure without detailed scrutiny, and thus the bankruptcy adjudication cannot be relied upon as a finding of a court or tribunal for the purposes of varying the maintenance order.
• The Respondent alleges that the Applicant has frustrated the implementation of the court's orders by refusing to cooperate with bankruptcy trustees and continuing to be involved in Company A’s affairs, which may be a criminal offence.
• She claims ongoing financial hardship, including homelessness, and asserts that the Applicant's bankruptcy was designed to frustrate the court’s orders and prevent proper provision for her and the dependent children.
• The Respondent disputes the Applicant's financial disclosures and highlights inconsistencies and deficiencies in his affidavit of means.

Table of Precedents Cited

Court's Reasoning and Analysis

The court began by reaffirming that the Applicant's prior falsehoods severely undermine the reliability of his financial disclosures. The court noted the serious misconduct by the Applicant as a director of Company A, including unauthorized use of company funds, irregular accounting, and failure to regularize tax liabilities. The Applicant's bankruptcy in his home country was examined in detail, with the court observing that the process is largely self-reported and lacks rigorous scrutiny at the initial stage, relying heavily on the honesty of the applicant.

The court found the Applicant's affidavit of means to be highly deficient and inconsistent with insolvency papers, further compromising its reliability. The court also expressed concern that the Applicant might be using the confidentiality of these proceedings to conceal wrongdoing and impede justice.

In considering the application to vary maintenance, the court concluded that the mere fact of bankruptcy adjudication does not automatically justify variation given the nature of the bankruptcy process and the deficiencies in the evidence. The court emphasized the need to protect the interests of the Respondent and dependent children, particularly regarding medical and dental expenses, which must continue to be met.

Balancing these factors, the court decided to suspend (not extinguish) the Applicant's obligation to pay maintenance above €3,000 per month for a limited period (either the duration of the bankruptcy process or six months), allowing time for the bankruptcy process to progress and for a reassessment thereafter.

The court rejected the Applicant’s argument that he was ordered to do the impossible, finding no basis to conclude that compliance with the maintenance order was presently impossible. The court also addressed the Applicant's attempt to re-litigate findings from the original judgment and found no error in that judgment.

Regarding publication of judgments, the court acknowledged the Applicant's presumption of innocence in his home country but noted that the Applicant had not progressed resolution of his affairs as anticipated. The court proposed publishing the judgments with appropriate anonymization and hearing the parties on any concerns about publication or disclosure of court records to bankruptcy trustees or authorities.

Holding and Implications

The court REFUSED TO VARY the existing maintenance order at this time. Instead, it SUSPENDED the Applicant’s obligation to pay maintenance in excess of €3,000 per month for a defined limited period (the shorter of the bankruptcy duration or six months), without extinguishing any outstanding liabilities.

This decision balances fairness to both parties by acknowledging the Applicant's bankruptcy status while protecting the Respondent’s and children’s interests. The court confirmed that medical and dental expenses must continue to be met by the Applicant. The suspension allows the bankruptcy process to proceed and provides a mechanism for reassessment of maintenance obligations thereafter.

No new legal precedent was established; rather, the court applied existing principles with careful consideration of the unique facts, including the nature of the bankruptcy process in the Applicant’s home country and the Applicant’s history of untruthfulness.