B-H v H

• Jurisdiction: Cayman Islands
• Judge: (Foster, Ag. J.)
• Judgment Date: 07 April 2009
• Court: Grand Court (Cayman Islands)
• Date: 07 April 2009

Grand Court

(Foster, Ag. J.)

B-H

and

H

Mrs. G.E. Nervik for the petitioner;

S.T. McCann for the respondent.

Cases cited:

(1) Charman v. CharmanUNK(2007), 9 ITELR 913; [2007] 2 F.C.R. 217; [2007] 1 FLR 1246; [2007] EWCA Civ 503, applied.

(2) Doak v. Doak, 2002 CILR 224, referred to.

(3) Ebanks (L.A.) v. Ebanks (K.D.), 1992–93 CILR 294, referred to.

(4) Miller v. Miller, [2006] 2 A.C. 618; [2006] 2 W.L.R. 1283; [2006] 3 All E.R. 1; [2006] 2 F.C.R. 213; [2006] 1 FLR 1186; [2006] UKHL 24, applied.

(5) Nike Real Estate Ltd. v. De Bruyne, 2002 CILR 389; further proceedings, 2002 CILR 31, referred to.

(6) R. v. R, [1992] 1 A.C. 599; [1991] 3 W.L.R. 767; [1991] 4 All E.R. 481, referred to.

(7) Uzzell v. Uzzell, 2001 CILR N[12], distinguished.

(8) Wachtel v. Wachtel, [1973] Fam. 72; [1973] 1 All E.R. 829, referred to.

(9) White v. White, [1998] 4 All E.R. 659; [1998] 2 FLR 510; on appeal, [2001] 1 A.C. 596; [2000] 3 W.L.R. 1571; [2001] 1 All E.R. 1; [2000] 2 FLR 981; [2000] 3 F.C.R. 555, applied.

(10) Wight v. Wight, 2006 CILR 1; further proceedings, 2006 CILR 416; on appeal, C.A., November 30th, 2007, unreported, applied.

Legislation construed:

Matrimonial Causes Law (2005 Revision), s.19: The relevant terms of this section are set out at para. 15.

s.21: The relevant terms of this section are set out at para. 15.

Family Law-financial provision-discretion of court-when dividing matrimonial assets, factors to be considered by court under Matrimonial Causes Law, s.19 not in hierarchy of significance, except best interests of children of marriage always first consideration-weight to be attached to them depends on particular circumstances of case-principles not to apply solely to ‘big money’ cases

Family Law-financial provision-equality-when dividing matrimonial assets under Matrimonial Causes Law, ss. 19 and 21, court to strive for equality and only depart from it if good reason to do so such as special contribution by party

Family Law-financial provision-matrimonial property-assets acquired before marriage-property acquired by one party prior to marriage and remaining in his name not necessarily non-matrimonial property-e.g. may be matrimonial property if used during marriage to benefit both parties as matrimonial home or to raise money for joint ventures-equally, not all property brought into marriage automatically subject to division

Family Law-financial provision-matrimonial property-factors-when court determining what constitutes matrimonial property for purpose of division, factors to consider include circumstances and timing of acquisition; parties” contributions; their intentions; its use during marriage; and

organization of their financial affairs-not to be considered with hindsight but at time of relationship

On divorce, the petitioner/wife sought an order for the division of the matrimonial property and for maintenance to be paid by the respondent/husband for the children of the marriage.

The parties had been married for 12½ years and had two children. They had brought properties of their own into the marriage and during the marriage they acquired a number of other properties, including apartments, houses and office space, as well as establishing and taking over several businesses. The wife had established her own law firm and the parties had also incorporated several real estate companies. They had kept their financial affairs separate throughout the marriage, each with his/her own personal current accounts through which they received their incomes and out of which they paid their own expenses. They also conducted their businesses informally, failing to keep detailed financial records and not distinguishing their own income/expenditure from that of their firms and companies, so that in effect they carried on business as sole traders rather than through the firms. The wife”s petition on the ground of the husband”s unreasonable behaviour was not contested and she sought the division of their assets.

She submitted that (a) the properties she had brought into the marriage were not matrimonial assets because they had always been and remained her own property and the respondent had made no contribution towards their purchase; (b) the property that her husband had brought into the marriage should be deemed a matrimonial asset because it had been rented out to raise money to benefit the family generally; and (c) the court should have regard to (i) her needs, because she would earn considerably less than her husband in the future; (ii) the special contribution she had made to the accumulation of the matrimonial assets, by bringing two unencumbered properties into the marriage, in caring for the children and the importance of her law firm and reputation in financing their joint projects; (iii) her responsibilities as principal carer of the children which would reduce her future earning potential; and (iv) the conduct of her husband, who had dissipated matrimonial funds through extravagant expenditure and the paying of his liabilities, transferred assets of their companies without her knowledge or consent to his solely-owned company and his failure to provide full disclosure of his assets when ordered to do so by the court. She submitted that when taking these factors into account, she should be entitled to a larger proportion of the matrimonial property. Finally, she sought to formalize the maintenance for her children in fixed monthly payments for practical convenience and to minimize future disputes.

The husband submitted in reply that (a) the property he had brought into the marriage should be not taken into account; (b) he had made valuable contributions to the wife”s properties, which should be deemed matrimonial assets, since matrimonial funds had been used to pay for their

utilities and the making of mortgage repayments and, moreover, they had been jointly used by the parties-to live in as matrimonial homes and to raise income to acquire other properties; and (c) to ensure a fair division the court should bear in mind that (i) he would have similar financial needs of his own and the same concerns about retirement in due course; (ii) his wife had made no special contribution that it would be inequitable to disregard but instead he had done so through his real estate experience and business acumen; and (iii) the wife”s conduct after their separation, by seeking to freeze the accounts and withdrawing the trading licences of two of their companies, trying to terminate the husband”s employment and aiding legal proceedings brought against one of the companies, was detrimental to the matrimonial property. The husband also submitted that the claim for child maintenance payments was excessive and unjustified and sought a variation of the existing order.

Held, ordering a broadly equal division of the matrimonial assets, together with maintenance for the children:

(1) When ordering the division of matrimonial property pursuant to s.21 of the Matrimonial Causes Law, the court would first have to determine what constituted ‘matrimonial property.’ It would need to have regard to all the circumstances, including the circumstances and timing of the acquisition of the property, the parties” contributions, their apparent intentions with regard to and the use of the property during the marriage and how they organized their financial affairs. It was important not to look at the situation with hindsight but to consider these circumstances at the time the relationship existed. It did not automatically follow that, because property had been acquired by one party prior to the marriage and the title remained in the name of that party, it would not be possible for it to have become matrimonial property. Equally, it would also follow that not all property brought into the marriage would become automatically subject to division. Non-matrimonial property would not be irrelevant to the ordering of financial provision, however, because it would have to be taken into account when assessing the owner”s needs (paras. 22–25).

(2) The present parties” attitude to income and expenditure during the marriage showed that they had seen their relationship as a partnership. Even though they had not generally pooled their moneys and had never had a joint current bank account, their earnings prior to separation would be treated as matrimonial income. Viewing their relationship as a partnership meant that their businesses and 10 of their properties would be categorized as matrimonial assets. These included the 3 properties brought into the marriage, since they had both benefited from them-as matrimonial homes and using them to raise money to finance the acquisition of other properties-and spent money on them, they had during the marriage generally treated them as assets for the benefit of both of them. They would therefore be treated as matrimonial assets subject to division, even though some of the properties were held in only one of their names (paras. 33–35; paras. 39–41; para. 44; paras. 47–49; para. 52).

(3) Having identified and valued the matrimonial assets, the court then had to determine, when exercising the wide discretionary powers conferred by ss. 19 and 21 of the Matrimonial Causes Law, what would be the fairest distribution between the husband and the wife in all the circumstances. The court would strive for equality and only depart from it when there was a good reason to do so. The factors the court would be required to consider under s.19, apart from the best interests of any children of the marriage (which were always the first consideration), were not stated in any hierarchy of significance. The weight or importance to be attached to them depended upon the circumstances of the particular case. Moreover, these principles did not solely apply to ‘big money’ cases involving substantial assets, though, given the total value of matrimonial assets in this case (more than...