G v G

JurisdictionCayman Islands
Judge(Henderson, J.)
Judgment Date05 May 2010
CourtGrand Court (Cayman Islands)
Date05 May 2010
Grand Court, Family Division

(Henderson, J.)

G
and
G

D.T. McGrath for the petitioner;

Ms. S. Brooks for the respondent.

Case cited:

(1) Gojkovic v. Gojkovic (No. 2), [1992] Fam. 40; [1991] 3 W.L.R. 621; [1992] 1 All E.R. 267; [1991] 2 FLR 233; [1991] F.C.R. 913, applied.

Family Law-financial provision-offer to settle-Calderbank letter-offer to settle not revealed to court until after decision made-if declined and court”s award less or equally favourable, offeror may be awarded costs and not required to pay offeree”s-offeree should be given reasonable time to consider

Family Law-financial provision-costs-prima facie position that costs follow event easier to displace in matrimonial cases-costs usually only awarded if assets substantial-reasonable failure to respond to Calderbank letter not to result in costs award-reasonable not to respond if disclosure unsatisfactory and only made shortly before hearing

The petitioner/wife sought financial provision from the respondent/husband in divorce proceedings.

The parties had lived together in their matrimonial home for a number of years. After their separation, the husband continued to live in the matrimonial home, whilst the wife moved abroad. The matrimonial home was subsequently damaged by a hurricane, and was left without utilities for some time. Nonetheless, the husband continued to live there, and carried out repairs for which he paid himself, the deductible amount of his insurance policy exceeding the costs of the repairs. He then transferred

most of the matrimonial assets to a company he owned without consulting the wife.

The Grand Court (Quin, J.) ordered that the husband disclose to the wife various financial details, which he did but without giving a detailed explanation as to certain payments he had made. He also sent her a letter, marked ‘without prejudice save as to costs,’ making her an offer of settlement, which she did not accept. The Grand Court (Henderson, J.) made her an award, the value of which was considerably lower than the husband had offered in his letter. The award included deductions (a) of three months” notional occupation rent of the matrimonial home, representing the three months after the hurricane during which the house was without electricity; (b) for house insurance; and (c) for the costs incurred repairing the house.

The wife applied to amend the order, submitting that (a) the husband should not be permitted to deduct three months” rent for the period after the hurricane since the house was not uninhabitable, as shown by the fact that he continued to live there; and (b) he should not be permitted to deduct the costs he incurred repairing the house, since he had already made a deduction for the cost of the house insurance policy. She further submitted that he should not be awarded costs, since (c) he had failed to explain certain payments he had made; (d) some of his disclosure was only provided on the morning of the hearing; (e) her failure to respond to his letter was therefore reasonable; and (f) costs should not be deducted from her award, as it was not ‘substantial.’

The husband submitted in reply that his deductions from the settlement were appropriate, since (a) the living conditions in the house during the three months after the hurricane justified a deduction of notional rent from the award; and (b) he had not claimed for the costs of repairs from his insurance policy, since the policy”s deductible amount exceeded the costs of repairs. He further sought to recover his costs, submitting that (c) the wife had unreasonably failed to respond to his offer; and (d) since the offer was more favourable to the wife than the court”s award, he was entitled to costs.

Held, allowing the wife”s amendment applications in part and dismissing the husband”s costs application:

(1) The wife”s award would be increased. The husband would not be permitted to deduct three months” notional rent from the award for the period after the hurricane, since it had not been rendered uninhabitable (indeed, he had continued to live there), and the notional rent payable for that period would therefore be halved instead. His deductions for the costs of repairs to the matrimonial home following the hurricane would be allowed, however, notwithstanding that he had also deducted the cost of house insurance, since the policy”s deductible amount exceeded the cost of the repairs (paras. 2–4).

(2) The husband would not be awarded costs. In matrimonial cases, costs would prima facie follow the event. However, the court”s discretion

was wide, and costs would only usually be awarded at all if the assets involved were substantial. If a party failed to respond to a Calderbank letter-a written offer to settle ‘without prejudice save as to costs,’ only revealed to the court after judgment-offering a settlement equal to or more favourable to the offeree than the court”s award, the court could potentially award the offeror his costs and not require him to pay the offeree”s. This would encourage parties to compromise and settle. However, the parties” behaviour-including particularly the disclosure of material documents-would be a relevant consideration, and the offeree should be given reasonable time to consider the offer. In the circumstances, although the offer was more favourable to the wife than the court”s award, her failure to respond was reasonable. Since the husband had transferred most of the matrimonial assets to a company he owned without consulting her, and a long time had passed since the separation, he came under a heavy burden of disclosure. However, he had failed to give a satisfactory explanation...

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