H v H

JurisdictionCayman Islands
CourtGrand Court
Judge(Graham, J.)
Judgment Date13 December 1999
Date13 December 1999
Grand Court

(Graham, J.)

H
and
H

N.A.J.G. Mostyn, Q.C. and D.T. McGrath for the petitioner;

J. Turner, Q.C. and Mrs. L.D. DaCosta for the respondent.

Cases cited:

(1) Conran v. Conran, [1997] 2 FLR 615; [1997] Fam. Law 724, applied.

(2) Dart v. Dart, [1996] 2 FLR 286; [1997] 1 F.C.R. 21, dicta of Thorpe, L.J. applied.

(3) Duxbury v. Duxbury, [1992] Fam. 62; [1990] 2 All E.R. 77; [1987] 1 FLR 7, considered.

(4) Gojkovic v. Gojkovic, [1990] 2 All E.R. 84; [1990] 1 FLR 140, dicta of Butler-Sloss, L.J. applied.

(5) H v. H, (Financial Provision: Capital Allowance), [1993] 2 FLR 335; [1993] F.C.R. 308.

(6) Miller v. Miller, 1980–83 CILR N–6, applied.

(7) Newton v. Newton, [1990] 1 FLR 33; [1989] F.C.R. 521n, dicta of Sir Roualeyn Cumming-Bruce applied.

(8) O”D v. O”DELR, [1976] Fam. 83; sub nom. O”Donnell v. O”Donnell, [1975] 2 All E.R. 993, applied.

(9) Wells v. Wells, [1997] 1 W.L.R. 652; [1997] 1 All E.R. 673; on appeal, [1999] A.C. 345; [1998] 3 All E.R. 481, observations of Thorpe, L.J. applied.

(10) White v. White, [1998] 4 All E.R. 659; [1998] 2 FLR 510, observations of Thorpe, L.J. applied.

Legislation construed:

Matrimonial Causes Law (1997 Revision) (Law 9 of 1976, revised 1997), s.19: The relevant terms of this section are set out at page 563, lines 41–45.

s.22: The relevant terms of this section are set out at page 564, lines 2–13.

Family Law-financial provision-lump sum-if assets considerable, starting point for award is wife”s reasonable needs, not specific percentage-lump sum may be calculated by ‘Duxbury’ calculation-future changes in parties” circumstances may be taken into account, but no later variation-award to wife not to cripple husband”s business and husband to be given sufficient time to pay

Family Law-financial provision-means of parties-wealthy spouse bears burden of showing assets less than asserted by applicant-necessary to call financial evidence-parties” likely costs to be ignored when assessing means-financial value of intended remarriage to be taken into account

A wife applied for ancillary relief in divorce proceedings.

The parties had been married 30 years and had two grown-up children. The wife had worked continuously for a Cayman bank during the marriage. The husband was an electrical technician who owned the majority shareholding in the family business and a valuable franchise. The acquisition of his present business premises had been financed by loans from the bank. The wife had for many years made a significant contribution to her husband”s business in the form of secretarial, administrative and cleaning work, until relations between them began to break down. The husband”s income from his business interests far exceeded that

of the wife from the bank. She would receive a small pension upon retirement some years hence.

The parties had purchased the matrimonial home with the aid of a mortgage at a preferential rate from the bank, and also owned two other houses, one inherited by the husband, and another built on land given to them by the husband”s father, and the land adjacent to it, bought with savings. Two of these houses were let out whilst the parties lived together, and the wife moved into one upon their separation. Their two children now lived there with her and contributed to the living expenses. Together with another family member, the wife had funded one child through a higher education course and had paid for the wedding of one of them. The husband remained in the matrimonial home.

The husband owned a boat and several cars and the wife owned a car given to her by the husband. The value of the husband”s boat, the matrimonial home and the family business were disputed. The husband planned to remarry, and both parties expressed a wish for a clean break.

Held, making the following orders:

(1) Since the true value of assets could only be ascertained upon their sale, and therefore valuations put forward by the parties” experts were at best educated guesses, the court was entitled to adopt a figure between the two ‘mid-range’ valuations suggested by the experts. In valuing the husband”s business premises, the court had identified a range of values by taking an average from the different methods of valuation agreed between the experts, and adopted a figure within that range, taking into account land inflation and depreciation in the value of the fabric of the building (page 559, lines 8–13; page 559, line 37 – page 560, line 41).

(2) Since the assets to be divided were considerable, the court”s starting point was to be the wife”s reasonable needs rather than a pre-determined fraction of the total assets. This could be calculated in terms of the total income-generating capital sum needed to meet her necessary annual expenditure, given her life expectancy and taking into account her pension entitlement and other relevant circumstances. This approach (a Duxbury calculation) was a guideline, derived from English authority, rather than a rule. Whilst the calculation could take into account future potential changes in circumstances, the lump sum arrived at, unlike periodical payments, would not allow for a variation in receipts, e.g. following the wife”s retirement or in response to a change in the husband”s business fortunes (page 561, line 41 – page 562, line 36).

(3) The court would also have regard to the parties” direct and indirect financial contributions to the marriage on an equal basis. In particular, although the bulk of the capital had been provided by the husband, the wife had made a valuable contribution in services to the family business

and by financially assisting their children. It was for the husband, as the more wealthy party and potential payer, to show that his means were less than asserted by the wife, as he claimed, by calling evidence from his accountant and/or bank manager. The probable benefits to him from his remarriage (in terms of benefits from his future wife”s employment and domestic services) were to be taken into account. However, the court had to ensure that its award to the wife was not so onerous as to endanger the husband”s business, and that he was given sufficient time to pay. The parties” costs were a matter for them, and would not be deducted from the assets before division was made (page 557, lines 3–13; page 562, line 37 - page 563, line 31; page 564, lines 21–41).

(4) In accordance with these principles, but bearing in mind that under the Matrimonial Causes Law (1997 Revision) the Grand Court was guided by the deserts of the parties as well as their financial resources, responsibilities and earning capacities, the husband would be ordered to transfer to the wife the title of the house in which she was living and pay her a lump sum, which together with the value of the house and its adjacent land amounted to 35.3% of the total assets. This award might not permit her to remain in the house indefinitely but would allow her to buy a smaller property and invest the remainder for her retirement. The lump sum was to be paid in two instalments within one year of the order. The wife would be ordered to transfer her minority shareholding in the business to the husband (page 563, line 32 – page 564, line 18; page 564, line 44 – page 565, line 29).

GRAHAM, J.:
Introduction
The parties, to whom I shall refer as ‘husband’ and ‘wife,’ are respec
15 tively aged 50 and 51. They were married on April 11th, 1969 and had
two children together. One is now aged 30 and the other is aged 24. The
wife worked for what is now known as the Scotia Bank from the birth of
the first child until the present time. There was a break at the time of the
birth of the second child, but she returned to work relatively soon
20 thereafter.
The husband qualified as an electrical technician, and in 1977 set up a
business with a partner in the electronics field. That company went into
liquidation in 1981, after which he set up his present company, ‘I.E.L.’
Of the 100 issued shares, he held 98 and his brother and his wife held the
25 other 2. He expanded the business from his own resources and loans. In
1972 he inherited 18.75% of the equity of H.L. Co., an office block in
central George Town. In 1981 he inherited a further share of the equity in
that company bringing his total share to 38%. He founded I.E. (S. & M.)
Ltd. in 1996 with the same shareholding arrangement as I.E.L.
30 In April 1990, the husband inherited the family home in Bodden Town.
The then matrimonial home at Whitehall Estates, which was built on a
plot donated to the parties by the husband”s father, was let for a time and
the parties lived together in the family home in Bodden Town. A building
plot adjacent to the Whitehall Estates house was bought by the parties out
35 of their savings in or about 1980. Around that time, the husband bought
his first boat out of his inheritance topped up with a loan.
In 1990 I.E.L. bought part of its present premises in the industrial area
of George Town. It was financed by a loan from the bank in which the
wife worked and still works. He also sold some of his mini-warehouses to
40 finance the purchase. It is quite obvious to the court that he was treated as
a valued customer, not only because of his own credit rating, but also
because of his wife”s trusted position at the bank.
In December 1991 a house was bought at Jellicoe Quay, Governor”s
Harbour, George Town. A mortgage was raised to finance this purchase.
45 The wife was able to secure part of the mortgage (now standing at
$82,000 at a preferential rate) as a staff member. Both the husband and
the wife benefited from this situation. The parties then moved into their
new matrimonial home and both the Bodden Town property and the
Whitehall Estates property were let. A
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