K v K

• Jurisdiction: Cayman Islands
• Judge: (Goldring, P., Field and Moses, JJ.A.)
• Judgment Date: 21 December 2017
• Court: Court of Appeal (Cayman Islands)
• Date: 21 December 2017

Court of Appeal

(Goldring, P., Field and Moses, JJ.A.)

K

and

K

S. Harrison, Q.C. and K. Cox for the appellant;

D. McGrath for the respondent.

Cases cited:

(1) B v. S (Financial Remedy: Marital Property Regime), [2012] EHWC 265 (Fam); [2012] 2 FLR 502, referred to.

(2) H v. H, [2007] EWHC 459; [2007] 2 FLR 548; [2008] 2 F.C.R. 714, referred to.

(3) McTaggart v. McTaggart, 2011 (2) CILR 366; further proceedings, 2015 (1) CILR 123, followed.

(4) Martin-Dye v. Martin-Dye, [2006] EWCA Civ 681; [2006] 1 W.L.R. 3448; [2006] 4 All E.R. 779; [2006] 2 FLR 901, referred to.

(5) Maskell v. Maskell, [2001] EWCA 856; [2003] 1 FLR 1138; [2001] 3 F.C.R. 296, referred to.

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

(7) Northrop v. Northrop, [1966] 3 All E.R. 797, referred to.

(8) P (Child), Re, [2003] EWCA Civ 837; [2003] 2 FLR 865, dicta of Thorpe, L.J. considered.

(9) Scatliffe v. Scatliffe, [2016] UKPC 36; [2017] A.C. 93; [2017] 2 W.L.R. 106; [2017] 2 FLR 933, followed.

(10) TW v. TM (Minors), Re, [2015] EWHC 3054 (Fam); [2016] 2 FLR 1386, referred to.

(11) White v. White, [2000] UKHL 54; [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.

Legislation construed:

Matrimonial Causes Law (2005 Revision), s.19: The relevant terms of this section are set out at para. 6.

s.21: The relevant terms of this section are set out at para. 7.

s.22(1): The relevant terms of this sub-section are set out at para. 33.

s.23: The relevant terms of this section are set out at para. 33.

Family Law — financial provision — children of marriage — under Matrimonial Causes Law, s.21(f), judge has wide discretion to make appropriate order for benefit of children — need not be exclusively for their benefit — may order child maintenance to be paid by father comprising mother’s child-related expenses and her other expenses of providing suitable home for them

The appellant petitioned for divorce.

The parties married in 2002. The appellant was 45 years old and senior vice-president of an investment management company earning approximately US$400,000 per annum. The respondent was 43 and worked for a local property developer earning some US$50,000 per annum. They had two children. Following the appellant’s petition for divorce in March 2015, the Grand Court (McMillan, J.) made a shared residency order in respect of the children. Both parties continued to live in the family home until December 2016, when the respondent underwent rehabilitation until March 2017. She then moved to rented accommodation. The children remained in the family home with the appellant and had little contact with the respondent. The appellant had been adamant that he wished to retain the family home to provide stability for the children but was now reconciled to its sale.

The Grand Court (Williams, J.) subsequently ordered that (1) the appellant was to pay the respondent US$600,154.17 by a cash payment or, if he wished to do so, by a cash payment and pension sharing order (para. 1 of the order), and (2) if the appellant were unable to make that payment, the former matrimonial home was to be sold and he was to pay US$600,154.17 from the net proceeds of sale (para. 3 of the order). The appellant was ordered to pay child maintenance of US$3,000 per child per month until the child was 16 or in full-time education until the age of 21, backdated to March 2017 (when the respondent had moved out of the family home). The figure comprised the respondent’s purely child-related expenses (for both children) of US$1,555 per month, and the shortfall in her other domestic expenses of providing a home for the children. The appellant was also ordered to pay spousal maintenance to the respondent for three years. The judge made no order as to costs but instead took account of the fact that the appellant had paid US$41,746.77 more in legal costs than the respondent and ordered him to pay the respondent an equivalent sum after which each party would be responsible for their own remaining fees.

The appellant appealed against the order on the basis that it unfairly favoured the respondent. He submitted inter alia that (a) the judge’s approach to the calculation of child maintenance was flawed and the figure ordered was too high; child maintenance was to be paid for too long; and it should not have been backdated; (b) the judge had failed to consider the net effect of the order on the distribution of the capital assets between the parties, awarding the respondent more than 50%; (c) the judge was, in particular, wrong to adjust the capital assets by reference to legal costs; and (d) in para. 1 of the order, the appellant was given the choice of using his pension as part of the payment of the sum to the respondent whereas in para. 3 he was not, which was inconsistent and unfair as it affected his ability to meet his and the children’s housing needs.

The respondent submitted in reply that (a) the judge had taken a proper approach to child maintenance, which enabled the respondent to provide a suitable home to comply with the existing residence order; and (b) although the judge should not have made any order regarding costs without hearing proper argument, it made no difference to the outcome and the amount by which the capital was adjusted was not disproportionate.

Held, dismissing the appeal:

(1) The judge had sought to resolve the issues between the parties as fairly as possible. The appellant left the marriage in a far stronger financial position than the respondent. The court would not interfere with the judge’s decisions and the appeal would be dismissed (paras. 63–64).

(2) The court would not interfere with the orders for child maintenance. Section 21(f) of the Matrimonial Causes Law obliged the court to make an “appropriate” order “for the benefit of the children.” The latter words gave the judge a wide discretion. The order did not have to be solely for the children’s benefit, it would be sufficient if it could reasonably be said of the order that it fulfilled the needs of the children. In the present case the judge had identified two areas of need for the children which fell to be met. The first was expenses incurred by the respondent which were directly attributable to the children. The sum of US$1,555 per month for both children met that need. The second area of need was broader and reflected the need to provide the respondent with sufficient resources to enable her to provide for the children at a level that the judge thought appropriate. The judge could have provided for this second area of need by means of maintenance payments to the respondent or by means of child maintenance payments. There was nothing objectionable in the judge’s decision to provide for the second area of need by means of child maintenance payments. The sum ordered (US$4,268 per month for both children) was possibly a little generous but was within the judge’s discretion. While the duration of the orders, i.e. until the children were 21, would not be appropriate if the children continued their education outside the Islands after the age of 17, the order could be amended in the future if necessary. The judge had also been entitled to backdate the child maintenance payments to the date on which the respondent vacated the family home. She needed to provide a home of particular size and quality in order to enable the existing residence order properly to be complied with. The fact that that order had not been complied with and the respondent’s contact with the children had been limited was not a basis for changing the starting date for the order (paras. 38–41; para. 44).

(3) The court would not interfere with the judge’s order that the appellant pay the respondent US$41,746 so as to put the parties in the same position in respect of the legal costs. Although the judge should not have made any order as to costs without hearing proper argument, even if he had heard argument the outcome would not have been materially different (paras. 51–52; paras. 54–55).

(4) Paragraph 1 of the judge’s order, that the appellant should transfer to the respondent the sum of US$600,154.17 which could be a cash payment or, if the appellant wished, a combination of a cash payment and a pension sharing order, and para. 3, that, if the appellant could not make the payment in para. 1, the family home should be sold and the appellant should pay the respondent the sum from the proceeds, were clearly explicable and within the judge’s discretion. The judge considered that a property valued between US$750,000 and US$800,000 would meet the respondent’s needs. It followed that a similar property would meet the appellant’s needs. In para. 1 of the order, the judge tried to enable the appellant to retain the family home. In para. 3, on the basis of the sale of the property, the judge was better able to reflect the parties’ starkly different financial circumstances. If the property were sold and the payment made to the respondent, the appellant would have liquid assets of some US$359,409 and an annual income of some US$400,000. He also had a mortgage from his employer of US$1m. He could plainly afford to buy an appropriate property. The respondent on the other hand had a speculative annual income of some US$50,000 and a borrowing facility of US$350,000. The liquidity imbalance between the parties was likely to be speedily redressed (paras. 61–62).

(5) The general approach in the Cayman Islands when making orders for ancillary matters pursuant to the Matrimonial Causes Law (2005 Revision), s.21 did not materially differ from that in England and Wales where the court was required by s.25(2) of the Matrimonial Causes Act 1973 to have regard to all the circumstances of the case and in particular the matters set out in sub-s. (2). By s.19 of the Law, the court was to have regard...