Rodriquez v Ebanks

• Jurisdiction: Cayman Islands
• Judge: (Smellie, C.J.)
• Judgment Date: 21 February 2014
• Court: Grand Court (Cayman Islands)
• Date: 21 February 2014

Grand Court, Family Division

(Smellie, C.J.)

RODRIQUEZ

and

EBANKS and R.L. EBANKS (intervening)

Ms. K. McClymont for the petitioner;

Ms. S. Brooks for the respondent;

A. Akiwumi for the intervener.

Cases cited:

(1) Arnison v. SmithELR(1889), 40 Ch. D. 567, referred to.

(2) Batthyany v. WalfordELR(1887), 36 Ch. D. 269, referred to.

(3) Central Elec. Generating Bd. v. Halifax Corp., [1963] A.C. 785; [1962] 3 W.L.R. 1313; [1962] 3 All E.R. 915, referred to.

(4) Coburn v. Colledge, [1897] 1 Q.B. 702, followed.

(5) Cooke v. GillELR(1873), L.R. 8 C.P. 107, referred to.

(6) Dewitt v. Dewitt, 2011 (1) CILR 298, applied.

(7) Eldridge v. BurgessELR(1878), 7 Ch. D. 411, applied.

(8) Letang v. Cooper, [1965] 1 Q.B. 232; [1964] 3 W.L.R. 573; [1964] 2 All E.R. 929; [1964] 2 Lloyd”s Rep. 339, followed.

(9) Lloyd v. DimmackELR(1877), 7 Ch. D. 398, referred to.

(10) Phillips v. Homfray (No. 2)ELR(1883), 24 Ch. D. 439, applied.

(11) Pinchon”s CaseENR(1611), 9 Co. Rep. 86; 77 E.R. 859, referred to.

(12) Read v. BrownELR(1888), 22 Q.B.D. 128, referred to.

(13) Shephard, In re, Atkins v. ShephardELR(1889), 43 Ch. D. 131, applied.

(14) Stanhope v. StanhopeELR(1886), 11 P.D. 103, applied.

(15) Wheatley v. LaneENR(1667), 1 Saund. 216; 85 E.R. 228, referred to.

Legislation construed:

Grand Court Rules 1995, O.15, r.6(2): The relevant terms of this sub-rule are set out at para. 67.

Family Law-divorce-death of party-divorce petition personal action between spouses and unable to subsist after respondent”s death-intervention to resolve spouse”s claim to beneficial interest in property held by third party creates distinct cause of action able to subsist after abatement of petition

The petitioner petitioned for divorce from her husband and alleged in the associated financial provision proceedings that she had an equitable interest in family property now held by her sister-in-law, the intervener.

The petitioner and her husband, the respondent, bought a plot of land on which to build a matrimonial home. They did so using savings (to which they had both contributed) and a mortgage loan. The loan, however, was taken out in the names of the respondent and his mother, allegedly so as to take advantage of her financial standing with the bank. Further, the property was registered in the names of the respondent and his mother-although the petitioner was unaware of this until after the construction on the property had begun. The respondent”s mother made no contributions to the repayment of the mortgage loan, which were paid entirely by the respondent and the petitioner. The land was divided into two parcels and, shortly after the petitioner and the respondent moved into the matrimonial home, the parcel on which it stood (‘the property’) was transferred into the sole name of the respondent”s mother. The petitioner claimed that she was unaware that this had been done. The other parcel was sold and no account was made to the petitioner of this money (although the mortgage loan was entirely paid off shortly after this had occurred). After the respondent”s mother died, his sisters were granted letters of administration and transferred ownership of the property to the intervener.

The petitioner filed for divorce and alleged in her claim for financial provision that the intervener held the property on constructive trust for her and the respondent. The intervener applied to be joined to the proceedings and submitted that the court should not make any ruling in relation to property owned by her. The court directed that the issue of whether the petitioner was entitled to a beneficial interest in the property should be tried as a separate preliminary issue. The petitioner filed her final submissions but, before either the respondent or the intervener had filed their final submissions in reply, the respondent died.

The intervener submitted that, as a divorce petition was personal to the respondent and the petitioner, the court did not have jurisdiction to conclude the matter after his death.

The respondent”s attorney agreed with the intervener”s submissions and further submitted that, as she no longer had a client from whom to take instructions and no one had been appointed to administer the respondent”s estate, it would be impossible for her to file any final submissions in the preliminary matter.

The petitioner submitted in reply that although the divorce proceedings could not continue, the preliminary issue could still be tried as a separate cause of action. Further, as the respondent had died intestate before the divorce had been finalized, she would be the person best entitled to instruct the respondent”s attorney in the proceedings.

Held, allowing the preliminary issue to proceed:

(1) The intervention gave rise to a separate cause of action which was capable of surviving the abatement of the divorce proceedings. The Grand Court Rules, O.15, r.6(2)(b)(ii) stated that, when a related cause or matter existed between the parties to the proceedings and any third party, the court was entitled to add that third party to the proceedings. This was in line with the duty of the court to resolve all issues between the parties properly and conveniently in a single action. Although the Grand Court Rules were generally disapplied to matrimonial proceedings, which were instead covered by the Matrimonial Causes Rules (2003 Revision), the Matrimonial Causes Rules did not prevent the court from resolving third party claims which affected the married parties” beneficial interests and, further, included several provisions which allowed for third party claims to be made. As an individual cause of action arose from every fact which it would be necessary for a plaintiff to prove to support his or her right to judgment, the intervention had created an individual third party action which was distinct from the divorce action, albeit one which was being tried in the same proceedings (paras. 66–72).

(2) The court could continue to hear the preliminary issue even though the respondent had died. A cause of action which involved three or more parties was capable of surviving the death of one party since there were still parties before the court between whom the dispute might continue. The divorce action, being in personam proceedings personal to the petitioner and the respondent, had abated with the respondent”s death. The third party action, however, being a claim by the intervener to determine who was entitled to the equitable interest in the property, subsisted even after the respondent”s death and the decision would bind any parties to the proceedings (including his estate). The intervener would therefore be required to file final submissions. Although the respondent had died and any person appointed to represent his estate would be entitled to join the preliminary cause, the petitioner was the most likely party to be that person. There was therefore no purpose in requiring separate submissions

on behalf of the estate (paras. 48–55; paras. 63–65; para. 70; paras. 76–79).

1 SMELLIE, C.J.: The issue to be resolved is one of jurisdiction. It is whether the court might proceed to render judgment upon a dispute over matrimonial property in the context of divorce, in respect of which a third party relative has intervened and in circumstances where the respondent husband has died.

2 The background to this unusual situation derives from the breakdown of the marriage between the petitioner and the now-deceased respondent and the filing of the divorce petition nearly seven years ago in Cause D132 of 2007 (‘the divorce action’).

3 While the divorce cross-petition was proved in the divorce action on August 29th, 2007, the division of matrimonial assets and other ancillary matters will remain unresolved.

4 The central and very vexed issue to be resolved relates to the true beneficial ownership of a residential property which was for a number of

years occupied by the petitioner, the respondent and their two children as the matrimonial home.

5 The property became registered in the name of the third party-Rhonda Lue Ebanks, a sister of the deceased respondent-in circumstances which the petitioner alleges were aimed at defeating her beneficial interests in the property. The following chronology sets the factual background to the petitioner”s claim.

6 Rhonda Lue Ebanks will be referred to by name or as the ‘intervener’ interchangeably as the context requires.

7 In 1991, the petitioner and respondent commenced their relationship. They married on November 22nd, 1992 in the Cayman Islands, the petitioner (who is from Costa Rica) having moved to the Cayman Islands to be with the respondent.

8 On March 1st, 1994, the first child of the marriage, Eric, was born. On December 14th, 1995, Jessica, the second child, was born.

9 On May 8th, 1997, the property was purchased as undeveloped land in the joint names of the respondent and his mother, Jannitta Ebanks. She predeceased him on February 18th, 2006, but by then the property had been transferred into her name alone.

10 At the time of purchase, a charge in the amount of a loan of $45,000 had been secured against the title to the property in favour of Barclays...