W v W

• Jurisdiction: Cayman Islands
• Judge: (Chadwick, P., Forte and Conteh, JJ.A.)
• Judgment Date: 08 April 2009
• Court: Court of Appeal (Cayman Islands)
• Date: 08 April 2009

Court of Appeal

(Chadwick, P., Forte and Conteh, JJ.A.)

W

and

W

D.T. McGrath for the appellant;

A. Akiwumi 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, followed.

(2) 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, followed.

(3) 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, followed.

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

Legislation construed:

Matrimonial Causes Law (2005 Revision), s.19: The relevant terms of this section are set out in para. 11.

Family Law-financial provision-matrimonial property-assets acquired before marriage-dealing with pre-acquired assets depends on length of marriage-in short marriages, fairness may disentitle other party to any share-in longer marriages (e.g. over 20 years) court to consider source of assets and use during marriage-e.g. if derived from other assets and used to benefit both parties, may be matrimonial property

The parties were divorced in the Grand Court which made an order for division of the matrimonial property.

The parties had been married for over 20 years and had 2 children. The husband carried on a business selling household goods and appliances, which he had started before the marriage and he had purchased its premises. The wife had briefly worked as a sales clerk for the business, whose assets included moneys on deposit, stock, some handling equipment and a debt owed by the husband on a loan account. The moneys on deposit had been partly raised from the re-mortgaging of matrimonial property and insurance receipts in respect of hurricane damage to that property and were used as a source for the family”s expenditure. The loan from the capital assets of the company had been authorized to cover the parties” matrimonial expenses and the husband”s medical costs. The profitable continuation of the business was doubtful and therefore it had no value as a trading concern.

The parties also had various other properties and chattels which, when making an order for ancillary relief under s.19 of the Matrimonial Causes Law (2005 Revision), the Grand Court (Levers, J.) declared to be matrimonial assets which were to be sold and the proceeds divided equally between the parties. The court determined, however, that the husband”s retail business was not a matrimonial asset and so would not be considered in the division. It considered the length of the parties” marriage but ruled that, because the husband had commenced the business and run it on his own and since the wife had not contributed to its enhancement nor was its sale required to meet her needs, she would be entitled to no part of its value.

On appeal, the wife submitted that the court erred (a) in identifying the husband”s business as a non-matrimonial asset; and (b) in failing to account for it in the property adjustment order made in relation to the rest of their assets.

Held, ordering that account be taken of some of the assets of the business in the ancillary relief order:

(1) The approach of the Grand Court had been incorrect in identifying the husband”s business as a non-matrimonial asset when dealing with the order for ancillary relief, pursuant to s.19 of the Matrimonial Causes Law (2005 Revision). The court had not had proper regard to the applicable principles when dealing with property brought into the marriage by one of the parties. The factors to be considered depended upon the length of the marriage, with fairness requiring in a short marriage that a party should not normally be entitled to a share of such property. In a longer marriage, the court would have to consider the nature and value of the property, the circumstances in which it was acquired and how the parties organized their financial affairs. Consequently, as this was not a short marriage (being over 20 years), the Grand Court should have considered the source of the various assets owned by the husband”s business and the way in which the parties had treated those assets during the marriage when determining whether the business was a matrimonial asset (para. 10; paras. 13–16).

(2) On the distribution of the proceeds of the sale of their assets, the husband would have to bring into account the value of certain assets of the business-the moneys on deposit and his loan from the business-which should be considered as matrimonial property. The source of these assets had been in part through the re-mortgaging of and insurance receipts from other matrimonial properties, which, coupled with the fact that the parties dealt with those funds as part of their general expenditure, strongly suggested that they were matrimonial property. Further, the money used for the loan to the husband had also been derived from these funds and therefore the moneys on deposit and those funds represented by the loan would be treated as matrimonial assets in which the wife should have an equal share. The premises of the business would be treated as non-matrimonial property and the remaining assets of the business (such as its stock) would be disregarded as being of no realizable value. No order would be made in respect of the husband”s interest in, or assets held by or on behalf of the company (para. 25; paras. 30–34).

1 CHADWICK, P.: This is an appeal from an order for ancillary relief made on October 27th, 2008 by Levers, J. in matrimonial proceedings between Mr. and Mrs. W. That order was made following a hearing in July 2008. Although the marriage between the parties was dissolved by a final decree pronounced on November 7th, 2008, it will be convenient-and I hope will not cause offence-if I refer to them in this judgment as the husband and the wife.

2 The principal issue on the appeal is whether the judge erred (i) in identifying as non-matrimonial assets the interest of the husband in a business carried on through a company known as NWF Ltd.; and (ii) in deciding, on the basis of that categorization, to leave that interest out of account in the property adjustment order which she made in relation to other assets.

3 The parties were married in Grand Cayman in December 1986. The husband was then 36 years of age; the wife was some 8 years younger. There were 2 children of the marriage, a daughter, who was born in December 1991 and a son, born in July 1997. The husband had 2 children by a previous marriage.

4 At the time of the marriage, the husband was carrying on a business, known as Tru-Valu Home and Auto Centre, at property on Shedden Road, George Town East, known as Block 20B, Parcel 91. That property-to which I shall refer as ‘the Shedden Road property’-had been acquired by the husband in 1979 for a consideration of CI$23,000. The business-which was that of a retail store selling household goods and appliances and hardware-had commenced in or about 1982. From April 1990 or thereabouts, the business was carried on by a company incorporated in April 1990 under the name Builders Club Tru-Valu Ltd. In June 1993, the company”s name was changed to NWF Ltd. At all material times the husband has owned 299,998 out of the 300,000 issued shares in that company. The company...