Christine Duty v Charles Alexander Duty - Judgment

¶ ```html IN CHAMBERS IN THE GRAND COURT OF THE CAYMAN ISLANDS CAUSE NO：D44 OF 1998 BETWEEN：CHRISTINE DUTY PETITIONER AND：CHARLES ALEXANDER DUTY RESPONDENT Appearances： Mrs. Sheridan Brooks-Hurst of Brooks & Brooks for the petitioner Mr. Phillip Boni of Truman Bodden & Co. for the respondent Before：Chief Justice Anthony Smellie JUDGMENT The parties seek the resolution of ancillary matters following the grant of the petition for divorce. The petition followed on a brief five-year marriage which was the second for both parties. Brief though it was, the marriage unfortunately became tumultuous and eventually marred by domestic acrimony and violence at the end. There are no children of the marriage. Both parties are in their mid-fifties and having raised families from their previous marriages, are concerned in the present proceedings only with their own entitlements. The task presented to me is therefore to arrive at the just and fair division of such division of such maternity as complicating aspect of the matter relates to the health of the parties the petitioner in particular. ```
She invites the Court to have regard to injuries she sustained at the hands of the respondent and which she asserts have exacerbated chronic spinal and other back illness, resulting in her inability to work. She seeks payment of maintenance as the result. The respondent's own chronic health problems are also to be considered as a factor going to question his continuing ability to work in his business as an electrician in the construction field. I will return to consider those issues below. A further complicating factor is presented by the respondent's claim to have acquired an interest in the matrimonial properties, not primarily by virtue of financial contributions, but by virtue of the contribution of construction labour, expertise and know-how - in other words, contribution in kind. The measurement of that contribution and the assignment of value to it, will be issues to be specifically addressed. The third complicating factor arises from the absence of full disclosure in support of the respondent's stated position, as deriving his income entirely from a company known as Electrical Enterprises 2000 Ltd; in which he is a shareholder. This company is the successor to Caribbean Construction Consultants Ltd. now defunct and through which the respondent formerly carried on his electrician's business. A concern of the petitioner's is that the defunct company once held lucrative subcontracts for electrical work in very large projects, some of which she believes must have been assigned to Electrical Enterprises. She believes that new contracts are also being won and that the respondent obtains significant income through Electrical Enterprises which he does not disclose. The respondent admits to receiving a monthly salary of CI$4,500, but nothing more.
On his behalf, Mr. Boni argued that as neither company can be regarded as a party to the divorce, they are to be regarded as third parties and that enforced discovery against third parties can only be permissible in certain well-defined circumstances not presented here. Further that as the petitioner did not seek to invoke the appropriate process of the Court for discovery from Electrical Enterprises 2000 (as the company now being operated), she is not entitled to discovery from it as a third party. Thus, in effect, the Court must rely upon what the respondent says about his relationship with and entitlements from that company. When despite this argument, it was made plain to Mr. Boni by the Court that his client’s obligation remained to give full and frank disclosure of his own entitlements (actual or potential), the respondent submitted to being put on oath and testified about the affairs of Electrical Enterprises. He also presented some corporate records including bank account statements. Among other things, these showed total deposits of more than USD 4 million over a period of 2 years and 10 months (from 1st January 1998 to the 3rd October 2000). These deposits represented income from the many electrical subcontracts which were also then identified. These records represented unaudited accounts prepared for the company by the respondent himself. He cited the “astronomical” costs of having the accounts of the company independently audited by a recognized firm of accountants. The respondent also testified that Electrical Enterprises has a staff of some 50 workers. He said that the average monthly wage for workers was CI$40000.
This would represent an annual payroll of CI$960,000 or CI$2,720,000 over the 2 year 10 month period during which the company earned more than USD 4 million. From that information latterly disclosed, it appears that while the company doubtless has had will continue to have significant expenses, as its 49% shareholder, the respondent will expect to have significant income by way of dividends. Such dividends will doubtless be diminished by the fact that the construction industry has been severely impacted by the local economic recession which has only deepened since the hearing in this matter. There is notably some evidence that the company operated an overdraft of up to CI$45000. While this would be consistent with a cash flow problem arising from the untimely payment out of dividends to shareholders, the respondent insisted that it was due to the maintenance of the full payroll even while the company’s earnings diminished due to the recession. He said the company’s policy was never to lay off workers if it had a choice. I also take account of the fact that the level of earnings disclosed might well be diminished by the gross costs, not only of labour but also of materials to be supplied by the company for contracts. Nonetheless it is well known and in the absence of complete disclosure I take notice that in the construction industry here contractors typically seek a net markup of between 15% and 25% above costs. To conclude on this issue, while I have no evidence which directly refutes the respondent’s account that he receives only a monthly salary of CI$4500, I am able to infer that he will likely receive dividends with the company as will of course be in keeping with the fortunes of the company.
The assets of the parties At the time of the marriage the petitioner was by far financially the better off of the parties. As at the date of marriage, - 7th August 1993 - she held or had an interest in the following properties, a number of which were subsequently disposed of on the dates and for the prices indicated: | Registration section | Block | Parcel | Date of transfer or sale | Price | |----------------------|-------|---------|--------------------------|--------| | 1. George Town | 14D | 280 | 3.2.94 | CI$231000 | | 2. George Town | 14D | 284 | (At cost of $72000 bank loan, small office building constructed on this parcel). | | | 3. George Town | 14D | 309 | 8.7.96 | CI$183000 (petitioner's 1/3 share of sale price of CI$549,000) | | 4. George Town | 14D | 301, 302 | 11.1.99 | CI$225500 | | 5. George Town | 14BH | 105 | 22.11.94 | CI$4825 representing petitioner's (2/18th share) | | 6. George Town | 25C | 6 | 30.5.95 | CI$226800 | | 7. George Town | 20C | 3 | (the petitioner has a right to a 2/18th share) | | | George Town | 27C | 22 | ruled into JoNo transient petition | | | 8. On | 38 | | nameser daughter of and adr | | | | | | of former marriage. | |

¶ [1] Six of these eight parcels of property or interests in them, were obtained by the petitioner by way of family inheritance.

¶ [2] One - G.T. Block 25C Parcel 6 - she bought from personal savings in 1989, some 4 years prior to the marriage.

¶ [3] The eighth property - Savannah 27C Parcel 38 - she acquired in the divorce settlement of her previous marriage. It was her former matrimonial home and was transferred into the joint names of herself and her daughter. From that property she prior to the transfer received rental income of CI$1500 per month. That property is now however, intended to serve as the home of her daughter and her grandchildren. The petitioner has deposed to the fact that no further income comes to her from it.

¶ [4] It will be seen that 5 of the 8 parcels of property were sold after the date of the marriage.

¶ [5] The petitioner therefore retains the interests described in the other three. More will be said about those below.

¶ [6] At this juncture, it is convenient that I note my finding as to the disposal of the proceeds of sale which she received from the 5 parcels.

¶ [7] Here evidence in her affidavit, (and in her 3rd affidavit in particular) carefully sets out the history of the matter. I accept, as she explained, that all the proceeds – some CI$870,000 - were effectively contributed by her to the marriage. They went to the following areas of expenditure: (i) the acquisition of the parcel on which the matrimonial home of the parties now stands.
The construction of the matrimonial home on that site as well as the construction of a block of apartments on an adjacent site (Spotts 24B Parcel 67); which had been owned by the respondent prior to the marriage. The funding for the project was made available through an account taken by the petitioner in their joint names and into which she paid the various amounts. The funding for these two construction projects was initially obtained by way of loans from Cayman National Bank in the amount of CI$250,000. Those loans were however redeemed from the proceeds of sale of the properties of the petitioner and from the sale of the apartments on Block 24B Parcels 67. That property had become jointly registered in the names of the parties to reflect the petitioner's financial investment in the project. Prior to the sale of the apartments, the petitioner had been responsible for the repayment of the bank loans in the amount of CI$4,000.17 per month. Improvement in value of approximately CI$50,000 made to the matrimonial home by the petitioner after the breakdown of the marriage and after the respondent was ordered by the Court to vacate the home. These included the addition of a swimming pool and deck. Repayment of a loan of CI$100,000 to the petitioner’s mother, the proceeds of which had been used by the parties in the construction projects.

¶ [1] (vi) Redemption of charge with the Bank of Butterfield in amount of

¶ [2] CI$72907 over GT Block 14D Parcel 284, in respect of loan taken to

¶ [3] construct small office building on that site.

¶ [4] (vii) Living and personal expenses of the parties which also came from the joint

¶ [5] account during the course of the marriage.

¶ [6] (viii) Some CI$16,000 towards redemption of a personal loan of the petitioner's. At the time of the marriage, the petitioner also had income from the rental of the Savannah home of CI$1,500 per month; from the small office building in George Town of CI$1,500 per month and significant monthly trust income of CI$11,000 per month. She deposed however, to the fact that the trust capital is depleted and so no further income comes from the trust. With the discontinuance of the rental income from the Savannah home, she can therefore expect an income of only CI$1,500 per month in the future; being the rental income from the George Town office building. The respondent admits to having had little by way of capital when he entered the marriage. He asserts a net worth at that time of CI$143,000 but admits that the bulk of that sum represented debts owed to him for electrical work he had performed for others. His only tangible asset was in Spotts Block 24D Parcel 67, the parcel on which the apartments were constructed.

¶ [1] Shortly before the marriage, the respondent had invested some CI$60,000 in the construction of a studio flat beneath his son's house in Grand Cayman. The respondent occupied the flat and so too for a short period did the petitioner with him, prior to moving into their matrimonial home.

¶ [2] The respondent lays no claim to this property however, it having become affixed to his son's house and regards it as a gift made to his son.

¶ [3] Even though he now lives in what he describes as "substandard accommodation" since being excluded from the matrimonial home, the respondent has not sought to reoccupy the flat. In a further expression of altruism, he was concerned that doing so would involve evicting the in-laws of his sons who tend daily to the grandchildren. That need arises because his son and his son's wife work full-time with him in the business of Electrical Enterprises.

¶ [4] The consequence of all events, is that the primary tangible asset of the parties is now the matrimonial home. For it, differing valuations of CI$520,000 (Cadriff & Co.) and CI$438,000 (J.E.C. Consultants) have been presented. Mr. Boni and Mrs. Brooks-Hurst agreed however, that I should adopt the median of those values at CI$476,000; although this will be academic in light of the conclusion at which I have arrived.

¶ [5] The acquisition of the matrimonial home, as has been shown above, was almost exclusively capitalised by the petitioner.

¶ [6] The respondent accepted this when he asserted that his were payments in kind – the contributions of workers' time and labour. The record goes against him. All transactions through the joint account of the parties at Cayman National Bank - (through which their construction projects were

¶ [1] funded) - reveal that the workers were pay-rolled through that account and that there were

¶ [2] significant payments by way of cheques made out in his own name, by the respondent.

¶ [3] Although he claims that these latter payments were used to purchase "miscellaneous

¶ [4] materials" for the projects, the cancelled cheques show payments to himself and it is odd

¶ [5] that as an experienced contractor and businessman, he would have overlooked the

¶ [6] importance of proper record keeping. Some of these cheques were for relatively large

¶ [7] amounts.

¶ [8] As to arriving at their respective contributions to the costs of the projects there is,

¶ [9] however, a significant area of uncertainty. While monies from the sale of the apartments

¶ [10] were also contributed to this account, it is now impossible to tell whether this was at a net

¶ [11] loss or gain to the parties. For her part, the petitioner claims that the construction and

¶ [12] sale of the apartments carried at a loss. This was due to large overruns resulting from the

¶ [13] assignment of the responsibility for the project by the respondent to his son, who was

¶ [14] then a novice in the construction business. Similarly, she avers that serious overruns were

¶ [15] experienced in the construction of the matrimonial home.

¶ [16] For his part, the respondent asserts that one of the four apartments was sold to the

¶ [17] petitioner's adult son at an undervalue and that the difference should be factored in now

¶ [18] as a benefit to her. The evidence shows, however, that this apartment was sold "pre-

¶ [19] construction" and at a price which was nonetheless comparable to that obtained for two

¶ [20] other three-floor factor mentioned by the petitioner was the failure of the the cert

¶ [21] was the fail

¶ [22] of record and completion of the

¶ [23] electrical works and other areas, costs which she says should have been avoided.
```html 1 Regrettably, that is now all to be regarded as spilt milk and is relevant only to show the 2 respective contributions in the past. As noted at the outset, I can divide between the 3 parties only such assets as exist. With that in mind, I now turn to express my findings. 4 5 Findings 6 What we have here is as unfortunate marriage from which the petitioner has emerged 7 clearly less well-off than she was before. As she approaches her autumnal years, she 8 faces the threat of failing health probably exacerbated by abuse suffered at the hands of 9 the respondent. She also faces the unhappy prospect of dwindling capital from which she 10 must extract her income. Apart from the matrimonial home, that capital will be the office 11 building. 12 Unsupported allusions by Mr. Boni to her “wealthy and supportive” family, were 13 properly objected to by Mrs. Brooks-Hurst as being unsubstantiated by the evidence. In 14 any event, any such considerations must be irrelevant as not going to the means of the 15 parties themselves. 16 Despite the relative large expenditure of capital during the marriage, the respondent does 17 not appear to have benefited either. 18 Apart from such income as he might have personally taken for working on their 19 construction projects, there is no evidence of his earnings during that time. Nor is there 20 evidence that he had acquired or retained any significant personal assets from his efforts 21 in those projects to the fact that the projects were indeed, as the indeed, very 22 expensive due to inefficiencies. ```
The fact that all that remains of significance is the matrimonial home at the unimproved value of less than one half the total expenditures, is proof positive of the failed nature of the investments. This however, is a loss the brunt of which the petitioner has had almost exclusively to sustain and must be factored in at the end. The respondent for his part, also faces the unhappy prospect of his autumnal years in failing health. From the medical records he submitted, it appears he has suffered but fortunately recovered from a form of skin cancer. There is also a debilitating arm injury which could affect his long-term ability to work in construction. While I have concluded that his income potential is more favourable than he has chosen to disclose, I must accept that there are realistic limitations on this continuing much into the future. Given the rigours of his work, his ability to earn substantial income past age 65 must be regarded as unlikely. That is even if there again emerges the favourable economic climate in which to do so. Such are the risks that he will confront as an entrepreneurial electrician. To be taken account of in his favour, are two small pension funds to which he has contributed. Present day values combined total less than $10,000. The petitioner once worked as a secretary and has acquired no other vocational or professional skills. She now says that her problems with her back (which indicate the ed 70i surgqfevencrgw would prevent her from returning to work. The medical evidence ort from the medical pp0fs unS-rter diae ut for then che final Di neery)wthia Horn I have evidence 21 suprighosis. cursoninRar t f the assess. suprogsEngninme the ornopedic surgeon. But for the agglavation of thecravationuort.from respondent, she says she would have been able to return to work. She now faces the risk of losing her
```html 1 home (which she describes as her "dream house") as she may not be able to get by only 2 on the income from the rental of the office building. She argued that she should be 3 compensated by way of an order for maintenance. 4 I have concluded that the conduct of the respondent (for which he was convicted on a 5 charge of assault occasioning actual bodily harm) can properly be taken into account in 6 the manner proposed by the petitioner. I also find that its result is of sufficient 7 seriousness to justify doing so. 8 The guiding provisions of the Matrimonial Causes Law (1997 Revision) are in section 19 9 and which provide as follows: 10 "In dealing with all ancillary matters arising under this Law, the Court shall have 11 regard first of all to the best interests of any children of a marriage and thereafter 12 to the responsibilities, needs, financial and other resources, actual and potential 13 earning power and the deserts of the parties". 14 The term "deserts of the parties" connotes an unrestricted obligation and discretion in the 15 Court ultimately to do what is just between the parties. This is the result to be arrived at 16 by reference to the other factors mentioned in the section and to the relative contributions 17 to the marriage and family; relative benefits already enjoyed and to be enjoyed and, it 18 seems to me - by parity of reasoning - the relative consequences of the conduct of the 19 parties. 20 Where in the context of the breakdown of marriage, the conduct of a spouse causes harm certain 21 results which are distinct from the other, it may be 22 within the purview of the Court to adjust the awards to reflect and to ratify certain 23 the "deserts of the parties". ```
```html 1 As is shown in the cases of Jones v Jones [1975] 2 All E.R. 12 and Kyte v Kyte [1987] 3 2 All E.R. 1041；the English Courts have taken account of conduct by reference to express 3 statutory provisions there. The provision in operation at the time of Kyte v Kyte was 4 section 3 of the Matrimonial and Family Proceedings Act 1984 which provided in 5 relevant part： 6 “(1) It shall be the duty of the Court in deciding whether to exercise its powers 7 (for resolution of ancillary matters) and, if so, in what manner, to have 8 regard to all the circumstances of the case, first consideration being given 9 to the welfare while a minor of any child of the family who has not 10 attained the age of eighteen. 11 (2) As regards the exercise of the powers --- in relation to a party to the 12 marriage, the Court shall in particular have regard to the following matters 13 --- (g) the conduct of each of the parties, if that conduct is such that it 14 would in the opinion of the Court be inequitable to disregard it---”. 15 In that case, the blameworthy conduct of the wife was dealt with in the following manner 16 as described in the headnote to the report of the case： 17 “For the purposes of (section 3(a)(g) of the Act) “conduct” of a party which it 18 would be inequitable for the Court to disregard when determining an application 19 for ancillary relief, included any relevant conduct during and after the marriage 20 where conduct might have contributed to its breakdown or which it would otherwise be 21 inequitable, that is not the other or r p：or taking 22 steps to 23 prevent the husband's suicide attempts when she knew she would gain financially

¶ [1] if he succeeded, but also in forming a deceitful relationship with another man was

¶ [2] gross and obvious conduct which it would be inequitable to disregard even taking

¶ [3] into account the husband’s conduct. The husbands appeal would therefore be

¶ [4] allowed and the lump sum order reduced to £5,000”.

¶ [5] The consequential order following from domestic abuse as between husband and wife

¶ [6] was the reverse in Jones v Jones. There the Court of Appeal held:

¶ [7] “(i) The Court was entitled under (the Act) to have regard to the husband’s

¶ [8] conduct in attacking the wife in determining what award should be made

¶ [9] to her.

¶ [10] The word “conduct” in (the Act) was not limited to events which had

¶ [11] taken place before the breakdown of the marriage or indeed before the

¶ [12] decree was made absolute. Furthermore, conduct was a relevant factor not

¶ [13] only when the question was whether a claim by a wife to a share of the

¶ [14] matrimonial property should be cut down but also where the question was

¶ [15] whether it should be increased, for in cases involving conflicting claims to

¶ [16] matrimonial property, an increase of one party’s share inevitably involved

¶ [17] a decrease of the other’s. The conduct of the husband in attacking the

¶ [18] wife was of such a gross kind that it would be offensive to a sense of

¶ [19] justice that it should not be taken into account in deciding what should be

¶ [20] the appropriate shares of the parties in the family assets.

¶ [21] (ii) alongside working without, the b

¶ [22] When the child ceas

¶ [23] on her by the husband; in those circumstances it would be unjust that she
```html 1 should be required to sell the home and look for somewhere else to live. 2 Accordingly the judge ought to have made an order vesting the whole of 3 the beneficial interest in the home to her”. 4 5 While the harm inflicted in Jones v Jones was more egregious than in this case, here the 6 petitioner’s disability is none the less likely to have been hastened by the harm she 7 suffered from the respondent’s assault. I feel obliged to accept that any hope she may 8 have had of returning to the work place, for however limited a period, has therefore been 9 denied. 10 When this is considered in the context of dividing the primary matrimonial asset, 11 consideration will be taken first of what his entitlement in the matrimonial home should 12 be and then to what extent it should be denied. 13 The preponderance of the evidence is already heavily in favour of allowing the petitioner 14 to keep the home in which she has continued to reside. Her contributions to its 15 acquisition far outweighed the respondent’s and she has added significantly to its value 16 since his departure. 17 The only question then was whether he should receive some value for his contributions. I 18 have been able to attribute no more than 10% of its value at the time of separation 19 (CI$42，600) exclusively to his efforts. This would reflect mainly his contribution of the 20 and for the project，tha project，and on the most favourable view that some net proceeds 21 we ly paid in t on me mon per monew 22 taking also into account the modest income of $1，500 per US$1.5th.x she will likely 23 be able to realize from the rental of the GT Block 14D Parcel 284 and any income which ```
```html 1 her interest in Savannah Block 27C Parcel 38 might yet yield in the future, as well as the 2 needs and circumstances of the petitioner，I award the matrimonial home in its entirety to 3 her. 4 I should explain that this award is intended also partially to compensate her loss due to 5 his conduct by the denial of the respondent's interest in that property. 6 As to the issue of maintenance：In a clear case of ability to pay the circumstances here 7 would doubtless be appropriate for such an award. However，the nature of his disclosure 8 of his interests in Electrical Enterprises present some difficulty in deciding whether the 9 means of the respondent allow for such an order and I am obliged also to consider his 10 needs and circumstances. 11 He must now provide a home for himself for which he has no capital，at least none that 12 has been shown. The evidence presented about the affairs of Electrical Enterprises 13 suggests that he ought to have earned some significant dividends over the last 2 years in 14 particular. The unaudited accounts presented by him do not however，establish this. 15 The respondent's failing health is also a factor. In order to secure his welfare during 16 retirement，he will have to redouble his efforts to make hay while the sun shines. 17 Also in this regard，this was a relatively short marriage during which it could not be said 18 that the wife had become financially dependent upon the husband. 19 Any award of maintenance must therefore reflect the foregoing competing 20 considerations. 21 Whatever may be Electrical Enterprises cannot be resolved early in its entirely ir. potential 23 to reward his recalcitrance over disclosure.

¶ [1] I conclude, as already stated, that he must be taken as being likely to obtain significant dividends whatever they might be. When taken with his admitted monthly salary of CI$4,500, I conclude that he must be required to make some contribution to secure the future financial position of the petitioner which I accept he has impaired by his conduct.

¶ [2] The award of maintenance will be in the lump sum of CI$40,000.

¶ [3] Complicated as this case is by the factors discussed above, this is not a case as in White v White [2001] 1 All. E.R.1. in which the House of Lords decided upon a starting point for division of matrimonial assets of equality, as suitable in that and in other cases where the available assets exceed the parties’ financial needs for housing and income.

¶ [4] Here the available tangible assets have been contributed virtually all by one party, the petitioner, who is now at risk of not being able to meet her own needs.

¶ [5] The order is that the petitioner will retain the matrimonial home and the respondent directed to transfer his joint legal interest to her immediately, failing which the Clerk of the Courts is directed to execute the form of transfer. The petitioner will also retain her interests in George Town Block 25C Parcel 6 and George Town Block 14D Parcel 284. two other properties mentioned above. She will also receive the sum of CI$40,000 by way of maintenance; as to which I will hear submissions as to the terms of payment.

¶ [6] This sum I regard as representing a potential year's salary working as a secretary in a professional environment. It is a sum which she could have realistically expected to have earned after working for a further five to ten years.
```html 1 As to costs, I will also hear further submissions, if any are proffered. 2 3 4 5 6 Anthony Snellie 7 Chief Justice 8 Dated this 30th day of January 9 10 11