Thomas Dewitt v Edna Dewitt - Judgment

¶ IN THE GRAND COURT OF THE CAYMAN ISLANDS HOLDEN AT GEORGE TOWN, GRAND CAYMAN CAUSE NO. D66 OF 2008 BETWEEN: THOMAS MARTIN DEWITT Petitioner AND: EDNA VANDEEN DEWITT Respondent Appearances: Mr. Philip Boni of Higgs Johnson for the Petitioner Ms. Eileen Nervik of Nervik & Company for the Respondent Before: Hon. Justice Henderson Heard: March 24, 2010 JUDGMENT

¶ [1] After a hearing intended to settle the ancillary issues in this matrimonial cause, I directed the parties to file written arguments on a number of disputed points. That has been done and the parties are agreed that I should now give my decision without hearing further oral argument. As I explain below, 1 there are some issues which cannot be resolved without 2 additional evidence. 3 4 2. The parties met in 1988 and began living together at 74 Seaview 5 Drive on Grand Cayman in that year. They were married in 6 July, 1991. After twenty years of marriage, the parties 7 separated in January, 2008. There are no children. Mr. Dewitt, 8 who is 67 years of age, describes himself as now retired. 9 10 3. This is a case in which the division of property is best 11 approached by first determining the percentage share each of 12 the parties should retain in each matrimonial asset. 13 14 4. The “Sea Beauty” Businesses 15 16 Mrs. Dewitt, who is a Caymanian citizen, established her own 17 business called “Vans Hair Success” in 1984 under a trade and 18 business licence issued in her name. 19 20 5. In 1989, Mr. Dewitt wished to establish a jewellery business. 21 Not being a Caymanian citizen or status holder, he could not 22 obtain a trade and business licence in his own name. Mrs. Dewitt changed the name of her business to “Sea Beauty” and from that point on both businesses – the beauty salon and the jewellery business – operated under that same trading name and trade and business licence. Mrs. Dewitt also took out a work permit which permitted her to hire Mr. Dewitt to run the jewellery business. Mr. Dewitt designed the jewellery, manufactured it and provided the equipment. The money from both businesses was deposited into an account by Mrs. DeWitt. After their marriage, the parties built an addition on to the matrimonial home at 74 Seaview Drive. This addition was shared between Mrs. Dewitt’s beauty salon business and Mr. Dewitt’s jewellery business. In 2000, Mrs. Dewitt tired of running the beauty salon and closed it. The “Sea Beauty” name was retained by the jewellery business. In reality, the driving force behind the business was now Mr. Dewitt and Mrs. Dewitt took on a subsidiary role. Thus, the ostensible position evidenced by the trade and business licence (in her name) and the work permit (for the employment of Mr. Dewitt) was reversed. 1. 8. Mrs. Dewitt performed the accounting and banking for the Sea Beauty jewellery business. Mrs. Dewitt says she attended at the customs department to collect and clear stock received by the business, delivered jewellery to retail outlets, and collected jewellery needing repair. She took no active role in the manufacturing of jewellery because, she says, the dust produced by that process and the fluids used in it aggravated her asthmatic condition and allergies. Mrs. Dewitt now says that she intends to carry on running the Sea Beauty jewellery herself “once these proceedings are completed”.

¶ [2] 9. Mr. Dewitt asserts that Mrs. Dewitt’s role in the jewellery business has been minimal. He says that bank deposits were made once per month and customs matters were attended to about once per year.

¶ [3] 10. After Hurricane Ivan, in September, 2004 the jewellery workshop was relocated to 42 Avalon Street and operated from the garage there. After the parties separated in 2008, the jewellery workshop equipment and stock was relocated to 73 Seaview Drive.

¶ [11] Mrs. Dewitt says that Mr. Dewitt ceased making jewellery around the time of separation and that the stock held on consignment by retail outlets “ran dry” around May, 2009.

¶ [12] As an unincorporated business which has not operated since 2008, the value of Sea Beauty will be reflected in its equipment, its stock on hand, and its account receivables. There is little evidence as to the value of the equipment; I will adopt a suggestion in Mr. Dewitt’s submission and set a value on it for present purposes of $20,000. Since Mrs. DeWitt intends to operate the jewellery business and Mr. DeWitt does not, I award the equipment to her.

¶ [13] Sea Beauty Accounts Receivable There is a substantial issue between the parties concerning accounts receivable owed to the Sea Beauty jewellery business at the date of separation and the subsequent disposal of this income. Mr. Dewitt (in his affidavit filed January 12th, 2010) says that he had at the date of separation “approximately US $200,000 worth of jewellery memoed to Island Companies.” In effect, this jewellery was provided to vendors like Islands Companies on consignment. As the retailer sold the merchandise, it would inform Mr. Dewitt and Mrs. Dewitt would then collect the proceeds cheque and deposit it into the Sea Beauty account at Scotiabank. Mr. Dewitt says that, since separation, he has not been advised of the status of the sales or the state of the bank account. He has not received the usual monthly reports provided by Island Companies to Sea Beauty showing payments made on account. Mr. Dewitt says he has requested an accounting of the deposits and withdrawals by Mrs. Dewitt but has not received one. He has also requested bank statements and asserts that he is owed “a minimum of US $75,000.” Mrs. Dewitt, in her affidavit of February 24th, 2010, explains that the inventory of jewellery was relocated to 73 Seaview after the couple separated. She says: “I am unable to provide a breakdown of these items or estimate their value” (paragraph 16). She goes on to say: “in addition, on or around 18, February 2008, I handed over to Ms. Lavern Branford stock held in my possession with a value of approximately US $31,071.75 representing a total of 105 items.” Lavern Branford is an employee of Sea Beauty. Mrs. Dewitt attached a document entitled “Sea Beauty – Returned Stock” to her affidavit. She said that Mr. Dewitt has provided to her “stock reports in the sum of $23,285”. Items having a value of US $6,455 in the stock reports also appear in the “Returned Stock” document. The remaining items in the stock reports, having a value of US $16,830, have, according to Mrs. Dewitt, been delivered to various retailers but were not accompanied by Sea Beauty invoices. Mr. Dewitt’s second affidavit of March 16, 2010 asserts, based upon the content of an email which he attaches, that one retailer (Island Companies) has jewellery to a value of US $65,000 still unsold and on consignment. He attached to his affidavit a “purchasing sales analysis” which, he says, demonstrates that as at December, 2007 jewellery with a value of $181,406.49 had been provided on consignment to Island Companies, the major retailer of the product. The proper interpretation of this document is not self evident and no explanation has been provided. It lists pieces of jewellery having an “on hand cost”, the total on hand cost for everything listed is $42,479.16 There then appears the figure of $181,406.49 set beside the legend "Totals for Buyer DD". Only the first and last pages of this twenty-five page document are provided. Mrs. DeWitt, also, attached a number of business records to her affidavit without providing any adequate explanation of their meaning.

¶ [16] I am satisfied that Mr. DeWitt made a substantially greater contribution to the jewellery business than that of Mrs. DeWitt. Her contribution, however, was of significant value and deserves full recognition. I award to Mr. DeWitt 60% of the value of the Sea Beauty jewellery business. Its value is equal to the sale proceeds received since the date of separation less the overhead for that period, plus the value of the still-unsold inventory and the $20,000 value I have assigned to the equipment.

¶ [17] The state of the evidence does not permit me to evaluate the accounts receivable. Mrs. DeWitt handled the banking and booking; I will direct her now to obtain affidavits within 60 days from Sea Beauty's retail vendors setting out: the value of inventory on hand at February 1, 2008; a list of payments (including payee, date, and amount) made on account to either party since then; a list of items returned to either party since 1 February 1, 2008 and their assigned value; and the value 2 assigned to the inventory still on consignment at the vendor. 3 The parties are at liberty to apply for Witness Summons to the 4 vendors if the required information is not presented in a 5 coherent form. 6 7 18. 73 & 74 Seaview Drive 8 9 This property was purchased by Mr. Dewitt nine years before 10 the marriage. The parties began living together at 74 Seaview 11 Drive in 1988 and occupied the premises there as their 12 matrimonial home until 2004. In addition, both businesses were 13 operated from these premises. 14 15 19. Mrs. Dewitt says that she contributed a lot of work to 16 maintaining the Seaview property, including cleaning the beach, 17 installing trellises, garden boxes and planting, repairing the 18 building structure, painting the interior and exterior of the 19 premises, and replacing furniture and appliances. In his 20 affidavit evidence Mr. Dewitt takes issue with the nature and 21 extent of Mrs. Dewitt’s contribution to the upkeep of the 22 Seaview premises.

¶ [20] After the parties moved to 42 Avalon Street, the premises (at 74 Seaview Drive) which had housed the beauty salon and jewellery businesses were converted into apartments. With some additional remodeling, 74 Seaview was made to provide three apartments for rental.

¶ [21] During the marriage, a two bedroom house known as 73 Seaview Drive and a tool shed were erected on the same piece of land. Both that home and the apartments have generated rental income since 2004.

¶ [22] The parties are agreed that the Seaview properties have a value of $400,000. Mrs. Dewitt says the Seaview property is a matrimonial asset but Mr. Dewitt denies that.

¶ [23] I am satisfied that the parties have treated the Seaview property as a jointly-owned asset for some considerable period of time. It was the matrimonial home for 16 years and housed both businesses. It is a matrimonial asset. 1 24. Mr. DeWitt brought the Seaview asset into the marriage and, in 2 addition, has made a greater financial contribution than Mrs. 3 DeWitt to its upkeep and expansion. In recognition of his 4 greater contribution, Mr. DeWitt is entitled to 75% of the value 5 of this asset. 6 7 25. Rental Income 8 9 Mrs. Dewitt says that the gross income from the rental of all 10 four units is $4,000 per month. She claims a share in the rental 11 income. She is entitled to a sum equal to 25% of the net rental 12 income since separation, after deduction of all reasonable 13 expenses incurred in maintaining the property. There is no 14 evidence of these expenses. If the parties cannot agree on the 15 appropriate figure, each is at liberty to apply. 16 17 26. 42 Avalon Street 18 19 The parties are agreed that this property, which was the last 20 matrimonial home, is a matrimonial asset. It was purchased in 21 2002 with funds from the jewellery business and rental income 22 from the Seaview property. It has a current value of $525,000; there is a mortgage on the property in the amount of $216,287. Mrs. Dewitt has resided at this address since separation and wishes to continue to reside in this property. The value of this asset should be divided equally. Occupation Rent As Mrs. DeWitt has been residing in the matrimonial home alone since the date of separation, she might be taken to owe a sum for occupation rent to her husband. However, there is no evidence before me as to what that rent should be. In these circumstances, I will not award any occupation rent to Mr. DeWitt. Wisconsin Properties Many years before he met Mrs. Dewitt, Mr. Dewitt acquired land at Bailey’s Harbour in Wisconsin. This land now consists of eight lots which have a total estimated value of U.S. $205,000. It is unclear, however, what the net sale proceeds might amount to because Mr. Dewitt owes back taxes on the land.

¶ [29] Mrs. Dewitt asserts that the Wisconsin property is a matrimonial asset because the “funds to sub-divide the property … came from income derived from “Sea Beauty”. The property was subdivided into 14 lots in 2000; six of the lots were sold prior to separation. Mrs. Dewitt claims an entitlement to 50% of the value of the remaining lots.

¶ [30] Mrs. Dewitt has also said (in her affidavit filed May 16, 2008) that “I was unaware as to how the monies derived from my business ‘Sea Beauty’ were spent,” thus seeming to contradict her assertion that revenue from “Sea Beauty” paid for the expense of subdividing. Moreover, there is no evidence as to the amount of this expense. The assertion that the cost of bringing about the subdivision was absorbed by income from the “Sea Beauty” jewellery business is not established by the evidence. I am satisfied that the Wisconsin properties are not matrimonial assets. 1 31. Liquid Assets 2 3 At the time of separation, the parties owned shares in Caribbean 4 Utilities Company, Cayman National Corporation, Telecom 5 Investor Ltd., and Butterfield International Balanced Fund. Mr. 6 Dewitt says the value of some of these shares is not 7 known and some have been sold by Mrs. Dewitt since 8 separation. He has received none of the proceeds. 9 10 32. Mrs. Dewitt agrees that these investments are matrimonial 11 assets but provides no further information in her affidavit. 12 13 33. There is insufficient evidence of any justification for a departure 14 from an equal division of this asset. I direct each party to file 15 within 14 days an affidavit accounting for any disposition of 16 any of these shares. Mrs. DeWitt is also to file evidence from 17 which the value of the Cayman National Corporation and 18 Telecom Investor Ltd. shares can be inferred. The CUC shares 19 are valued at $13,944 and the Butterfield shares have a value of 20 $16,423. 21 22 1 34. Daffodil Street 2 3 Mrs. Dewitt owns a 1/4 share in the property at 11 Daffodil Street in Bodden Town. She obtained this from her father in 4 5 1964. Mr. Dewitt concedes that this is not a family asset and I agree. 6 7 8 35. Boat 9 10 Mr. Dewitt lists as a family asset a boat, to which he assigns a value of $1,000. In the absence of any better evidence, I accept that this matrimonial asset is valued at $1,000 and award it to 11 12 Mr. Dewitt. 13 14 15 36. Gifts 16 17 Over the years, Mr. Dewitt has created some $30,000 worth of 18 jewellery which he gave to his wife. He concedes that these 19 gifts should not be treated as matrimonial assets. 20 21 22 2 37. Chattels 4 When the couple separated, Mr. Dewitt left the family home. In doing so, he left Mrs. Dewitt in possession of a number of chattels, including paintings, a table he had made, a collection of rare coins, and furniture. He seeks what he refers to in his written argument as an accounting. I direct that these chattels are to be listed and appraised (as at February, 2008) and that each of the parties is to bear half of the cost of these appraisals. 11 Mrs. Dewitt’s evidence contains no clear information on the whereabouts of these chattels or their current value. She is to file an affidavit within 60 days setting out clearly whether she has disposed of any of these matrimonial assets and, if so, the amount received for the asset. Each party is entitled to a 50% share by value in these chattels. 18 38. Stock Trading Accounts 20 Mr. Dewitt discloses two stock trading accounts called Bay Lake and E Trade. He says that each has a value of $1,000 or less. 2 39. Mrs. Dewitt says that she considers the Bay Lake account to be 3 a matrimonial asset but provides no details about her reasoning 4 in that regard and makes no mention of the E Trade account. 5 Mr. Dewitt asserts that he acquired both accounts “long before 6 marriage”. In the absence of any further evidence, I find that 7 neither account is a matrimonial asset. 8 9 40. Spousal Support 10 11 Mrs. DeWitt will now operate the jewellery business on her 12 own account. Mr. DeWitt is 67 years of age and has elected to 13 retire. Mrs. DeWitt has been able to work throughout the 14 marriage and cannot be said to have been disadvantaged 15 financially by the relationship. The couple have no children. In 16 these circumstances, I am satisfied that an award of spousal 17 support is not justified. 2 41. Costs 4 Costs of the hearing are reserved until the remaining ancillary issues are resolved. 7 Henderson, J. 8 Henderson, J 9 May 20, 2010