Foster J
IN THE GRAND COURT OF THE CAYMAN ISLANDS CAUSE NO: D133 OF 2007 BETWEEN: DELBERT ASTRONAUT SMITH Petitioner/Cross Respondent AND: KAREN MAXINE SMITH Respondent/Cross Petitioner Coram: The Hon. Mr. Justice Foster Appearances: Mr. James Kennedy of Samson & McGrath for the Petitioner/Cross Respondent (Ms. Smith) Mrs. Sheridan Brooks of Brooks & Brooks for the Respondent/Cross Petitioner (Mrs. Smith) Heard: 28th October 2008 REASONS FOR RULING AND ORDER
On 28th October 2008 I heard the application for final ancillary relief in the divorce proceedings between the Petitioner/Cross Respondent, who I shall refer to as Mr. Smith and the Respondent/Cross Petitioner, who I shall refer to Mrs. Smith.
There are two children of the marriage, namely a girl, K-Ann Shennelle Smith, who was 16 years old at the time of the hearing but in full time education and a boy, Daniel Delbert Smith, who was 5 years old. The parties were agreed that they should have joint custody of the minor child of the marriage, Daniel, and that Mrs. Smith should have day to day care and control of Daniel. It was also agreed that Mr. Smith should have liberal access to Daniel as agreed between the parties. The dispute between the parties related to the matter of child maintenance, spousal maintenance and the division of matrimonial assets.
After the hearing I adjourned until later that afternoon and then gave the following ruling: "In this matter the parties are agreed that they should have joint custody of the only minor child of the marriage, Daniel Delbert Smith, and that Mrs. Smith should have day to day care and control of him. It is also agreed that Mr. Smith should have liberal access to Daniel, as agreed between the parties. I therefore make orders accordingly. The dispute between the parties relates to the division of matrimonial assets, spousal maintenance and child maintenance. The older child of the marriage, K-Ann, is now 16 but she is in full time education. The parties do not disagree over what the matrimonial assets are or their approximate value. They accept the principle of a 50/50 split. The principal assets are the former matrimonial home at 59 Frenchman Drive, Breakers and the house at Passage Fort, St. Catherine, Jamaica. There are also 4 motor vehicles and 3 money market accounts, 2 of which are in Jamaican dollars and 1 of which is in United States dollars. In addition there is a credit card liability with Scotia Bank of CI$5,802 but it is disputed by Mrs. Smith that this is truly a matrimonial liability; she contends that it is Mr. Smith’s own sole liability. As far as the former matrimonial home is concerned, it has a gross value, agreed by the parties, of CI$200,000. It is, however, subject to a mortgage and the value of the remaining equity is agreed at approximately CI$99,000. The house is occupied by Mrs. Smith and the 2 children. The monthly cost of the mortgage is approximately CI$1,400. Pursuant to an order of the Summary Court made in 2006, Mr. Smith was making the monthly mortgage payments in full until that order was effectively varied by an order of this Court on 19th November 2007, since when Mr. Smith has been paying one half of the monthly mortgage payments. The title to the house is in joint names of the parties. The contents of the house and certain building blocks and other items on the site have an agreed value of about CI$10,000. The house in Jamaica has a value agreed by the parties equivalent to CI$58,603. It is unencumbered and belongs jointly to the parties. However, there are two complications with the Jamaica house. Firstly, although the parties purchased the property from Mrs. Smith’s uncle the title has never been transferred out of her uncle’s name. If and when the title to the house were to be transferred into the name of one or other or both of Mr. and Mrs. Smith there would not only be transfer costs but also outstanding arrears of property tax to pay off in an unknown amount. The second complication is that the property is currently occupied rent free by Mr. Smith’s adult nephew and niece. The parties did not significantly disagree about the division of the 4 motor vehicles between them or their value, but they did disagree about the former matrimonial home and the house in Jamaica. Mr. Smith proposed that Mrs. Smith should get the former matrimonial home and contents and that he should get the house in Jamaica. Mrs. Smith submitted that she could not afford to pay the mortgage on the former matrimonial home herself and that she would not qualify for refinancing on her own. Although she did not submit any evidence of that, it does seem quite likely in light of her net income of approximately CI$2,800 per month. Her proposal was that she should get the Jamaica house which she would rent out and thereby derive an income from that and that the former matrimonial home should be sold so that with her share of the equity on sale of the former matrimonial home and income from the Jamaica house, she would be able to afford to rent suitable accommodation for herself and the children. She proposed that Mr. Smith should continue to pay one half of the monthly mortgage payments in respect of the former matrimonial home until it is sold. One half of the monthly mortgage payments at the current rate would amount to CI$700 per month. In my view, it would be desirable that the children continue to live in the former matrimonial home if that is possible and I have considered requiring Mr. Smith to continue to pay one half of the mortgage payments indefinitely. However there are clearly risks in that and any event in the circumstances here it seems desirable that there should be as much of a clean break as possible. Regrettably therefore, in the absence of agreement between the parties, I can see no real alternative to the sale of the former matrimonial house. I do not think that Mrs. Smith’s proposal in relation to the house in Jamaica is really realistic or fair if she is to get one half of the former matrimonial home as well and accordingly, consistent with the desirability of a clean break and a 50/50 split, I order that the property in Jamaica should be sold also. In each case the net proceeds of sale of the properties and their contents should be divided equally between the parties. I also do not accept that the credit card debt is a matrimonial liability and I therefore do not take it into account. I am satisfied that Mr. Smith incurred that liability himself, it is in his name, and he must be responsible for it. As far as the motor vehicles are concerned, I direct that Mrs. Smith shall keep the Honda, already in her possession valued at $5,000 and Mr. Smith shall keep the Silverado truck valued at $2,000 net. He shall also keep the Toyota Hiace van which is in Jamaica and valued at approximately $3,516. Mr. Smith has already given away the Nissan car, valued at $1,000 so he must give credit for that and pay Mrs. Smith $500 in respective of her one half share of that matrimonial asset. Mr. Smith must also pay Mrs. Smith $516 to reflect the total difference in value of the two vehicles he will be keeping and the value of the one vehicle which Mrs. Smith will be keeping. Lastly, as far as the money market accounts are concerned, in my view, they fall to be divided equally between the parties, with the amount already withdrawn by Mr. Smith to pay arrears of maintenance previously ordered by the Court to be taken into account. As I understand it, that means that the total amount of these accounts would be notionally assessed at $2,665 of which one half, namely $1,332.75 is due to Mrs. Smith in respect of the accounts. Accordingly, in light of what I have already ordered about cash payments, Mr. Smith must pay Mrs. Smith a total lump sum in settlement of CI$2,348.5. I direct that this should be paid in 2 installments of $1,174.38 each, the first to be paid on or before Wednesday 12th November 2008 and the second on or before Wednesday 10th December 2008. As far as maintenance is concerned, I direct that until the former matrimonial home is sold, as I have directed above, Mr. Smith must continue to pay one half of the monthly mortgage payment together with one half of the insurance on the house. He shall in addition pay one half of the health insurance and any excess medical expenses in respect of the two children as well as their educational expenses until they reach the age of sixteen or, if, as is the case with K-Ann, they are in full time education until such full time education finishes or until they reach the age of twenty-one, whichever is sooner. Mr. Smith shall also pay maintenance in respect of the 2 children, K-Ann and Daniel, in the total sum of $700 per month, payable through the Court Funds Office. As I have already said, maintenance shall continue to be payable until the children reach the age of sixteen or, if in full time education, until that finishes or they reach the age of twenty-one, whichever is sooner. I further direct that the house in Jamaica shall be placed on the market as soon as possible and in any event within a month. Mr. Smith is to arrange for notice to be given to the current occupiers and to instruct them to allow viewing of the property by potential purchasers and to vacate the property on any sale. The parties are to cooperate as far as possible in order to achieve a sale of both matrimonial properties. Sale costs shall be shared equally. Lastly, in the circumstances I think it fair to make no order for costs. Each party shall have liberty to apply insofar as necessary for the further working out of the order which I shall make in light of this ruling".
Following this ruling I duly signed an order which I considered properly reflected my ruling.
In reaching my decisions on the matters on dispute between the parties I had regard to sections 19 and 21 of the Matrimonial Causes Law (2005 Revision) ("the Law") and in particular I endeavoured to have regard, first of all, to the best interests of the children and thereafter to the responsibilities, needs, financial and other resources, actual and potential earning power and the deserts of the parties.
As far as the 2 children were concerned, only one of them, Daniel, was under sixteen but the older child, K-Ann was in full time education and accordingly in my view it was appropriate to direct that maintenance should be paid in respect of her pursuant to the proviso to section 22 of the Law. I also considered that in the particular circumstances of this case, having regard to the factors specified in section 19 of the Law, it was appropriate and reasonable that Mr. Smith should also pay one half of the children's health insurance, excess medical costs and educational costs.
With regard to spousal maintenance, Mrs. Smith was employed and earning, Mr. Smith had contributed significantly to the matrimonial assets and the evidence was that his income was sporadic and not necessarily any greater than Mrs. Smith's. I also ordered that Mr. Smith pay significant child maintenance and expenses. In the circumstances I did not consider that spousal maintenance was justified or fair and I therefore made no order for spousal maintenance in my ruling.
As far as the division of the matrimonial assets was concerned, I was satisfied that the credit card debt was not a matrimonial liability. The expenditure concerned was not matrimonial in nature but was for Mr. Smith’s personal benefit and in my view it was properly to be considered his personal obligation.
In the circumstances it did seem fair and reasonable to me that the money market accounts should be divided equally between the parties and, as I understood it that was not significantly disputed. However, the sums withdrawn by Mr. Smith to meet his obligation to pay maintenance pursuant to Court order, did not amount, in my opinion, to a matrimonial debt to be taken into account in assessing Mrs. Smith’s share and accordingly the amount in the accounts was assessed disregarding the sums he had withdrawn for that purpose.
As far as the 4 motor vehicles were concerned, as I noted in my ruling, the parties did not significantly disagree as to who should receive which vehicle and in respect of the vehicles’ values.
In considering the former matrimonial home, it did seem to me that ideally it would have been in the best interests of the 2 children to be able to continue to reside there. However, in light of the parties’, and particularly Mrs. Smith’s means, and the desirability of a clean break given the history of bitter disputes over financial matters, unfortunately that did not appear to be a practical option. On the other hand, in light of Mr. Smith’s contribution to the value of the former matrimonial home, I did consider it fair that the parties should divide the net equity equally between them and the parties themselves proposed a 50/50 split of the matrimonial assets generally. The former matrimonial home was considerably more valuable than the house in Jamaica. In the circumstances, given that she would get half the equity in the former matrimonial home, in my judgment, Mrs. Smith’s proposal that the house in Jamaica be awarded solely to her, was not fair or reasonable. I therefore considered that the fairest and most appropriate approach was for the house in Jamaica to be sold as well and the proceeds of sale divided equally between the parties, in the same way as the former matrimonial home.
Having regard to sections 19 and 21 and the proviso to section 22 of the Law, in light of all the circumstances I duly ruled as set out above and made the order of 28th October 2008 accordingly. Dated 8th June 2009 The Hon. Mr Justice Angus Foster Judge of the Grand Court (Acting)