F v F

• Jurisdiction: Bermuda
• Judge: Thompson
• Judgment Date: 12 July 2024
• Docket Number: 2020: No. 32
• Court: Supreme Court (Bermuda)

BETWEEN:

F

Petitioner

and

F

Respondent

RULING of Cratonia Thompson, Acting Registrar

2020: No. 32

In The Supreme Court of Bermuda

Petitioner: Georgia Marshall of Marshall Diel & Myers Limite

Respondent: In person

RULING

Final Application for Ancillary Relief; Principle of Fairness;

Full and Frank Financial Disclosure; Adverse Inferences

Introductory

1 The parties were married in May 1995, and Decree Absolute was granted in November 2020. Ancillary Relief was adjourned to Chambers. By Notice of Application for Ancillary Relief dated 23 June 2023 (the Application), the Petitioner applied for the following relief:

• a) A lump sum provision;

• b) A property adjustment order in relation to the former matrimonial home (the FMH) and two vacant lots located in St Georges Parish ( Lots A and B); and

• c) Such other relief as the Court deems just, including a provision for costs.

2 There is one child of the marriage, who will be referred to in this Ruling as A. A is over the age of 18 and in full-time employment. A is also engaged to be married and has one child (the parties' grandchild). Both the Respondent and the Petitioner came into the marriage each having had a son from previous relationships. The Respondent's son will be referred to in this Ruling as B. It is the Petitioner's case that B is in full-time employment and is in business with the Respondent. The Petitioner's son is also over the age of 18. His employment status was not mentioned, nor is it material to this Application.

Procedural History

3 The Petitioner filed two affidavits in support of the Application, the first on 13 September 2023 (the Petitioner's First Affidavit) and the second on 22 April 2024 (the Petitioner's Second Affidavit).

4 The matter came before the Registrar on a number of occasions. Five separate orders were made by the Court prescribing directions for the hearing of the Application:

• (i) The matter first came before the Registrar on 1 August 2023. The Respondent did not appear and an order was made in her absence. The Order dated 1 August 2023 directed the Petitioner to file his affidavit of means on or before 29 August 2023, and the Respondent to file her response to that affidavit within 21 days. The matter was listed to return before the Registrar for mention.

• (ii) The matter returned before the Registrar for mention on 31 October 2023. The Respondent did not appear and another order was made in her absence. By Order dated 31 October 2023, the Court appointed Coldwell Banker Bermuda Realty to conduct valuations of the FMH and Lots A and B. By letter of even date the Petitioner served on the Respondent his Rule 57(4) Requests.

• (iii) The parties appeared before the Registrar for mention on 14 November 2023. The Respondent had not complied with the Order of 1 August 2023, wherein she had been directed to file a response to the Petitioner's First Affidavit. As such, the Respondent (who appeared at the hearing in person), was directed to file and serve an affidavit setting out her financial position on 5 December 2023. The Respondent was also given leave to file her own Notice of Application for Ancillary Relief, and to make her own Rule 57(4) requests. The matter was set down for a further mention on 19December 2023.

• (iv) When the parties appeared on 19 December 2023, the Respondent had not complied with the Court's directions. The Respondent appeared in person and was given an extension of time to respond to the Petitioner's Rule 57(4) Requests. Additionally, the Respondent was directed to file and serve a schedule setting out all bank accounts held jointly or in her sole name, as well as any bank account(s) she has held over the course of the marriage in relation to any business she has operated. The Respondent was also given a second opportunity to make her own Rule 57(4) requests.

• (v) The fifth and final order was made on 23 January 2024. The Respondent appeared. She was given a further extension of time in which to respond to the Petitioner's Rule 57(4) requests, an extension of time in which to provide the schedule setting out her bank accounts, and a further extension of time in which to make her own Rule 57(4) requests. The Application was set down for hearing commencing on 22 April 2024.

THE FACTS

5 As the procedural history suggests, the greatest challenge in this case was the Respondent's failure to provide the Court and the Petitioner full and frank disclosure as it related to her financial position. It is the Petitioner's case that throughout the parties' marriage the Respondent managed all of their assets and finances. The Petitioner has provided to the Court and to the Respondent in his First and Second Affidavits his evidence as it relates to his knowledge of the parties' finances, as well as his personal income and expenses. The Respondent did not file or serve any Affidavits. Consequently, the facts set out below are derived from the Petitioner's evidence set out in his First and Second Affidavits, and the parties' viva voce evidence at the hearing of the Application.

Assets

FMH

6 The FMH, located in Hamilton parish, is owned jointly by the parties having been purchased in 2003 for $1,100,000. The parties paid a deposit towards the purchase price, and the balance was raised by way of a mortgage. Until recently, both the Petitioner and the Respondent continued to reside at the FMH with A, A's fiancee, and the parties' grandchild. The FMH was valued in January 2024 at a market value of $1,100,000. There is an outstanding mortgage on the FMH, which is discussed more particularly below.

Business Property

7 In 1999, the parties purchased a property in Devonshire parish for $275,000 for the purpose of operating the parties' business, which was also started in 1999. $25,000 of the purchase price for the property (the Business Property) was secured through a gift from the Respondent's father. The remaining balance was raised by way of a mortgage.

8 In 2009, the parties took up a mortgage of $850,000 to assist with construction to the Business Property. Then in March 2010, a Further Charge in the sum of $103,446 was added to the borrowing to meet cost over runs on the Business Property, bringing the total debt owed in relation to the Business Property to $942,000.

9 It is the Petitioner's evidence that during the marriage the Family Business generated sufficient income to meet the monthly mortgage payments for the FMH and the Business Property, and that the Respondent managed these payments. The payment history of the debt owed with respect to the Business Property shows that since its inception the monthly interest and principal were paid from the business account of the Family Business. This continued until December 2017 when the principal outstanding had been reduced to $748,025. It is the Petitioner's case that from December 2017 onwards, the Respondent refused to meet the mortgage payment for the Business Property, which eventually resulted in the bank ( HSBC) taking legal action against the parties for recovery of mortgage arrears.

10 By Order dated 25 March 2021, the parties were given four months to pay the outstanding mortgage on the Business Property in full, failing which HSBC would obtain a possession order. The funds were not paid and HSBC made a further application to the Court to appoint Receivers. At the hearing of the Receivership Application, the Respondent confirmed that the Petitioner had no knowledge of the claim.

11 The Petitioner has no information of what transpired thereafter in relation to the mortgage secured against the Business Property, the possession order sought by HSBC, or any purported sale. On cross-examination, the Respondent indicated that she no longer owns the Business Property, and denied having any knowledge as to who owns it. It was put to the Respondent that she continues to operate the Family Business from the Business Property along with her son, B. The Respondent would not confirm this to be true, however the Respondent did confirm that all of the tools and equipment, as well as all of the stock in trade of the Family Business, is presently stored at the Business Property and that she has access to the Business Property at will.

Other Properties

12 In 1999, the parties, along with the Respondent's brother, purchased Lots A and B for $195,000. The Petitioner's evidence is that the parties covered the bulk of the purchase price, with the Respondent's brother contributing only $20,000. Both Lots A and B remain vacant and were valued in January 2024 for a market value of $100,000 each.

13 It is the Petitioner's case that the Respondent also owns a vacant lot of land jointly with her Father and siblings in Smith's parish ( Lot C). On cross-examination, the Respondent was invited to confirm her ownership interest in Lot C. The Respondent would not accept that she had any ownership interest in Lot C, and instead stated that Lot C was owned solely by her Father and siblings. While the Respondent did accept that she operates another business from Lot C, the Respondent insisted that she pays rent in the sum of $1,500 per month in order to do so.

Overseas Properties

14 During the marriage the parties purchased a total of four properties overseas - three in Florida and one in Huntsville, Alabama. The Respondent was asked to provide to the Petitioner and to the Court discovery related to the purchase and eventual sale or transfer of these properties but failed to do so. In some instances, the Petitioner was able to obtain through his own investigations information related to the transfer of these properties (either by sale or foreclosure), which was detailed in his First and Second Affidavits.

15 The Petitioner's evidence is that the parties jointly purchased the first Florida property in 1997 for a total of $52,000 with cash. The Petitioner ascertained through his own...