JC v BC

• Jurisdiction: Bermuda
• Judgment Date: 26 April 2013
• Date: 26 April 2013
• Docket Number: Divorce Jurisdiction 2011 No 22
• Court: Supreme Court (Bermuda)

2013 Bda LR 33

In The Supreme Court of Bermuda

Divorce Jurisdiction 2011 No 22

Between:

Jc

Petitioner

and

Bc

Respondent

Mr D Kessaram for the Petitioner

Ms G Marshall for the Respondent

The following cases were referred to in the judgment:

Ellison v Ellison (1985 Civil Appeal No 1, Bermuda, unreported)

Duncan v DuncanBDLR [2005] Bda LR 32

Araujo v AraujoBDLR [2008] Bda LR 8

Ancillary relief — Ownership of business — Valuation — Matrimonial claims — 5 year marriage with premarital cohabitation — 1 child — Bermudian wife, non-Bermudian husband — Spousal employment rights — Matrimonial property

JUDGMENT of Wade-Miller J

1. The parties in this case are JC, the wife, Petitioner and BC the husband, Respondent. For convenience the Court shall refer to the parties as the wife and the husband.

2. The applications before the Court is the final hearing of the parties cross applications for Ancillary Relief.

3. The husband filed his application on the 12^th May 2011. He seeks an order that the wife be ordered to pay him such lump sum or sums provisions as may be just and such further or other relief as may be just.

4. The wife filed her application on the 19^th May 2011. She seeks:-

• i. An order that the husband pay maintenance pending suit to her, for herself and for the child of the family.

• ii. An order that the husband make periodical payments and/or secured periodical payments for herself and the child of the family;

• iii. An order that the husband make a lump sum payment or payments and/or secured lump sum payments for herself and the child of the family;

• iv. A transfer of property order; and/or

• v. An avoidance of disposition order in respect of the assets and undertaking of Rev Automotive pursuant to s 41 of the Matrimonial Causes Act 1974 (MCA)

5. On 3^rd May 2011, the wife filed a Specially Endorsed Writ which commenced Civil Proceedings Action 2011 No. 151 against the husband, Justin Bento and Rev Automotive Ltd. seeking:-

• i. Damages in the amount of $135,101;

• ii. Damages for fraudulent conversion appropriation and undertaking of the sole proprietorship of Rev Automotive belonging to JC;

• iii. A mandatory injunction for the transfer of the assets and undertaking to JC of the shares in Rev Automotive Limited (RAL);

• iv. An account of profits, dividends or other payments or other property derived directly or indirectly from the income of the business or representing the assets and undertaking of Rev Automotive.

• v. An order for payment to JC of all amounts found due on the taking of such accounts and inquiries;

• vi. Interest; and

• vii. Costs.

6. Counsel for JC, the wife, explained that part of the relief claimed by JC in the civil proceedings overlap with the claim under s 41 Matrimonial Causes Act 1974 (MCA) in that the transfer to and appropriation of the business ostensibly by RAL (but in reality by BC) is sought to be set aside thereby re-vesting the business of Rev Automotive in JC.

7. Ultimately there are three principal issues in these proceedings:-

• i. Where does the ownership of Rev Automotive lie?

• ii. What is the value of the business?

• iii. How are the matrimonial claims to be resolved?

Evidence

8. The evidence consists of four extensive affidavits filed by the parties — two by the wife and two by the husband — including numerous exhibits in eleven lever arch binders, their oral evidence and the evidence of one expert witness. The trial occupied 8 days.

9. The Court does not propose to repeat the evidence which is now a matter of record. However, the Court has considered all the evidence and, even if a piece of evidence is not directly referred to, the Court has taken all the evidence into account in arriving at the final decision.

10. This has been a hard fought case. There were several matters raised where disputed facts led to credibility issues. In my judgment, neither the husband nor the wife was an impressive witness. Counsels obviously have to take their client's instructions and advance their client's case which invariably involves attacks on the credibility of the opposing side. A client may even reject their counsel's advice, but when emotions are running high advisers have to be extra vigilant to stand back from the hostility and direct their focus on resolving the matter in a cost-effective, fair and reasonable way.

Background

11. The husband (BC) is 40 years old and the wife (JC) is 39 years old. They met in Bermuda and started a romantic relationship in or about April 2004. From January 2008 they started living together at the wife's residence in Paget (which is owned by the ‘DE’ Trust settled by the wife's father). They married on the 4^th February 2006. It was the wife's second marriage. After the marriage they continued to live in the Paget property until the breakdown of the marriage. The wife vacated the premises in January 2011 and the husband vacated two months later. After the husband vacated the wife re-entered the premises and she continues to reside there with her two daughters. They have one child together who was born on the 14^th November 2007. The wife also has a daughter from her first marriage; this child resided with the parties when they commenced cohabitation until the marriage ended.

12. In February 2011 the wife filed her petition for dissolution of the marriage. Decree Nisi of divorce was made Absolute on 24 June 2011. So the marriage lasted 5 years and 4 months. The Court must and has regard to the period of premarital cohabitation. The parties have joint custody of their child with the issue of her care and control adjourned to chambers. It was agreed that the husband should contribute $3,000 towards the divorce costs.

13. The wife who is Bermudian has always worked. When the parties first met she was employed as an office manager at HSBC Bank of Bermuda. After she left HSBC she worked with JPM Administrator Services Bermuda Ltd. On 1^st August 2011 she commenced working for GAM Limited. From this employment she earns $115,000 per annum. In addition she participates in a discretionary bonus scheme operated by her employer. During cross-examination the wife admitted that she did not disclose the fact that she was negotiating this contract of employment with GAM Limited as she did not consider this relevant. In my judgment the wife made a deliberate decision to withhold this information that a process was underway whereby her earnings would be increased.

Rev Automotive

14. There is a major dispute as to where the ownership of Rev Automotive lies.

15. In 2004, when they first met, the husband, who is a Canadian, was employed by Holmes William & Purvey (HWP) on a work permit basis as a car mechanic servicing Skoda and VW vehicles. While working for HWP he was importing and selling car parts and accessories on the side. The Court states at the outset that he was breaking the law as he did not have the Department of Immigration's permission to do this work.

16. Mr Kessaram, Counsel for the wife, submits that in 2004 the husband's side job was properly organized and run legitimately as a business by the wife. It was given a name which the wife chose and was registered with the Social Insurance Department on the 10^th August 2004 as a sole proprietorship and, from that date was run out of the wife's home until the parties separated in 2011. The wife dealt with all of the administrative responsibilities associated with the business. In 2005 the husband moved into the wife's home and continued to run the business from the wife's home. The parties married in February 2006 and continued living together as man and wife, until they separated in 2011. After the marriage the business was expanded and provided car repair and maintenance services. The husband rented premises for this purpose. The wife remained fully involved and continued to carry out the administrative duties. The husband did not take a regular salary. The wife did not receive a salary for her services. The company provided the income which supported the lifestyle of the parties during the marriage.

17. Based on the evidence that the Court heard it is satisfied that together the parties agreed to start up the business Rev Automotive. This Court views the start-up of this business against the backdrop of the husband being non-Bermudian who was employed by HWP and whose work permit did not authorize him to engage in any other activity. In my view the wife could not put the husband's name forward at the Social Insurance Department as they would be openly breaking the law. The Court accepts the evidence that the business operated from the wife's residence and she carried out the clerical and administrative (duties) associated with the running of the business. After the parties started living together in January 2005, the business continued to operate out of the wife's home.

18. The parties planned to marry at the end of 2006. However, the husband's employment with HWP ended in early 2006. The parties brought forward their wedding date and married on the 4^th February 2006 so that the husband could enjoy the benefits of the Spouses Employment Rights which enabled him to work without Bermuda Immigration restrictions.

19. A garage to carry out repairs and maintenance was established in 2006. Premises were located at Industrial Park Road, Southampton and the lease was for three years, with an option to renew. The wife paid out of her own bank account the rent to secure the premises.

20. The Court is satisfied that all decisions...