L v L

• Jurisdiction: Bermuda
• Judgment Date: 23 March 2006
• Docket Number: Divorce Jurisdiction 2005 No. 77
• Date: 2006
• Court: Supreme Court (Bermuda)

Between:

L

Petitioner

and

L

Respondent

[2006] Bda L.R. 21

Divorce Jurisdiction 2005 No. 77

In The Supreme Court of Bermuda

Ancillary relief — Division of assets — 7 year marriage, 2 children — Whether Mesher order appropriate

The following cases were referred to in the judgment:

Trott v Trott [1998] Bda LR 19

Smith v Smith [1996] Bda LR 17

B v B [2003] 2 FLR 285

Ms K Lomas for the Petitioner

Mr J Pachai for the Respondent

RULING of Kawaley, J

Introductory

1. The parties in this case married in the Azores on January 8, 1998. They purchased a home in the Respondent's sole name in 1999, and a timeshare unit in 2003, with a daughter and a son being born to the family in 2000 and 2003.

2. The husband operated, with some assistance from the wife, a landscaping business he had started before the marriage. The wife worked, maternity commitments apart, as a cleaner. This seemingly initially happy and hard-working home was finally broken apart when the husband left the home on April 18, 2005 at the request of the wife. A highly publicized assault on the wife on April 27, 2005 resulted in the husband being convicted on his own plea in Magistrates' Court on June 17, 2005. He received a suspended prison sentence and probation. In August he was fined for breach of the probation order, and a further breach resulted in the husband being sentenced to ten months imprisonment to be followed by 18 months probation.

3. Decree nisi was granted on August 26, 2005 on the grounds of the husband's unreasonable behaviour, and his own cross-petition, in which he accused the wife of adultery, was not proceeded with. In the course of the hearing, however, the wife frankly admitted committing adultery during the marriage in revenge for similar suspected conduct on the husband's part.

4. At the ancillary relief hearing, the husband was serving a prison sentence, and relying on a manager and his father to run the business to enable him to, somewhat remarkably, continue to meet his mortgage and maintenance commitments in respect of the matrimonial home and his family.

The family assets and the contending positions

5. The parties have sensibly reached agreement on how certain assets should be divided. It is common ground that the husband should keep the motor cycle1 and the timeshare, and that the wife should keep the car and the furniture.

6. The wife seeks 50% of the net equity in the matrimonial home ($698,924/2 = $349,462, based on an agreed valuation), if it has to be sold, but primarily asks that she be permitted to remain in occupation until she remarries or the children complete their full

time education (a Mesher order). The main rationale for this is that, as a non-Bermudian, she cannot invest in real estate in Bermuda in her own right. The husband says this would be unfair as (a) the property is in his sole name, (b) he contributed his then life savings of $80,000 as a deposit, and he would be unable to make a fresh start without the return of his equity now; (c) he was lent $50,000 by his parents repayable if the marriage was dissolved, and (d) it is more than fair for him to agree a 50/50 share of the property.

7. The wife seeks half of the net value of Lima's Landscaping, half of monies transferred from the parties joint business account, and half of the value of withdrawals from certain Hansard accounts, plus half the value of the remaining policies. The husband suggests she should not receive any of these amounts(a) because the business is a pre-marriage asset which she made minimal contributions to, (b) the monies withdrawn from the joint account went to meet business expenses2, and (c) the surrender value of the remaining policies is virtually nil at this juncture.

8. With respect to maintenance payments, the wife seeks the existing payments of $2,383 (including a $1300 per month mortgage contribution) to continue until the husband's release from prison, after which they may be reassessed in light of his then income. The husband says he plans to sell the business, and expects to earn no more than $1000 per week. If the wife is unable to keep the house and refinance the mortgage, and compelled to rent, she would seemingly be unable to meet her expenses without additional financial support, over and above the child support payments ($1083 per month), without depleting her capital.

9. It was submitted on behalf of the wife that as a non-Bermudian she could not acquire any interest of her own in any real estate, so using her share of the proceeds from the sale of the matrimonial home to acquire a home for herself and the children was not a viable, or desirable, option.

10. It was not explicitly contended by Ms. Lomas for the wife that the particularly violent assault after the husband had left the former matrimonial home should affect the financial disposition of the matter. Nor did Mr. Pachai seek to rely on the wife's belated admission that her own adultery preceded this incident, as conduct affecting the financial award. It was, nevertheless, submitted on behalf of the husband that the acrimonious nature of the divorce made a clean break the only sensible solution.

11. The parties are both comparatively young, the husband is 33 years of age and the wife only 26.

Applicable law

12. Section 27 (1)(a)-(c) of the Act empowers the Court to make maintenance orders and lump sum payments orders. Section 28 empowers the Court to make property adjustment orders. The broad principles which govern the present application, it was agreed, are to be found in the following provisions of the Matrimonial Causes Act 1974:

“29 (1) It shall be the duty of the court in deciding whether to exercise its powers under section 27(1)(a), (b) or (c) or 28 in relation to a party to the marriage and, if so, in what manner, to have regard to all the circumstances of the case including the following matters—

(a) the income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future;

(b) the financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future;

(c) the standard of living enjoyed by the family before the breakdown of the marriage;

(d) the age of each party to the marriage and the duration of the marriage;

(e) any physical or mental disability of either of the parties to the marriage;

(f) the contributions made by each of the parties to the welfare of the family, including any contribution made by looking after the home or caring for the family;

(g) in the case of proceedings for divorce or nullity of marriage, the value to either of the parties to the marriage of any benefit (for example, a pension) which, by reason of the dissolution or annulment of the marriage, that party will lose the chance of acquiring;

and so to exercise those powers as to place the parties, so far as it is practicable and, having regard to their conduct, just to do so, in the financial position in which they would have been if the marriage had not broken down and each had properly discharged his or her financial obligations and responsibilities towards the other.”

13. The Court does have a discretion to postpone the sale of the former matrimonial home where there is a need for the wife and children of the family to have a settled home, even if the husband is unable to obtain a return of his equity until the child reaches a certain age: Mesher v Mesher[1980] 1 All ER 126. But I accept Mr. Pachai's submission that this solution has only seemingly been contemplated in England in circumstances where the husband is able to purchase a new home in any event (Mesher v Mesher), and even then has been a solution criticised as generally inappropriate on appeal (Mortimer v Mortimer[1986] 2 FLR 315. More recent English case law supports the view that such orders are only appropriate where the husband has no need for his capital, either immediately or at all, but not that such orders should never be made3.

14. I have also been assisted by the other authorities which the husband's Counsel supplied to the Court. The House of Lords decision in White v White[2000] 3 W.L.R. 1571 makes it clear that there is no presumption of equal division of assets, but that equality is a useful yardstick, the departure from which should be justified on specific grounds. The relevance of conduct is helpfully discussed in Jackson, Matrimonial Finance and Taxation, Seventh Edition, paragraphs 3.42–3.57, 8.24–8.26.

15. After reserving judgment, I offered Counsel an opportunity to submit short written submissions on what appear to be the only, or only recent, decisions of the Bermuda courts in relation to the making of non-consensual Mesher orders. The first case is the Court of Appeal for Bermuda decision Trott v Trott[1998] Bda LR 19, which suggests that a more liberal approach may be taken in Bermuda than in England. This was a ten year marriage in which the matrimonial home had been fully paid for by the husband before the marriage. The husband was 41 years of age, and the wife 30, when the parties married in 1980. Decree Nisi was granted in 1990, but was not made absolute until 1996. The ancillary relief order was not made until January 1998, by which time the parties would have been roughly 59 and 48 respectively. The elder child of the family was by then an adult, but the younger child of the family was 12 years of age. The wife's interest in the matrimonial home was held to be one third.

16. In Trott, Meerabux J at first instance ordered that “the former matrimonial property shall be held on trust for sale and not be sold until the child of the family…reaches eighteen (18) years or finishes her education, whichever is later”4. He further ordered that the husband should give up possession of the property, save for the apartment, to the wife, and it appears he had to some extent been occupying...