The Privy Council gave very strong guidance to Jamaican courts adjudicating on the property entitlements of husband and wife after divorce in the case of Eutetra Bromfield v Vincent Bromfield, a Jamaican case heard and decided earlier this year by our highest court.
The upshot of the decision is that since the courts in Jamaica now have wide powers to redistribute property following divorce, it is unnecessary, “difficult and ultimately arid” for the courts to embark upon an in depth investigation into who said what and paid what at the time the property was purchased in order to determine the extent of each party’s beneficial interest. This approach often results in the court making decisions on the basis of inadequate documentary material and rival versions of what the husband said long ago to the wife and vice versa.
In Bromfield, the parties had been married for 15 years, had 3 children, a valuable matrimonial home bought in the husband’s sole name and 2 “family” businesses. Prior to the marriage, the wife had graduate and postgraduate degrees and had been employed in various managerial positions, but gave them up following the birth of their third child. Thereafter she worked, to some extent, in the husband’s two businesses. In one business she was a minority shareholder and in the other, despite contrary intentions expressed during the marriage, no shares were ever transferred to her during the marriage. Two commercial properties were held in the name of the latter.
The Privy Council importantly upheld that companies are legal entities separate from their shareholders. Company property is company property, and not that of its shareholders, subject to very limited exceptions, most of which are statutory. Therefore, the fact that the husband is a shareholder of a company that owns property doesn’t mean the husband owns that property. The company’s property is therefore not “up for grabs” in the matrimonial property dispute, unless specific circumstances arise.
The Privy Council also discussed a possible loophole in the legislation which may find a party unable to obtain a second lump sum payment on an application to vary a maintenance order because it is not expressly stated that the court has that power. This will have to be addressed by Parliament and is something to be considered when accepting a lump sum payment the first time around.
The Privy Council’s criticism of the way in which the first instance Judge reached his conclusions is helpful to future litigants preparing their cases or considering their options:
1. It is impossible for the court to identify fair capital provision without reference to the approximate size and nature of the parties’ existing assets.
2. The court has a duty under the Maintenance Act to seek to obtain credible information concerning the income and expenditure of the parties and should not accept any party’s failure to provide credible financial information to the court.
3. Where a party so fails, the court may make orders for specific disclosure and/or require the parties to answer questionnaires. The court may also issue a witness summons to a third party to give oral evidence or produce documents.
4. Examples of documents that should routinely be provided are recent tax returns, bank statements, credit card statements, company accounts and passports. These documents may also be used to identify questions for a questionnaire.