Roberts v Chute [2004] FJHC 290; HBC0283.2002 (8 July 2004)

IN THE HIGH COURT OF FIJI
AT SUVA
CIVIL JURISDICTION

CIVIL ACTION NO.: HBC0283 OF 2002

BETWEEN:

KENNETH A.J. ROBERTS
PLAINTIFF

AND:

ROSALIA L. CHUTE and ANOTHER
DEFENDANT/APPLICANT

Mr. S. Matawalu for Plaintiff
Mr. D. Sharma for Defendant/Applicant

JUDGMENT

BACKGROUND:

The parties were married on 26th September 1996. They have one son Benjamin Allan John Roberts. The child was born 4th October 1990. A Decree Nisi was pronounced on 1st November 2001 on husband’s petition on grounds of wife’s adultery. A decree absolute was made on 21st December 2001. The learned Magistrate who dealt with the divorce transferred the issue of matrimonial property to be finalized by the High Court.

This led to the applicant filing an originating summons seeking equal interest in seven different items of real property and in six companies. The parties filed their affidavits but because of the contentious nature of proceedings and disputes as to material facts oral evidence was called.

Divorce is invariably a sensitive matter. The parties have taken considerable time to file their submissions. Delay in divorce matters is highly undesirable as until the litigation including property matters are finally concluded, it is difficult for parties to make a transition from married life to an independent one.

In White v. White - 2000 1 ALL ER 1 the House of Lords made the following pertinent remarks as follows:

“Divorce creates many problems. One question always arises. It concerns how the property of the husband and wife should be divided and whether one of them should continue to support the other. Stated in the most general terms the answer is obvious. Every one would accept that the outcome on these matters, whether by agreement or court order, should be fair, more realistically, the outcome ought to be as fair as it possible in the circumstances. But every one’s life is different. Features which are important when discussing fairness differ in each case. And sometimes different minds can reach different conclusions on what fairness requires. Then fairness like beauty lies in the eyes of the beholder.”

One has to be objectively fair having regards to the relationship which existed prior to the divorce. Sections 86 and 87 the Matrimonial Causes Act are the relevant statutory provisions in relation to settlement of property matters. Section 86(1) gives the court wide discretionary powers to make “such a settlement of property ... as the court considers just and equitable in the circumstances of the case”. These sections give the court powers to determine how a property or properties of both parties are to be divided. The object which the above provision aims to achieve is for a court to produce whether by agreement of parties or by its own order an outcome that is fair to both parties.

Section 86(1) was considered by the Fiji Court of Appeal in Protima Devi v. Rajeshwar Singh – Civil Appeal 29 of 1985 which at page 3 said that “despite the absence of any reference in its text to contributions by the spouses, such may properly be taken into account of in exercise of the discretion to order a settlement”.

Contribution is widely construed so it encompasses not only monetary contributions but also contributions like looking after the children or doing household duties. A homemaker’s contribution is no less than that of a salary earner. They are both equally valuable to a relationship of marriage.

In the context of this case I shall look at the pre-marital acquisitions and post-marital acquisitions of property. For purposes of the exercise I shall take January 1988 as the cut off date as that is when the parties began their relationship albeit a de facto one. They had a child born on 4th October 1990. The legal marriage took place on 26th September 1996. There was no break in relationship in the transition from de facto relation to a legal one except for one of a ten-month period.

The applicant it appears owned no real properties when she began the relationship. She also explained that prior to their commencement of relationship the respondent owned certain properties namely:

(1) A residential property at Smith Drive, Lami. It was acquired by the respondent in 1973 and was in a run down condition in 1988 after some tenants had moved out. Some improvements were made to it and the parties lived there till 1994. It had been fully paid off by 1988. It cannot be considered a matrimonial property.

(2) An eight-acre property at Navua held in the name of Bialoa Limited which was a company incorporated in 1980. The shareholders are Rim Holdings Limited and Susan Elizabeth East. Rim Holdings Limited is a company incorporated in 1980. It is vacant land generating no income and incurring little expenditure. It was purchased well before the relationship and I find it is exclusively respondent’s property.

(3) There is a property in Queensland, Australia purchased in 1978. It too generates no income. Again I find it is pre-marital acquisition to which the applicant is not entitled.

As far as other properties are concerned the applicant’s main submission is that these were accumulated during the course of their relationship when she worked for company called Makosoi Products Limited which she alleges is a family company. She says she helped the company expand its business. She alleges that the assets were acquired using funds generated by her efforts through Makosoi Products Limited.

The respondent submits that the applicant was paid for her efforts in Makosoi. She was paid a salary of $18,000.00 per annum. He also submits that the applicant was more of a liability in spending her time and money to the detriment of Makosoi. She made no financial contribution to the acquisition of any property and that the marriage was entered into to protect the interest of the only child. In other words the respondent is saying that applicant’s role in Makosoi was only ornamental and peripheral to making success of the business.

Since Makosoi Products Limited has featured so strongly in the case a word or two about this company are warranted. A search of the company done on 31st October 2001 shows it was incorporated on 13th November 1980. The shareholders were Rim Holdings Limited, the applicant, the respondent, Coconut Limited Westco Secretaries Limited and Wilson Fred Tigarea. It is therefore not strictly a family company as entities other than the parties here are shareholders. Both the applicant and the respondent were directors of the company. Search shows she resigned on 13th April 2000.

According to the applicant the following properties were purchased by funds generated by Makosoi:

(1) 1 Isa Lei Drive, Lami for $275,000.00 registered in the name of Rosewood Limited. A search of Rosewood shows the parties are shareholders. It also shows there is a mortgage dated 15th May 1995 securing advances in the sum of $193,500.00.

(2) 150 acres native land on Gau Island for $27,000.00. It is registered in the name of Kiama Limited whose directors are the two parties but the shareholders are two solicitors. There is a collateral mortgage dated 1st September 1999 securing $200,000.00 in favour of Bank of Hawaii. This property was bought to supply coconut oil to Makosoi for manufacture of its products.

(3) Lot 26 Wailada Subdivision purchased in 1991 by Makosoi. A two-storey factory premises is located on this land. It was purchased by obtaining a loan from Bank of Hawaii and not too long after the relationship began.

(4) A motor vehicle BMW registered number DE 885 bought on 23rd January 1998. The registration shows it is registered in the name of Jans Rental Limited so it may be on a hire purchase.

(5) A Nissan pathfinder registration number CZ 332 in 1996 used by the respondent.

(6) A car CV 295 bought for $12,000.00 in 1996 and used by her. It was taken away by the respondent and sold. The respondent says the car was meant for sales person for Makosoi. If it was meant for a sales person then why was it sold. There is no evidence of a replacement vehicle being bought. I find that this car was meant for her exclusive use because of her status as a wife.

Makosoi was a company incorporated in 1980. According to the respondent in 1982 it developed technology to manufacture 100 percent pure coconut soap distributed to tourist plants locally and also exported to Australia, United Kingdom, New Zealand and North America. So on the basis of this undisputed piece of evidence, the infrastructure both for production and export was in place long before the applicant arrived on the scene. The respondent had since 1965 been associated with Cope-Allman International Limited a company dealing in soap and biscuit manufacturing so this type of activity was not foreign to the respondent. He was the Managing Director of Cope Allman in Fiji from 1969 to 1981.

The applicant said she took over the management role from 1990 in Makosoi and extended the business. The respondent she said worked full time for Fiji Employers Association. She suggested that her contribution to the success of the business was pivotal. The respondent on the other hand says though he is employed by Fiji Employees Association, he spends an hour or two in the mornings with the company after dropping his son at school. If needed, he also goes back in the afternoon and this is how he operated all the time. He has also kept a telephone at his place of work for him to be accessible if needed. I believe the respondent on this as with his experience in the industry he was able to put in place a system which did not require his constant supervision. The applicant in fact was away working for Diners Club for ten months at one time so her role cannot be significant or instrumental to success of the business.

I listened to the two parties very carefully. I am aware that both of them have a great deal at stake in these proceedings. The respondent’s credentials Defence Exhibit 1 are self-speaking. He had been by experience saturated in the business of oil and soap. He had the company put in place; he had the factory going and sales and exports set up. He appeared as an intelligent, self- assured, controlled and disciplined person, confident of his abilities as a businessman. He spoke coherently and confidently. I believe him when he says that he earned $62,500.00 from his employment and ploughed this money into Makosoi.

Opposed to him was the applicant who alleged that she was the driving force in the success of the business. I do not consider this to be true. The person in charge of finances was the respondent. He in fact dismissed her thrice for being financially undisciplined in trying to bulldoze ideas which were unworkable because of expenses involved. He had been in such business and would therefore be knowledgeable about such matters. The applicant appeared to me as an erratic person, intelligent but undisciplined. She described the respondent as a “control freak”. In matters of business he probably was as he wanted the company to run accordingly to set plans in an organized way for it to succeed.

The success of this company is due largely if not wholly to the respondent. Having said that it must still be remembered that she was given 100,000 shares in the company whether she paid for it or not is really immaterial. I am of the view she was given these shares because the parties were married and a benevolent recognition of whatever little contribution she made. I do not believe she was holding these shares in trust for the son as there is no evidence of this. These shares are lawfully hers. There would be no need for her to hold on trust. They could be put in son’s name. I note in case of Rim Holdings Limited the son held 100 shares in his own name. As for her contributions to the company, she was getting paid $18,000.00 per annum which was quite adequate.

The respondent gave her credit where it was due. He acknowledged that the applicant was very good with people. However she had problems with drinking which did not help her at her work. In fact she admitted going out to parties while the husband and the son stayed home. It appears that the relationship between the two was an unsteady one. Even before 1994 she had gone away once for ten months and worked for Diners Club. In the year 2000 she admitted to going to Sri Lanka with the co-respondent who did not take his wife with him. At the beginning of cross-examination she would not admit that she was living with the co-respondent but it is obvious that she is. I got a very distinct feeling that both the sanctity and stability of marriage did not matter great deal to her. Her partying and drinks were more important to her than her family. I am not saying this by way of any criticism because people are infinitely different with varying likes and dislikes. She appears to be of an outgoing vivacious nature which was not at the time agreeable to a steady relationship.

Given the applicant was paid $18,000.00 annually, the fact that she was given 100,000 shares in Makosoi an already well established company and whatever evidence is points to a volatile relationship, I am of the view that the 100,000 shares in Makosoi and use of car CV 295 express more than adequately her contributions to this relationship and what the parties intended should be her total interest in the properties. I therefore hold that the applicant is entitled to only a car of value equivalent to CV 295 and value of her shares in Makosoi. Beyond that, in the circumstances of this marriage it would be unjust to declare any of the other properties as matrimonial properties.

With this remarks I hope the parties can sit down and work out a reasonable sum for settlement acceptable to both parties.

[ Jiten Singh ]
JUDGE

At Suva
8th July 2004