Goodhew v Goodhew [2007] SBHC 140; HCSI-CC 272 of 2007 (23 November 2007)

1. The petitioner and the respondent got married at the Central Magistrates’ Court on 24th February, 2000. Thereafter the couple lived together as husband and wife. There was no child of the marriage. Throughout their marriage life the couple had considerable marital difficulties. As a result they had separated in January 2007.

2. On 23rd July, 2007 the petitioner filed a divorce proceeding in the High Court, supported by an affidavit filed on 13th August, 2007. On 28th September, 2007, this Court pronounced a decree nisi of divorce on the ground of irrevocable broken down of marriage.

3. After the petitioner obtained a decree nisi of divorce, she now applies for financial relief in regards to the division of matrimonial property. Matrimonial property is all property acquired, bought, accumulated, won or gained after marriage by both husband and wife together, or by either the husband or wife. The respondent also claims one third proprietary interest in those properties which has to be shared to her.

4. The petitioner relies on the marriage as a sanctity of union, and that one gives to the other what they have upon entering into marriage. A marriage is a contract that continues beyond separation and the petitioner is entitled to be supported by the respondent.

5. Secondly, being a legal wife acknowledging her domestic responsibilities at home. Beside, there is no dispute that she owns 20% share of the company Lalae Charters Ltd under which the MV Lalae has operated. Not only that but she also worked on the boat as a third crew.

6. The petitioner admitted in evidence that all the assets she claimed one-third of were acquired during the currency of their marriage, except the land cruiser.

7. They were paid for by the respondent. It is not disputed that she did not financially contribute towards the purchasing of all the assets, except the claim she has majority of the goods in the container.

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ASSETS CLAIMED
		AUD	SBD
1	MV Lalae	$250,000.00	$1,500,000.00
2	1994 Isuzu		60,000.00
3	Canoe and engine		22,000.00
4	Mixed goods		80,000.00
5	ANZ Honiara		10,000.00
6	Australian Banks	$11,000.00	66,000.00
7	Land cruiser		27,000.00
8	Mixed goods		2,000.00
Total Assets			$1,767,000.00

8. The respondent’s main point of argument is that only himself has contributed financially to purchase, maintenance and upkeep the above properties. There is no dispute as to that. In submission the petitioner has received $20,000 and continued receiving financial assistance after separation until May 2007. Also in the submission the respondent has supported the petitioner and her family during subsistence of their marriage, in fact she enjoyed the property to the value of $60,000 and living on other expenses for a total of eight years.

9. Because the petitioner has played no part in the financial input in the operation of the company and other assets bought to the efficient running of the vessel, she has no proprietary interest in those properties as to qualify her for a share of them. She entered into the matrimonial home with just clothes and a typewriter that too she has to walk off with.

10. Common law jurisdictions have developed a law of matrimonial property which was broadly accepted that the wife during marriage, had no independent legal existence from that of her husband. In the words of Blackstone[1]:

"By marriage, the husband and wife are one person in law; that is, the very being or legal existence of the woman is suspended during the marriage, or at least as incorporated and consolidated into that of the husband."

"By the rules of Common law, husband and wife were regarded as one person in that, during the marriage, the wife’s legal existence was treated as incorporated or merged into that of the husband, and from this it followed that, in general, a married woman was incapable of acquiring, enjoying or alienating, independently of her husband, any real or personal property."

11. As this branch of law continued to develop, over the years; married woman was allowed to acquire property during the currency of her marriage, and certain property for her own benefits without her husband obtaining any interest in that property. The process then culminated in the Married Women’s Property Act 1982. The effect of the Act was that a married woman was capable of acquiring, holding and disposing of any real or personal property. However, should dispute arise, with her husband which consequently end up in separation or divorce, Section 17 of the Act,[2] provides evidence where the issue be resolved.

"In any question between husband and wife as to the title to or possession of property, either party may apply by Summons or otherwise in a Summary way to any judge of the High Court of Justice ... and the judge may make such order with respect to the property in dispute as he thinks fit."

12. Despite the passing of the Act the main benefits of the separate property principle were reserved to the wife of having an income and property of her own. An unemployed wife who brings no income home receive no benefit from the separate property regime. If the marriage broke down she was left to her personal right of maintenance but was not able to claim any proprietary interest in the assets the family manage to accumulate; even though she displayed good skill in managing household affairs, an important factor in the building up of the family assets.

13. The Counsel for the respondent relies on the traditional adaptation of the English law, hence refer to Petit v Petit[3] which maintains the principle of equality is equity; that the Court has no judicial discretion to share the matrimonial property; that the married couples are to be treated no differently from anybody else.

14. However, what transpires from that case is a new development in English law. It basically concerns with the principle of constructive trust. Below is a brief summary of what Lord Diplock said from page 413 – 415:

(1) That the Court has to look at common intention of the parties in relation to proprietary rights in the family asset and their usages or enjoyment.

(2) The Court must impute a constructive common intention which in the Court’s opinion would have been formed by reasonable spouses.

(3) The Court must exercise and do what it considers to be fair and reasonable in all the circumstances.

(4) The Court must consider at the time of transaction that the parties are happily married and not contemplating in break down.

15. In Gissing v Gissing[4] where the house of Lords in reversing the Court of Appeal decision stated on page 782 and 783 paragraph 5. This case was heard after Petit v Petit:

"It is perfectly true that where she does not make direct payments towards the purchase it is less easy to evaluate her share. If her payments are direct she gets a share proportionate to what she has paid. Otherwise there must be rough and ready evaluation. I agree this does not mean that she would as a rule get a half share. I think that the high sounding brocade "equality is equity" has been misused. There will, of course, be cases where half a share is a reasonable estimation, but there will be many others where a fair estimate might be a tenth or a quarter or sometimes even more than half."

16. The Petitioner’s Counsel in his submission refer to four Solomon Islands cases and one from Vanuatu. In the Solomon Islands cases the Court rely on the evidence by the parties, their admissions as to the appropriate rate, and thereafter a determination was reached.

"In a case such as this where the marriage existed for some years and both parties made a contribution to the marriage, I feel in general the property should be split equally between the parties."

"Equally the respondent has withdrawn to some extent from his other entrenched position over the store premises and agrees he and his ex-wife have a 50:50 interest in the premises."

19. In the case of Margaret Takohu v John Waihou and Elizabeth Oihanaru[7], the Court stated on page 1 paragraph 4:

"Without going into the details of the evidence, I accepted that capital accrued during the marriage and that the contribution of both parties to the marriage were involved. I am satisfied it should be regarded as a joint asset. Indeed the respondent effectively demonstrated that fact when he pointed out in existence that he spent almost half of the $2,105.00 on his wife’s expenses."

20. The court shared the capital of 50:50 and less the husband’s share of the items taken by the wife.

21. Indeed those cases were not really of assistance in regards to where the wife has no financial contribution whatsoever in acquiring the family property, and on what basis she should acquire interest in those properties. In fact those cases were decided on the basis of evidence adduced, and the fact that there were agreements by the parties to have equal share, because they have contributed equally to the matrimonial property.

22. After reading Petit v Petit and Gissing v Gissing cases in full together with other Common law cases, the law has now developed and deviated from the old rigid approach, and vested upon the court the discretion to decide the share of the parties to a matrimonial asset. However, despite that there are some lingers that still hang on the old approach, in particularly the treatment of married couples.

23. This case is more difficult because the petitioner had not financially contributed to the purchase and acquisition of all the properties, except for the assets in the container which she claim majority of it, and the 20% share of the Lalae Charters Ltd, a company incorporated which the MV Lalae was operated under.

24. The circumstances of this case is such as to prompt this court to consider the evidence available before it. In the absence of such evidence this court must draw inferences to decide the common intention of the parties at the time the assets were acquired. Was there any agreement or understanding that the petitioner who contributed no financial input, to have a proprietary interest in the assets. If nothing was said the court has to look at the actions and the conduct of the parties during the course of their marriage and draw inferences to that effect.

25. After marriage on 28th February, 2000, the respondent purchased the MV Lalae property purposely to run charters.

The boat was purchased by the respondent’s own money assisted by a loan from a financial company in Australia. There is no evidence that there was a prior consultative meeting where parties discuss their interest on the boat. Likewise nothing is coming from examination or cross examination in court. This court is therefore left to examine the action and the conduct of the parties, and where possible draw inferences.

26. There is evidence that the only source of income enjoyed by the parties is the proceeds from the charter of MV Lalae.

27. Apart from owning 20% share of the company, the petitioner performed her usual skills in managing the domestic duties, for eight years, before separation. She also worked on the MV Lalae
as a third crew, whether paid or not, she is willing to undertake that responsibility.

28. It is argued that the 20% share is a paper share. She was not offered to buy. In my respective view without the share under her name the MV Lalae would not have operated in Solomon Islands. In reality she has contributed directly to the company under which the MV Lalae operated. Her service on the boat was a direct contribution acknowledging the fact that she owned 20% share of the company which operated the boat. With that, of course, she has proprietary interest on the boat and must have a share of.

29. These assets were bought by the respondent with his own money. The petitioner has never denied that. The land cruiser was bought before marriage and was brought in. The isuzu vehicle and the outboard motor and canoe were bought during the currency of marriage.

30. Here we are looking at a marriage where couples established a business giving their time and effort to ensure the business runs successfully. Both worked hard together to see their goal materialize. The assets which the respondent bought were purposely to enhance the efficient running of the MV Lalae. They are necessary assets associated to the business. Not so much for comfort and enjoyment but for sole usages for the general running of the business.

31. The sources from where the respondent purchased the assets in particular the isuzu and the outboard motor and engine were not clear. Were they bought by money accumulated from the bank account the respondent has in Australia or bank account in Honiara. Would it not be possible that some of the money spent on the assets coming from the Lalae operation. I feel there is possibility as it was the only sources of income then.

32. Vehicles and outboard motor and engine are assets which the husband brought into the family, not like a loaf of bread which does not require, and necessarily not at all for the wife to be aware of. Such assets before acquiring them the couples, of course, must have some discussion consultation and agreement. Not necessary agree on the proprietary interest in them but at least some consensus was reached. And in this case to assist them managing the business operation which is under their name. Those assets as I would say are family assets. By their usage, to include the petitioner, purposely to assist in progressing the business forward, and by the fact that the petitioner also work and assist on the boat, surely I can draw inferences that she has contributed indirectly to the purchase of the assets. Therefore, she has acquired some proprietary interest in them.

33. The respondent’s two bank accounts hold about seventy-six thousand Solomon dollars. He accumulated this balance during the course of the marriage. The general notion is that each couple of the marriage have their own rights to have their own bank accounts. In this case there is no evidence that the petitioner do have a bank account at all.

34. No evidence is available to suggest to the court that the petitioner was paid for the work done on the boat. I could infer that no one is to work for nothing. Perhaps with some money earned she contributed to the cost of living and domestic needs, which assist the respondent to concentrate on the business and accumulate money in those bank accounts. Of course, she has indirectly contributed to their accumulation. Therefore, she must at least have some share out of it.

35. The goods in the container are not well identified by the parties. They are not categories as to who owns what. The petitioner claims she owns majority of the goods. The respondent claims he owns everything. I believe the petitioner that some of the unidentified goods in the container belong to her hence she has the right of share to the total value.

36. This is equally the same with small goods sold by the respondent to the dispensary in Honiara.

37. Even if the respondent paid for all without the financial contribution from the petitioner, those assets were acquired during the subsistence of the marriage. Any domestic assets are meant for usage and enjoyment of the family, and of course any rightful-minded man would agree they belong to the family. I agree those assets belong to the family and the petitioner must have a share of it.

38. Firstly, I disqualify $40,000 given to petitioner’s family, as a liability. That amount was given while the marriage was current. It was one of those obligations under the marriage. And it was given under a free will. It does not contribute towards value of any asset. I am also not considering any liabilities in regards to overhead expenditure as life raft, services, slipping, repair, insurance, maintenance of the boat and wages, etc. They are continuous overhead expenditures which a business has to incur. They contribute nothing to the value of any asset.

39. I have taken into account of the twenty thousand dollars the petitioner left with at the separation.

40. I have also considered the outstanding loan which is yet to be paid, currently standing at $85,927.83 (AUD) which is approximately equivalent to $515,842.00. In my view that amount has some effect to the value of the boat. Meanwhile the financial company has a portion owing to it. Until the loan is fully repurchased the full value of the boat will be realized as owned by the respondent. I consider a deduction is most appropriate.

41. Finally, even if am not assisted by the English cases, or fall short in applying the law to the facts, the Vanuatu case of Fisher v Fisher [8]which attempted to set a common starting point to share the family property. Interestingly, the Court of Appeal of Vanuatu had in its written judgment a view or an approach which I think is significant and appropriate to Solomon Islands as well. It stated on page 5 paragraph 2:

"Even if she does not earn money, a wife looking after the home and children and contribute substantially to the family well being. Over the years she acquires an increasing large interest in the family property, which can include property acquired by either party before marriage. A non working wife who brings nothing into a marriage acquire very little in the first few years of marriage, but for a marriage lasting several years the starting point for assessing the share is one third."

42. That view I would concur is applicable in the circumstances of Solomon Islands. After eight years of marriage, though not financially contributed to the family assets apart from services provided on the boat, the petitioner contributed substantially to the family well being as a wife.

43. The respondent in this case would like to see the petitioner go out with what she came in with, that is a typewriter and her clothes, and himself enjoying assets accumulated during the marriage currently valued at $1,767,000.00. Is that fair and reasonable in the circumstances of this case? I do not think that reflected a fair treatment of the wife. Being a wife for eight years and had assisted in many ways at home and the boat, she is entitled to what she claims which is reasonable, that is one third of the total value of all properties. And I share one third total value of assets be paid to the petitioner.

44. In this case, total value of all the assets is calculated at $1,767,000.00. From that account I deducted outstanding arrears of loan which in my view is a liability calculated at $515,800.00, and it gives $1,281,200.00. When that amount is divided by 3 it equals to $417,000.00 to the nearest round number, less $20,000.00 worth of asset she has taken and is equal to $397,000.00.

1. That the petitioner to transfer to the respondent her 20% shareholding in MV Lalae Charters Ltd.

2. No order as to transfer of Isuzu to petitioner. Let parties sort out as to the manner of payment, may be by way swap over.

3. The respondent within 60 days from the date of this order pay to petitioner’s solicitor the sum of SBD$397,000.00 by way of lump sum settlement in default whereof there be an order for the sale of vessel MV Lalae and the petitioner paid from the proceed of the sale.

^[1]. Law for Pacific Women, P. Imrana Jalal, 1998.

^[2]. Married Womens Property Act 1982.

^[3]. (1970) AC 77.

^[4]. (1970) 2 All ER 780)

^[5] [1991] SMHC 34, HC-CC 284 of 1989.

^[6] [1991] SMHC 26, HC-CC 040 of 1989.

^[7]. [1991] SMHC 31, HC-CC 2156 of 1990.

^[8]. [1991] VUCA 2; Civil Appeal Case No. 01 of 1991.

High Court of Solomon Islands

Goodhew v Goodhew [2007] SBHC 140; HCSI-CC 272 of 2007 (23 November 2007)