Dailey v Dailey, Court of Appeal - Privy Council, October 02, 2003, [2003] UKPC 65

Resolution Date:October 02, 2003
Issuing Organization:Privy Council
Actores:Dailey v Dailey
 
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Dailey v Dailey (British Virgin Islands) [2003] UKPC 65 (02 October 2003)

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Privy Council Appeal No. 45 of 2002

Franklyn Dailey Appellant

v.

Harriet Dailey Respondent

FROM

THE EASTERN CARIBBEAN COURT OF APPEAL

(BRITISH VIRGIN ISLANDS)

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JUDGMENT OF THE LORDS OF THE JUDICIAL

COMMITTEE OF THE PRIVY COUNCIL,

Delivered the 2nd October 2003

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Present at the hearing:-

Lord Hope of Craighead

Lord Clyde

Lord Hutton

Sir Andrew Leggatt

Sir Philip Otton

[Delivered by Lord Hope of Craighead]

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This is an appeal from a decision of the Court of Appeal of the Eastern Caribbean States sitting in the British Virgin Islands (Byron CJ, Redhead and Matthew JJA) dated 26 March 2001 reversing in part the decision of Moore J in the High Court dated 4 February 2000 in a dispute between the parties concerning their matrimonial property.

The background

The parties first met in about 1966. Their first child was born on 1 May 1967, and they were married on 31 December 1971. Their second child was born on 5 July 1972. At the time of their marriage the appellant was employed as a construction worker and the respondent worked as a ticket agent for the Puerto Rico International Airline. During the 1970s they began to acquire property in Tortola. Their first purchase was of land at Sophie Bay, and it was there that their matrimonial home was constructed. They lived there together from about 1974. In about 1978 they set up a small children's store in Road Town, Tortola. By late 1979 they had constructed another building in Tortola. They opened another business there for the sale of household goods and food which they called Franklyn's General Market (``FGM''). The children's store was merged into that business, and in November 1979 the parties gave up their jobs elsewhere so that they could devote their joint efforts to running FGM full-time.

As a result of this change in their activities FGM became the sole source of the parties' income. They used this income to run their household as well as the business, and the money from it was set aside in various bank accounts. The respondent kept the books of the company and she handled the money which it generated. The income which they were able to save was placed into a personal joint account at Chase Manhattan Bank in Tortola. It was later transferred to a joint Certificate of Deposit account at Banco Popular De Puerto Rico, St Thomas, United States Virgin Islands (``the CD Account''). The parties also used the income from their business to purchase and develop real property in Tortola. Among the properties which they purchased in their joint names was a parcel of land known as Parcel 16, Block 3450B, East End (``Parcel 16'') which they purchased in 1984 for $150,000.

In or about 1983 the appellant met Karena Lewis with whom he developed an intimate relationship. The parties continued nevertheless to live together and to conduct their business as before, although the respondent was aware of the relationship. But on 9 February 1989 Karena Lewis gave birth to the appellant's child and in September 1989 Hurricane Hugo was approaching the Virgin Islands. The appellant went to live with Karena Lewis to ride out the storm with her, and the respondent went to live with her mother. The home at Sophie Bay was severely damaged by the hurricane. The parties were unable to continue living there, so they remained where they were. In the result the appellant began living with Karena Lewis permanently.

On 27 September 1989 the respondent signed an instrument of transfer by which in consideration of $100,000 she transferred Parcel 16 from the parties' joint names to the name of the appellant only. At or about the same time the appellant, who suspected the respondent of appropriating money from the business to her own use, closed the CD Account and took over control of the books and financial transactions of the company. Karena Lewis also started working at FGM. On 4 April 1995 the appellant transferred Parcel 16 to FT Ltd, a company in which he held 99 shares and his brother the only other share, for the nominal sum of $1. In the same year the appellant sold the business of FGM to another company, Fahie Ltd, for $100,000. By this time the parties' relationship had broken down irretrievably. In July 1995 the appellant commenced divorce proceedings against the respondent, and in October 1995 he instructed her to leave FGM's premises. In February 1996 the respondent commenced these proceedings against the appellant for ancillary relief under section 19 of the Married Women's Property Act.

The proceedings

Among the reliefs which the respondent sought in her originating summons were (a) a declaration that the instrument of transfer in respect of Parcel 16 was made under undue influence exercised by the appellant over her and an order for cancellation of the transfer (paragraphs 1 and 3), (b) a declaration that the property comprised in Parcel 16 was owned by the parties in undivided half shares or such order as to the ownership thereof as might be just (paragraph 8(b)) and (c) a declaration that the CD Account was jointly owned and an order to give effect to any such declaration (paragraphs 15 and 16).

Moore J said that two main issues had been identified for his determination by the respondent's counsel. These were (a) the extent of the respondent's share in the business of FGM and whether that share was to be reduced in terms of such sums as the appellant alleged that the respondent had misappropriated and (b) whether the respondent had transferred her share of Parcel 16 to the appellant by way of a proper sale or whether the appellant held that share in her favour on a resulting trust. Having heard and examined the evidence, the trial judge rejected the appellant's claim that the respondent had improperly drawn out money from the business. He held that the parties were the owners of FGM at all material times, and that the respondent was entitled to a one-half share in the proceeds of sale of FGM with interest at the rate of 5 per cent from the date of sale. But he rejected the respondent's claim that her agreement to the transfer to the appellant of her share in Parcel 16 had been obtained by the exercise of undue influence. He made no findings with regard to the CD Account. He dismissed all the respondent's other claims.

In the Court of Appeal the...

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