Reid v Reid

• Jurisdiction: Barbados
• Judge: Bastide, P.,Saunders, J.,Bernard, J.,Wit, J.,Hayton, J.
• Judgment Date: 24 November 2008
• Neutral Citation: BB 2008 CA 11
• Docket Number: C.C.J. Appeal No. CV 9 of 2007; BB Civil Appeal No. 2 of 2002
• Court: Court of Appeal (Barbados)
• Date: 24 November 2008

Court of Appeal

Bastide, P.; Saunders, J.; Bernard, J.; Wit, J.; Hayton, J.

C.C.J. Appeal No. CV 9 of 2007; BB Civil Appeal No. 2 of 2002

Reid

and

Reid

Ms Beverley J Walrond QC and Ms Marvalee Franklyn for the appellant

Mr Leslie F Haynes QC for the respondent

Civil Practice and Procedure - Enforcement of Judgment — Order for division of assets given in Massachusetts — Whether order was arbitrary — Finding that there was no fundamental procedural deviation by judge in Massachusetts.

1 The parties to these proceedings were married to each other for 28 years before Mrs Reid filed for divorce in the USA. The couple had been resident there for a considerable length of time. Judge Sweeney, a judge of the Probate and Family Court of the Commonwealth of Massachusetts, heard the spouses and their legal representatives over a four day trial. He granted the divorce and made an order dividing the marital assets.

2 Both sides were dissatisfied with the order. Mr Reid appealed to the Appeals Court of the Commonwealth. Mrs Reid cross-appealed. In a judgment to which we shall return, the judges of the Appeals Court substantially reversed Judge Sweeney and remanded the case back to him for further proceedings consistent with directions given by them in their judgment.

3 Judge Sweeney conducted further hearings, this time in the absence of Mr Reid and his legal representatives. The judge then made a second order dividing the assets. It is this second order that is in issue in these proceedings. Mrs Reid was satisfied with it. She filed an action in Barbados to have it enforced against Mr Reid who was then resident in Barbados. Having so filed, she applied for summary judgment. Mr Reid resisted that application. He filed a defence to the action for enforcement of Judge Sweeney's second order.

4 The application for summary judgment came first before Justice Moore in the High Court. Mrs Reid prevailed. Mr Reid appealed. The Court of Appeal of Barbados overturned Justice Moore's decision and remitted the case for trial. Mrs Reid appealed the judgment of the Court of Appeal to this court. We are of the view that her appeal to us should succeed and, for the reasons that follow, we have ordered the restoration of the orders made by Justice Moore.

THE MASSACHUSETTS PROCEEDINGS

5 The spouses owned assets in the USA and in Barbados. At his first hearing, where both spouses were represented, Judge Sweeney found these assets to have a net value of US$615,781. (All money amounts throughout this judgment are stated in United States dollars). The assets included: the matrimonial home in the USA and, in Barbados, two lots of land and a property (“the Mount Standfast property”) that Mr Reid had inherited from his father and which was said then, in 1993, to be worth $300,000.

6 In his initial division of the assets, Judge Sweeney effectively awarded to Mr Reid assets that were then valued at $391,000 net. That sum included an amount representing 70% of the value of the Mount Standfast property. The judge awarded to Mrs Reid assets with a net worth of $224,000 which sum included the two lots of land in Barbados, the marital home in Massachusetts and 30% of the value of the Mount Standfast property. The judge made a few other orders including one requiring each party to be responsible for his or her own attorney's fees and for his or her own liabilities.

7 On appeal, each spouse again being legally represented, the Massachusetts Appeals Court concluded that Judge Sweeney's order had failed adequately to take into account Mrs Reid's substantial debts and liabilities and the financial position in which she would be left upon payment of those liabilities. The Appeals Court noted that Mrs Reid's liabilities (which were said to include her attorney's fees of $81,846) amounted to $153,517 while Mr Reid's, including his attorney's fees, amounted only to $74,979. The Appeals Court saw “no sound reason why [Mrs Reid] should leave the marriage with assets net of debt worth approximately $71,000 while [Mr Reid] leaves the marriage with assets net of debt worth well in excess of $300,000”. Accordingly, the court set aside those aspects of Judge Sweeney's order pertaining to “property division and debt allocation” and remanded the case. Judge Sweeney was directed to hold such hearings and take such evidence as he deemed necessary to effectuate their order. In all other respects, the Appeals Court stated, the judgment of Judge Sweeney was affirmed.

8 Prior to the Appeals Court delivering its judgment Mr Reid had sold the two lots of land in Barbados that had been awarded to Mrs Reid by Judge Sweeney's original order. This was a violation of that order. As a result, Mrs Reid successfully pursued contempt proceedings in the USA against Mr Reid. The Mount Standfast property was also sold by Mr Reid some time before Judge Sweeney's second hearing. In determining Mrs Reid's application for summary judgment in Barbados nothing turns on either of those matters and we mention them only for the sake of completeness.

9 On 29th August 1996, in the course of the second round of proceedings before him, Judge Sweeney issued a “Temporary Order” pending a hearing on the merits. The Temporary Order addressed itself principally to a distribution of the spouses' real estate and other property located in the USA. The Order concluded with a notification that:

“There will be an evidentiary hearing on November 14, 1996, to determine what … [it seems that this last word should really be “whether”]… Jerome L. Reid has sold any marital assets located in Barbados since the divorce decree was entered on December 20, 1993 and also the sales price received by Jerome L. Reid from those sales”.

10 Although the Temporary Order was personally served on Mr Reid in Barbados on the 18th September, 1996 he declined to participate in or be present at the November 1996 hearing. He had earlier sworn an affidavit, on 25th July, 1996, stating that he did not have sufficient funds available to him in the USA to retain lawyers to act for him in any further proceedings before Judge Sweeney.

11 Mrs Reid participated fully in the November 1996 proceedings. She filed a Memorandum regarding the change in value of marital assets. In this document she disclosed that she had information to the effect that Mr Reid had sold the Mount Standfast property in Barbados for US$1.5 million. She urged the court to take full account of that updated valuation when dividing the assets. She argued that she should be awarded a one half share of the proceeds of the sale of that property. She did not in her Memorandum indicate whether the Massachusetts property that originally had been awarded to her had similarly appreciated in value and, if so, to what extent. Her lawyers submitted for the consideration of Judge Sweeney a proposed Judgment in which was set out how, in their view, the matrimonial assets should be distributed.

12 Judge Sweeney held his November 1996 evidentiary hearing as promised. We do not know what precise form the hearing took and precisely what evidence was placed before or considered by the judge. But we do have the judgment that resulted from the evidentiary hearing. The judgment is dated 21st November, 1996. It affirms that an evidentiary hearing was indeed held on November 14, 1996, and the content of the judgment is said to be issued “in consideration of the parties' submissions”.

13 In his second judgment Judge Sweeney awarded to Mrs Reid the real estate in Massachusetts including the former matrimonial home. The judge found that Mr Reid had on 15th December, 1995 sold the Mount Standfast property for US$1,260,000. Mr Reid was ordered forthwith to pay to Mrs Reid $415,800.00 representing a one third share of the gross proceeds of that sale. Mr Reid was also ordered “to pay the sum of $148,690.00 to the law firm of Atwood & Cherny … as contribution towards the Wife's costs and counsel fees in this action, including the costs of appeal and post-trial proceedings …”

14 Atwood & Cherny is the law firm that represented Mrs Reid throughout the Massachusetts proceedings. As security for the legal fees owed to them by her, Mrs Reid had granted a mortgage for $150,000.00 over the Massachusetts property in favour of that firm. The firm had earlier filed a real estate lien against the said property for those legal fees.

MRS REID'S ACTION IN BARBADOS TO ENFORCE THE JUDGMENT

15 Mrs Reid wished to obtain the fruits of Judge Sweeney's second order from Mr Reid in Barbados. It is settled law however that at common law a judgment creditor seeking to take advantage of a final and conclusive money judgment obtained abroad cannot directly execute on that judgment in Barbados. The judgment creditor must bring an action on the foreign judgment in the local court. If the creditor brings such an action and the judgment debtor gives notice of an intention to defend, the Rules of the Supreme Court allow the judgment creditor the possibility of averting a trial of the action. The judgment creditor may apply for summary judgment pursuant to Order 14 of the rules. If the judgment creditor's application is successful then a full-blown trial of the action becomes unnecessary. The substance of the foreign judgment is then embodied in an order of the local court which is enforceable in the usual way in which such orders are enforced.

16 The relevant provisions of Order 14 state:

1

(1) Where in an action to which this rule applies a statement of claim has been served on a defendant and that defendant has given notice of intention to defend the action, the plaintiff may, on the ground that that defendant has no defence to a claim included in a writ … apply to the Court for judgment against that defendant. 2. … [not relevant] … 3. (1) Unless on the hearing of an application under rule 1 either the Court dismisses the application or...