Chin (Lascelles A.) v Chin (Audrey Ramona)

JurisdictionJamaica
CourtCourt of Appeal
Judge BINGHAM, J.A , SMITH, J.A: , K HARRISON J.A : , BINGHAM, J.A.
Judgment Date20 December 2005
Neutral CitationJM 2005 CA 75
Judgment citation (vLex)[2005] 12 JJC 2001
IN THE COURT OF APPEAL
BEFORE:
THE HON. MR. JUSTICE BINGHAM, J.A THE HON. MR. JUSTICE SMITH, J.A THE HON. MR. JUSTICE K. HARRISON, J.A
BETWEEN:
LASCELLES A. CHIN
APPELLANT
AND
AUDREY RAMONA CHIN
RESPONDENT
R.N.A. Henriques, Q.C., and Leonard Green Jnr., instructed by Chen Green and Co. for the Appellant
Dr Lloyd Barnett and Gordon Steer, instructed by Chambers, Bunny and Steer for the Respondent

MATRIMONIAL PROPERTY - Division of property

BINGHAM, J.A
1

This present appeal is from a judgment of Clarke, J. delivered on December 6, 2001, The judgment was consequent on a re-hearing of an originating summons brought by the respondent in the Supreme Court under the Married Women's Property Act. This re-hearing lasted for several days between May and September, 2001. At the end of the trial the learned trial judge reserved his judgment.

2

On December 6, 2001, in a well reasoned judgment, he found in favour of the respondent and granted the following reliefs ordering that:

  • "1. Mrs. Chin is entitled to one-half of the equity capital of Lasco Foods Limited.

  • 2. The shares of Lasco Foods Limited are to be valued by Price Waterhouse Coopers, Chartered Accountants.

  • 3. In valuing the said shares Price Waterhouse Coopers are to determine the fair market value for the shares of the company as a going concern at the end of the Company's most recent financial year for which audit accounts are available (hereinafter referred to as "the valuation date").

  • 4. Price Waterhouse Coopers are to be guided by, or, where necessary have regard to the following factors;

    • (a) the past, present and future earnings of the said company are to be taken into account;

    • (b) assets (fixed, current intangible and goodwill) of the said company are to be taken into account and valued using the net assets basis, that is full current market value at valuation date;

    • (c) the liabilities of the said company are to be taken into account as at valuation date;

    • (d) all outstanding directors' loans and loans outstanding to any company in which Mr. Chin is a shareholder, which are outstanding or previously written off are to be separately stated and included in the valuation together with interest at no less than commercial bank's weighted deposit rates for the relevant periods as published in the Bank of Jamaica Statistical Digest;

    • (e) all transfers of property or assets or funds of the said company made prior to the valuation date other than in the ordinary course of business are to be separately stated included in the valuation.

  • 5. Price Waterhouse Coopers are to be provided by Mr. Chin with the financial statements and relevant subsidiary records.

  • 6. Price Waterhouse Coopers shall present and state the value of the shares within three (3) months of the date of this Order and shall file the same in Court and serve a copy on the Attorneys for Mrs. Chin and a copy on the Attorneys for Mr. Chin.

  • 7. Once the valuation of the shares is served on the parties, Mr. Chin shall within three (3) months pay to Mrs. Chin, one-half of the amount of the said valuation in return for a transfer to him or his nominee of the shares registered in her name.

  • 8. The costs of the valuation to be borne equally by Mr. and Mrs. Chin.

  • 9. Either of the parties is to be at liberty to apply to this Court as he or she may be advised."

3

The reliefs concluded with an order for the costs incurred in the hearings before Panton, J., the Court of Appeal, Their Lordships' Board of the Privy Council and the hearing before Clarke, J.

4

The History of the Claim

5

The parties were husband and wife in a marriage which lasted from February 22, 1986 to 1994, when it was terminated by the grant of a decree absolute. They, however, prior to that marriage, were engaged in a common-law relationship for a number of years. This union was blessed with the birth of a daughter in 1980.

6

The respondent had in the interim, sought to advance herself by pursuing tertiary studies which resulted in her qualifying as a chartered accountant. She was successful in obtaining employment with a reputable firm of accountants. She retained this position until February 1986. The appellant for his part was a very successful businessman having the controlling interest in several companies.

7

In 1985, the appellant was successful in being offered a Contract by the Jamaica Commodity Trading Company Ltd. (J.C.T.C.), then a Government owned entity. This Contract was to package skimmed milk powder. To take up the Contract, required the setting up of a manufacturing plant with the necessary rolling stock as well as a trained workforce and a competent managerial staff.

8

The appellant prevailed upon the respondent to accept the position as Managing Director of the newly formed company. He contends that the respondent in taking up her position as Managing Director was a paid employee who could be hired and fired like any other paid employee working in the business.

9

The respondent for her part, contends that she agreed to take on the role of Managing Director of the proposed company on the understanding and belief that she was doing so as a joint and equal partner with the appellant. To support this, she relied on the following factors:

  • 1. When the contract was being negotiated she played an active part in meeting with the principals at J.C.T.C. She took part in all the discussions leading up to the award of the Contract. Following this, she played a leading role in successfully raising the bank loans to capitalize the company.

  • 2. She accompanied the appellant abroad to countries where machinery and equipment required for use in the plant were located. She had discussions with the principals at those companies.

  • 3. She was responsible for having dialogue with the foreign suppliers and in arranging for someone from their plant to visit Jamaica and oversee the installation of the machinery in the plant in Jamaica.

  • 4. When the company was incorporated the two subscriber shares were allotted equally to the parties, one each.

  • 5. Once the company was a going concern and in production, the respondent said that she only took drawings as a director if and when she required money to meet her personal and domestic needs.

  • 6. In a period of five years (1987-1992) the respondent never sought to increase the drawings that she took from the company. She made no payment towards statutory deductions unlike the other employees of the company. In this respect as a director of the company, the other being the appellant, such drawings as she took, were in the nature of being regarded as director's remuneration and so would not qualify to be subject to statutory deductions.

  • 7. While not putting up any monetary capital towards the incorporation and launching of the company, the respondent's contribution was in kind by virtue of her professional expertise and in offering her services in the initial stages in the promotion of the company leading to the successful obtaining of its most valuable asset, the J.C.T.C. Contract, were factors which given the manner in which she guided and directed the company's affairs in putting the interest of the company before her own personal interests, could only be seen as a situation in which she clearly regarded her status as that of an equal partner in the venture.

10

It is common ground and not in dispute that the efforts made by both parties in the promotional work leading up to the incorporation of the company did not result in any remuneration being made to them. By the manner in which they set about this task and later on after the company was a going concern, clearly points to the fact that they regarded themselves as equal partners in the business. While not making any financial contribution to the launching of the company, the respondent by her knowledge, skill and experience in corporate matters, would have been well placed to guide the affairs of the company through any possible difficulty that would have surfaced in the formative period of its existence. To quote from the judgment of Downer, J.A. in the first appeal (S.C.C.A. No. 115/96 Audrey Ramona Chin v Lascelles Augustus Chin (unreported)) delivered on May 10, 1999:

"The appellant Audrey is a Chartered Accountant. In professional terms the marriage combined the accounting skills of the wife with the business acumen of the husband."

11

Learned counsel for the appellant Lascelles Chin has consistently placed the main thrust of his submissions in contending that the matter fell to be determined on whether or not the respondent was merely a paid employee of the company who could be hired and fired by the appellant who was solely in control of the company. This argument was rejected by both this Court at the first hearing of the appeal and later on by Her Majesty's Board of the Privy Council. Both saw the critical issue in the case as being what was the nature of the beneficial interest of the parties in the company.

12

Moreover, as Dr. Barnett for the respondent has contended, even if the respondent was a paid employee of the company that by itself would not have disentitled her to her claim to an equal share in the company. This stood to be determined on an examination of the surrounding circumstances leading up to the formation of the company as to what was the common intention of the parties.

13

In this regard, of particular significance are the combined efforts of the parties in promoting and obtaining the J.C.T.C. Contract as well as the time and energy they both put into negotiating with the foreign suppliers for machinery and equipment abroad. These trips abroad included visits to the United States of America and Argentina, to meet with the principals at these companies and concluding arrangements for the shipment of the machinery necessary for the plant.

14

While...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT