Tulsa Family Lawyer and Mediator
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It is a common scenario that one of the main assets of a marriage is a business that was acquired or established by one of the parties prior to the marriage. When the marriage breaks down the court will often order that the value of the business that accumulated during the marriage should be shared between the parties. Accordingly, the court must decide two matters in relation to the business: how much is it worth, and what proportion of that sum accumulated prior to the marriage?
These were the central questions in the recent Court of Appeal case Martin v Martin.
Now, there is an awful lot going on in Martin v Martin (as is often the case in big money financial remedy cases, especially when they are concerned with business assets), and I am just going to scratch the surface here. If you want all the detail, you can read the full judgment, all 147 paragraphs of it, at the link below. I’m just going to concentrate on those two central questions, dealing with them as simply (and hopefully understandably!) as I can. I have also taken some small liberties with the case, for the sake of clarity.
Extremely briefly, the relevant facts in the case were that the husband started the business in 1978, the parties began living together in 1986, were married in 1989, separated in 2015, and divorce proceedings ensued. (I told you it would be brief!)
In 2017 the wife’s financial remedies application was determined by Mr Justice Mostyn. He awarded the wife a half share of the marital wealth, which included the value of the husband’s company (and other assets), less its value as at the date the parties started living together.
To value the company, Mr Justice Mostyn used its net value, which he considered was equivalent to cash, as “the only difference between it (i.e. the company) and its cash proceeds is … the sound of the auctioneer’s hammer”. In other words, the value of the company was “the estimate of what it will sell for now”.
To determine the value of the company as at the date that the parties began cohabiting Mr Justice Mostyn applied a ‘straight line apportionment’ to the present value of the company, from the date that it was first incorporated in 1978 to the date of the hearing. To understand this, I refer the reader to paragraph 19 of Mr Justice Mostyn’s judgment (which you can find here), which sets out the method in graphical form.
The wife appealed against the decision, to the Court of Appeal, and the husband cross-appealed. Both appeals were in relation to how Mr Justice Mostyn had approached those two central questions in relation to the company. The wife argued that he was wrong to use a straight line apportionment, and the husband argued that he had wrongly treated the value he ascribed to the company as equivalent to cash and, as a result, had awarded the wife an unfair proportion of the ‘non-risk’ assets.
The leading judgment of the Court of Appeal was given by Lord Justice Moylan.
As to the question of the valuation of the company, he found that the husband had not shown that Mr Justice Mostyn’s factual determination of the value of the company was wrong. However, Mr Justice Mostyn was wrong when he said that the “only difference between [the company] and its cash proceeds is … the sound of the auctioneer’s hammer”. As a result of this conclusion Mr Justice Mostyn failed to consider whether his proposed award achieved “a fair division of both the copper-bottomed assets and the illiquid and risk laden assets”. There was no evidence that the sum awarded to the wife could be extracted from the company within the timescale that Mr Justice Mostyn envisaged. Lord Justice Moylan therefore increased the period for the payment of that sum, from one year to four years.
As to the question of the value of the company as at the date that the parties began to cohabit, Lord Justice Moylan found that Mr Justice Mostyn was entitled to adopt the straight line apportionment approach. That approach may be ‘broad brush’, but it saved the time and expense of getting an accountancy valuation. He also found that it “resonates with fairness”, because it “takes an overarching view of the weight to be attributed to the husband’s contributions to the business throughout its existence.”
Accordingly, Lord Justice Moylan dismissed the wife’s appeal, and only allowed the husband’s appeal to the extent set out above.
Lords Justices Coulson and Simon gave concurring judgments.
If you wish to, you can read the full Court of Appeal judgment here.
The post Valuing a company established prior to the marriage appeared first on Stowe Family Law.
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Author: John Bolch
On the face of it, the father’s two objections to the mother’s application for the return of their son to Turkey in the recent case K (A child : Hague Child Abduction Convention) seemed to have some merit. However, the court still ordered the return.
The background facts of the case were, briefly, that the mother is Turkish and the father has dual Turkish/British nationality. The parties met in Turkey in 2006 and married in 2007. Their son, ‘K’, was born in Turkey in 2007 and was eleven years old when the mother’s application was heard by Mr Darren Howe QC in the High Court last July (as with many child abduction cases, the report of the judgment was only published much later (last week on Bailii in this instance), possibly to ensure that the return had taken place before the publication).
The parents first separated in 2016, but there was then a reconciliation. The father left Turkey in October 2016 and relocated to England. There was some dispute as to whether he relocated with the intention of the remaining family members joining him, but this was not a matter upon which the judge had to adjudicate.
The mother and K remained in Turkey. By April 2017 the marriage had finally broken down.
In September 2017 the mother arranged for a paternal family member to collect K from Turkey and take him to England for an agreed holiday with his father. K flew to England on the 9th of September and was due to be with the father for a week. That was then extended for a second week, and K was to return by no later than the 23rd of September.
I will not go into the detail of what happened next, but suffice to say that K was not returned to Turkey. In March 2018 the mother made an application under the Hague Convention for his summary return (she claimed that she had not made the application earlier, as it was not until January 2018 that she knew of the Convention).
The father accepted that K was habitually resident in Turkey prior to September 2017, and that his retention of K in England was wrongful within the meaning of the Convention. However, he raised two defences to the mother’s application:
All in all, it might appear at first glance that these defences were quite strong. However, the judge did not find them to be made out.
As to the acquiescence defence, he found that the mother had not at any time acquiesced in the father’s retention of K in England. The context of the mother’s email had to be considered. At that time she had not been allowed by the father to speak with K on the telephone. She did not know of her rights under the Convention and was desperately putting forward proposals in an attempt to arrange telephone contact. In any event there was never a concluded agreement regarding K remaining in England, as there never was any contact.
As to K’s wishes, the judge accepted the Cafcass officer’s view that he had been influenced by his father. However, more than that he found that K’s presentation of his wishes amounted to no more than a preference or a wish, and did not reach the threshold of an objection.
Accordingly, the judge made an order directing that K be returned to Turkey forthwith.
The message, I think, from this case is clear. If you are going to succeed with a defence to a Hague Convention application, then your defence really needs to be watertight. The rationale behind the Convention is that a child should normally be returned to its ‘home’ country, and it is for the courts of that country to make decisions about future arrangements for that child. That is what should happen, and only in clear cases will a return not be ordered.
You can read the full judgment here.
The post Child ordered to be returned to Turkey despite apparently strong defences appeared first on Stowe Family Law.
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Author: John Bolch
In this instalment of Stowe guests, we are joined by Rhiannon Ford who runs a divorce consultancy in Walton on Thames in Surrey.
A former family lawyer, Rhiannon combines her legal experience and work as a personal development coach to provide much needed support to those thinking about, going through or coming out of a divorce or separation.
Today, she joins us to offer her advice on the three things you need to think about if you are considering a divorce.
If you have come to the sad conclusion that your marriage has come to an end, there are probably lots of questions whizzing around in your mind, e.g. “What happens when?”
Whilst there may be lots of unknowns at this stage about what the future will look like now you wish to divorce, I would recommend the starting point be for you to gather your thoughts on 3 important topics:
Here is a summary of what you will need to think about….
Marriage
If you are unmarried then clearly divorce is not necessary. However, even if you are married, you may not wish to rush in to getting divorced. It is important to bear in mind that divorce is not the only way a couple can decide to arrange their separation.
You could for example, choose to live apart and resolve financial and children matters whilst remaining legally married. There is also the option of “Judicial Separation”. If/when you choose to dissolve the marriage then a divorce application will be made through the court.
Finances
When you decide to separate and/or divorce, an agreement will need to be reached to resolve financial matters between you and your spouse (whether or not you divorce). There are various options available to help resolve financial matters and you can choose which approach is most appropriate for the two of you. For more details about the various options, see my blog How do I approach reaching a financial agreement in my divorce.
There are also different ways to formalise any financial agreement reached, depending on how the relationship is brought to an end- e.g. separation or divorce.
Children
There are two main issues to be addressed in relation to the children of the family:
Living arrangements – this refers to the living arrangements of the children and how their time will be shared between the two parents.
Financial support – an agreement needs to be reached between you and your spouse as to how you will both financially support the children once you are living apart.
For a list of the issues that the parents will need to decide on see my blog Separating Parents: Planning arrangements for the children.
Contact
This blog provided general information about the important issues a separating couple will need to consider.
To find out how I might be able to help you in your situation, see my blog: How a divorce consultant can help when you are considering divorce and get in touch here.
Stowe Family Law has an office based in Surrey in Esher, close to Walton-on-Thames. The team is headed up by Emma Newman and can be found on the High Street. You can contact them here.
The post Stowe guests: 3 things you need to think about if you are considering divorce appeared first on Stowe Family Law.
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Author: Stowe Family Law
This is an unusual one, at least in terms of reported cases. As explained by Mr Justice Cohen in the first paragraph of his judgment, the case AR v JR concerned an application by the husband for the wife’s financial remedies application to be struck out on the basis that it was (a), vexatious, and/or duplicative and/or (b), on the basis there had been a prior compromise.
The relevant facts of the case were as follows:
Mr Justice Cohen dismissed the husband’s application, for the following reasons.
Firstly, it was clear to him that the order of 2011, made in the judicial separation proceedings, was not intended to cover a subsequent divorce, and that neither party thought that it did cover a divorce.
Secondly, the argument put forward on behalf of the husband that the wife should in the judicial separation proceedings have made her full financial claim covering her entitlement in all respects arising from the marriage was unsustainable, because:
In the circumstances the husband’s application failed. The wife’s financial remedies application must therefore proceed.
Mr Justice Cohen ended his judgment with this rather sad plea to the parties:
“They are now in their late 70s. It does not appear to me that either is in the best of health. This litigation has been going on for three years. They should not be spending time locked in litigation when there is plainly more than ample funds available in this case for it to be settled. I do urge them to consider mediation to try and bring matters to a closure.”
Let us hope they take heed.
You can read the full judgment here.
The post Husband fails to have wife’s financial remedies application struck out appeared first on Stowe Family Law.
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Author: John Bolch
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It’s easy to be cynical. I often am myself. It’s particularly easy to believe in stereotypes, especially if they are likely to attract popular support.
One such stereotype is that all lawyers are self-serving, interested only in their fees, rather than their clients, or the common good. It is often suggested, for example, that all lawyers run cases with the aim of maximising their fees, rather than benefitting their clients.
Well, I’m sure that the legal profession contains some people who have such an attitude. But then, so does every walk of life. You will find examples even the medical profession, which is generally held in the highest public esteem. However, to tar all lawyers with this brush is to fall into the trap of going along with the popular view, without critical thought or research.
What got me thinking about this ‘lawyers only care about their wallets’ cliché? Well, it was a conversation I witnessed on Twitter (which, despite all its faults, can be a useful vehicle for serious discourse) between Baroness Deech and various family lawyers regarding the Baroness’s Divorce (Financial Provision) Bill 2017-19 which, as that title suggests, aims to reform the law regarding financial remedies on divorce.
The Bill has been strongly criticised by many very eminent family lawyers (and also some rather less eminent such as myself), as I explained when I wrote here about it last November.
But it wasn’t the merits or otherwise of the Bill that got me thinking, it was the Baroness’s response to criticism on Twitter. She tweeted:
“The aim [of the Bill] is to have less of the couple’s assets go on lawyers’ costs. So of course it is unpopular in some quarters!”
As one lawyer responded, this was a “cheap shot” at family lawyers, suggesting that they are only opposed to the provisions of the Bill because they believe that they would get less work if it was enacted. It is particularly sad, but perhaps not entirely surprising, that someone in the position of the Baroness should stoop to using the stereotype in this way to gain popular support.
But I have some news for those who think in this way, and it may come as a shock: not all lawyers are self-serving.
Sticking with the example of reform of family law, lawyers have long advocated reforms that were likely to reduce the amount of work that they do, and therefore the amount of fees that they receive. Without much thought I can give two shining examples of this.
Firstly, the introduction of a system of no-fault divorce. This has almost universal support amongst family lawyers. But think about it: contested divorce brings in work for family lawyers, and the animosity stirred up by having to attribute blame for the breakdown of the marriage makes it more likely that the parties will contest finances or arrangements for children, thereby giving more work to lawyers.
Which brings me to the other example. Contrary to popular belief, many family lawyers have long been supporters of ‘alternative dispute resolution’, i.e. resolving family disputes by other methods than going to court, such as mediation (it became compulsory a few years back for anyone issuing a family application to attend a meeting to assess whether the case was suitable for mediation). Obviously, contested court proceedings will be far more lucrative for lawyers than having the disputes resolved in mediation, but that does not stop many family lawyers advocating mediation, and suggesting it to their clients, as I used to do when I was practising.
So when lawyers give their views on law reform they are not necessarily thinking only of protecting their fee income.
And of course lawyers are likely to have something to say about reform of the law, simply because they are (obviously) experts in the field. Family lawyers see the effects of the law on their clients every day, and understand better than most how any proposed reform is likely to play out. Their view is worth listening to, rather than being cheaply dismissed by reference to some popular stereotype.
There are, of course, other ways in which lawyers are anything but self-serving (I hope I do not need to explain that most advice given by lawyers to their clients is for the benefit of the client, not the lawyer’s bank balance). I think, for example, of the enormous amount of pro-bono (free) work that they do, something that very few other professions do. And lawyers also raise huge amounts for charity.
So next time you see a lawyer make a contribution to a debate on law reform, give them a serious listen, rather than dismissing them as being purely self-serving. They may just have something important to say.
The post Not all lawyers are self-serving shock horror! appeared first on Stowe Family Law.
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Author: John Bolch
Your parents or grandparents left you something in their wills because they love you and wanted to secure your financial future. What they probably did not have in mind was for you to split that inheritance up during your divorce. However, this does not necessarily have to be your situation.
When you receive your inheritance and how you treat it afterward can influence whether to view it as separate or marital property. If it is separate property, then it is yours to keep and will not have to go through property division. However, if it is marital property, then you could have to say goodbye to some of your inheritance. Here are a few things to keep in mind.
Does before or after marriage matter?
It depends. If you received an inheritance before marriage, then it is generally considered separate property. This is true of most things you own before tying the knot. This does not mean that you should not take necessary steps to protect your wealth, though.
Even if you receive an inheritance while you are already married, it might still be separate property. Unless your parents or grandparents specified your spouse in their wills, then they may have intended your inheritance to be for your use only, and the law will continue to view it that way as well.
Beware of commingling
Regardless of when you got your inheritance, how you treat it plays a huge role in how you will treat it during divorce. Depending on the circumstances, an inheritance can actually make the jump from separate property over to marital property. This generally happens when you commingle the funds.
Commingling usually occurs when an heir deposits his or her inheritance into a joint account and then uses the money for marital expenses. Things like paying the mortgage, purchasing groceries and settling marital debts are marital expenses. If you handled your inheritance in this way, you might still be able to keep the remaining funds as separate property, but you will have to demonstrate that you never intended to share the funds.
A prenup can help
No one can predict the future, which is why protecting yourself, your assets and your financial future is so important. This includes things like inheritances, which you may not have yet but know that you will receive at some point in the future.
A carefully constructed prenuptial agreement can protect you in the event that you and your spouse decide to divorce. By setting clear divisions between separate and marital property, and addressing issues such as property division, you can both lay a foundation for open communication but also implement important protections for your future. Crafting an enforceable prenup can be tricky, though, so first consider speaking with an attorney who is familiar with Texas family law.
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Author: On behalf of Katie L. Lewis of Katie L. Lewis, P.C. Family Law
Ending a marriage seems like a daunting task. On top of that, the media and the silver screen make it look like an extremely emotional, unpleasant, contentious and life-altering event. For some, this is there reality; however, others are able to navigate the process with more ease. No matter the situation, many couples take measures to avoid such fates, especially when law changes could make matters worse for them.
For couples contemplating divorce this past year, many of them decided to pull the trigger before the close of 2018, as changes in laws impact how taxes are handled. A major change this year impact alimony. There are no longer tax breaks for those required to pay alimony starting this year.
While alimony is often a concern when going through the divorce process, there are other areas of concern. Wealthy or not, a prenuptial agreement could be part of the marriage. If a couple decides to divorce, this document should be executed properly. Additionally, if a spouse is unsure about the terms, it is important to challenge them.
Another factor that impacts the timing of divorce is having a business involved. Business valuation is not straightforward and can be complex. Tax implications are involved, causing some spouses to find it difficult to reach agreeable terms. Finally, it is important to consider other assets involved in the divorce process. For example, one should weigh the difference between receiving the family home or a spouse’s retirement plan. Tax deductions and implications can impact one’s decisions.
While there is no perfect time to divorce, for couples positive that dissolving their marriage is the best step for them, it is vital to understand if it is best to proceed right away or postpone it. Even if a couple cannot make things work, they could make the process run more smoothly by understanding that timing can make a huge difference.
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Author: On behalf of Katie L. Lewis of Katie L. Lewis, P.C. Family Law
Addicted to running, bullying or controlling behaviour, theme park rides, and the lack of a bathroom door for two years are just some of the recent reasons given in divorce for “unreasonable” behaviour that we have encountered at Stowe Family Law.
There is only one legal ground for divorce in England & Wales: that the marriage has irretrievably broken down. This contention must be supported by one of five reasons: adultery, behaviour, 2 years separation with consent, 5 years separation without consent and the very rarely used desertion.
With no-fault divorce yet to be an option in England & Wales, behaviour is becoming increasingly used as an umbrella term for a wide range of different reasons, often very unexpected ones.
So, we asked over 70 specialist Stowe family lawyers: What are the most common reasons behind unreasonable behaviour in divorce?
Here are the ones they hear the most:
Sometimes illnesses are the cause of certain types of behaviour including:
Whilst it might be hard to see how the other spouse’s illness is unreasonable, it is often the consequential behaviour that comes with illness, when everything just becomes too much, that is the cause of the relationship breaking down.
And what about some of the more unusual reasons our lawyers have encountered:
Camilla Burton-Baddeley, a Senior Solicitor from the Stowe Altrincham office explains:
“We are definitely seeing a trend in the more imaginative use of unreasonable behaviour as a reason for divorce.
Previously it was money problems or drinking that would be cited frequently but it can be anything that an individual considers to be unreasonable, even if others do not.”
The number of divorces being granted on the grounds of unreasonable behaviour is steadily increasing. In 2017, unreasonable behaviour was the most common reason for opposite-sex couples divorcing with 52% of wives and 37% of husbands petitioning on these grounds.
Camilla explains:
“Most people are not prepared to wait two years to get divorced, which is the closest option we have for a no-fault divorce. They have made the decision to move on with their lives and citing unreasonable behaviour means they can start the process quickly.
Until we have the option of no-fault divorce, I believe we will continue to see the definition of unreasonable behaviour stretched even further.”
For advice on all aspects of divorce you contact Camilla at the details below or view her profile.
The post The common, unusual and downright bizarre reasons for divorce appeared first on Stowe Family Law.
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Author: Camilla Burton-Baddeley