I see that my old friends at Baxter Caulfield have recently entertained themselves with a successful visit to the Court of Appeal over a decision of our local County Court in a property dispute between a woman and her fiance. You can find the judgment here:
Smith v. Bottomley and his company
Now on the face of it, this is, dare I say it, just a routine cohabitant dispute. The story seems to be that the parties formed an intimate relationship in 1992. They got engaged and had a child together, who was born in 1994. In 1995 they broke up and Ms. Smith moved out, never having quite got round to marrying. In 2001 or 2002, after having re-formed their relationship, they became engaged again but again never quite getting in front of a Registrar. In 2002, they bought a house together, with a trust deed specifying their respective shares. Mr. Bottomley got the greater share as he made the greater initial contribution to the purchase.
Now Mr. Bottomley had acquired other property down the years. In 1985 he had bought The Coach House, where he had lived and where he still carried on his business. He had bought some land adjoining it in 1995 and in 2000 he bought a property called The Mill. The Mill was transferred to a company Mr. Bottomley formed in 2002 and later in the same year, the company sold it for a substantial profit.
Ms. Smith claimed "When I agreed to move back in with him again he said he would put
everything 50/50. The agreement covered everything. He said he wanted to
give me peace of mind. Coach House Properties [the Company] was [Mr Bottomley]. He said everything we have is 50/50; he did not go into detail. The company was Mr Bottomley."
Why is this important? Well, because they weren't married of course. Had they been, the legal title of the assets would be relatively academic as the court in divorce proceedings possesses the power to order the transfer of ownership from one spouse to the other, or the sale of property and payment of a lump sum. They weren't, so it couldn't. All Ms. Smith would be entitled to would be what she owned as a matter of law.
Once the company had sold The Mill, it bought The Barn. It still owned this at the time when everything came to an end. In 2010, the parties separated again, this time for good. Ms. Smith brought an action claiming a half share of the Barn. There are two interesting legal points in the Court of Appeal decision. The first, which they fail to provide an answer for, is about detriment. A promise, on its own, is not binding against the person who makes it. For it to be enforceable, the recipient of it needs to show that she did something to her detriment in reliance on the promise. So what did Ms. Smith do which was detrimental to her? "she (i) agreed to marry Mr Bottomley and (ii) gave up
her independent accommodation, in which she had lived since the end of
her first period of co-habitation with Mr Bottomley." Well, that was her case, anyway.
How can it be argued that agreeing to marry someone amounts to detriment? If she gave up a promising career to further the engagement, that might make some sense. If she gave away property of her own in reliance on her new-found joint ownership, that might too. Just getting engaged - well, I can understand why the judge at first instance seems to have skated straight over it in his judgment. How anyone seriously thought that could be good enough is something I struggle with. In fact, the judge ignored completely the lengthy submissions from both barristers on the subject of detriment but it is an essential element of the test to decide if Ms. Smith had acquired any ownership of the property. Frustratingly though, the Court of Appeal ducks this very issue itself, saying, "It is not necessary in this judgment to consider the distinct question whether, in any event, a promise to marry could in principle constitute sufficient detrimental reliance to found a claim to a constructive trust." I really don't see that it's so difficult.
Likewise, while they lived apart, Ms. Smith rented a house to live in. When they reconciled, she gave up the tenancy but in what way was this to her detriment? Instead of paying rent for accommodation, there is nothing to suggest that Mr. Bottomley was charging her to live in the house he owned. Surely she was better off, not worse off? No detriment means no claim and this is well-established law.
The second interesting element was the ownership of The Barn. It didn't belong to Mr. Bottomley - it belonged to his company. As we have all recently been reminded, in no uncertain terms, by the Supreme Court no less, (Prest v. Petrodel), the two must be distinguished from each other. Even on Ms. Smith's account of things, Mr. Bottomley made the promise, not the company. The Court considered Petrodel and noted that it could not be said that Mr. Bottomley's company simply held The Barn on trust for him. So for this second reason, the appeal was allowed. Now it may seem a little too unusual to have wider application, but in recent times, particularly in relation to high value properties, companies have been increasingly used to own real property. Sale of company shares do not carry stamp duty in the way that property transactions, so it has clear tax advantages. We may actually see more of these complications cropping up in the future and Prest v. Petrodel being applied in circumstances which weren't envisaged at the time.
P.S. As an aside, I was relieved on a professional level to see the Court of Appeal graciously deciding that Mr. Bottomley's solicitors should not be criticised for failing to point out a deficiency in Ms. Smith's pleading of her case. It's bad enough making sure your own client's case is properly put without being expected to argue the other side's case too! After all, we do have an adversarial system of justice and solicitors are obliged to act in the best interests of their client, not their opponent.
P.P.S Just on reflection, perhaps the most surreal part of this case is where the Court of Appeal considers the issue of agreeing to marry and detriment. In deciding firmly to sit on the fence, the Court said, " The answer is likely to depend upon the particular
factual circumstances: for instance, did acceptance of one offer of
marriage preclude acceptance of another, competing offer which
foreclosed the offeree from protecting his or her financial position
more fully by accepting the competing offer?" How Jane Austen is that? I have a vision of a young lady pondering the many offers from her various suitors, comparing their prospects and estates before making up her mind whose is the most appealing! Was this really happening in the 20th century, still less the early 21st?
Blog Disclaimer: Nothing in www.austinkempfamilylaw.blogspot.com blog should be construed as legal advice. If you require legal advice upon any family law related matter then you should instruct a solicitor. Any links to other blogs or web sites are provided for convenience only and Austin Kemp Solicitors cannot accept any responsibility for the contents of such linked blogs/sites.
Showing posts with label court of appeal. Show all posts
Showing posts with label court of appeal. Show all posts
Tuesday, 30 July 2013
Thursday, 12 July 2012
Will the parents grow up before their children do?
Some years ago I appeared in a local county court for a mother in a Children Act application brought by the father. The solicitor on the other side was a local practitioner of many years experience and asked me if we could go in to see the judge without clients first of all. I agreed and we went in before the judge, an equally experienced family law judge. My opponent introduced the case by saying, "This is one of those cases, ma'am, where we should all devoutly hope that the parents grow up before their child does." Instantly, the judge knew exactly what to expect!
I had my attention drawn to this report from the Telegraph recently and it triggered my memory of that afternoon.
Childish adults
My instinctive response was, oh yes, we've all been there. Thorpe LJ was just voicing what we have all thought so many times in the past. Why on earth do intelligent people expose themselves as acting in what can only be considered an immature way in front of a number of independent professional people? The whole atmosphere is so often one of tit for tat. Isn't it too undignified for words?
“It seems to me almost puerile; these very rich people distrusting and disliking each other intensely, so somebody has to come into the nursery to make some rules to dissipate all this nonsense.
“I simply cannot understand how the parties can litigate with such profligate extravagance.”
We aren't told what this pair have spent in legal fees so far. I know I harp on about this, but it is quite important really. I tell all my clients - I will advise you, as best I can, how much you could realistically hope to benefit by if you take your case to the next stage. I will also tell you how much it will cost to get there. If the first number isn't considerably larger than the latter, then there's no point in carrying on any further. Unless, that is, you would rather I had the money than either you or your ex.
In this case there seems to be another factor to take into account. The wife is saying that the original order, which gave her £26m, just isn't enough. She seems to have managed to get that order overturned and is now waiting to go back to argue for more. For whatever reason, she won't settle for more money than the vast majority of us could spend in several lifetimes. Having lived with countless clients through the whole trauma of contested financial proceedings, I find it very hard to understand why someone who is to benefit from that sort of wealth wants to go through the whole thing all over again. Why? To be awarded still more money which you are unlikely to have time to spend before you die?
In 1985, we are told, the couple were penniless. Now they can each leave their marriage with at least £26m. Surely that's enough? The saddest element, as always, is when you see that they have two teenage daughters. What is the effect on these two of seeing their parents squabbling like this and being derided by a senior judge in such demeaning terms?
Blog Disclaimer: Nothing in www.austinkempfamilylaw.blogspot.com blog should be construed as legal advice. If you require legal advice upon any family law related matter then you should instruct a solicitor. Any links to other blogs or web sites are provided for convenience only and Austin Kemp Solicitors cannot accept any responsibility for the contents of such linked blogs/sites.
I had my attention drawn to this report from the Telegraph recently and it triggered my memory of that afternoon.
Childish adults
My instinctive response was, oh yes, we've all been there. Thorpe LJ was just voicing what we have all thought so many times in the past. Why on earth do intelligent people expose themselves as acting in what can only be considered an immature way in front of a number of independent professional people? The whole atmosphere is so often one of tit for tat. Isn't it too undignified for words?
“It seems to me almost puerile; these very rich people distrusting and disliking each other intensely, so somebody has to come into the nursery to make some rules to dissipate all this nonsense.
“I simply cannot understand how the parties can litigate with such profligate extravagance.”
We aren't told what this pair have spent in legal fees so far. I know I harp on about this, but it is quite important really. I tell all my clients - I will advise you, as best I can, how much you could realistically hope to benefit by if you take your case to the next stage. I will also tell you how much it will cost to get there. If the first number isn't considerably larger than the latter, then there's no point in carrying on any further. Unless, that is, you would rather I had the money than either you or your ex.
In this case there seems to be another factor to take into account. The wife is saying that the original order, which gave her £26m, just isn't enough. She seems to have managed to get that order overturned and is now waiting to go back to argue for more. For whatever reason, she won't settle for more money than the vast majority of us could spend in several lifetimes. Having lived with countless clients through the whole trauma of contested financial proceedings, I find it very hard to understand why someone who is to benefit from that sort of wealth wants to go through the whole thing all over again. Why? To be awarded still more money which you are unlikely to have time to spend before you die?
In 1985, we are told, the couple were penniless. Now they can each leave their marriage with at least £26m. Surely that's enough? The saddest element, as always, is when you see that they have two teenage daughters. What is the effect on these two of seeing their parents squabbling like this and being derided by a senior judge in such demeaning terms?
Blog Disclaimer: Nothing in www.austinkempfamilylaw.blogspot.com blog should be construed as legal advice. If you require legal advice upon any family law related matter then you should instruct a solicitor. Any links to other blogs or web sites are provided for convenience only and Austin Kemp Solicitors cannot accept any responsibility for the contents of such linked blogs/sites.
Thursday, 10 May 2012
If ever tha does owt for nowt, allus do it for theesen!
I ranted a little while ago about a Mail article which suggested that it was easy to fall foul of a property claim from your unmarried partner. I strongly disagreed- see here just to remind yourself:
what can the Daily Mail teach us about Family Law?
A classic example of why this just isn't so has been reported in the Court of Appeal. You can read the report here:
Geary v. Rankine
It's a commonplace story - one I've heard in different minor variants many times over the years. Mrs. G formed a relationship with Mr. R. They began to live together. They had a child together. A few years after they got together, Mr. R bought a business - a guest house. He bought it with his savings and in his sole name. Clearly there were two distinct assets here - the premises and the guest house business which operated from it. After a little while, the two of them moved to live at the guest house and ran the business there. 12 or 13 years later, the parties separated. Mrs. G claimed that she was entitled to part ownership of the guest house.
The Business
What Mrs. G said was that she had worked unpaid in running the guest house. The judge found that she had cooked, cleaned and done much of the paperwork. She described Mr. R as being controlling - she only got money if she asked for it and needed it. Mrs. G claimed that she was a partner in the business and also had joint ownership of the guest house itself. The judge decided that she was not a partner in the business. She had not been held out as one, the accounts didn't show her to be one, she hadn't received drawings and there were other reasons and explanations which were very much to the contrary.
If you work for someone you love, that does not of itself place you in a business relationship with them. Working for them for nothing makes sense in its own way. Family income is used for the benefit of the family. If Mr. R's income was used to provide for the family, working for nothing in his business increases the benefit to the family. What it doesn't do is create any legal rights or obligations.
The Building
Mrs. G said there was a common intention that she would have an interest in the building itself. She said that although it had been bought originally for Mr. R alone, that had changed. What the Court of Appeal emphasised here was that it had to be a shared intention - i.e. both of the parties needed to be agreed on it. Mrs. G pointed out that she had given up her job in London at very short notice to go and live at the guest house to help get it back on its feet. She said that that was evidence of a common intention that they would operate and own the business together. The judge who decided the case and the Court of Appeal were agreed that that simply wasn't enough. Whatever she thought was the case, she had to prove that Mr. R thought the same and that was always going to be very difficult indeed.
Why bring the case?
Reading between the lines, it seems to me that there were two main motivations for Mrs. G maintaining that she should receive some of Mr. R's property. The first was that she deserved it. She had worked very hard over the years and did things which seem to have been beyond Mr. R - like paperwork, for example! So she had, but that isn't how this branch of law works. If they had been married, the court would have had no problem in saying that they had both made equal contributions to the family welfare, he by buying the place, she by working in it. That's fine where s.25 of the Matrimonial Causes Act is in play but it's irrelevant if it's not.
The second seems to me to be that Mr. R was a difficult man to live with. He was controlling and mean with money. In other words, he should be penalised for not being nice enough. Again, that's just not relevant. Even in divorce cases, although we see that sort of reasoning often, it cuts no ice at all.
Taken together, these may make Mrs. G aggrieved but they don't amount to a legal claim.
The Lesson
If ever tha does owt for nowt...... Just because someone else has benefited from your hard work, that doesn't mean you have a claim on their property. So if you're going to work hard, make sure that you get something for it! Don't, whatever you do, rely on the good nature and honesty of the person you do it for. That's what generates cases like this and the legal fees which accompany them. I have to say, this case really doesn't set any new precedents and I find it hard to see how it ended up running the distance in the first place.
Blog Disclaimer: Nothing in www.austinkempfamilylaw.blogspot.com blog should be construed as legal advice. If you require legal advice upon any family law related matter then you should instruct a solicitor. Any links to other blogs or web sites are provided for convenience only and Austin Kemp Solicitors cannot accept any responsibility for the contents of such linked blogs/sites.
what can the Daily Mail teach us about Family Law?
A classic example of why this just isn't so has been reported in the Court of Appeal. You can read the report here:
Geary v. Rankine
It's a commonplace story - one I've heard in different minor variants many times over the years. Mrs. G formed a relationship with Mr. R. They began to live together. They had a child together. A few years after they got together, Mr. R bought a business - a guest house. He bought it with his savings and in his sole name. Clearly there were two distinct assets here - the premises and the guest house business which operated from it. After a little while, the two of them moved to live at the guest house and ran the business there. 12 or 13 years later, the parties separated. Mrs. G claimed that she was entitled to part ownership of the guest house.
The Business
What Mrs. G said was that she had worked unpaid in running the guest house. The judge found that she had cooked, cleaned and done much of the paperwork. She described Mr. R as being controlling - she only got money if she asked for it and needed it. Mrs. G claimed that she was a partner in the business and also had joint ownership of the guest house itself. The judge decided that she was not a partner in the business. She had not been held out as one, the accounts didn't show her to be one, she hadn't received drawings and there were other reasons and explanations which were very much to the contrary.
If you work for someone you love, that does not of itself place you in a business relationship with them. Working for them for nothing makes sense in its own way. Family income is used for the benefit of the family. If Mr. R's income was used to provide for the family, working for nothing in his business increases the benefit to the family. What it doesn't do is create any legal rights or obligations.
The Building
Mrs. G said there was a common intention that she would have an interest in the building itself. She said that although it had been bought originally for Mr. R alone, that had changed. What the Court of Appeal emphasised here was that it had to be a shared intention - i.e. both of the parties needed to be agreed on it. Mrs. G pointed out that she had given up her job in London at very short notice to go and live at the guest house to help get it back on its feet. She said that that was evidence of a common intention that they would operate and own the business together. The judge who decided the case and the Court of Appeal were agreed that that simply wasn't enough. Whatever she thought was the case, she had to prove that Mr. R thought the same and that was always going to be very difficult indeed.
Why bring the case?
Reading between the lines, it seems to me that there were two main motivations for Mrs. G maintaining that she should receive some of Mr. R's property. The first was that she deserved it. She had worked very hard over the years and did things which seem to have been beyond Mr. R - like paperwork, for example! So she had, but that isn't how this branch of law works. If they had been married, the court would have had no problem in saying that they had both made equal contributions to the family welfare, he by buying the place, she by working in it. That's fine where s.25 of the Matrimonial Causes Act is in play but it's irrelevant if it's not.
The second seems to me to be that Mr. R was a difficult man to live with. He was controlling and mean with money. In other words, he should be penalised for not being nice enough. Again, that's just not relevant. Even in divorce cases, although we see that sort of reasoning often, it cuts no ice at all.
Taken together, these may make Mrs. G aggrieved but they don't amount to a legal claim.
The Lesson
If ever tha does owt for nowt...... Just because someone else has benefited from your hard work, that doesn't mean you have a claim on their property. So if you're going to work hard, make sure that you get something for it! Don't, whatever you do, rely on the good nature and honesty of the person you do it for. That's what generates cases like this and the legal fees which accompany them. I have to say, this case really doesn't set any new precedents and I find it hard to see how it ended up running the distance in the first place.
Blog Disclaimer: Nothing in www.austinkempfamilylaw.blogspot.com blog should be construed as legal advice. If you require legal advice upon any family law related matter then you should instruct a solicitor. Any links to other blogs or web sites are provided for convenience only and Austin Kemp Solicitors cannot accept any responsibility for the contents of such linked blogs/sites.
Wednesday, 14 March 2012
Good news - judges like to do the right thing. Edgerton v. Edgerton
There's been one of those odd and complicated divorce cases in the Court of Appeal recently. It's all to do with a husband declaring that a significant part of the family assets, belong to his mate.
First the husband asserted that he owed his friend Mr. Shaikh a shed load of money. Then the story changed - actually Mr. Shaikh and he were in partnership and that a large sum of money and a house were actually partnership assets. Despite the fact that the wife had got an undertaking from the husband that he wouldn't dispose of his interest in various assets, including the "partnership" assets, the husband's friend began an action against the husband, claiming repayment of the debt. Then he discontinued that action and began a separate one, claiming that his partnership with the husband was dissolved and seeking an account of the partnership assets.
Withdrawing legal aid - stupid or what?
So now Mrs. Edgerton faces her first problem. She has legal aid for the divorce proceedings but the partnership action is in the High Court Chancery division. At one stage it is joined with the ancillary relief application but for unexplained reasons this is changed and the hearings are separate. It is not clear why, but she didn't have legal aid for the Chancery action. Legal aid to argue over the property division but no legal aid to decide how much property there is to divide. Penny wise, pound foolish!
As a result, Mrs. Edgerton loses the Chancery action and a large slice of the matrimonial pot looks as if it's going to disappear to the husband's close friend and associate.
However, the judge in the divorce proceedings, somewhat surprisingly, asserts that he isn't bound by the decision of the chancery court as to the partnership action. The order in the chancery action had been by consent between the husband and his friend as the wife's defence of it had been struck out for failure to comply with directions. In other words, the wife had unsurprisingly been out of her depth, she didn't have legal assistance and the husband had taken full advantage of this. As a result, the family judge makes an injunction which effectively prevents the chancery order being implemented, so the husband and his friend appeal against the injunction to the Court of Appeal.
At the Court of Appeal
Now it doesn't require a great deal of legal knowledge to appreciate that the wife's case in relation to the chancery order has problems. There aren't different High Courts - there's just the one and it simply has different divisions. That must and does mean that a decision of one division must bind all the other divisions. That's why in relation to disclosure issues, husbands have tended to go to the Queen's Bench Division for orders rather than the Family Division - the judges have a different approach and can still bind the family judge. So this was an appeal which was bound to succeed and it did.
But the Appeal judges clearly couldn't stand the thought of clear injustice being done. They thought long and hard and came up with a doctrine, based on uncontested facts, which would give the wife a remedy. They then set a timetable with detailed steps which would enable her to access that remedy.
So good news! Judges are hostile to injustice and will exercise their intellects and legal knowledge to secure justice for a litigant wherever possible. All is not yet as bad as it could be.
Blog Disclaimer: Nothing in www.austinkempfamilylaw.blogspot.com blog should be construed as legal advice. If you require legal advice upon any family law related matter then you should instruct a solicitor. Any links to other blogs or web sites are provided for convenience only and Austin Kemp Solicitors cannot accept any responsibility for the contents of such linked blogs/sites.
First the husband asserted that he owed his friend Mr. Shaikh a shed load of money. Then the story changed - actually Mr. Shaikh and he were in partnership and that a large sum of money and a house were actually partnership assets. Despite the fact that the wife had got an undertaking from the husband that he wouldn't dispose of his interest in various assets, including the "partnership" assets, the husband's friend began an action against the husband, claiming repayment of the debt. Then he discontinued that action and began a separate one, claiming that his partnership with the husband was dissolved and seeking an account of the partnership assets.
Withdrawing legal aid - stupid or what?
So now Mrs. Edgerton faces her first problem. She has legal aid for the divorce proceedings but the partnership action is in the High Court Chancery division. At one stage it is joined with the ancillary relief application but for unexplained reasons this is changed and the hearings are separate. It is not clear why, but she didn't have legal aid for the Chancery action. Legal aid to argue over the property division but no legal aid to decide how much property there is to divide. Penny wise, pound foolish!
As a result, Mrs. Edgerton loses the Chancery action and a large slice of the matrimonial pot looks as if it's going to disappear to the husband's close friend and associate.
However, the judge in the divorce proceedings, somewhat surprisingly, asserts that he isn't bound by the decision of the chancery court as to the partnership action. The order in the chancery action had been by consent between the husband and his friend as the wife's defence of it had been struck out for failure to comply with directions. In other words, the wife had unsurprisingly been out of her depth, she didn't have legal assistance and the husband had taken full advantage of this. As a result, the family judge makes an injunction which effectively prevents the chancery order being implemented, so the husband and his friend appeal against the injunction to the Court of Appeal.
At the Court of Appeal
Now it doesn't require a great deal of legal knowledge to appreciate that the wife's case in relation to the chancery order has problems. There aren't different High Courts - there's just the one and it simply has different divisions. That must and does mean that a decision of one division must bind all the other divisions. That's why in relation to disclosure issues, husbands have tended to go to the Queen's Bench Division for orders rather than the Family Division - the judges have a different approach and can still bind the family judge. So this was an appeal which was bound to succeed and it did.
But the Appeal judges clearly couldn't stand the thought of clear injustice being done. They thought long and hard and came up with a doctrine, based on uncontested facts, which would give the wife a remedy. They then set a timetable with detailed steps which would enable her to access that remedy.
So good news! Judges are hostile to injustice and will exercise their intellects and legal knowledge to secure justice for a litigant wherever possible. All is not yet as bad as it could be.
Blog Disclaimer: Nothing in www.austinkempfamilylaw.blogspot.com blog should be construed as legal advice. If you require legal advice upon any family law related matter then you should instruct a solicitor. Any links to other blogs or web sites are provided for convenience only and Austin Kemp Solicitors cannot accept any responsibility for the contents of such linked blogs/sites.
Subscribe to:
Posts (Atom)