“The Italian Job” …..re Spousal Maintenance

SHOULD THE UK COURTS FOLLOW THE ITALIAN SUPREME COURT ON SPOUSAL MAINTENANCE?  Vijaya Sumputh, Solicitor, Family Law specialist at Curwens asks whether this case will have any effect.

According to “The Telegraph”, Vittorio Grilli, the former Italian Economy and Finance Minister (2012-2013) and his former wife Lisa Lowenstein, an American businesswoman, divorced acrimoniously in 2013.  Vittorio was ordered to pay his former wife the monthly sum of €2M to maintain her lifestyle but that was not the end of legal proceedings as Lisa then returned to Court to make Vittorio pay her debts.

The Court of Appeal in Milan rejected her claim for maintenance payments for life on the grounds that her Income Tax Returns were incomplete and Vittorio’s income had since reduced, so Lisa took the matter to the Supreme Court in 2014.

In May 2017 the Supreme Court of Cassation in Rome ruled that divorcees do not have the right to automatic indefinite maintenance payments.   The Judges stated that divorce should be modernized and not be seen as “set up for life”.  They concluded that divorcees who have independent means or the capacity to work, should not expect to receive maintenance payments indefinitely. They stated that divorced parties are not all entitled to maintain the same “tenor of life” as when married and, if possible, they need to learn to be self sufficient.

The Judges further recommended that keeping up payments indefinitely can be “an obstacle to starting a new family”  and have called for the divorce law to reflect modern relationships.

Now that the Italian Family Law system has rejected the idea that divorced spouses are guaranteed their previous standard of living, it is likely that many Italian divorcees will want to challenge their divorce settlements, however, the Italian Family Court will have to be incredibly careful not to discriminate against the financially weaker party and unfairly disadvantage those without the means to gain financial independence.  While they may no longer guarantee life long maintenance payments, they must guarantee provision for those who lose their earning capacity because of their commitment to marriage.

Given Italy’s trend, it will be interesting to see if other justice systems will also be tempted to reform the reasoning behind divorce settlements.

In contrast, only a few months ago, in a UK divorce case, Mills v. Mills, the former husband asked to end indefinite maintenance payments under English Law.  The parties were married for 13 years. The wife said that in the early years of the marriage, she ran her own beauty business and financially supported the family while the husband finished his studies, after which they both then worked together to set up his business as a surveyor. The parties have one son, who is now at university.

Towards the end of the marriage, the wife suffered serious health problems and had to reduce her working hours. The parties separated in 2001 and divorced in 2002. They reached an agreement that the family home would be sold, the wife would receive £230,000.00 from the sale to buy a new home for herself and their son, and husband would keep his business assets. Additionally, the husband agreed to pay the wife spousal maintenance of £1,100 per month. In 2014 the husband applied to court to end those payments and the wife cross-applied to increase them. The judge disagreed with both of them so they both appealed.

The Court of Appeal found that the original judge had erred in not increasing the maintenance to cover the wife’s shortfall, despite knowing that she could not meet her basic needs and the husband could afford it. The appeal court increased the maintenance to £1,440 per month indefinitely.

This shows that in the UK, maintenance payments continue to be set for a limited period of time or until one party dies, marries or enters into a civil partnership but the Court calculates maintenance payments based on the financially weaker party’s income needs and earning capacity, considering a range of factors such as their age, the length and living standard of their marriage, their health and caring commitments. While each case is specific to its own facts, the Court’s objective is always to enable a party to make a transition to independence where possible. On the facts of the Mills case, the wife was not able to make that transition

At Curwens we are regularly faced with the issue of claims for maintenance, acting for either the person making or challenging the claim.   We provide expert advice on what is a reasonable amount to expect to be awarded or agreed.  We will also guide you through the procedure and explain the financial risks where agreements cannot be reached.  It is therefore essential that you obtain expert legal advice on your position.

Vijaya (Asha) Sumputh

vijaya.sumputh@curwens.co.uk

Family Law Solicitor – Curwens LLP.

Vijaya offers both fixed fees and flexible pricing for all family law services. For an initial consultation, call Vijaya direct on 0208 884 7221 and she will be happy to help you with all your family queries.

www.curwens.co.uk                                                                                      CURWENS LLP

“Neighbours…everybody needs good neighbours…..”

That’s true, not just in an Australian soap opera, but all over the world, so the worst thing we can do is fall out with our neighbours because, as we all know “good neighbours become good friends“… or at least they don’t start a war which ends up in Court as happened in this case – “BOUNDARIES, BORDERS AND COSTS” reported in Civil Litigation Brief  by Gordon Exall

Solicitors are often contacted by one aggrieved party who feels that they’ve been slighted because their neighbour’s tree overhangs their garden or they think a new fence has been put in 3 centimetres too far over. Those are common gripes but on the other hand, it can often be that they may really have their property rights at stake, for example, where an extension is being built up against a party wall without following the procedure laid down in the Party Wall Act 1996 which provides a framework for preventing and resolving disputes in relation to party walls, boundary walls and excavations near neighbouring buildings.

Other common problems can be boundary disputes, the blocking of shared drives and the fallout from buying a house where the sellers have failed to disclose material issues about their neighbours, such as complaints they’ve made for years about rave parties.  If these are not disclosed during the sales process, it is possible for the new owner to bring a claim against the seller for that non-disclosure and the amount to which the problems have diminished the value of the property. Many household insurance policies contain Legal Expense Insurance which usually covers advice on neighbour/boundary disputes, so it’s always worth checking your policy documents. These are complex matters of law which need the advice of an experienced lawyer who specialises in property dispute resolution.

If you need any further help with this topic, call Adrian Boulter on 0208 363 4444

adrian.boulter@curwens.co.uk

www.curwens.co.uk

 

 

 

 

 

Accountants – 7 pitfalls to avoid when buying Gross Recurring Fees

For my latest blog, I’m grateful to my colleague, Spencer Laymond for reference to his Report for Accountants “7 pitfalls to avoid when buying Gross Recurring Fees”.  This is just an extract from the much longer and more detailed Report which is available direct from Spencer on 0208 363 4444  or by email  spencer.laymond@curwens.co.uk

“Introduction

Buying a block of gross recurring accountancy fees can be an exciting and stressful time. Exciting – because with the right deal, the additional fees can be an effective mechanism to your grow your business. But stressful – because even with the right deal, if the structure is wrong, or if certain pre-purchase checks are not made, the acquisition can have disastrous consequences.   Even with that fantastic potential (“red ribbon”) acquisition,  one has to be very careful.  According to Dr William G. Hill  the “red ribbon rule” says that if a deal sounds too good to be true, then it is too good to be true! Particular care must be taken to avoid the potential pitfalls.

What are these pitfalls?

There are many potential pitfalls that could arise and for convenience we have placed them into the following 7 categories:

Pitfall 1 – The seller does not own the goodwill.     The issue is that goodwill and turnover are not interdependent. Looking at the measure of what a business takes from an analysis of the profit and loss account, whilst a relevant indicator, it is only an indicator. Importantly, turnover is not conclusive evidence that the goodwill generating the turnover is actually owned by a person selling.

Pitfall 2 – Past performance does not equal future performance.     Rather than considering any specific reasons why future performance may not equal past performance, we look at the two main ways to protect against this pitfall.  First through pre-purchase due diligence, and second with a price adjuster clause in the purchase agreement.

Pitfall 3 – Relying on seller warranties rather than a price adjuster clause.    Suing for breach of warranty should be considered a remedy of the last resort. It involves a legal process which may have inherent uncertainties in terms of costs, outcome and time involved. Accordingly we recommend, when buying a business priced on the actual performance (an earn out), both a price adjuster clause and suite of warranties should be incorporated.

Pitfall 4 – Acts of God.     What are we trying to get at here? Well, in general terms, any major event that, irrespective of probability, if it arose would create a material issue for the buyer.

Pitfall 5 – Misunderstanding the implication of the Transfer of Undertakings (Protection of   Employees) Regulations 2006.      Where an accountant is buying a block of gross recurring fees, the risks of TUPE cannot be ignored.   We highlight that the transfer of staff is automatic and it is statutory i.e. the buyer and seller cannot as between themselves merely agree which members of staff transfer.

Pitfall 6 – Buying the shares in a limited liability company.     The main issue, and the reason for this pitfall, is that when acquiring shares in a company, a buyer will acquire the company with all of its historic, current, prospective and contingent liabilities.

Pitfall 7 – Not accounting for integration of systems, cultures and office space.     The extent of the issue is likely to be determined in part through the due diligence process, but in part, for a number of reasons, there may be a number of factors where it is impossible to fully account for.  The answer may fall into the overall price / price mechanism you are prepared to agree on.

Concluding thoughts and next steps

We can offer a number of services to assist with the process of spotting or dealing with a red ribbon acquisition, that is too good to be true – from legal due diligence to drafting and negotiating the purchase agreement – it’s then down to you to implement the plan to win over client relationships.”

Spencer Laymond       0208 363 4444

Partner, Curwens LLP               

www.curwens.co.uk

PRE-NUP – WHAT’S THAT ? DO I NEED ONE ?

With the romance of Valentine’s Day now behind us, let’s talk again about the practical aspects of our relationships.

With the unavoidable increase in divorce and separation rates, it means that more of us who are getting married or moving in together are not “first timers“. Not only that, either one or both parties may have children from a previous marriage. This can mean ongoing financial ties to an ex-partner and possibly having a home or assets to bring into the new relationship.

So it’s  more important than ever for couples to take a small step back from the romance of their new relationship or wedding plans and think about the practicalities. If they are about to start living together, or planning to tie the knot, they should take legal advice on having a Cohabitation Agreement or Pre-Nuptial Agreement.

These don’t have to be long or complicated documents. The aim is to record what can be agreed amicably straight away, to cover what would happen if you ever did split up:-

  • Do you get to keep the property you brought into the relationship ?
  • Do you have to financially support one another after separation ?
  • How do you split anything held in joint names ?
  • Do you have to share any debts ?

The idea of considering a pre-nup early on is to avoid the time, anxiety and cost of a complex legal battle further down the line. Of course no-one has a crystal ball and your thoughts on how assets should be divided between you may change if you are married for many years, or if you have children together but in that case, no problem – you simply agree to review the terms of the Agreement on certain “trigger” events.

If you would like more information on having a Cohabitation or Pre-Nuptial Agreement drawn up please contact

Enfield:  

Vijaya Sumputh

0208 363 4444      vijaya.sumputh@curwens.co.uk

Hoddesdon/Royston:

Amanda Thurston 

01992 463727       amanda.thurston@curwens.co.uk

Curwens LLP is your local firm of solicitors offering you expert legal advice when you need it most.

Offices in Royston, Hoddesdon and Enfield.

www.curwens.co.uk

 

 

“Love Thy Neighbour ?”

Really ? How well do you get on with your neighbours ? Our Dispute Resolution team gets involved in so many property disputes between sellers/buyers and also neighbours over a whole range of problems.

When we buy a property, we rely on the Sellers’ Property Information form to tell us whether there have ever been any neighbour or boundary disputes – the answer is usually “No” – because you do know that “Yes” would be the kiss of death to the sale!  The boundaries are also identified – left or right of the property.

One good tip when buying a house is to go back at various times and check out the surrounding area – including the evenings, after dark on a Friday or Saturday night, just to see what the noise level is like, particularly from the house next door.

So far, so good.

The problem arises, though, when you move in or you yourself get new neighbours and they start with the all-night parties – (housewarming – ok – you let that one go – but then the loud music carries on each week!) – or they decide to build a large extension (sometimes on the party wall) and have to move the boundary fence for that and replace the old fence……but a couple of feet over – or they let the leylandii shoot up like triffids – any of this starting to sound familiar ?

Clearly these examples (not exhaustive) sound extreme but they can cause no end of stress and at the worst, can ruin lives – because, when it’s your home, there is no escape.

If you do have neighbour issues, firstly, check your household insurance policies for the words “Legal Expense Insurance” (e.g. via ARAG).  These policies often cover neighbour/ boundary disputes, so that would be your first port of call, to their helpline.  If they think you need legal advice from a specialist firm of solicitors, they may refer it to someone like Curwens solicitors, the cost of which is covered by your policy as long as it’s a viable claim (and you follow our advice!).

For further advice, call 0208 363 444 and ask for Adrian Boulter, property dispute expert.

www.curwens.co.uk

 

D-I-V-O-R-C-E – who gets what?

This month, I’m grateful to my colleague, Vijaya Sumputh, a specialist Family Law Solicitor at Curwens for her timely advice on the way some family assets are dealt with in divorce :

“According to a recent article in the Guardian, divorce enquiries are expected to rise more than 300% at the beginning of the year.  As Family Law solicitors, in this situation, we’re often asked the big question :  Who gets what?

The process of dividing the marital assets on divorce or family breakdown can be  emotional and complicated. What our clients want is a clear idea of what they may end up with at the end of this process, for example:

  • Who gets the matrimonial home?
  • Who gets the engagement ring?
  • Who gets the family pet?

Sadly, it’s not always possible to give a definitive answer to these questions, particularly in the early stages.

The Courts approach each case on its own individual set of facts – what might be right for one family, may not necessarily be right in all cases. The law in England and Wales is based on a discretionary regime which means there is a vast range of settlement options available in different circumstances.

There is no hard-and-fast rule, which is why it is important to take legal advice so that you have a better idea of the range of likely outcomes in your case.

Who gets the family home?

Often the family home is the biggest matrimonial asset and potentially the most emotionally significant one. Whether the house will end up being sold (and the net proceeds of sale divided) or transferred to one of the spouses, very much depends on the family’s needs.

In some cases, the family home may be kept by one spouse if that spouse is the primary carer for the children. Unless there is sufficient net equity in the property to re-house both spouses in a mortgage-free property, priority will usually be given to the spouse who needs to have the children living with him or her.

In some cases, the family home is kept by one party until a defined point in the future (such as when the children are all over 18) when the former family home can be placed on the market for sale at a price to be agreed by the parties (or if they can’t agree, as determined by a Court).

If, however, there are other assets that a Court can take into account, then one spouse may be able to retain the house permanently and pay other funds to the other person to “buy out” their interest.

When making any financial order, the court will look at a number of factors such as the length of the marriage, the age of the parties, whether they are working and what their earning capacity is, whether there are children, what each party’s needs are and what assets are available to meet those needs. It’s complicated, so do take legal advice.

Who gets the engagement ring?

The answer to this question can vary depending on whether the engagement ring was a family heirloom or perhaps inherited by one party. More often than not, engagement rings are retained by the wife to be passed down to one of the children.

As a general rule, the courts prefer chattels to be divided by agreement but if no agreement can be reached, the court can simply order all chattels to be sold and the proceeds divided.

Who gets the pet?

The family pet is mostly regarded as a member of the family but as the Courts will usually treat family pets much in the same way as any other chattel, we strongly encourage the parties to agree who will have responsibility for continuing to care for (and pay for) their family pet! ”

Vijaya Sumputh  –  0208 363 4444  –  Vijaya.sumputh@curwens.co.uk

www.curwens.co.uk