Divorces involving a family business
The importance for business owners to seek early advice to minimise future problems should their marriage break down in the future.Read more
As written in one of our previous posts, according to the Office for National Statistics, more than 6 million couples in the UK are cohabiting. This is over twice as many as did 20 years ago.
Many people who do cohabit believe that if they separate from their partner they have rights as a ‘common law spouse’, especially if they have been together for many years. This belief is incorrect and when an unmarried couple separate, one partner can end up leaving the relationship with virtually nothing or be faced with lengthy and costly disputes with their former partner.
This case is just another example of how you could be impacted if your relationship should break down but remember, there are steps you can take to protect yourself.
Rupert Ashmore told the court that he could not say if he loved his partner of 25 years any more than he loved his dog.
Mr Ashmore met Kim Woodward when he was 36 and she was 19. He was a lecturer and she was a gifted design student. Ms Woodward moved into Mr Ashmore’s cottage in 1989. They changed house, once in 1991 and again in 2001, when they moved into a large farmhouse with 50 acres of land, worth in the region of £700,000. All 3 houses were purchased in Mr Ashmore’s name.
They had a son together in 1993 and ran a successful business. During the day, Ms Woodward canvassed for custom for the business whilst Mr Ashmore worked at the college and they both worked together in their design studio late into the evenings.
They separated in 2010 and Mr Ashmore refused to pay Ms Woodward a penny. She had, in his view, been only a lodger and an assistant in his business. Ms Woodward commenced court proceedings in 2012. Judge Mark Bell called Mr Ashmore’s evidence “untrustworthy, partial and self-serving.” He described Mr Ashmore as “extremely callous” towards Ms Woodward and their son, Jack.
The County Court Judge decided that there was a constructive trust based on the common intention and that Ms Woodward had made substantial direct and indirect contributions towards the purchase of the property. The Judge ordered that the house and land be sold and that Ms Woodward should receive 50% of the proceeds of the sale.
Mr Ashmore appealed but it was clear to all (perhaps except Mr Ashmore) that they were a couple and were cohabiting. Ms Woodward, understandably, believed that she had an interest their home. Sir Terence Etherton said it was a “strange proposition” to suggest that someone who had done so much over 25 years should find themselves with “not a penny.”
After a two year legal battle, culminating in the Court of Appeal, Mr Ashmore has finally agreed to pay her £275,000 for her interest in the property.
My advice is for so long as the law remains unchanged (many groups are campaigning for couples who live together to have similar rights to those who are married) if you are considering moving in with a partner it is wise to consider taking advice on drawing up a Cohabitation or Living Together Agreement setting out who gets what percentage of the house, furniture and other assets. Whilst it may not seem the most romantic way to begin a new chapter in your relationship, it is likely to save you both a lot of heartache and distress if your relationship subsequently breaks down.
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