Tuesday, May 06, 2008

When a clean break is not achievable

H v H [2008] EWHC 935 (Fam), reported today on Family Law Week, involved a family business, in which both parties had an interest, but which was run by the husband. Both parties sought a clean break, but Mr Justice Moylan, not willing to require the husband to sell the business, found that the non-business assets were insufficient to achieve a fair clean break. He therefore awarded the wife 67% of those assets, and ordered the husband to pay £60,000 per annum spousal maintenance.

This was a relatively 'big money' case, but I think it has application to many cases involving parties of more modest means. It is a common scenario that the family business, being the only or main source of the family's income, cannot be sold and must therefore remain the property of one of the parties. This can then leave insufficient other assets for there to be a clean break, desirable though this may be, and the other party may therefore have to rely upon periodical payments to 'make up the difference'. The amount of the capital and maintenance elements of the settlement will usually be based upon needs and sharing, as in H v H.

Of course, the maintenance may later be capitalised, upon a subsequent application by either party for a clean break, if circumstances then make a clean break possible.

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