Back to Basics: Divorce and your rights

Related tags Tenancy agreement Marriage

It's the gloomier side of Christmas. The obligation to have a good time combined with the cost of paying for it is an added strain on many marriages,...

It's the gloomier side of Christmas. The obligation to have a good time combined with the cost of paying for it is an added strain on many marriages, and for some, sadly, it is the final straw, pushing up the numbers of divorce proceedings that start in the new year.

For publicans, it can bring extra difficulties to relationships that already have to stand up to the pressure cooker of making a living in the licensed trade.

Although pub companies and brewers are more open these days to singles running pubs, many still look to married couples to provide a strong team at the heart of the business.

But living and working together day in, day out, and having to keep smiling for long hours in the public gaze, not to mention the increasing financial pressures that independent licensees face, make keeping the relationship intact a challenge.It is one of the unfortunate realities of the pub industry that marriages break up under these pressures, and divorce follows - with an impact on the business as well as the people concerned.

This article tries to answers some of the questions raised by divorce in the pub trade. But let's hope you won't need the advice…

My husband owns the entire business, including the freehold of the pub, but I have no stake. Do I have any claim?

While the husband in this instance is what we call the legal owner, or has the legal interest in the business, the wife has what we call a beneficial interest in the property. Beneficial interest is an interest which is not fixed, and can be intangible. 

Getting a percentage or proportion of any settlement would depend upon various factors which are presently governed by Section 25 of the Matrimonial Causes Act 1973. The court will consider everything it feels is appropriate, and might include:

• the ages of the parties

• the duration of the marriage

• the ages of the children

• the income contribution of either party towards the business

• both parties' capabilities of obtaining a mortgage

• present savings

• pensions

• inheritance prospects.

In short, not having your name on any documentation does not preclude you from making a financial claim once divorce proceedings have been commenced.

My husband caught me cheating with one of the regular customers. He now says that I am not entitled to anything as a result of my infidelity. Is he right?

It is important to note that under English law the conduct of either party is very rarely considered by the courts. This is on the premise that one's behaviour is subjective and it can lead to further animosity when negotiating a settlement.  Secondly, English law does not apportion 'blame' on either party.  For example, a wife can turn around and say: "Yes, I did commit adultery, but I only committed adultery as a result of the fact that my husband was violent towards me".  The point the courts are trying to make is how far do you go back in a marriage and say: "Yes, at this stage it went wrong"?

Would my husband have to sell the business in order for me to obtain my share?

In the normal course of events, as long as there is enough equity after the sale to re-house both parties, the court would readily accept a sale to take place. 

The alternative is what we term a 'buy-out' in which, rather than selling, the husband could re-mortgage and offer the equivalent lump sum to the wife so she can meet her accommodation needs. 

The situation is somewhat different, however, if there is insufficient equity for a sale, and there are young children. If the wife insisted, the court could allow her to remain in the business and to receive her share until the children reach 18 or complete full-time education. 

Normally, however, courts try to encourage a full and final clean break, if this is possible.

My husband and I are tenants of a brewery. What are my rights?

If a tenant or lessee couple divorces, the first document a solicitor would seek to obtain would be the tenancy agreement. The rights of either spouse, and the rights of the landlord, are superseded by this agreement. 

The decision of who should stay and who should go can be made by the landlord according to the terms of the tenancy agreement. If the agreement is silent as to what happens, and if both parties have their names on the tenancy, both would essentially have the right to remain in the pub until the agreement has been terminated. 

As a joint tenant with my spouse, what am I entitled to in any divorce settlement?

The worth of the business - inclusive of goodwill - is considered to be an asset under the law and lawyers will usually call in accountants to make a valuation and gain a true picture of what the pub is worth. Prior to any 'financial disclosure' the court will want to see evidence of the state of the business. This will dictate aspects of the settlement such as:

• spousal maintenance

• the possibility of buying one party out

• each spouse's contribution towards the business either through capital contribution, by working long hours or by being the 'brains' of the business.

The question is, what can be turned into ready cash?

If the lease is assignable, and can be sold on, then naturally this will form part of the matrimonial pot and affect the settlement.

Essentially, anything that can be 'liquidised' (excuse the pun) will be considered by the court to be fair game as a potential claim for the parties concerned.

The way it is split will, again, depend on the Section 25 factors which I have already referred to.

We are both employed as joint managers by a pub company. What happens there?

Where a couple are directly employed by a pub company there is something of a crossover between employment law and matrimonial law. A lot depends on the contract of employment they have signed. If the contract is silent in relation to divorce, then the principles adopted in the case of a tenant would, I suggest, apply.

Remember, no two divorce cases are the same. The above information should be treated only as a guide.

Lak Sangha is based at Chambers Solicitors in Slough, Berkshire, and is a member of the Law Society's Family Law Panel. He can be contacted on 01753 522204

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