The breakdown of a marriage in any family is upsetting, but within a farming family a divorce can be particularly difficult to resolve.
The court does not differentiate between a family farm and any other business in divorce proceedings. This can make the process of distributing assets in a divorce very complex, farms tend to operate as a lifestyle business, with accounts often showing poor income and funds tied up in capital. Farms are often inherited and passed through the generations with many family members having a share in the enterprise.
Thomas v Thomas [1995] established that the court has almost limitless discretionary power to re-distribute the assets of spouses in divorces. However, the court is often restricted in its approach in farming cases as their powers can be quite limited and unsophisticated to manage the complexities of a family farm on divorce. The lack of flexibility can be viewed in a positive light, as this is often an incentive for parties to negotiate to find a creative workable solution.
In the event that a workable solution is not identified the ultimate goal of the court is to achieve fairness amongst the parties.
‘Matrimonial’ v ‘Non Matrimonial’
The court views matrimonial property as property that was acquired during the marriage by means of inheritance or gift, for example the family home. Even if this were brought into the marriage by one of the parties it would usually be the focal point of the marriage and would therefore be treated as matrimonial. Non matrimonial property would include inheritances, gifts and property, which either party acquired prior to the marriage.
The development of the distinction between matrimonial property, and non matrimonial property and the approach to the division of assets is fundamental to the approach of the court in farming cases. This distinction is important in a farming context as the courts tend to adapt a different approach to non-matrimonial assets, in that the ‘sharing principle’ does not necessarily apply in the same manner to non matrimonial assets and as such there will be a greater justification to depart from equality. However, this factor carries very little weight in circumstances where the needs cannot be met by reference to sharing of purely matrimonial assets.
In summary, matrimonial and non-matrimonial assets will be considered as separate entities. Nonetheless, if there are not surplus assets and needs cannot be met the court will deviate away from this stance.
What should I do first?
In the unfortunate event that a marriage has ‘broken down irretrievably’ it is important to know what the necessary next steps are to take.
Initially, you should try to ensure that your accounts are in order gathering as much information as possible about the farm. We will need to know who owns which parts of the land with mortgage details where possible. This might be time consuming but will be time well spent. We understand that this can be a daunting prospect, but it is important to take advice early on to establish your options and how to proceed. If you would like to speak with one of our family law specialists, please contact us on 01392 207020.
