Assets, divorce & future earnings

Future earnings and divorce

A recent Court Of Appeal decision makes it clear that whilst there are many factors the courts must and in some cases must take into account in determining finances between divorcing parties, one factor which cannot be considered to be an asset is the future earning capacity of the parties at the time of the marriage.

Undue Influence – a new case

Challenging a will – not easy

Aside from dependency claims based on being a close relative qand having a financial need for provision which has not been taken into account in a will, it is not easy to convince a court in England & Wales that a testator has been unduly influenced.

In a recent High Court case, Leigh Crowdery failed to convince the court that her elderly grandmother had been unduly influenced by a 40 year old male neighbor, who she befriended. The Judge found on the evidence that the testator knew exactly what she was doing and had the legal right to exclude her granddaughter from inheritance.

Personal circumstances should not affect Planning Approval

A Council has been criticised by the Local Government Ombudsman for a sympathetic approach to a planning application which involved an elderly and disbled person, stating that a Council's procedures should be adhered to and that personal circumstances should not impact. It will be interesting to see if this type of ruling might be challeneged in future inder the Equality Act or Human Rights legislation, both of which are having an increasingly significant legal impact.
The person who applied for permission to build the bungalow was elderly, disabled and owned a home which was susceptible to flooding. Melton Borough Council granted planning permission despite the objections of the owners of adjoining land and even though the application was contrary to the Council’s stated planning policies and went against the recommendation of the planning officer who had reviewed the application.
The Ombudsman ruled that the owners of the adjoining land should be compensated for the diminution in value of their property as a result of planning permission being granted and awarded an additional £500 for their time and trouble in raising the complaint.

Defective Wording Does Not Remove Liability

When a document contains errors, the court will often act to ensure that commercial common sense dictates its interpretation.
 
In a recent case, a farmer sought to avoid an estate rentcharge for roads and sewers on the farm estate whe
Field
n the covenants in the land transfer documents contained errors and omissions.
 
Concluding that the rentcharge was not intended to yield a profit but merely to allocate the costs to the occupier of the land, the court ruled that the documents had to be construed to give effect to the ‘missing covenant’.
 
The decision was also influenced by case law which provides that a person who takes the benefit of a deed cannot avoid a burden which attaches to it.

Charity Trustees Given Financial Crime Awareness Warning

Charity Trustees have been reminded of the need to be aware of the possibility that their charity may be used for financial crime, with the National Fraud Authority estimating that annual losses to charities due to financial crime amount to more than 2 per cent of total income.
 
As the Charity Commission points out, ‘trustees have a legal duty and responsibility under charity law to protect the funds and other property of their charity so that it can be applied for its intended beneficiaries. They must also comply with the general law (and overseas law where applicable) including in relation to the prevention of fraud, money laundering and terrorist financing.’
 
The Charity Commission has therefore prepared a list of ‘ten top tips’ for charity trustees to ensure they are aware of the possibility and take appropriate steps to reduce the risk of financial crime.
 
These are as follows.
 
  1. Review your financial controls at appropriate intervals and do so critically, keeping them up to date. Just because you have not been a victim of fraud, do not assume that it will never happen;
  2. Segregate duties – do not allow one or two people to be in charge of all aspects of your charity’s financial controls without any checks being made;
  3. Make sure all of the separate parts of the financial records agree with each other. Always ask for and keep receipts. Reconciling bank statements with invoices, receipts, purchase and payment authorisations will often help to identify fraud at an early stage, and may discourage potential fraudsters;
  4. Never weaken your financial security for the sake of short cutting or time saving. For example, do not pre-sign blank cheques, even if a second signature is required. Doing so reduces your cheque security by 50 per cent –or, to put it another way, doubles the risk;
  5. Keep lists or registers of valuable fixed assets and key charity property, and periodically inspect them;
  6. Ensure that electronic or online banking arrangements are secure and are protected with dual-level authorisation;
  7. When recruiting staff – especially those who handle the charity’s finances – make appropriate background checks and take up references;
  8. If your charity makes grants to beneficiaries or other organisations, carry out appropriate due diligence checks on applicants. Guidance on this can be found at  ‘know your beneficiaries’;
  9. Ensure that as trustees you receive and consider regular reporting information about the charity’s finances. If you are a trustee or manager, make sure that you understand the financial summaries and reports that are presented to you, and if you do not, ASK for an explanation that you CAN understand; and
  10. If you suspect or become aware of fraud, make sure that you know what to do and who to inform. Make sure it is part of the culture of your charity. Prompt and appropriate action will help to protect your charity and limit any financial damage.
 
If you have concerns about how a charity of which you are the trustee is being run, contact us for advice.

No-Shows – ECJ Rules No Vat Due

A recent decision of the European Court of Justice will come as good news for hard-pressed hoteliers and has led to HM Revenue and Customs issuing new guidance on deposits.

hotel 1
The decision confirms that there is no relationship between a deposit taken and the supply of a standard-rated service. Accordingly, therefore, where a deposit has been taken for a hotel booking and retained because the person making the booking is a ‘no-show’, there is no need to account for VAT on the deposit.
 
However, if the deposit is made for a specific room which is therefore kept vacant, the supply remains one on which VAT is due.
 
Hotel owners can reclaim VAT overpaid as a result for the past four years only. In addition, hoteliers will want to consider their terms and conditions to ensure they are VAT efficient.

Trade Mark – Whole, Not Parts of Whole, is What Matters

The High Court has confirmed that a trade mark refers to the general impression given by the mark, not to the details of the mark and this can include auditory and conceptual factors as well as purely visual ones.
 
The important issue is whether the average consumer would be misled bearing in mind that the mark is perceived as a whole, not by its individual parts.
 
Merely creating a mark that is subtly different from a trade mark may well be insufficient to prevent an action for violation of the trade mark or ‘passing off’ (deriving an economic benefit from it) if the overall impression is similar. For advice on all trade mark and other intellectual property matters, contact us.

If it is in the Sky, It is Weather!

Plane on runway

The Financial Services Ombudsman has refused to refer a test case involving a travel insurance claim to the court in order to determine whether the volcanic ash cloud which caused so much disruption to European aviation in 2010 was not covered by the phrase ‘poor weather conditions’.
 
Most travel insurance policies contain limitations in cover which exclude or limit claims resulting from ‘acts of God and those relating to areas where there is civil unrest or war or to which travel is undertaken when the Foreign Office has advised against it. Normally, they allow a claim to be made where it results from adverse weather conditions.
 
The case involved a woman whose claim was refused by the insurer, which argued that it was not covered by the clause that allowed a claim to be made when the travel disruption resulted from adverse weather conditions. She appealed to the Ombudsman.
 
The ombudsman concluded that it was not a suitable case to refer to the court as a test case and made an award to the claimant.

Redundancy selection criteria

Second guessing employers actions

A long established principle running through much of English employment law is the principle that it is not an Employment Tribunal’s role to second guess the actions of an employer as long as those actions generally satisfy reasonableness and procedural norms.

This principle has again been reaffirmed in a recent Employment Appeal Tribunal case, in the context of redundancy. Many employers will know that as one factor and method of acting reasonably and fairly in a prospective redundancy situation, a point scoring system can be seen as an effective and objective tool for selection.

In the case in question the Tribunal found that the scoring system in  a redundancy selection process should only be investigated in exceptional circumstances, such as bias or obvious mistake. In effect, the Claimant in this case argued that there was a degree of subjectivity in the scoring system at his former workplace and that there had been no bias or obvious mistake.

Two Flats are Not a Residence

When a family is being housed, the provision of separate, self-contFlats and dangerained flats with no common living areas does not mean that accommodation had been made available such that the members of the applicant’s family could ‘reside together’ in the ordinary meaning of the phrase.