Division of Property including business under which both parties were involved

17/05/2016

Richard Watson received an enquiry from Tina who had separated from her same sex partner Lisa. 

Following Richard Watson being instructed and re-focusing initially by Tina and thereafter as a consequence, refocusing by Lisa as to what was the desired outcome of each of the parties, when Richard Watson was initially instructed the parties had spent about $1,000,000.00 on legal costs and associated matters. 

Tina could not see any end to the adversary process or a result.  It was clear to Richard Watson that unless the matter could be re-focused, the parties were becoming unfocused on the business, debating all issues and fighting for survival and the inevitable obvious conclusion would have led to each of Tina and Lisa being left with almost no assets. 

Tina was concerned that as she had been on the receiving end of numerous Applications in the Family Court over a 2 year period.  The Applications were distractions from a resolution of the division of the net assets between Tina and Lisa. 

Richard Watson is an experienced family law and commercial dispute resolution Lawyer with in excess of 20 years in dealing with and mostly resolving very complex commercial and family dispute cases.  The process adopted was to analyse the case and break it down to its basic elements so as to enable the parties to properly consider the proper processes, cost effectiveness and benefits of alternative approaches that may be available to a resolution by negotiation or by an efficient Court determination.  All cases are different and there may be resolution by negotiation, Mediation, Arbitration, expert examination or Court process. 

Richard Watson and the team at Watson & Watson look at the cost benefit to each of the processes and consider the input of the client as to the likely process or processes to achieve the desired outcome.

At an initial conference Richard Watson ascertained that:

1.         Tina and Lisa (aged about 40) had been in a relationship for approximately 10 years.

2.         There were no children to the relationship.

3.         Lisa and Tina had been involved in a joint enterprise (business) which had produced a good lifestyle. 

4.         The net asset pool on any basis was no more than $3,000,000.00 - $4,000,000.00.

5.         Each had benefits, strengths and weaknesses in relation to the business operation and also in their relationship.

5A.       As a result of the apparently successful business Tina and Lisa acquired a significant number of properties, however each and every one of them were heavily mortgaged.

6.         Each of Tina and Lisa had previously engaged well known Family Lawyers and Tina and Lisa had adopted an adversary process in that all issues were debated and as a result they had lost their way to finding a resolution to separate their emotions and their assets.

7.         By that time Tina and Lisa had spent about $1,000,000.00 in legal fees. 

The Applications that were before the Court related to many issue including injunctions, preventing either party taking actions, money for funding the litigation, allowing access to the business to Lisa and Lisa’s advisors to monitor the business and some other relatively minor issues such as return of a motor vehicle.  The return of a motor vehicle is not always a minor issue but certainly in this case was not one that the parties should have spent more on then the value of the motor vehicle. 

It had been assumed that the case had been conducted on the basis that Tina should pay Lisa a sum for taking over the business.  Negotiations had commenced at the early stages and a figure had been discussed, however the constant dispute and distrust led to the business deteriorating slowly and thereafter at a greater pace.  At the time Richard Watson was appointed, there were real issues as to solvency of the business and whether the business could pay their debts when they fell due.  Despite this Lisa was maintaining the assertion that the business was worth approximately $3,000,000.00 net.  Tina believed that the business was worth a significant sum albeit less than $3,000,000.00.  The reality of the matter was that if the parties did not resolve the matter, the parties interest in the business would be very much reduced and may in fact be nil.  Once Richard Watson was instructed the initial approach was to re-focus on the value or the failures of the business and secondly that Tina would be content with disposing of the business to Lisa or to a third party.  This was a turning point in re-focusing the expectations of the parties, the realisation by each of the parties that the $1,000,000.00 that had been spent on legal fees had not achieved either a situation where their net benefit could ever be anything like the amount that would have been achieved by either party if an appropriately considered approach had been adopted.

Eventually the matter was resolved on the basis of a valuation of the business closer to $1,000,000.00 than $3,000,000.00 and the realisation by Lisa who had not been in the business for some years that it is better to take some money rather than a small net pool of assets.

Lisa obtained a second opinion from an independent legal firm (experienced in family law) and instructed alternative Solicitors.  The matter was resolved after Mediation on terms that could have been achieved or should have been achieved without Tina and Lisa spending $1,000,000.00 on legal and accounting fees.

Richard Watson and the team’s experience will result in a better outcome for the parties in the difficult times following separation.  You do not have to wait until you have spent considerable time, money and emotion before you understand the likely outcome of a court battle.  We usually can achieve an understanding of the likely outcome of a litigated matter and set a course to try and achieve a resolution at the appropriate level.

There are many ways the experienced team at Watson & Watson can have the parties including the “unreasonable” partner decide what is best to achieve a reasonable outcome.  If you have any queries please contact Richard Watson or his Personal Assistant, Shereen Da Gloria to obtain an opinion and advice from the experienced Family Law team at Watson & Watson.

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