Baker v. Baker

Application by widowed wife under the Inheritance (Provision for Family and Dependants) Act 1975. The application succeeded.

The widow's husband died unexpectedly in 2001. The couple had fours sons from this marriage plus one child each from previous marriages. He had been running a well-known scrap and motor parts business for many years and also owned a house in Ipswich. The goodwill in the business was left to the four sons who successfully and profitably developed the business after their father's death.

A key factor in this judgment was the value of the business. There were few accurate figures and no expert evidence as to valuation available. The judge therefore conducted his own very broad brush valuation, with some trepidation, to arrive at a current value for the business. He found that the goodwill was worth between £600,000 to £800,000, the premises worth £150,000 and the residential property £340,000. This made the total assets valued at between £1.15m and £1.35m. He also made the point that, although the sons had made significant improvements to the business since their father's death, they had traded on the very good reputation of the business which enabled them to move the business forward seamlessly.

In the light of this valuation he was able to find that the wife had not been sufficiently provided for (she had received £160,000 from bank accounts and polices) and so he proceed to make an award under the 1975 Act. He approached the exercise seeking equality through a clean break, though mindful of the effects that any award will have on the business, and concluded that the wife should receive a lump sum of approximately £400,000 plus the residential property. This made an award of £750,000 out of the total award, which was more than half, but justified it on the basis that the "authorities do not provide for a maximum figure and the factors set out within the Act have to be taken into account and applied against the yardstick of equality."

An full report on this case from the excellent Family Law Week site. Click HERE