Living with someone else following a divorce - a second bite at the cherry?
Where a wife lives with someone else following her divorce this has historically had a detrimental impact upon the regular maintenance she received in her financial settlement. Certainly, the courts in East Anglia would then find her needs to be partly met by her new partner. However, an interesting recent case (known as W -v- W) highlights that this might not always be the case.
The court looked at the obligation on a spouse (usually the ex-husband) continuing to pay maintenance where the former wife is in a settled and continuing relationship, but has chosen not to remarry. The leading lawyer and peer Baroness Deech recently advocated an end to maintenance “where a women cohabits rather than remarries”. In W -v- W the ex-wife was seeking to increase her maintenance and then turn that maintenance into a further capital settlement. They had had one child and the marriage, including co-habitation, at four years was deemed to have been “short”. The divorce settlement provided the wife with a housing fund, index linked maintenance for herself for life and for the child, as well as school fees. The husband had a share in a private company valued at £3.65million but at the time of the original settlement he could not access those funds without selling the business.
Following her divorce the ex-wife entered into a relationship with another man who moved in to live with her. Two years after the separation the husband sold his company for £11.45million and this prompted the wife’s application for an increase in maintenance and its capitalisation. Her cohabitation became the central factor in the case. When it came to court, she had actually been living happily with her boyfriend for five years. She continued to assert that she had no intention of marrying him – which would have brought the maintenance to an end automatically.
Current case law is clear that cohabitation does, in itself, not equate to marriage and so does not end an obligation to pay maintenance, even if the payer feels a sense of outrage that he has to continue to make maintenance payments when the recipient is living with someone else. However, the Court must take the fact of her co-habitation into account and give due weight to the overall circumstances (including the financial consequences if maintenance stops) and as a result the courts retain a wide discretion.
In W –v- W her maintenance was increased to £40,000 per annum and this was then capitalised initially at £940,000. The Judge then applied a discount of one third of the capitalised sum to take into account her cohabitation and she received £625,000. His obligation to pay her maintenance then stopped, although he will continue to pay support for the child and school fees. He argued that he did not think it was fair and reasonable for there to be an increase in her maintenance and that by choosing not to marry she had the best of both worlds. He sought that her maintenance order should in any event end when their child reached 18, because by that stage she would have been cohabiting for 14 years (which would have considerably reduced the lump sum), although the court rejected that argument.
One can understand, looking at the short length of the marriage, the husband’s frustration and annoyance with the current law and its approach to cohabitation. To prevent further applications for capital to buy-off maintenance it is always wise, if possible, to achieve a clean break settlement which will ensure certainty going into the future, and prevent an ex-wife from trying to have a second bite at the cherry.
If you would like to find out more information about this case and how it might have an impact upon you and your business then please do not hesitate to contact Debbie Lloyd in the Family and Matrimonial Team at Birketts LLP on 01603 232300 or deborah-lloyd@birketts.co.uk.
The content of this article is for general information only. As always, specific professional advice should be taken on each individual matter.© Birketts LLP 2010. Solicitors regulated by the Solicitors Regulation Authority.