Is Cohabitation Grounds for Maintenance to End?

Is Cohabitation Grounds for Maintenance to End?

Divorce Finances, Unmarried Couples

The payment of spousal maintenance is often a tricky issue in divorce cases. It becomes even trickier when the receiving party, usually the wife, starts to cohabit and the husband feels that it is not fair that he should be expected to continue to support his ex. Is the fact of cohabitation grounds for the maintenance to come to an end and the wife’s claims dismissed once and for all?

As the law stands, if a wife has a spousal maintenance order, it can take the following forms:

  1. A term order i.e. payable until a certain event occurs e.g. when the youngest child has reached the age of 18 or finished their full time secondary or tertiary education, whichever is the later.
  2. Payable on joint lives i.e. until one or the other dies.

All spousal maintenance orders end on the remarriage of the recipient. They do not end automatically by law on cohabitation. A term order can be worded on the basis that, once the term has expired, the wife is barred from applying to extend that term.

It is unusual to find an order that states the maintenance will end on cohabitation as it is unlikely that the wife would agree to such a condition.

Cohabitation may be a catalyst for variation of an Order

The fact of cohabitation can be the catalyst for the husband to ask for the maintenance to be reviewed or indeed terminated. If the wife does not agree to her maintenance ending (which is usually the case) then the husband will have to make an application back to the court for a variation of the original order. The court has to consider all the ‘circumstances of the case’ and the fact of cohabitation has to be taken into account. The court also has a duty to consider whether there should be a financial clean break between the parties.

However, the court has to look closely at the financial circumstances of the new partner and what they ought to contribute to the household. If the new partner is impoverished and has no job then it follows that their contribution is going to minimal. However, the court can infer a notional income based on what it is likely he would be earning if in work. That said, the court has to consider the credibility of the evidence of the earning capacity. There may be an implied criticism of the wife’s choice of partner, but that in itself does not mean that she should be cut loose from the financial support of her former husband.

The case of Grey and Grey (2009) tackled this issue. In brief, the case involved a wealthy couple. The marriage had lasted 10 years and had produced one child. The capital assets were divided equally and the wife was awarded maintenance at £100,000 per year. The husband was not at all happy with the award and appealed citing that the wife was in an established relationship and was cohabiting. The wife denied she was living with her new partner. The husband, undeterred by the wife’s protestations, hired a private investigator whose report concluded that she was living with this chap. No evidence was produced of the partner’s financial circumstances. The husband’s appeal was allowed and as to the nature of the variation the matter was dealt with by the court that made the original order. The court subsequently directed itself to the following questions:

  • were the parties living together in the same household;
  • did they share daily tasks and duties;
  • how long had the parties been in a relationship;
  • was the relationship a sexual one;
  • was there evidence to show that to a third party it was reasonable to conclude that the parties were cohabiting.

In the Grey case the wife’s maintenance was not dismissed. What the Judge did was to increase the child maintenance from £16,500 to £27,500  and reduce the wife’s maintenance by the same amount. The court attributed an earning capacity for the new partner of £16,500. The husband’s earnings at the time of the re-hearing were £1.3 million gross with an expected bonus of £1 million.

Capitalisation of maintenance

On an application for variation the court can consider capitalising the wife’s maintenance i.e. paying her a lump sum to achieve a clean break. If this is an option, first the court would consider whether the original order should be varied downwards and then a formula is used to calculate what would be an appropriate lump sum payment.

In the interesting case of Dixon v Marchant (2008), on application by the husband for a variation he agreed to capitalise the wife’s maintenance in return for  a clean break. The wife said that she was not cohabiting and did not intend to cohabit. However, seven months after she received the lump sum, she married her partner. She said at the time the Order was signed off, she did not expect to re-marry. However, her partner proposed to her out of the blue and she accepted. The Court refused the husband’s appeal and said that the lump sum payment was not contingent upon the wife not re-marrying i.e. she did not have to pay any of it back. The risk of her re-marrying after payment was one the husband had accepted.

This decision may seem harsh on the husband, but then again the court cannot legislate for every eventuality. It is important to remember that at the heart of each divorce case are very personal issues and one size does not fit all.

These are some important points to consider:

  1. Hope that your ex finds a partner who is richer than you.
  2. Consider carefully before cohabiting or re-marrying, if you are in receipt of maintenance.
  3. If you are considering capitalising maintenance, think about including a provision that part of the lump sum should be paid back if the wife cohabits or re-marries.
  4. Find out as much as you can (legally) about the financial circumstances of the new partner.
Court’s Approach to Spousal Maintenance Orders

Court’s Approach to Spousal Maintenance Orders

Children, Divorce Finances

There are various financial claims that can be brought by the parties under the umbrella of divorce proceedings, one of which is spousal maintenance.  Where there is an ongoing entitlement to maintenance post divorce, the question arises should this be a joint lives order (i.e. until one of them dies) or should there be a cut-off point in the future? If so why and when?

Effect of re-marriage and cohabitation upon spousal maintenance order

A spousal maintenance order will automatically end if the recipient re-marries.  So, if the spouse has a generous maintenance order, they need to think carefully about re-marrying.  Once the maintenance order has come to an end upon re-marriage it cannot be resurrected even if, on a pessimistic note, the second marriage ends in divorce.

Cohabitation does not automatically revoke a maintenance order. If an ex-partner does cohabit then the other party can ask the court to look at varying the maintenance order or discharging it completely.  In cases of cohabitation, what the court will look at is what the new partner is contributing to the household budget as clearly if there is a reasonable contribution this will reduce the maintenance needs and the knock on effect will be less need will need less from the former spouse.  It is important to note that if child maintenance is being paid, cohabitation will not terminate that liability to pay child support and generally is not varied as the new partner has no legal obligation to support the children that are not theirs.

The Court must consider whether a clean break can be achieved

The court in financial cases has to consider whether a clean break between the parties can be achieved.  ‘It shall be the duty of the court to consider whether it would be appropriate so as to exercise those powers that the financial obligations of each party towards the other will be terminated as soon after the grant of decree as the court considers just and reasonable’.

When acting for the party paying maintenance, the initial reaction is to want a clean break order.  They generally do not want to be tied to a maintenance order, be it a term order or for life.  Where there are still minor children it is quite usual for claims for maintenance to remain open even if only for a nominal amount, i.e. £1 a year until the children have reached the age of 18 or finished their full time education whichever is the later event.  This acts as a safety net for the main carer should there be any issues with the payment of child support. 

When should there be a clean break?

If the assets of the marriage are of such value that the spouse’s claims for maintenance can be capitalised, i.e. the maintenance entitlement is rolled up into a one off capital payment.  Capitalisation is often considered an option where the payer is reaching retirement age and there is a joint lives order in place.  One party may if he there is sufficient capital look to buy the other party out of their future claim on income, in particular pension income.

What is a reasonable level of maintenance?

In the majority of cases the income has to stretch to cover the two household budgets where once it covered one and the inevitable slashing of the income needs schedule can be a quite brutal exercise and a bit of a reality check.

There is no fixed formula for the level of maintenance that is awarded.  It becomes a discretionary exercise for the Judge.  The needs of the parties in the majority of cases dictate what the level of maintenance will be.  The court will endeavour to achieve that each party and their children have enough to meet their reasonable needs.  In the big money cases the court has more flexibility to generously assess those needs where appropriate.