During the course of divorce proceedings, the Family Court is authorized to make certain financial orders. Under Sections 21-25 of the Matrimonial Causes Act 1973, the Court, on granting a decree of divorce, can make awards for maintenance, lump sum payments, property and pensions. However, Section 28(3) of the Act places a condition on upon any such awards, stating that in the event of the recipient remarrying, they can no longer apply to their former spouse for any financial provision.
In the event of a remarriage, however, a distinction must be made between ‘capital’ and income awards. This is because any capital award – i.e. one concerning a lump sum payment or property – which was made before the remarriage can still be pursued despite the fact that the person has remarried. By contrast, however, an order for spousal maintenance or ‘periodical payments’ cannot extend beyond the remarriage of the recipient and so those payments will automatically be terminated.
It is important to note, given its increasing popularity, that there is no similar provision for couples who decide to cohabit as opposed to remarry. The law in this area is somewhat ambiguous and arguably inadequate. The impact that cohabitation has upon periodical payments such as maintenance has been examined in an abundance of case law with differing rulings. Case law even attempts to establish what cohabitation actually is.
What is cohabitation?
In the case of Kimber v Kimber, a financial order had been made which contained a proviso that the periodical payments made to the wife would cease if she cohabited with a new partner for three months or longer. The wife ran a bed and breakfast and her new partner now lived there. When the husband told her that he would therefore be stopping the periodical payments, she helped her new partner move to a friend’s house. The wife then issued a summons seeking to recover what she claimed were missed payment arrears. The Judge in this case considered what actually constitutes cohabitation. He noted that a comprehensive list of criteria was not possible but said that guidance could be found in the Social Security and Benefit Act 1992. Here, the couple shared daily tasks, had intermingled finances as well as continued sexual relations, and would have continued living together but for the husband’s warning. As a result, a reasonable person would have considered the couple to be cohabiting the Judge declared, and the wife’s case was therefore dismissed.
However, what is clear from the above, in the absence of a definitive definition, is that the word ‘cohabitation’ is somewhat inadequate. The Judge in another case, Grey v Grey, said cohabitation was an unsatisfactory concept and “vague as to quality and duration”. But, if it is established that cohabitation exists from a legal perspective, what effect does this have upon periodical payments?
What are the effects of cohabitation?
In Atkinson v Atkinson, it was held that the cohabitation of the wife should not affect her maintenance payments as there could be no comparison between cohabitation and marriage. Although this may appear to be a hard and controversial stance to take, the ruling was later affirmed in the case of Flemming v Flemming. The now retired Lord Justice Thorpe also gave guidance on this issue, saying that the appropriate approach to be taken is to assess the impact of cohabitation, looking at the overall circumstances of each case. In particular, attention should be given, he said, to the specific financial implications of cohabitation and how long it has lasted.
However, Sir Paul Coleridge, also now retired, questioned the above rulings in K v K. He suggested that consideration must be given to the way in which society has progressed and now views cohabitation as “normal, common place and as acceptable as marriage”. Nevertheless, he stated that the Courts were restricted in how far they could go to address shortfalls in current legislation. Sir Paul implied in his judgement that there was no reason why periodical payments should not be stopped when the recipient cohabits, after a certain period of time.
The approach in K v K was not followed, however in the later case of Grey v Grey. Here it was held that the orthodox line of authority culminating in Flemming v Flemming could and should be followed, so to allow the Court to “do justice and to reflect the social and moral shifts in our society”. Although the judgement in Grey v Grey stated that cohabitation does not equate to an automatic termination of periodical payments, cohabitation is relevant, it stated, insofar as it means a reduction in the financial needs of the recipient. This is obviously the case as it is inevitably cheaper to run a household with two incomes rather than one.
In conclusion then, despite the fact that the law does not support immediate termination of periodical payments in the event of the payee cohabiting, case law clearly establishes that cohabitation may justify a reduction, following an application to do so by the paying party. Indeed, Courts have the discretion to rule that payments cease completely if it is found that the payee no longer needs the payments.