Settlement and Drafting Options
Following on from our Definition and Proof of Cohabitation post, where we discussed the issue with defining and proving cohabitation, we are here discussing the current possibilities for ending spousal maintenance.
The courts have signalled their reluctance to equate cohabitation with remarriage and automatically trigger termination of maintenance. The orthodox line of Fleming v Fleming (2003) survives the Court of Appeal decision in Grey. It seems unlikely that any significant change to this area of law will need to come to parliament. With little sign of change on the horizon, the interplay between cohabitation and remarriage will continue to be a ‘hot topic’ for negotiations between the parties when reaching a settlement following their divorce.
As it stands, parties essentially have three options in relation to termination of spousal support/maintenance:
- An automatic termination after a period of cohabitation for a defined period of time;
- That the order remains silent as to the effect of any cohabitation leaving it to be dealt with under ‘further order’;
- Provision for an automatic reduction in maintenance on cohabitation (say to a nominal level for the duration of the cohabitation).
Dealing with each of these in turn:
If acting for the payee submitting to such a clause a significant warning must be given. A payee must be aware that, regardless of the means of their new partner, they will have no claim personally against their cohabitant for financial support during the lifetime of that relationship, or in the event it breaks down, and the maintenance payments from the former spouse will come to an end and cannot be revived. This could leave the payee in a situation where they are unable to continue to meet mortgage payments on the property in which the payee and any children of the family are living. Equally, it may force the payee to return to employment or increase their working hours at a time when any children may be young.
If, regardless of warnings given, the payee is prepared to submit to such a clause, attention must then be given to the drafting. For example, how long must the payee cohabit before the maintenance ends? It would, we submit, be entirely inappropriate for maintenance to cease immediately upon cohabitation; this way, potentially as soon as the payee’s new partner stays one night, the payer could argue that the maintenance will cease. Usually, such a clause will provide for the payee to have cohabited continuously for at least six or 12 months before it impacts on maintenance.
Care should also be taken to ensure that it is clear that cohabitation only covers relationships of an intimate nature, i.e. it would not apply in the case of, for example, a lodger.
This is the ‘orthodox’ route when drafting consent orders and allows the court to exercise its discretion at the relevant time as to the impact of the payee’s cohabitation on any variation application. However, it does put the onus on the payer to bring the matter back to court in the event that they become aware of the payee’s cohabitation, and both parties are likely to face a second round of legal fees arguing as to the impact of the cohabitation.
The payer should be made aware that they may face problems both in proving cohabitation and convincing the court it justifies the maintenance being extinguished or suspended (and not just reduced). Case law is not necessarily in the favour of payee’s in this regard: the husband in K v K still had to pay £100,000 to discharge the maintenance order despite the positive comments expressed by Coleridge J (although that was in part due to the fact the original order had been made before the advent of pension sharing). Whether or not, at district judge level, more instances of cohabitation are resulting in an outright dismissal or suspension of the maintenance obligations is unclear given that the reported cases tend to involve high earners with surplus capital bases. Anecdotally, there seems to be a difference in approach between the higher and lower courts and between the Principal Registry and elsewhere.
A potential compromise:
Suspension of Maintenance
One potential solution is to suspend the payee’s maintenance in the event of cohabitation for a defined period of time, but with provision for substantive amount in the event that cohabiting relationship breaks down. The circumvents concerns as to the payee being left impoverished in the event that the cohabiting relationship breaks down while addressing the payer’s distaste at being asked to pay maintenance to a former spouse while they cohabit with a new partner. It does not, however, get round difficulties as to defining and proving cohabitation, nor the situation where the payee falls in love with the ‘man of straw’.
Conclusion: What Lies Ahead
Many thought that the comments on Coleridge J in K v K would herald a new era of the courts taking a stronger approach in terminating maintenance in the event of cohabitation. However, Grey rather put an end to those hopes. The Court of Appeal in particular has already expressed reservations in relation to such an approach (in Grey) unless and until rights are brought in to force for cohabitants on the breakdown of their relationships. Given that as at September 2011 the government indicated that they had no intention to take forward the Law Commission’s recommendations on reforming the law relating to cohabitation at present, that day may well be some time off.
In the meantime, it would of course be open to parliament to reform s25 of the MCA 1973 so as to specifically legislate for the impact of cohabitation on spousal maintenance payments. That issue does not expressly form part of the Law Commission’s current project (looking at prenuptial agreements, inherited wealth and needs) though it could arguably be addressed within the section on ‘needs’.