If you are receiving or paying maintenance and think there should be a change in the sums paid the following case may be of interest to you. It provides a useful reminder that where a Maintenance Order has been made in favour of a spouse, subsequent cohabitation by either or both parties will not necessarily prevent any increase in the maintenance provision. Furthermore financial changes which arise for either party may be relevant and lead to significant changes in the future maintenance provision despite such cohabitation.
The case is called W –v– W and is reported at [2009] EWHC. The relationship was short, lasting in total five years. There was one child. On divorce the husband agreed by Court Order to provide the wife with a housing fund of £478,000 and maintenance of £18,000 per annum for herself and £15,600 for the child. Maintenance payments were to be index linked. That agreement was reached in 2004. Both spouses formed new cohabiting relationships. In 2006 the husband’s company was sold and he received £11.4 million. The wife sought an increase in maintenance and also requested that maintenance payments be capitalised that is that she receive a lump sum to reflect future maintenance payments in return for a clean break.
After a hearing the Court decided:
1. The wife’s spousal maintenance entitlement was increased to £40,000 per annum.
2. She was awarded a lump sum of £625,000 representing capitalised maintenance payments (at a rate of £40,000 per annum this was equivalent to over fifteen years’ maintenance using a very crude approach to the figures).
3. Amongst other things the Court observed:
i. Cohabitation was a factor to be taken into account.
ii. The standard of living enjoyed during the marriage did not represent a ceiling: where there was an improvement in the financial circumstances post divorce this would be taken into account in the assessment of maintenance.
iii. When considering whether it was fair to terminate a maintenance payment the Court had to consider whether the wife could adjust to the new financial arrangements without undue hardship even though she was cohabiting.
iv. The Court must not overlook the effect on a spouse of the loss of career.
v. The wife’s contributions as a mother give significant weight to her claims.
The Courts frequently grapple with the issue of cohabitation and subsequent changes to the parties’ financial circumstances. They repeatedly point out that they cannot change the law in this area and that the significant changes in law which may be appropriate should be undertaken by Parliament.
Where there is a significant change to the paying party’s financial circumstances after the divorce and financial settlement, the receiving party may legitimately pursue a claim and in appropriate circumstances may expect to receive an increase in payments.
If you would like further information then please visit the family section of our website or if this is something on which you would like to be advised please contact a member of our Family Team/Mary McEvoy
