England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM NEWCASTLE UPON TYNE COUNTY COURT
(HIS HONOUR JUDGE TAYLOR)

		Royal Courts of Justice Strand London, WC2
		17 November 2003

1. LORD JUSTICE THORPE: The parties to this appeal are 49 years of age. They both qualified as dental surgeons in 1978 shortly before their marriage on 2 September. There are four children of the marriage now aged respectively 24, 21, 17 and 14. The parties separated in September 1995 after 17 years of marriage. The husband petitioned for divorce shortly after the separation. A decree was pronounced on 3 March 1997 and an ancillary relief consent order was made on 15 December 1998. The order provided for the division of properties between the parties and for the payment of £1,000 per month by way of periodical payments to the wife until 20 December 2002. The order was made by a district judge in the Newcastle upon Tyne County Court. The circumstances in which the order came to be made have not been other than briefly explored at today's hearing.
2. Neither Mr Spon-Smith who appears for the appellant husband, nor Mr Richardson who appears for the respondent wife acted in December 1998. The solicitors have had conduct throughout, but we have not been shown any material from their respective files to establish the basis upon which the order was made. Mr Richardson suggests, on instructions, that the compromise was reactive to some sort of comment made by the judge. But, for the purposes of this appeal, I proceed on the basis that, absent any particular evidence as to the nature of the compromise, it is to be taken as one that each of the parties and their respective advisers regarded as being a fair disposal. I proceed on the basis also that the district judge must have regarded it as a fair disposal otherwise he would not have made the order that he did.
3. The order is quite plain: "the husband do pay the wife periodical payments in the sum of £1,000 per month, commencing on 1 December 1998, during joint lives until the respondent shall remarry or until 30 November 2002 whereupon the wife's claim for secured periodical payments shall stand dismissed and the respondent shall not be entitled to make further application." It is to be noted that that form of order did not include an express provision under the terms of Section 28 (1) (a) to the effect that -

"The court may direct that that party shall not be entitled to apply under Section 31 below for the extension of the term specified in the order."

4. Accordingly on 1 July 2002 the wife exercised her right to apply for an extension of the term provided by the consent order. That application was heard by His Honour Judge Michael Taylor. He delivered an extempore judgment on 25 February. Mr Spon-Smith, who appeared for the husband below, unsuccessfully sought permission to appeal the judge's conclusion that the wife was entitled to an extension of her periodical payments order on a joint life basis, albeit at the reduced rate of £500 per month. Permission to appeal was granted by me on paper.
5. We have heard today the submissions of Mr Spon-Smith in support of his appeal and Mr Richardson defending the judge. Mr Spon-Smith in his skeleton argument has advanced two points which he contends are points of principle. This is the first: the wife has for many years - indeed, even from the period of her qualification - suffered from a disabling condition which has impaired her ability to develop a professional career to anything like the successful extent that her former husband has achieved. The judge had to make an assessment of what was her present and future earning capacity in the light of expert evidence that had been before the court in 1998 and further expert evidence that was before the court in 2003. He also had to make that assessment on the basis of the wife's evidence, not only in writing but also orally. The judge came to clear conclusions in those fields. Mr Spon Smith in his skeleton argument criticises the judge for having failed to take account of certain passages in the expert evidence which he submits support the conclusion that the wife has not taken responsible steps to minimise the impact of her disability. Mr Spon Smith submits that had the judge correctly assessed the totality of that evidence he would have dismissed the wife's application on the simple basis that her disability was, in reality, self- inflicted.
6. The second submission which he advances as one of principle is that the judge gave insufficient weight to the settled relationship between the wife and her cohabitee. Its inception preceded the consent order by some 18 months and accordingly had five-and-a-half years of uninterrupted history by the date of the hearing before Judge Taylor. That leads Mr Spon Smith to submit that the decision of this court in Atkinson v Atkinson [1998] Fam 93 requires reassessment. Mr Spon-Smith submits that the increasing tendency of couples to cohabit rather than marry justifies a more rigorous approach to cases involving applicants who are in stable, long-term, quasi marital relationships.
7. Mr Richardson for the respondent wife submits that the issues below were essentially ones for the judge's assessment and for his determination in the exercise of a broad discretion. He submits accordingly that it is not open to this court to interfere with the judge's conclusion.
8. In relation to Mr Spon Smith's first submission, I am satisfied that Mr Richardson's response is well founded. The judge had to assess for himself the complexities of the wife's reaction to her disability. He did so in a way that was broadly favourable to the wife and I do not think that that conclusion is open to criticism on appeal.
9. Nor do I think that the decision of this court in Atkinson v Atkinson calls for re-visitation in the light of whatever social changes there may have been over the course of the last 15 years or so. The judgment of Mr Justice Waterhouse on the point of principle is broadly expressed. His conclusion that cohabitation is not to be equated with marriage remains as sound today as it was then. Equally it seems to me that the direction that the court, in assessing the impact of cohabitation, should have regard to the overall circumstances, including financial consequences, remains the proper course to be followed. Of course in a case such as this, where the length of cohabitation is now greater than many a marriage that comes before a court for assessment, the range of discretion given to the judge enables him or her to place considerable weight on that circumstance. There is no indication that Judge Taylor did not regard the continuing cohabitation as other than a central feature of the case.
10. The statutory distinction between remarriage which, by virtue of Section 28 of the Matrimonial Causes Act 1973, terminates financial obligation and cohabitation, which does not, would fall for Parliamentary consideration if the Government's present plans to legislate rights and responsibilities for same sex partners were extended to cohabitees.
11. However the general thrust of Mr Spon Smith's argument to the effect that the conclusion reached by Judge Taylor was unprincipled seems to me to be well made out. The judge had before him an application for the variation of a periodical payments order under Section 31 of the Matrimonial Causes Act 1973. By an amendment to that section which was brought into force on 12 October 1984, in such circumstances the court is under an obligation to consider whether it would be appropriate to terminate continuing financial responsibility between the parties provided that that outcome is achievable without undue hardship to the payee. That provision contained in Section 31 (7) (a) mirrors the provision introduced at the same date to Section 25 with the arrival of Section 25A. Both these legislative amendments were intended to underline the court's obligation to bring about a clean break between divorcing spouses wherever that was achievable without undue financial hardship. The court's power to bring about that conclusion was subsequently extended by the addition to Section 31 (7) of the additional paragraphs contained in subsections (A) to (F) inclusive which were enacted with effect from 1 November 1998.
12. Accordingly from a date prior to the making of the original consent order the judge exercising the power to vary under Section 37 held both the duty to terminate, if achievable without undue hardship, and also power to do so by making a lump sum order in substitution for continuing periodical payments.
13. Those obligations are much enhanced in any case where there has been a previous term ordered. The undoubted intention of the parties and of the court in December 1998 was that the payer's obligations would terminate absolutely on 1 December 2002. In such circumstances the exercise of a power to extend obligations requires some exceptional justification.
14. Judge Taylor, it seems to me, did not in his approach to disposal have these considerations sufficiently in mind. He did not have sufficiently in mind his obligation to bring financial relationships between these parties to a conclusion. Nor did he have sufficiently in mind the enhanced obligation so to do in a situation where the payer had a legitimate expectation that his obligations would end on the date provided in the consent order. Judge Taylor approached the resolution of the case as a matter of broad discretion. He brought to the exercise of his discretion great experience in the family law field and his characteristic sympathy for human disability. But it is plain from a stricter analysis of his judgment that there was a fundamental flaw between his findings in paragraphs 30 and 31 and his ultimate conclusion in paragraph 38. For in paragraph 30, having criticised the quality of the wife's disclosure, he went on to say:

"I certainly believe that this is a woman who has an earning capacity, part-time, in the region of £15,000 to £20,000 per annum if she is able to maintain regular part-time work as a dentist. I say 'part-time' because I am satisfied on the basis of the medical evidence that given the chronicity of this lady's problems over the years full time work is just not going to be achievable."

15. In relation to the wife's cohabitee, in the following paragraph the judge, having again criticised the quality of the disclosure, said:

"I have no doubt that that man has an earning capacity in the region of £20,000 to £25,000 per annum."

16. Those combined incomes were more than sufficient to discharge their combined living expenses, and the judge specifically found that, in the relatively short period between the cessation of the periodical payments order as originally set and the hearing before him, the wife and her cohabitee had not been obliged to draw down on savings in order to make ends meet. In other words, their combined income had been sufficient to meet their combined expenditure without contribution from the former husband.
17. Given those findings in paragraphs 30 and 31, how was it the judge came to conclude - and this is his key finding given his statutory duty - as follows:

"I have no doubt that if I terminate or uphold the existing order and say no more that this is a lady who will suffer substantial financial hardship or risk suffering substantial financial hardship over the next few years."?

It seems to me that that finding is not only unsupported by evidence it is indeed quite contrary to the judge's earlier factual findings.

18. The judge briefly considered the possibility of terminating relationships between the parties by way of a capitalisation but concluded that it was not a sensible course for him to pursue in the overall circumstances of the case. Accordingly he went on to say that -

"Doing the best that I can I have come to the view there should be a continuing obligation upon the husband to maintain his wife."

He said that that should be at the reduced rate of £500 per month and that it should be intended to run for the rest of their natural lives or until the remarriage of the wife.

19. Mr Spon-Smith questions how the judge arrived at a figure of £500 per month. That question is, in my opinion, aptly posed, but it is not necessary to consider it further given my primary conclusion that the judge's order was wrong in principle.
20. I would accordingly allow the appeal and dismiss the wife's application for an extension.
21. Mr Spon Smith points out that in the interim since the judgment below the husband has fulfilled the monthly order and accordingly the wife has received sums now totalling about £6,000. Mr Spon Smith does not seek the reimbursement of those payments, which strictly he would be entitled to seek given the dismissal of the application for extension. Our order should be drawn on that basis.
22. LORD JUSTICE JONATHAN PARKER: I agree.
23. LORD JUSTICE SCOTT BAKER: I also agree.

[Appeal allowed, with the application for extension refused. No order in respect of costs at trial; amount of £3,000 paid originally to be repaid. Costs in appeal assessed at £4,000. Detail regarding payment to be negotiated]