England and Wales Court of Appeal (Civil Division) Decisions

IN THE HIGH COURT OF JUSTICE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM
The Honourable Mr Justice Singer
FD06D00385

		Royal Courts of Justice Strand, London, WC2A 2LL
		31/12/2009

LORD JUSTICE THORPE:

The Background

1. The parties to this appeal are in their mid-thirties. They come from Dublin where they became close in their school days. They became engaged in 1996 and in 1997 moved to London to enable the husband to pursue his career in the City. They married first in 1998 in Spain, but the marriage was invalid since it had not been properly registered. Their only child, a daughter, was born on 16^th September 2001. A valid marriage was celebrated in a London register office on 18^th September 2003. The parties separated in April 2005. The husband moved from the final matrimonial home in St John's Wood to a nearby flat. The wife returned to Dublin with their daughter.
2. Hard fought ancillary relief proceedings ensued, during the course of which neither party paid much attention to the rule that requires full, frank and clear disclosure. The contest culminated in a trial before Singer J commencing on 4^th February 2008. As a result of serious illness, Singer J was unable to hand down his written judgment until March 2009.
3. The value of the family assets had fallen between trial and judgment, at which stage there was approximately £3 million. That was split equally between the parties with the exception of some pension rights which had been acquired by the husband post separation. In broad terms, the wife received the house which had been bought for her and their daughter in Dublin, a lump sum of about £320,000, to which about £135,000 was added in lieu of back-dated periodical payments. Finally the wife received a share of the husband's pension rights worth some £45,000.
4. Singer J set the wife's periodical payments at an annual rate of £135,000 from November 2006 until judgment. The rate thereafter he set at £125,000 per annum. It was agreed that periodical payments for their daughter should be at the rate of £15,000 per annum.

The Issue of the Appeal

5. Only the judge's orders for periodical payments were challenged by the husband. He sought permission to appeal which was effectively granted on the papers. The basis of the husband's challenge has a very narrow focus. Its only foundation is the wife's relationship between November 2006 and the trial with Mr Thompson, a Dublin resident separated from his wife.
6. Mr Martin Pointer QC for the husband advanced two basic submissions:

i) That the judge had failed to make proper findings of fact regarding the relationship between the wife and Mr Thompson.

ii) That the judge misdirected himself in law, failing to apply established authority and rejecting a submission that a new approach had emerged based on a proper recognition of the inter-relationship between pre-marital and post-marital cohabitation.

7. Mr Nigel Dyer QC, for the respondent wife, first submitted that there had been no cohabitation between the wife and Mr Thompson. Accordingly the judge correctly abstained from positive finding. Secondly, Mr Dyer submitted that if there was cohabitation, the judge correctly directed himself in law by reference to the authorities in this court, rightly rejecting the submission of recent evolution. Thirdly, Mr Dyer submitted that the periodical payment orders made by the judge, with no discount for the relationship between the wife and Mr Thompson, were within the generous ambit of his discretion.

The Judge's Findings of Fact.

8. It is easy to arrive at a distorted assessment of the judgment below. For the purposes of this appeal, it is necessary to consider only paragraphs 70-74 under the heading "W's relationship with L". It must be emphasised that this was only one of a large number of issues that the judge had to resolve in the course of a judgment running to 103 paragraphs. It must also be remembered that the judge had the unenviable task of writing a judgment more than a year after the trial on his return to the bench after many months of illness and convalescence. Before citing the vital paragraphs in full, it is necessary to review the evidence as to the relationship between the wife and Mr Thompson as well as the relevance of the relationship.
9. The development of a relationship between the wife and Mr Thompson was inevitably revealed to the husband by the fact that the wife's house was in the same street as that of her parents in law. The issue was raised by the husband's solicitors in January, June and December 2007. In responding on 26^th June 2007, the wife's solicitors wrote "Lara instructs me that Liam is not her boyfriend, he is a friend. He does not live with her." About six weeks before the trial her solicitors wrote again; "my client is not cohabiting with Liam. He is making no financial contribution to the household".
10. On 22^nd December 2007, the husband's father agreed to keep observation and to maintain a record of Mr Thompson's use of the wife's home. The detailed diary between 22^nd December and 28^th January 2008 demonstrated that Mr Thompson was clearly living with the wife throughout that five week period. Mr Grey's detailed evidence was the subject of an affidavit sworn on 29^th January 2008. He was not required to attend the trial for cross-examination.
11. Similarly an enquiry agent, Mrs Dorman, carried out surveillance between 12^th and 27^th January 2008. Her report dated 28^th January confirmed the observation of Mr Grey senior. She too was not required to attend the trial for cross-examination.
12. In her evidence in chief, the wife was asked to confirm the content of the letter of 31^st December 2007 from her solicitors:

"Did you consider, in 2007, that you were cohabiting? A. No, not at all.

Q. How did you view the future of your relationship with Liam when you were giving instructions for this letter to be written? A. No different than it is now.

Q. Which is what? A. Which is every third day, every second weekend or whenever. Just a companionship basis."

13. This was her explanation for Mr Thompson's presence throughout the five weeks preceding the trial:

"Q. What was different about January? A. It was coming up to my – well, this divorce hearing and I needed extra – I needed a little bit of extra company, somebody who wasn't involved with the proceedings. I had constant streams of faxes from Manches. I was very worried and upset about these four days that were coming up and he was just being very supportive and I'm glad for that. It's just me and my daughter. When she goes to bed, me on my own, looking at four walls. So, yes, he was definitely there for quite a bit of time but that's not the norm.

Q. Have you had any discussions with Mr Thompson about him moving in permanently? A. No, never.

Q. Is that what you would like? A. No, not at all.

Q. And why is that? A. I am in no way mentally or emotionally ready for any man to move into my home, especially with me and my daughter at the moment. Definitely not, no. "

14. For his cross-examination Mr Pointer had potent ammunition which enabled him to suggest to the wife that she was carrying Mr Thompson's child. She was only about 17 weeks pregnant and no doubt felt secure in concealing a development which she had not anticipated that the husband would sniff out. Thus this highly relevant development emerged only during the course of her cross-examination. She further accepted that she was "in a fixed, committed relationship" with Mr Thompson and that it was "a fixed permanent relationship".
15. The wife's endeavours to explain away the very recent past of course did not meet the evidence of Mr Grey senior concerning the period from November 2006 to the effect that Mr Thompson's presence as the wife's cohabitant was "common knowledge amongst the neighbours on our small street". Specifically he recalled that when he called for his granddaughter on 26^th August 2007, Mr Thompson opened the front door to him and pleasantly introduced himself.
16. Mr Pointer also cross-examined the wife as to Mr Thompson's occupation. The following were her concessions:

"Q. Liam, I think you told my Lord he is in charge of programmes on radio stations; is that right? A. Yes, he runs radio stations.

Q. Yes. Quite a big group, is it not? A. I don't know the size of it.

Q. It runs 42 radio stations, across Europe? A. I know it runs quite a lot but I don't know the amount.

Q. And he is the group programme director, is that right? A. He is, yes."

17. What is remarkable to my mind is that Mr Pointer did not proceed to ask any questions as to Mr Thompson's remuneration as Group Programme Director or as to his financial circumstances generally. Thus, at the close of the evidence, there was not a word or a document that gave any indication of whether or not Mr Thompson was contributing financially to the wife's household or as to whether he was in a position to do so. Perhaps Mr Pointer thought to rely on his occupation of a house in a fashionable district, his apparent ownership of a smart car and his responsible employment, which together could be said to give rise to the implication that his salary would be commensurate with the level of his responsibility.
18. Alternatively it may be that Mr Pointer did not pursue the question of Mr Thompson's financial circumstances since he intended to advance the submission that case law had reached the stage that proof of settled cohabitation resulted in law in the dismissal of the claim to periodical payments, or at the least, to a nominal order.
19. Mr Pointer's written final submissions indicate that he was confident of a finding of cohabitation and that the consequence in law must be the dismissal of the wife's claim to periodical payments.
20. However, the note of his oral submissions includes the following:

"MP: In relation to periodical payments for the Wife, if you conclude there should be some, they should be seen in the light of:

i. H's future income

ii. W's budget as commented on by H at A88

iii.What Liam might contribute.

Singer J: What about a nominal Order?

MP: There are a number of uncertainties. She says re. carrying the child.

Singer J: If you've made your case for no periodical payments, maybe the right balance is nominal Order.

MP: I understand your reasoning, but my client would prefer [not].

The Judgment Below

21. On the basis of that evidence and those submissions these then were the judge's conclusions:

"70. Once more the truth concerning this is confounded behind W's reluctant, unsatisfactory and (I am satisfied) partial presentation. She and L appear to have been in relationship since about the end of 2006 at the latest. Until shortly before the hearing she was coy in her responses to enquiry, when indeed she deigned to deal with them. Confronted by H with enquiry agent evidence and details of the observations made by her father-in-law (for H's parents live just three doors away from her home in Dublin) she was constrained to admit that L had spent most of his January leisure hours and nights at her home. Not until cross-examination did she reveal that she was 17 weeks pregnant by him.

71. Her suggestion that she had not thought to mention that because she thought it insignificant in these proceedings is not credible. Disclosed her pregnancy clearly should have been. But its relevance and effect must be considered dispassionately. L was not free to marry her, were that their intention, although one assumes that that impediment could in time be removed. There was no evidence to suggest that he made any effective or material contribution to her living expenditure on any sustained basis. Their expected child is likely to increase their mutual dependence, but will not inevitably do so. They may or may not cohabit – an unsatisfactory word and concept, in my long-held view, vague as to quality and duration and not a reliably valid indicator of anything long-term. The helpful decision of HHJ Tyrer in Kimber v Kimber [2001] 1 FLR 383 contains a useful check-list of potentially relevant considerations, but there can be no cut-and-dried test: in a number of situations reliance on the opinion of more than one 'reasonable person(s) with normal perceptions' could lead to different conclusions.

72. The presence of L on W's scene, and indeed the presence of their child, do not in my opinion affect at all the quantum of capital provision with which W should exit this marriage, any more than did the presence of Mr Black affect Mrs Duxbury's entitlement: see [1992] Fam 62n, [1987] 1 FLR 7, CA.

73. As to income provision (for this is not in my opinion a clean break case), I was invited to view the authorities. They are really all one way until one gets to Coleridge J's first instance decision in K v K (periodical payments: cohabitation) [2005] EWHC 2886 (Fam), [2006] 2 FLR 468, were he potently puts the case for a revised approach, praying in aid the undoubted changes in public perception of cohabitation as 'normal, commonplace and acceptable as marriage'. In that case the former wife had for three years lived in settled cohabitation with her partner and they had been fully involved in each other's financial affairs. That is by no means this case, and it is to be observed that the outcome arrived at by Coleridge J nevertheless would have continued the husband's (albeit reduced) liability for maintenance provision but for an order capitalising it in a sum representing more than 8 years' purchase at the reduced rate.

74. But however much I may feel sympathetically attracted by Coleridge J's philosophy, it must be the line of authority in the Court of Appeal rather than his (viewed in their light) heretical observations which I am constrained to follow. Change in this area must come from Parliament, or from a court with authority to make new law or to change the old. The Court of Appeal in Atkinson v Atkinson [1988] Fam 93 and Fleming v Fleming [2003] EWCA Cov 841. [2004] 1 FLR 667 has consistently held the orthodox line. Thorpe LJ reaffirmed the principle at [9] and [10] of Fleming thus, in response to the former husband's submission that the increasing tendency of couples to cohabit rather than to marry justified a more rigorous approach to cases involving applicants who are in stable, long-term, quasi-marital relationships:

'[9] Nor do I think that the decision of this court in Atkinson v Atkinson calls for revisitation in the light of whatever social changes there may have been over the course of the last 15 years of so. The judgment of Waterhouse J 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 His Honour Judge Michael Taylor did not regard the continuing cohabitation as other than a central feature of the case.

[10] The statutory distinction between remarriage, which terminates financial obligation (by virtue of s28 of the Matrimonial Causes Act 1973), and cohabitation, which does not, would fall for Parliamentary consideration if the Government's present plans to legislate rights and responsibilities for same-set partners were extended to cohabitees.'

That was a case of over five years of settled and uninterrupted relationship. Making every possible allowance for lack of candour or even downright dishonesty on the part of W, her relationship with LJ is some way off from that. "

Conclusions on the Factual Findings

22. On the factual issues I would accept Mr Pointer's submission that the judge's findings were plainly inadequate. I would reject Mr Dyer's contrary submission that there was no evidence to justify a finding of cohabitation.
23. The judge correctly directed himself in law by reference to the authority of Kimber v Kimber [2000]1 FLR 383 in which His Honour Judge Tyrer helpfully reviewed social security authorities that consider what is necessary to demonstrate a state of cohabitation.
24. However it was plainly not enough for the judge to resolve this hotly contested issue by simply saying:

"They may or may not cohabit – an unsatisfactory word and concept in my long-held view, vague as to quality and duration and not a reliably valid indicator of anything long term."

25. This finding is in the first place ambiguous: was the judge expressing his views on the present state of sharing or the likely future state of sharing? It is also far from sufficient.
26. In my judgment the judge should have approached the question thus:

i) The unchallenged evidence established actual cohabitation throughout the five weeks of surveillance and the commencement in November 2006 of a situation in which Mr Thompson was a regular member of the household.

ii) The wife had presented a false case both in preparation for trial and at the trial itself. She was caught out in her deception by the husband's investigations through his agents.

iii) The wife's only motive for her false case was to protect her periodical payment claim from reduction to reflect the arrival of Mr Thompson in her life.

iv) The explanation for Mr Thompson's presence as a member of her household throughout the five weeks preceding trial was fundamentally implausible.

v) The judge should not have accepted the wife's evidence on this topic without corroboration and if any inferences were to be drawn they were to be drawn against the wife.

27. The above route would have led the judge to a clear finding that, whatever the future might hold for them, the wife and Mr Thompson were a couple and the financial consequences of that development had to be investigated and assessed.
28. The judge did not address the financial consequences of the development. He was indeed correct to say that there was no evidence of financial contribution by Mr Thompson to the wife's budget but that was not the only relevant question. There is in these cases an obvious motive to avoid any pooling of income to meet expenditure. The real question will generally be not what is he contributing but what ought he to contribute. Although I recognise that the judge was not much helped by the rival submission, it is plain from the note of Mr Pointer's oral submissions that he and the judge discussed both partial discount and nominal order.
29. In ancillary relief proceedings the judge is not confined in the search for fairness by the nature of counsel's submissions nor is he bound by the evidence that the parties choose to adduce.
30. The judge could not be fair to the husband as the payer without investigating whether Mr Thompson was making any financial contribution to the household and, if not, what was his capacity to make contribution. Mr Pointer said that Mr Thompson, resident within the Irish Republic, was not a compellable witness. That circumstance did not prevent investigation. The judge had only to require the wife as applicant to produce evidence of Mr Thompson's means or risk the drawing of adverse inferences.

The Authorities Governing the Consequence of Cohabitation

31. Mr Pointer, in his supplemental skeleton argument, reviewed the development of authority from MH v MH [1982] 3 FLR 71 to K v K [2006] 2 FLR 468. The intervening cases were Duxbury, Atkinson [1988] Fam 93, Hepburn, Atkinson [1995] 2 FLR 356 and Fleming.
32. The first question that must be answered is whether the law as expressed in Fleming requires reconsideration in the light of the judgment of Coleridge in J in K v K. In that case the judge produced an orthodox outcome by reducing the periodical payments commensurately with the 47% drop in the husband's income. However in his reasoning, Coleridge J suggested that, had he not been bound by authority in the Court of Appeal, he might have independently reached different conclusions.
33. Miss Hussey, who appeared before him for the husband, submitted that the wife and her partner were in a quasi marriage. She then advanced an argument founded on the interrelationship of pre and post marital cohabitation. Ms Hussey demonstrated that the old rule, excluding premarital cohabitation when assessing ancillary relief applications after divorce had gone in consequence of the decision of Mr Mostyn QC in GW v RW [2003] 2 FLR 108. His approach had been followed in subsequent authority culminating in the observation of Baroness Hale in Miller v McFarlane [2006] 2 AC 618:

"…the marriage (which should probably include periods of pre marital cohabitation and engagement)."

34. That led Ms Hussey to submit to Coleridge J:

"If cohabitation equates with marriage in the context of an assessment of 'contribution' why should it not also, in a decision about the continuation of a periodical payments order? It is quite simply unfair to the husband to ignore the cohabitation of the wife and Mr B."

35. These considerations led Coleridge J to state:

"[87] This is a troubling and messy area of law and the current legislation enacted against an utterly different social fabric is not adequate to deal with it. The question is how far can the court go to redress the inadequacies of this somewhat superannuated legislation by applying it now in the contemporary context. Obviously, the impact of cohabitation can affect, potentially, both quantum and duration of an ongoing order.

[88] I do not shrink from saying that, in my judgment, nowadays the man on the Clapham omnibus (perhaps more likely now to be found on the crowded underground train) regards it as wholly anomalous and unfair for a cohabiting ex-wife in the circumstances of this wife to continue to receive income provision from a former husband indefinitely, perhaps for the rest of her life or until she chooses to remarry. If cohabitation is to be a social norm surely financial independence from a previous partner, whether married or not must go with it?

[89] However, on the other hand, if a wife in this wife's position has generated an entitlement to ongoing income provision is she not entitled, even cynically, to avoid the consequences of its cessation by refusing to take the step of remarriage whatever her emotional and financial commitment to her new partner? That is the clash of principle to which I refer earlier.

[90] Can the court resolve that clash and should it make some kind of judgment about the wife's choice? I tend to the view that the court cannot shrug off the point by saying it is a matter for Parliament. It is too important and too commonplace in these cases, especially 'variation' cases. There is no sign whatever that Parliament is proposing in the foreseeable future to confront the need for a thorough reconsideration of the principles underlying this area of the law. The opportunity afforded by the drafting of the recent Civil Partnership Act 2004 has been missed. There is no prospect of statutory change within 5 years and this issue will not go away.

[91] So I suggest that the court must nowadays grapple with this point and factor into its analysis and calculations not only numerically but in principle the existence of a lengthy and settled period of cohabitation and the likelihood of its continuing indefinitely. To confine its consideration to the arithmetic only is judicial fudge, mixing principle with practicality and producing potential unfairness and enhanced forensic uncertainty.

[92] Why because one cohabiting partner is prepared voluntarily and generously to support the ex-spouse is he or she to be discriminated against by reduction in an existing order when another partner in identical financial circumstances chooses/refuses to do so and therefore the payee ex spouse retains the full advantage of the existing order? There must be consistency of treatment so that couples can understand the financial implications of cohabitation and their lawyers can advise them.

[93] Apart from these 'cohabitation' factors, the other important check in this analysis is to be very careful to avoid allowing the wife 'a second bite at the cherry'. I have already indicated that on the documentation and the evidence I have seen the original order was proper and fair. There is never any warrant for trying to re-write a past injustice or look again broadly at the relative wealth of the two previous spouses in the context of applications of this kind for variation/capitalising periodical payment claims. It is a more narrowly confined exercise."

36. In the present appeal, Mr Pointer strongly pursues the point that Ms Hussey presented to Coleridge J. Paragraphs 11 and 12 of his supplemental skeleton put it thus:

"11. If it be the case that pre-marriage cohabitation is to be equated to marriage, there is no obvious logic in post-separation cohabitation attracting different treatment. We referred in our first skeleton (para 28) to the danger that is courted of a wife achieving double recovery in respect of the same period from H1 and H2, if the question of ongoing periodical payments during a period of post-separation cohabitation is not adequately policed. Further, the obvious unattractiveness of a wife receiving maintenance from her former husband while living with another man in a new relationship was pointed out by Wood J in the passages cited above.

However, there are 2 legal points that must be confronted here:

(a) First, Matrimonial Causes Act 1973, section 28 (2) does not apply to cohabitation. Thus, absent legislation, there can be no formal automatic termination of periodical payments. This can only be addressed by the terms of a court order, whether original or on a variation application.

(b) Secondly, at present, the status of cohabitation does not ordinarily lead to a financial claim against the partner. Thus the breakdown of the new relationship may lead to financial hardship for the dependent ex-spouse, if she is unable to be self-sufficient. This would particularly be of concern if that spouse was continuing to care for the minor children of the marriage.

Nevertheless it is important that this dynamic area of the law should not be out of touch with generally accepted notions of fairness.

12. The solution to this issue is, we suggest, as follows:

(a) If settled cohabitation be established then, as a matter of ordinary practice, that ought to lead to no substantive maintenance order being made; or if it be a variation application the previous periodical payments being abrogated.

(b) Secondly, in a case where the court has continuing concern as to the dependant's ability to be or become self-sufficient and has no obvious recourse against the cohabitant, then a nominal order should be made."

37. There is some support for elevating the consequence of post-marital cohabitation on the simple ground that the court now brings pre-marital contribution into the reckoning in the current edition of Jackson on Matrimonial Finance and Taxation.
38. In the previous edition paragraph 3.13 records the law as it then stood, namely that a period of cohabitation before marriage was not to be taken into account in assessing its duration for the purposes of exercising the section 25 discretion.
39. However in the current edition the authors at paragraph 3.79 record the shift as a result of which pre-marital cohabitation is not excluded from consideration. In the following paragraph they state:

"Now that it is established that pre-marital cohabitation normally does count as part of the duration of the marriage… it may be that post-divorce/dissolution cohabitation will be treated likewise."

40. On this issue, I prefer the submissions of Mr Dyer. In relation to pre-marital cohabitation it is only in a comparatively narrow range of cases that it will have significant effect on the outcome. The most obvious example is the marriage which is on the edge of being short and which may be rescued from that label by adding in a substantial period of pre-marital cohabitation. Another instance is, of course, the case where a long period of cohabitation is followed by a marriage and by a comparatively swift divorce.
41. As the law now stands the wife has no legal entitlement to financial contribution or benefit from her new partner either during the relationship or on its breakdown. The argument is superficially attractive but in my judgment does not run unless and until the applicant has acquired a statutory claim against the new partner.
42. Of course in this jurisdiction the government has yet to accept the recommendation of the Law Commission that it should legislate such entitlements. Mr Pointer's comparative analysis shows that cohabitants of different sexes have a statutory entitlement throughout the majority of the common law world. More to the point, his research on the eve of the hearing of this appeal revealed that there is a bill before the Irish Parliament, now at the stage of second reading, which would or might enable to the wife to bring a statutory claim against Mr Thompson. In that prospect there is insufficient certainty to draw me from the conclusion that the evolution in our approach to pre marital co-habitation does not lead to an inevitable re-evaluation of the impact of post-divorce cohabitation on the wife's claim for periodical payments.
43. Thus in my judgment the approach indicated by this court in Fleming v Fleming remains sound and is sufficiently flexible to enable the court to do justice and to reflect social and moral shifts within our society.
44. The next question is whether Singer J correctly directed himself in law. I am inclined to think that he did not. The passage cited above suggests that he approached the evidence on the basis that the husband's reliance on the new relationship would fail unless he, more boldly, took the path which Coleridge J had mapped but not followed. If that was his approach, it would, in my judgment be erroneous.
45. It was plainly open to the judge to discount the periodical payments claim to reflect the relationship between the wife and Mr Thompson applying the orthodox line of authority culminating in Fleming. That outcome was not dependent upon any reconsideration of principle or any evolution in the court's approach.
46. Since I have concluded that the judge erroneously assessed the evidence and misapplied the authorities, Mr Dyer's reliance on the exercise of his discretion is in vain. The judge should have attached significant weight to the new relationship and investigated its financial consequences fully.
47. Accordingly my conclusion is that the appeal must be allowed. What other orders should be made must depend upon an assessment of Mr Thompson's financial circumstances and an assessment of his capacity to contribute to the wife's economy. I would remit that further investigation and judgment to Singer J, before whom the husband's alternative application for variation of the continuing periodical payments orders is fixed for a three day trial early in the New Year. We were informed by Mr Pointer that an affidavit has already been filed by Mr Thompson in order to disclose his financial circumstances.
48. It was initially submitted by Mr Pointer that the listing of his appeal to this court should await the outcome of the variation application. I rejected that submission considering that it was essential to establish first the proper level of the order which it was sought to vary. Any downward variation of the wife's periodical payments order as a consequence of this appeal would ordinarily be backdated to November 2006. Any reduction resulting from the issue of the husband's variation application can only be backdated to the date of issue in February 2009. I am therefore in no doubt but that the procedural course that we have followed was the correct course and results in empowering Singer J to ensure an outcome fair to both parties from November 2006 and onwards.

Lord Justice Wall :
 


49. I have had the advantage of reading Thorpe LJ's judgment in draft. I agree with him that this appeal should be allowed for the reasons he gives and with the consequences he identifies.
50. I am puzzled by two of the features of this case, and am writing this judgment to give expression to that puzzlement. I start by saying I am the first to acknowledge that any family litigation, (whether about children or money) can seem quite different in its appearance in this court when contrasted with its presentation in the court below. At the same time, however, what the judge is said to have got wrong in the instant case is the level of the wife's periodical payments given the fact (on the husband's case) that she was and is cohabiting with another man (the third party). It is, accordingly, appropriate to focus on this narrow, but nonetheless important, aspect of the case.
51. In my judgment, the law has not changed from that which it was when I commenced practice in 1969. Post-separation cohabitation with a third party is a relevant factor for the court to take into account when considering the level of maintenance pending suit and / or periodical payments which the cohabiting spouse or former spouse should receive from his or her spouse or former spouse. In some cases, the fact of cohabitation will weigh heavily in the scales: in others, it will not. As Thorpe LJ rightly states in paragraph 28 of his judgment, the real question for the court is usually not what the third party is contributing but – as here – what ought he to be contributing?
52. Unless the judge was prepared to accede to what appeared to be Mr. Pointer's primary submission in this court, Thorpe LJ's question, in my judgment, cannot sensibly be answered without knowing what resources the third party has. Here, beyond knowing that that he is married, owns a property, has responsible employment and drives an expensive car, nothing is known about the third party's financial position. Both the judge – and this court – are thus deprived of the essential building blocks for answering Thorpe LJ's question.
53. The fact that the material was not available does not, however, in my judgment, mean that nothing could have been found out in this case about the third party's financial circumstances during the course of the proceedings in the court below. I entirely agree with Thorpe LJ that a judge in the position of Singer J has a proactive duty to ensure that all the information required for the fulfilment of the judicial exercise of discretion to make a financial award is available. Furthermore, if the wife (whose presentation the judge described as "reluctant, unsatisfactory and …. partial", but who was pregnant by the third party and admitted to a "fixed, permanent relationship" with him) persisted in her professions of ignorance, and if the third party was not forthcoming as to his means, the judge could have drawn an appropriate inference. However, the consequence of the judge's erroneous approach means inevitably, in my judgment, that the case must now go back to him to him to complete the task he has left incomplete.
54. Mr. Pointer's primary submission has, in my judgment, only to be stated to be rejected. The essence of that submission, as I understood it, was that (to put the matter in laymen's language) cohabitation with a third party means that substantive maintenance for the cohabiting spouse should cease. In my judgment, that is not the law. It has been expressly rejected in the leading case on the subject, and I am unable to draw it from the Matrimonial Causes Act 1973.
55. For present purposes, the two leading cases are the decisions of this court in Atkinson v. Atkinson [1988] Fam 93 (Atkinson), and Fleming v. Fleming [2003] EWCA Civ 184,. [2004] 1 FLR 667 (Fleming). In Atkinson, the husband was paying his wife £6,000 per annum. She then began to cohabit with a third party. The judge reduced her periodical payments to £4,500 per annum. The husband's appeal to this court was dismissed. Giving the leading judgment in this court, Waterhouse J, after a full review of the statute and authorities, stated: ([1988] Fam 93 at 108B to H): -

For my part, I am unable to derive from these cases or from the amended legislation itself any binding authority or persuasive support for the basic proposition on which the husband in the instant case relies, namely, that settled cohabitation by an ex-wife with a man should be equated to remarriage, at least whilst it lasts, and should disentitle the ex-wife to anything more than nominal maintenance whatever the particular financial and other circumstances of the parties may be. In my judgment it is clear that the wife's cohabitation constitutes a change of circumstance within the meaning of the new section 31(7) of the Act of 1973. I accept also that the cohabitation, the decision not to remarry and the reasons for it are conduct which it would be inequitable for the court to disregard within the terms of the new section 25(2)(g ) of that Act. In considering any application to vary or discharge a periodical payments order, however, the court must carry out the full exercise required by section 31(7), involving a review of all the circumstances of the case, including any change in any of the matters to which the court was required to have regard when making the order to which the application relates.

I can find no warrant for equating in this context remarriage with cohabitation, a word which itself presents problems of definition. The effect of remarriage is dealt with separately in section 28, governing the duration of a periodical payments order, and the policy that an ex-wife should lose her right to maintenance from her ex-husband on acquiring a new matrimonial status and new matrimonial rights against another man is readily understandable. I do not consider that it is open to the courts to add a gloss to those existing provisions by equating cohabitation, however defined, with remarriage without legislative sanction.

The court is invited on behalf of the husband to give decisive weight in the section 31(7) exercise to the fact of cohabitation, praying in aid, if necessary, the concept of "conduct." But it is conceded by counsel that a punitive approach would not be appropriate in this case and, in my judgment, that concession is rightly made. The variety of human folly is, of course, infinite and there may well be cases in which an ex-wife's conduct in the context of cohabitation, such as financial irresponsibility or sexual or other misconduct, may make it necessary and appropriate that a periodical payments order should be discharged or reduced to a nominal amount. Again, the overall circumstances of the cohabitation, particularly the financial consequences, may be such that it would be inappropriate for maintenance to continue: see  Suter v. Suter and Jones  [1987] Fam 111. But, in general, there is no statutory requirement that the court should give decisive weight to the fact of cohabitation. If the court were to do so, it would impose an unjustified fetter (in the present state of the law) on the freedom of an ex-wife to lead her own life as she chooses following a divorce: see the judgment of Ackner L.J. in Duxbury v. Duxbury  [1987] 1 FLR. 7.

56. In Fleming, this court expressly upheld Waterhouse J's approach in Atkinson. The relevant passage from Thorpe LJ's judgment is cited by Singer J in paragraph 74 of his judgment and I need not repeat it. I therefore note only that in that case, this court refused to extend a wife's order for periodical payments in circumstances in which she was living with a third party, and where her income, combined with that of the third party, was sufficient to discharge their combined living expenses.
57. Sympathetic as I am to Coleridge J's wish, in K v K (Periodical payment: Cohabitation) [2005] EWHC 2866; [2006] 2 FLR 468 (K v K) to move the law on and to achieve greater certainty for practitioners, I am satisfied that any change such as that proposed by Mr. Pointer would have to be introduced by Parliament. The power to award financial provision is statutory. There is a limit to the extent to which the courts can interpret statute.
58. Certainty is the family lawyer's Holy Grail. Ormrod LJ's "trial and error and imagination on the part of those advising clients" (see Martin (B.H.) v Martin (D.) [1987] Fam 12 at 20C-D has been replaced by the decision of the House of Lords in White v White [2001] 1 AC 596 (fairness and non-discrimination with a check against the yardstick of equality). However, each case remains fact specific, and this case is no exception. I vividly recall opening the husband's appeal to this court in Gojkovic v Gojkovic [2002] Fam 40, (a case which, today, would rightly be described as discriminatory) and telling this court (little thinking of course that one day I would be a member of it) that there was no point in the judiciary criticising the high level of costs in ancillary relief cases unless it laid down firm guidelines on quantum so that lawyers could give their clients definitive advice. Russell LJ's response is, of course, reported. He said: -

In his opening submissions to this court, counsel for the husband invited us to lay down guidelines which would, he said, be of assistance to those charged with the responsibility of deciding what, after divorce, is the appropriate level of lump sum payments in cases where very substantial capital assets are available. I do not think that such an exercise is possible. The guidelines already exist. Section 23 of the Matrimonial Causes Act 1973 is the enabling provision for an order for the payment of a lump sum. Section 25, as amended by the Matrimonial and Family Proceedings Act 1984, in terms, requires the court to have regard to all the circumstances of the case and subsection (2), under no less than eight sub-paragraphs, sets out the matters to which the court in particular shall have regard.

59. Thus if Singer J was not given – alternatively deprived himself of – (it does not matter which) the material upon which to decide the effect of cohabitation on the wife's periodical payments, we are in the same position, and it is impossible for us to decide what discount to apply. The only person who can undertake that task is the judge, and he has not done so. I entirely agree with the analysis advanced by Thorpe LJ in paragraphs 26 to 30 of his judgment.
60. My second area of puzzlement relates to the forthcoming application to vary. My understanding has always been that the court has an unfettered discretion to backdate any variation - if necessary, beyond the date of the making of the application to vary: - see Warden v Warden [1982] Fam 10 at 14A to D per Ormrod LJ (Warden). I am fortified in this view by paragraph 18.25 of the current (18^th) edition of Rayden & Jackson on Divorce and Family Matters which states: "The court, in so far as its own orders are concerned, has an almost unrestricted power to vary them retrospectively and, moreover, to backdate any variation which it makes in a pre-existing order beyond the date of the application for variation". Warden is cited as authority for that proposition, with the proviso in S v S [1977] 2 All ER 312 that the power must be exercised reasonably. Warden was cited by neither party before us.
61. This is not, of course, to say that this appeal has been without value. To the contrary, we have not only been able to re-state the law, but also to correct the erroneous approach taken by the judge. I see no reason, however, why he should not (provided his health permits) deal compendiously with the husband's variation application at the forthcoming hearing. He can either apply an appropriate discount for cohabitation and adjust the level of periodical payments accordingly, or he can backdate any variation which he sees fit to make.
62. Although I have taken the points in reverse order to that adopted by Thorpe LJ I repeat my entire agreement with his analysis. I would allow the appeal accordingly.

LORD JUSTICE PATTEN: I agree.