The man, who had been born a girl but began using a male name at 14, had appealed against a High Court ruling in January that he should be debarred, on grounds of "public policy" from claiming maintenance, a share of the pounds 400,000 matrimonial home or a lump sum after the marriage was declared a nullity in December 1994.
To widespread surprise, Mr Justice Hollis had declared in the earlier hearing that the wife never knew her husband's true gender until a copy of his birth certificate was produced in May 1994. The judge ruled he had committed perjury when he married her, and that any claim he might have should be limited to that of an unmarried co-habitee. The wife told the court he used to come out of the shower backwards.
Neither of the former partners can be identified because of a court order protecting two children of the marriage who were born after the woman, now 39, underwent artificial insemination with a donor's sperm. She told the hospital her husband had had a vasectomy.
In yesterday's Court of Appeal judgment, Lord Justice Ward said: "Many - and I am one of them - will find it quite astonishing that there was no single occasion in 17 years of life together when her eyes did not see, or her hands or her body feel, or her senses tell her that she was living with a man who had the genital formation of a woman, a man who did not simply have a small or deformed penis, but had no penis at all."
But that did not alter the fact that the man had deceived the woman, heiress of a wealthy society family, into marrying him.
In his 83-page judgment, Lord Justice Ward said the claim should be ruled out on the grounds of public policy. But while the other two judges, Lord Justice Neill and Lord Justice Potter, took a less restrictive attitude by deciding the case under the discretion given by matrimonial law, they both ruled against the transsexual.Leave to appeal to the House of Lords was refused.
The man, now 50, from a modest north of England background, was barred from contact with the two children last year because of the acrimony and hostility between the couple. He said yesterday: "I believe I am entitled to a settlement and am not prepared to let it rest."
For a UK marriage to be legal it must be between a man and woman - their sexes tallying with their birth certificates. Transsexuals have so far failed to secure the right to have their birth certificates changed to reflect their new sex.
The husband's solicitor, Madeleine Rees, said: "The civil rights of transsexuals have still got to be recognised at law. We'll seek leave to go to the Lords and if they refuse we will go straight to Strasbourg."
In one of the saddest cases of its kind, the man began wearing the artificial penis, made out of plaster of paris, from his late teens. After suffering severe depression he underwent a double mastectomy in December 1973 but the operation was so unpleasant that he never underwent phalloplasty - construction of a penis, a decision he was to regret. His body was scarred from the removal of his breasts, he retained the large nipples of a woman and the genitals of a woman. At 30 he moved south and met his future wife, a 19-year-old theology student, at the pub where they both worked. The court found that she had no sexual experience before the couple began an intimate relationship using the false penis.
In a bid to overturn Mr Justice Hollis's ruling that the wife had "thought that the defendant either had a very small penis or that it was deformed in some way," the man described a row after the marriage began to break down in 1994, telling the court that he undid his trousers and exposed his artificial penis, asking whether that was not good enough for her, to which she had replied: "it's not real."
In the first year of the marriage, he said, the wife had touched him between his legs and discovered his vagina but he had refused to discuss it.Reuse content