Broker wins appeal over payments to ex-wife

A City broker who hired a private detective in an effort to prove his ex-wife was living with another man won a Court of Appeal ruling in his favour today in his claim that she is not entitled to £125,000-a-year maintenance.

Richard Grey, 36, had been ordered to pay the annual sum to 35-year-old Lara Grey by a judge in the High Court's family division.

But the Court of Appeal, allowing a challenge against that decision by Mr Grey, announced that the judge, Mr Justice Singer, should have "attached significant weight to the new relationship and investigated its financial consequences fully".

They ruled that the issue will have to be looked at again by the judge to decide the "effect of cohabitation" on the former wife's periodical payments.

During divorce proceedings before Mr Justice Singer in February 2008, Mrs Grey admitted she was 17-weeks pregnant by Liam Thompson, a programme director for a group of radio stations.

Mr Grey had hired a private detective to observe her home in Dublin and his father John, who lived a few doors away, also collected evidence about her relationship.

However, Mr Justice Singer had said: "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 or anything long term."

Around £3 million of family assets were split equally between the parties.

Mr Justice Singer ordered the husband to make the periodical payments for life or until she remarried.

He set the payments at an annual rate of £135,000 from November 2006 until judgment, which was given in March this year, and thereafter at £125.000 per annum.

But Lord Justice Thorpe, sitting with Lords Justices Wall and Patten, concluded that the judge had "erroneously assessed the evidence and misapplied the authorities".

He added: "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."

The judge said: "I would remit that further investigation and judgment to Mr Justice Singer, 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."

Mr Grey and his former wife, who have a daughter together, both come from Dublin where they became close in their school days. They were engaged in 1996 and the following year moved to London.

They married first in Spain in 1998, but the marriage was invalid as it had not been properly registered. A valid marriage was celebrated at a London register office in September 2003. They separated in April 2005.

Mr Grey moved from the matrimonial home in St John's Wood, north west London, and his wife returned to Dublin.

Lord Justice Thorpe said: "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."

Also allowing the appeal, Lord Justice Wall said that "post-separation cohabitation" with a third party was a "relevant factor" for a court to take into account when considering the level of maintenance.

He added: "In some cases the fact of cohabitation will weigh heavily in the scales; in others, it will not."

The real question for the court "is usually not what the third party is contributing but - as here - what ought he to be contributing?"

He said the "consequences of the judge's erroneous approach means inevitably, in my judgment, that the case must now go back to him to complete the task he has left incomplete".

Lord Justice Wall rejected argument that "cohabitation with a third party means that substantive maintenance for the cohabiting spouse should cease", adding: "In my judgment that is not the law."