In Birch v Birch  UKSC 53, the Supreme Court (by a majority of 4:1) has granted the wife’s appeal and remitted for urgent hearing her application to be released from an undertaking in recitals to a consent order made on 28th July 2010. In this recital the wife undertook that if the husband had not been released from the mortgage covenants by 30th September 2012, the wife would secure his release by placing the former matrimonial home on the market for sale.
The wife had (and still has) duly discharged the mortgage payments and in November 2011 she issued an application to vary the undertaking outlined above. The wife explained that she had not been able to secure the husband’s release from his mortgage covenants and would not be able to do so by 30th September 2012.
The wife’s application referred to the fact that the children of the family were in schools in the vicinity of their home and it would be gravely damaging for them to have to move home while still at school. In such circumstances, the wife sought a variation so as to postpone her obligation to secure the husband’s release from his covenants until the date of their son’s 18th birthday.
The reasoning behind the Supreme Court judgment
The Supreme Court held that the description of the application as being to ‘vary’ the wife’s undertaking has been confused. The court’s power is only to grant or refuse an application for release from the undertaking. Although the court’s exercise of its power may result in something which looks like a ‘variation’ of an undertaking, if it decides to accept a further undertaking this is the product of a different process of reasoning.
The Supreme Court decided that the courts below had wrongly concluded that they did not have jurisdiction to release the wife from her undertaking.
The Supreme Court have confirmed that the case will now be sent to HHJ Waller to look into whether the court’s jurisdiction to vary the undertaking should be exercised. In light of the equivalence of the wife’s undertaking with an order for sale, HHJ Waller’s inquiry will be conducted in accordance with section 31(7) of the Matrimonial Causes Act. In doing so, he will give consideration to:
- The welfare of the two children (however this is only a consideration which may be outweighed by other factors).
- All relevant circumstances, including in particular:
- Whether the wife can establish a significant change of circumstances since her undertaking was given; and
- Whether the husband has suffered, and is likely to continue to suffer, prejudice by remaining liable under his mortgage covenants.
If the court finds that the husband has suffered, and/or would be likely to suffer, prejudice as a result of delay in selling the home, one approach the court may take is to request that the wife compensates him by making provision for him out of the net proceeds of sale as a condition of release from the undertaking.
If you are concerned about the sale, occupancy or ownership of the matrimonial home post-separation or the impact of a financial order, please do not hesitate to contact a member of our specialist Family Law team today on 0161 927 3118.