Family law matters occasional occupy centre stage in the media spotlight, as we have seen over the course of this summer, in the heart-breaking case of Charlie Gard. The attention this case has attracted has understandably meant that many other important family law judgments have flown under the radar, receiving less attention than they might otherwise ordinarily receive – none more so than the matter of Birch v Birch, which involved the Supreme Court looking at the issue of undertakings to sell the family home.
The parties in this case separated following a long marriage and compromised the matrimonial finances by way of a consent order in 2010. The order provided that the husband should transfer his interest in the family home to the wife, where she would live with their two children, who were then aged 8 and 10. The home was subject to a significant mortgage, which the wife undertook to pay and indemnify her husband for costs and expenses associated with it, whilst seeking to remove him from any mortgage obligations. Crucially, she undertook that if the husband had not been released from these mortgage covenants by September 2012, she would place the home on the market for sale.
In November 2011, the wife issued court proceedings seeking to “vary” her undertaking regarding the mortgage and the proposed September 2012 sale. The wife explained that she had been unable to secure the release of her former husband from the mortgage, but didn’t want to sell the home, as the children were well settled in good, local schools. Instead, she proposed to “vary” her original undertaking and defer the sale until the youngest child turned 18, in August 2019.
The husband argued that the court had no jurisdiction to hear the wife’s application and further argued that the wife’s original undertaking was equivalent to an order for sale under section 24A of the Matrimonial Causes Act 1973.
The Supreme Court, by a majority of 4 to 1, allowed the wife’s appeal, confirming the court holds jurisdiction to hear the wife’s application. In giving their judgment, the Supreme Court also sought to clarify the widely misunderstood aspect of “varying” an undertaking. The court’s power is only to grant or refuse an application for release from an 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, it is the product of a different process of reasoning. In layman’s terms, the end result might look the same, but the working out is different.
Giving the lead judgment, Lord Wilson stated:
“In my opinion, these proceedings have been bedevilled by a failure to distinguish between the existence of the court’s jurisdiction to release the wife from her undertaking (conditionally, on any view, upon her offering a further one in different terms) and the exercise of its jurisdiction. The preliminary issue has related only to its existence with the result that factors relevant to its exercise have not been the subject of investigation or argument. (Para 6)“
“I propose that this court should allow the wife’s appeal [and] should hold that jurisdiction exists to hear her application… In the light of the equivalence of the wife’s undertaking with an order for sale … [h]e will give first consideration to the welfare…of the two children; but it is a consideration which may be outweighed by other factors. He will have regard to all relevant circumstances including in particular… whether the wife can establish a significant change of circumstances since her [original] undertaking was given and whether, and if so to what extent, the husband has suffered, and is likely to continue to suffer, prejudice by remaining liable under his mortgage covenants. (Para 29)“.
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