Finality of litigation, particularly regarding financial remedy claims following divorce, seems to be a recurring theme of recently published judgments. I have already written here about the subject on a couple of occasions, for example in relation to the Stocker v Stocker case last month.
The latest variation on the theme is Birch v Birch, handed down by the Court of Appeal last Friday.
Birch v Birch concerned a consent order, setting out an agreed financial/property settlement following divorce. The order, which was made on 26 July 2010, was in a similar form to many such consent orders. It provided for the husband to transfer his interest in the former matrimonial home to the wife, in return for which the wife agreed to use her best endeavours to obtain the husband’s release from the mortgage on the property by 30 September 2012, failing which she would sell the property, so that the mortgage could be repaid from the net proceeds and husband could thereby be released from the mortgage. This arrangement was to be in full and final settlement of all financial/property claims by either party against the other.
Before proceeding, I should explain for the benefit of non-lawyers that the court cannot order a mortgagee to release one of the parties to a mortgage – whether a party is released is up to the mortgagee, hence here the wife could only agree to use her best endeavours to secure the husband’s release. It should also be noted that the court does not have power to order a party to do this, so the agreement must be incorporated into an undertaking attached to the order, rather than in the order itself – the court can enforce the undertaking as if it were an order.
Moving on, the other important fact in Birch was that there were two children of the family living with the wife, a girl aged fifteen and a boy aged thirteen.
The wife was unable to procure the husband’s release from his obligations under the mortgage. Obviously, this would have meant that, in accordance with her undertaking, she would have to place the house on the market for sale. However, she sought to avoid this by applying to the court for the undertaking to be varied so that the property did not have to be sold until the youngest child reached the age of eighteen, or (I believe) until both children had completed their full time education (presumably, whichever occurred last). In other words, she wanted to ensure that the children could remain in the property whilst they were still dependent.
The wife’s application was refused, on the basis that the court had no jurisdiction to entertain it. The wife appealed against this decision, but her appeal was dismissed. She appealed again, to the Court of Appeal.
Lord Justice McCombe gave the leading judgment of the Court of Appeal. Without going into all of the technicalities, he found that the court did have jurisdiction to vary the undertaking. However, here the variation that the wife sought was, in effect, an attempt to substitute an entirely different outcome from that provided for by the original consent order. In such circumstances, the scope for exercising the jurisdiction must be “extremely limited indeed”. In this case, he could see no basis upon which the court would exercise the jurisdiction.
Lord Justice Gross agreed, saying:
“…finality in this sphere of the law (as elsewhere) is a most important consideration. I regard it as unreal to suppose that the comprehensive consent order of 26th July 2010 could or would have been obtained had anything like the variation now contended for by the wife then been ventilated. As it seems to me, the variation sought would, years later, fundamentally undermine that consent order. Having regard to the nature of the variation sought, on the material before us and even assuming there to be jurisdiction to do so, it strikes me as wholly unrealistic to suppose that the jurisdiction would be exercised to vary the undertakings in question. If that be right, then we would be doing all concerned – and the administration of justice – a disservice by remitting the matter for yet further consideration.”
Accordingly, the wife’s appeal was dismissed.
The full judgment in Birch v Birch can be read here.
A correct decision and I hope he got his costs. This was a bog-standard case of a litigant giving undertakings when it suited and trying to resile when it didn’t. What is worrying is that the court thought it had any such jurisdiction.
So he accepts that he gets no benefit from the house at all provided that she arranges that he no longer has any further liability – that seems generous and she accepted.
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When she can’t get him off the mortgage she refuses to sell and keep her end of the agreement, she wants him to have this ongoing liability whilst still getting nothing at the end of it !
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She’s reneging on the deal, what is the court doing wasting time on this ? Perhaps we need a more efficient judicial system that can throw out ridiculous appeals in a timely manner.
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Andrew’s right – if he ended up with any costs out of this it is a disgrace.
Just to say that the last comment was the usual Andrew, I just didn’t hit the W hard enough!
I know of a similar case yet to come to court – except that W would never be able to obtain H’ release from the mortgage as W could never afford it herself and is unwilling to sell – 2 children aged 7 and 14 … thus no escape for H who would be still liable for the mortgage until the youngest reaches 18…
Also, massive unsecured family debt – all in H’s name as W never worked and always refused to share any liability – would have to stay with H, already on a massively reduced income on account of COVID with no eligibility for government help…
Question – As H can’t be released from the mortgage, can a court nevertheless order that W must henceforth service the mortgage herself – and so cannot ask H for help in paying the mortgage? Presumably not, as H’s obligation to the mortgage company would continue?
Any thoughts?