Supreme Court backs ex-wife in long-running mortgage dispute

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July 26, 2017

A woman involved in a long-running mortgage dispute with her ex-husband has won her appeal at Britain’s highest court to have her case heard and determined by a lower Court. The case could affect other divorcing couples who agree to a delayed sale of property, a senior family lawyer has claimed.

In Birch v Birch the former couple had reached an agreement following their divorce seven years ago that she would receive the husband’s share of the family home so that she could continue to live there with their two children. In return she agreed to take on the mortgage payments and to free her now ex-husband from any further financial responsibilities in relation to the property.

Part of the agreement stipulated that if she was unable to free him from his mortgage obligations by the end of September 2012, she would do so by putting the house on the market. In November 2011, however, the wife made a fresh application to the courts. She had been paying the mortgage as agreed, but had not been able to release her husband from the mortgage ‘covenant’ and believed she would not be able to do so by September 2012 as originally stipulated. Their children were attending local schools and it would not be in their interests to be forced to move, she added. Mrs Birch instead wanted to be able to postpone the obligation to free her former husband from the mortgage via sale of the home until their son turned 18 in 2019.

The husband objected, arguing that the court had no legal authority to hear the case. He was successful, with the courts agreeing they did not have jurisdiction to release the former Mrs Birch from her original agreement. But she pursued her case, first to the Court of Appeal and then to the Supreme Court.

Earlier today Britain’s highest court ruled in favour of the wife by a majority of four to one, declaring that the courts do have jurisdiction to hear the wife’s case after all. It was not logical, said the Justices, to make a distinction between the courts’ clear power to order the sale of a property in certain circumstances and the wife’s original undertaking to free her husband from his mortgage obligations.

The case will now return to the lower courts for a further ruling on whether or not to actually grant her request.

Stowe Family Law Managing Partner Rachel Roberts said:

“The ruling confirms that the Court’s powers are limited to releasing her from the existing undertaking and accepting another one in its place, rather than actually varying (changing) the original undertaking.”

She added:

“I would say that if the wife succeeds on this and is able to delay the order for sale because she is unable to remove him from the mortgage, this potentially has wide ranging implications for parties who have already entered into a consent (financial) order relying on undertakings for an order for sale, in the belief that they have a long stop date (deadline) for a sale. Certainly as lawyers, if she succeeds, we will need to be much clearer about warning future clients of the risk of the Court varying the timescale.”

Rachel continued:

“The judgement makes it very clear that this is a balancing exercise weighing up both parties interests with first consideration given to the children, but this is obviously a discretionary test for the Judge who ultimately determines this.”

Stowe Family Law is the UK’s largest specialist family law firm, with offices in North and West Yorkshire, London, Greater Manchester, Cheshire, Hertfordshire and Hampshire.

https://www.stowefamilylaw.co.uk/

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