Supreme Court allows wife’s appeal in Birch v Birch

In Birch v Birch [2017] 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 28 July 2010.

Part of the order provided that the husband should transfer to the wife his legal and beneficial interest in the matrimonial home subject to the mortgage so that the wife could continue to live there with the two children of the family. In return the wife undertook at para 4.3 of the recitals to discharge all mortgage payments, to indemnify the husband against any liability under it and to use her best endeavours to release him from the covenants under it.

Then, crucially, she undertook at para 4.4 of the recitals that, if the husband had not been released from his mortgage covenants by 30 September 2012, she would secure his release by placing the home on the market for sale and proceeding to sell it.

Hazel Wright, family law partner at Hunters Solicitors, commented:

“House price inflation is still beating wage increases. That often means the person who moves out has to rent rather than buy a new home and rental prices are even beating house price increases in many areas, particularly London and the South East.

“It is more difficult to persuade mortgage lenders to release the main breadwinner, since the financial crash of 2007/08 the Council of Mortgage lenders has insisted on more proof of income to pay the mortgage, if the mortgage is to be transferred to one spouse.

“If the court now decides that the wife can stay there until 2019, that is better for her and her children, as they keep their home. However, is it fair to the husband and any new family he may have that he remains liable for this mortgage, even if he does not pay it? This makes his buying a new home with a new mortgage very difficult indeed, as the new mortgage lender will take into account the first mortgage for which he remains liable.

“Housing costs are a huge part of any budget. Two budgets for two homes rarely stretch far enough. The welfare of the children is the responsibility of both parents.”

Read the full article in UKSC blog and Family Law Week.