The Supreme Court has granted an ex-wife’s appeal to keep her husband locked into a mortgage agreement for the sake of their children.
In Birch v Birch, judges heard how as part of the original order it had been agreed that Mr Birch would transfer the matrimonial home to his former wife so that she could continue to live there with their two children.
In return, Mrs Birch agreed to take over responsibility of the mortgage payments and she would also use her best endeavours to release her former husband from any further financial responsibilities relating to the family home, including the mortgage liability.
However, a clause in the agreement stated that if she was unable to free him from his mortgage obligations by the end of September 2012, she would do so by placing the house on the market for sale.
In November 2011, Mrs Birch went back to court to make a new application. She had been paying the mortgage as agreed, but had not been able to release her husband from the mortgage ‘covenant’ and believed that this would not be possible by September 2012, as originally agreed.
She told the court that as their children were attending local schools, it would not be in their interests to be forced to move. She argued that she should instead be allowed to postpone the sale of the family home, which would release her former husband from the mortgage, until their son turned 18 in 2019.
Mr Birch objected to the proposal and was initially successful as the court stated that it did not hold legal authority to hear the case.
However, Mrs Birch pursued the matter, firstly taking her case to the Court of Appeal and then to the Supreme Court where, by a majority of 4:1, judges granted Mrs Birch’s appeal allowing her to be released from the original undertaking.
Surjit Verdi, an Associate and Family Law expert with Palmers, said: “This is an important ruling which may have repercussions for other families who find themselves in similar situations.
“The court’s decision to allow Mrs Birch and her children to stay in the marital home until 2019 is obviously good news for them.
“However, Mr Birch now remains legally liable for the mortgage, even though his former wife may in fact be meeting the monthly repayments.
“In such circumstances, it will make moving on and buying a new home in his own right very difficult for the next two years, as a mortgage lender will take into account the first mortgage on the marital home, for which he remains liable.”
At Palmers, we are able to provide advice on all aspects of family law including financial agreements and applications to vary their original terms. For more information, please contact us.