Posted by Holly Crook on 27th July 2017

Following separation a divorcing couple are often encouraged to formalise the division of their assets or any financial agreement in the form of an Order which is then approved by the Court either by consent or through proceedings. The final Order is often seen as just that, final. The grounds for challenging an Order are extremely narrow, but this week, the Supreme Court has granted permission for a wife to challenge the terms of her original Order.

In Birch v Birch, the parties came to an agreement and had this formalised in a Consent Order which was approved by the Court. The first element of the agreement was that the family home would be transferred to Ms Birch within 28 days of the divorce being finalised. However, Ms Birch provided a formal promise to the Court (an Undertaking) that she would release the husband from the mortgage and if she failed to do so, the family home would be sold. Ms Birch was given significant time to release Mr Birch from the mortgage. However, Ms Birch was unable to secure the release of her husband from the mortgage and subsequently applied to the Court to have the Undertaking varied. Ms Birch wanted to change the Order so that the house would not be sold until her youngest child had turned 18 or completed their full time education. The parties’ two children were born in 2000 and 2001, so this application had the prospect of extending the time for the house sale significantly.

The lower Courts denied Ms Birch’s application and the wife challenged this decision and appealed the decision to the Court of Appeal where it was dismissed. In fact, the Judgement of the Court of Appeal went as far to say that “finality in this sphere of the law is a most important consideration”. In essence it is this consideration that has been key throughout proceedings. The security of a final Order is a fundamental element of financial proceedings and undermining this could change the way litigants and practitioners approach financial proceedings in divorce in the future.

This week the Supreme Court allowed the wife’s appeal with a majority of 4 to 1. The question for the Supreme Court was whether the Court has the jurisdiction to vary or release Ms Birch from her Undertaking. The Supreme Court decided that the lower Court does have jurisdiction to consider the wife’s application. However, Ms Birch’s battle does not end here.  When the case returns to Court, the Court will consider all circumstances of the case and in addition, whether Ms Birch can establish that:

  1. “(there has been) a significant change of circumstances since her Undertaking was given”.
  2. “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”.

The Supreme Court’s decision to grant permission for the wife to challenge her Consent Order is a good starting point but clearly Ms Birch has a long road ahead of her to successfully challenge the Consent Order. The decision of any future hearing will begin to shed some light in this complex area and, regardless of the outcome, will determine how we advise clients in the future.

If you require any assistance in relation to divorce and finances please contact our Plymouth office on 01752 674999.

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