Husbands and wives make promises to each other from the day they exchange their wedding vows.
Should a relationship break down, this continues during a divorce when a couple promise to do (or not do) things which will make their financial settlement work. So, assuming the original marriage vows are broken, when is a promise binding?
When agreeing terms in a legal dispute it is important to distinguish between things the court could make an order about, such as a property to be sold or maintenance to be paid, and things which it can’t. The most common example being the removal of one person’s name from a mortgage. The court cannot order this; the control sits with the mortgage company.
So, if a separating couple decide not to sell a jointly owned property – usually a family home in which one spouse will live – that spouse will need to make a promise to the other to use their ‘best endeavours’ to get the other off that mortgage over a period of time and also promise to pay the mortgage payments and other related payments. That promise is made not only to the other spouse but also to the court, so that is enforceable and these sorts of promises are called undertakings.
A case of broken promises
Promises have become headline news recently with a case Birch v Birch (2017) coming before The Supreme Court and focusing on exactly this sort of undertaking and its enforceability. Here, the husband and wife agreed a consent order, providing that Mr Birch transfer the former family home to his wife on divorce. There was a mortgage, so Mrs Birch undertook to pay the mortgage and use her ‘best endeavours’ to get him off mortgage formally. There was a fall-back provision; if she had not managed to do so within approximately two years, then the property would have to be sold.
However, when this two year period had elapsed, the wife had failed to remove her ex-husband from the mortgage and what is more, didn’t want to sell – intending instead to postpone the sale until their youngest child had reached 18 – some seven years later than the date provided for in the court order.
Perhaps unsurprisingly, eventually making its way all the way to The Supreme Court. Here, the verdict was that an undertaking cannot be varied – the house must be sold. So a promise is a promise after all, right? Well no, not quite. The court said the correct approach is to apply for release from the undertaking and offer a further undertaking in different terms – here that, for example, the property would be sold at the later date – when the child is 18.
Moving out and moving on?
As it stands, this is a story ‘to be continued…’. So far all that has happened is to allow the wife's appeal and send the case back to the Senior District Judge of the Family Division. That judge will have the difficult task of deciding effectively whether she can make another promise to the court.
The litigation so far has already delayed matters and kept the husband on the mortgage to date – there are now only another two years till the youngest child is 18. Remember that during that time, it is very unlikely that he will have been able to get a mortgage in his own name. For credit and other ratings, he will still be treated as if he owes the money on the family home because his name is still against it and that is very much the problem.
Now the judge will have to make a decision which gives ‘first consideration to the welfare of the two children’ but has regard to all relevant circumstances including the husband’s circumstances. He will have to consider whether the wife’s circumstances have really changed since she made her promise and balance this against how the husband has suffered financially.
We predict that if she is allowed to remain in the house for a couple more years with the children, there would surely have to be some financial compensation to husband, such as out of the proceeds of sale when finally sold!
As this case highlights, be careful what you promise….
Sarah Smith is Yorkshire's only Eminent Practitioner in Family Law. She is a qualified mediator and Managing Director of Berwins Solicitors.