03 August, 2017
The Supreme Court, on 26th July 2017, in the matter of Birch v Birch, over-turned the decision of a lower court in relation to the ability to 'vary' an undertaking that had been made in financial remedy proceedings.
An undertaking, commonly used within family proceedings, is a formal promise to the court to do or abstain from doing something. The circumstances involved in this case could have arisen in many family cases dealing with finances on divorce.
In the Birch case, the parties to the marriage agreed a financial settlement. As part of that financial order Mrs Birch gave two undertakings to the court: to use her best endevours to release her husband from his liabilities under the mortgage secured to the property and more importantly to sell the property if she was unable to do so by 30 September 2010. These types of orders and undertakings are regulary used in financial proceedings.
After concluding that she would not be able to secure her husbands release from the mortgage, Mrs Birch applied to the court to 'vary' the undertaking. In the first instance the court determined the undertaking could not be varied and the house should subsequently be sold.
However, the Supreme Court have now concluded that the court have the power to consider an application to be released from an undertaking, and if released from that undertaking can then consider accepting a fresh undertaking, in different terms. On this basis the Court will consider Mrs Birch application. When doing so they will need to consider the full circumstances including the needs of the children and whether any significant change has occured since the undertaken was given.
Whilst this ruling is significant in clarifying a couples ability to vary an order, it is bound to cast some uncertainty for parties who have similar orders.
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