Birch v Birch
| Jurisdiction | England & Wales |
| Judge | Lord Wilson,Lady Hale,Lord Kerr,Lord Carnwath,Lord Hughes |
| Judgment Date | 26 July 2017 |
| Neutral Citation | [2017] UKSC 53 |
| Date | 26 July 2017 |
| Court | Supreme Court |
[2017] UKSC 53
Lady Hale, Deputy President
Lord Kerr
Lord Wilson
Lord Carnwath
Lord Hughes
Appellant
Stephen Hockman QC
Jane Campbell
(Instructed by Alison Fielden & Co)
Respondent
John Wilson QC
Paul Infield
Julia Shillingford
(Instructed by Goodman Ray LLP)
Heard on 22 May 2017
( with whomLady Hale, Lord KerrandLord Carnwathagree)
The husband and wife (as it will be convenient to describe them notwithstanding the grant of a divorce) entered into a consent order dated 28 July 2010, by which they compromised their claims against each other for financial orders on the basis of a clean break between them. The wife wished to continue to live with the two children of the family, namely a girl then aged ten and a boy then aged eight, in the matrimonial home, which was held in the joint names of herself and the husband subject to a substantial interest-only mortgage. Part of the order provided, by way of property adjustment, that the husband should transfer to the wife his legal and beneficial interest in the home subject to the mortgage. In return the husband was to be released from his covenants under the mortgage. His release from them was provided in undertakings given to the court by the wife which were recited as a prelude to the order. Thus she undertook at para 4.3 of the recitals to discharge all instalments payable under the mortgage; in any event to indemnify the husband against any liability under it; and to use her best endeavours to obtain the mortgagee's agreement to release him from his 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. The several other provisions of the order, including for the division between the husband and wife of responsibility for specified debts, are for present purposes irrelevant.
On 18 November 2011 the wife issued an application which she described as being to "vary" her undertaking at para 4.4. In her statement in support of it she explained that she had not been able to secure the husband's release from his mortgage covenants and would not be able to do so by 30 September 2012. She said that, when she had given the undertaking at para 4.4, she had expected to be able to secure his release either by the provision instead by her brother or sister of guarantees to the mortgagee for the performance of her obligations under it or by her obtaining employment by reference to which she could persuade the mortgagee to accept her as the sole mortgagor; but that in the event neither the brother nor the sister had proved able to provide the guarantees and she had been unable to obtain employment. She explained that the two children were in fine schools in the vicinity of the home and that it would be gravely damaging to their interests for them to have to move home while still at school. In such circumstances she sought a "variation" of the undertaking at para 4.4. so as to postpone her obligation to secure the husband's release from his covenants under the mortgage by sale of the home from 30 September 2012 until (as she soon made clear) 15 August 2019, being the date of their son's 18th birthday.
In 2012 the husband countered by contending, through counsel, that the court had no jurisdiction to hear the wife's application. He requested the court so to rule in the determination of a preliminary issue. In retrospect it is unfortunate that the court acceded to his request. As of now, in 2017, the merits or demerits of the wife's application have never been ventilated. On any view, albeit subject to the extent of prejudice suffered by the husband as a result of remaining a co-mortgagor of the home, the wife's application for postponement of the sale for seven years was highly ambitious even if there was jurisdiction to hear it. But, unsatisfactory though it is, she has secured postponement for five of those years solely as a result of the continuing litigation in respect of the preliminary issue. So she is now able to present her request for postponement as being only for the two final years, being (so she says) more important than ever in the interests both of the parties' daughter who is about to embark on the second and final year of her A-level course and of their son who is about to embark on the first of them.
On 15 January 2014 District Judge Chesterfield, sitting in the Watford County Court, concluded that the court had no jurisdiction to hear the wife's application and so ordered that it be dismissed. On 12 May 2014 HHJ Waller CBE upheld the district judge's conclusion and dismissed the wife's appeal against his order. On 31 July 2015 the Court of Appeal (Gross and Kitchin LJJ, and McCombe LJ who gave the main judgment): [2015] EWCA Civ 833; [2016] 2 FLR 467 held that there was jurisdiction to hear the wife's application but that it was only a "formal" jurisdiction which existed only "technically"; that scope for its exercise was "extremely limited indeed"; and that, in the light of what the court had been told, there was no basis for its exercise upon the wife's application. Against the Court of Appeal's dismissal of her second appeal the wife brings a third appeal to this court.
All three lower courts adopted without demur the wife's description of her application as being to "vary" her undertaking. But her description betrays a conceptual confusion which it is as well to dispel as this early stage. An undertaking is a solemn promise which a litigant volunteers to the court. A court has no power to impose any variation of the terms of a voluntary promise. A litigant who wishes to cease to be bound by her (or his) undertaking should apply for "release" from it (or "discharge" of it); and often she will accompany her application for release with an offer of a further undertaking in different terms. The court may decide to accept the further undertaking and, in the light of it, to grant the application for release. Equally the court may indicate that it will grant the application for release only on condition that she is willing to give a further undertaking or one in terms different from those of a further undertaking currently on offer. In either event the court's power is only to grant or refuse the application for release; and, although exercise of its power may result in something which looks like a variation of an undertaking, it is the product of a different process of reasoning. In Cutler v Wandsworth Stadium Ltd [1945] 1 All ER 103 Morton LJ said at 105D-E:
"… the court does not vary an undertaking given by a litigant. If the litigant has given an undertaking and desires to be released from that undertaking, the application should be an application for release … Litigants are not ordered to give these undertakings; they choose to give them, and an application to have an undertaking already given varied is wholly wrong in form."
In my opinion these proceedings have been bedevilled by a failure to distinguish between the existence of the court's jurisdiction to release the wife from her undertaking (conditionally, on any view, upon her offering a further one in different terms) and the exercise of its jurisdiction. The preliminary issue has related only to its existence with the result that factors relevant to its exercise have not been the subject of investigation or argument. Nevertheless, influenced by a decision of the Court of Appeal in Omielan v Omielan [1996] 2 FLR 306 which will receive my careful consideration in paras 21 to 27 below, the lower courts have in my view looked over their shoulders at the ostensibly ambitious nature of the wife's application (being one of the factors relevant to exercise of the jurisdiction); and they have deployed it as a basis for denying the existence of the jurisdiction or, in the Court of Appeal, as a basis for concluding that the jurisdiction was no more than formal and technical (which, irrespective of what in this context those adjectives precisely mean, seems tantamount to a conclusion that, for practical purposes, the jurisdiction does not exist).
In Russell v Russell [1956] P 283 the husband appealed against a judge's refusal to release him from an undertaking that, unless he was out of work, he would not apply for a downwards variation of an order for maintenance in favour of the wife. Jenkins LJ said at 294:
"… any undertaking given to the court is capable of being discharged by the court whenever it appears to the court that circumstances have arisen which make that course a proper one in the interests of justice."
He repeated at 297 that it was "always competent" for the court to release a person from an undertaking as an exercise of its discretion in the interests of justice. In the light of what follows, however, it is worthwhile to note that, in proposing that the appeal be dismissed, Jenkins LJ there proceeded to explain that the husband had "wholly failed to show any such change in circumstances" as would warrant release.
In Kensington Housing Trust v Oliver (1997) 30 HLR 608 the Court of Appeal stressed the universality of the jurisdiction to grant release from an undertaking. A tenant had caused flooding of flats underneath her flat. As a result the landlord had obtained an order for possession of it but it had undertaken to the court to offer the tenant specified alternative accommodation at basement or ground floor level before seeking to enforce the order. When, following further flooding in breach of a reciprocal undertaking which the tenant had given to the court, the landlord applied for release from its undertaking, a recorder...
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