Facebook pixel

Family Court holds Mortgage Liability Indemnity Power

Published: 6th October 2017

After giving a judgement that was approved by the President of the Family Division, Sir James Munby, Mr Justice Mostyn has confirmed that the Family Court is able to dictate action in relation to mortgage payments. This includes instructing an individual to make the payments, as well as being able to seek compensation for any payments not made.

The Mortgage Liability Draft Consent Order

The matter came to light in a recent case, based in Southampton, which consisted of financial remedy proceedings following the separation of a married couple. This particular case saw the approval of a draft consent order, which was created with the specifics of transferring two separate yet jointly owned and mortgaged properties to the wife and husband, refused by district judges. The order stated that both individuals would do everything within their power to see through the release of their former partner from the mortgage on the property that they would obtain. This would therefore remove the other individual from their responsibility to make mortgage payments against that property, giving themselves sole responsibility for the repayments.

Mr Justice Mostyn’s Judgement

When making his judgement, Mr Justice Mostyn referred to a report published by the Financial Working Group in July 2014, which supports the claims regarding the order. Within his judgement, he said:

‘Under the new s31E(1)(a) MFPA 1984 in any proceedings in the family court, the court may make any order which could be made by the High Court if the proceedings were in the High Court. The High Court has power to order or decree an indemnity. This is an equitable remedy originally vested in the Court of Chancery which was subsumed into the High Court by the Supreme Court of Judicature Act 1873. It was the very relief initially ordered in Salomon v A Salomon and Co Ltd [1897] AC 22 (but which was later set aside by the House of Lords as offending the rule about the separate legal personality of companies). As to mortgage and other outgoings in my view the power to order A to make payment to B plainly includes the power to order A to make payments on behalf of B. The greater includes the lesser. It was necessary to spell out the power to order the payment of mortgage and other outgoings in Part IV FLA 1996 proceedings (see s40(1)(a)) because the wider direct power does not exist in those proceedings. It would be anomalous if the power to order payment of outgoings only existed in Part 4 but not FR proceedings. It is necessary in my view for the court to have these powers if only to cover the position if someone is not prepared to give the necessary undertakings or is not participating in the proceedings.’

The Power of the Family Court

Within the Financial Remedies Working Group’s last report of 2014, the group echoed their views regarding the power that the court has, again making suggestions in support of and relating to the power that the court has regarding mortgage liability.

It is also important to note that the judge stated that these exact orders have been made on a regular basis over the last three years, before the issue within the aforementioned case. The judge ended the matter by saying that the High Court has the necessary powers to make the order, which means that the power to make future orders of this nature is also held by the family courts.

If you are thinking of separation or divorce and are concerned about your financial situation then K J Smith Solicitors can help. Our team of family law specialists have handled financial matters in divorce ranging from the straight forward to the highly complex.

For more information or to arrange a free 45 minute consultation, please contact us today on 01491 630000 (Henley on Thames), 0118 418 1000 (Reading Head Office), 0118 418 1200 (Reading Central), 01256 584000 (Basingstoke), 01483 370100 (Guildford), 01494 629000 (Beaconsfield), 01235 375500 (Abingdon), 01344 513000 (Ascot), 01635 785 100 (Newbury), 01962 587900 (Winchester) or email info@kjsmith.co.uk.

Our Office Locations

All our offices are easily accessible by road, rail or bus and we are open Monday to Friday from 9:00am to 5:30pm.

Not sure which office is closest to you? Try our Office Finder.

If you would like to visit our team of family solicitors, we have offices in Henley-on-Thames (Head Office) Reading, Reading (Central), Basingstoke, Guildford, Beaconsfield, Ascot, Newbury & Winchester, St Albans, and Southampton. We serve a wide range of other areas including Abingdon, Bracknell, Gerrards Cross, Maidenhead, Marlow, Oxford, Slough, High Wycombe and Wokingham.

Why not contact our team of divorce solicitors for a free initial consultation today? We offer a free initial consultation that can take place in any one of our offices or over the telephone.

Client Testimonials

We are proud to have represented many excellent clients. Below are some comments our clients have made about us.

Join Our Team

Join Our Team

We are always looking for exceptional people to join our team.

Whether you are considering a move now or at some point in the future, we would love to hear from you and learn more about your career goals and motivations.

At K J Smith we pride ourselves on our commitment to offering support, guidance and career development across all roles. You will receive a competitive salary along with a comprehensive range of benefits.

Find Out More

Kulbir Rahi

Kulbir Rahi

Partner at our Ascot office

"I joined K J Smith with an open mind and with the expectation of developing and adding diversity and challenge to my career, having spent 23 years in a comfortable position with a traditional high street practice.

I can honestly say that K J Smith have exceeded my expectations. Since joining, I have felt supported and encouraged by the firm’s continued commitment to growth and improvement. The company allow staff at all levels to have a voice and recognise the importance of investment in their employees at every level."

Read other staff testimonials here.

Free Consultation

Free Initial Consultation


To find out how we can help you, please contact us for a free initial consultation. Call or email, we will be happy to speak to you about your options and how we can help.