Due to error during Appeal, partner is termed Overstayer

[BigMo123]

My wife and I have been on the Tier 1 since 2009, we applied for an extension January 2012 and got refused July 30th 2012 due to some technicality. An appeal was lodged August 2012 with a successful outcome in October 2012. A letter was received from UKBA November acknowledging outcome but didn't receive Biometric Residence Permit till June 2013.
To our surprise it was just my Biometric Residence Permit sent, none for my wife. We decided to investigate and realised an error was made during our appeal- we should have submitted 2 separate applications. A clause in the appeal form was misleading as it had the provision for family members applying along with main applicant.
Anyways, we appealed the decision and got a shock from the A&I Tribunal that my wife has been an overstayer since the initial refusal of July 30th 2012.
This is a very precarious situation and very bad timing, we have two kids now, first is 22 months and latest is 4 months, so leaving the UK is not a viable option.
We seriously need advice on what to do because we have never broken any law in our lives and don't intend to- the 'overstayer' tag isn't really palatable to be honest and has made us uneasy.
Any suggestions/advice would be highly appreciated, thank you.

[O_Relly]

Sorry to hear that mate. Not sure if you can make a fresh application from in-country, explaining the circumstances and about the prior error.

The only other options seems to go back to home country and make a fresh application from there. ?

Does the letter from the A&I Tribunal mention a time line before which she must leave the country?

Also, the timelines does seem a bit strange, you received a letter of approval in November 2012 but didn't receive BRP until June 2013?