H v W (Xydhias Agreements) [2025] EWFC 163 (B)

Judgment date: 12 June 2025

https://caselaw.nationalarchives.gov.uk/ewfc/b/2025/163

District Judge Field. W’s application that H should show cause as to why a final order in their financial remedy proceedings should not be made to reflect a concluded agreement alleged to have been made in correspondence, subject to matters of implementation and court approval.

Background

H and W both in their late 50s with no dependent children. The parties married in 2003, with the relationship perhaps starting in 1991. They separated in 2023. Both parties were represented at a pFDR on 30 July 2024, which did not settle.

Correspondence was subsequently exchanged between 13 August 2024 and 16 August 2024, which resulted in the directions appointment listed on 19 August 2024 being vacated by agreement.

W contended within that correspondence there had been ‘three alternative “moments”’ at which the court was invited to find an agreement had been reached.

The law

The principles to be applied where there is a dispute in respect of agreements to compromise financial remedy proceedings are set out by Thorpe LJ in Xydhias v Xydhias [1999] 1 FLR 683, which are summarised in Jackson’s Matrimonial Finance (10th edition) at 12.66 as follows:

‘a) ordinary contractual principles do not apply in determining whether there is an agreement for the compromise of ancillary relief claims;

b) an agreement for the compromise of ancillary relief claims does not give rise to a contract enforceable in law;

c) the parties seeking to uphold a concluded agreement for the compromise of an ancillary relief application cannot sue for specific performance;

d) the only way of rendering such a bargain enforceable is to convert it into a court order;

e) if there is a dispute as to whether the negotiations led to an accord, the court has a discretion in determining whether an accord was reached;

f) ordinarily heads of agreement signed by the parties or a clear exchange of solicitors’ letters will establish the consensus;

g) if all that remains unresolved is either mechanics or trivial, that will not prevent the court from concluding that an agreement has been reached;

h) if there is a dispute as to whether or not an agreement was reached, without prejudice correspondence must be admitted to determine that issue.’

The court retains a discretion when determining whether the parties had reached an agreement subject to the court’s approval, and whether they should be held to that agreement.

In the context of an alleged agreement where Xydhias applies, the court must ‘regard not only the offers and counter-offers in their terminology but also the communications with the court and the understanding of those involved’ (Xydhias at 694).

In approaching the ‘moments of agreement’ contended by W, District Judge Field applied the following at [17]:

1. Objectively construed, had the parties reached an agreement?
2. Where there is a lack of consensus, objectively construed, are these matters of substance or are they trivial or matters of detail, implementation or security which can be determined by the court without undermining the basis upon which the parties have reached agreement?
3. If the parties are found, objectively assessed, to have reached an agreement on all matters of substance, how should the court exercise its discretion in deciding whether the parties should be bound by that agreement, having regard to the understanding of the parties and their communications with the court?

Determination

Moment one

W argued that when her solicitors responded to H’s WP Offer in an Acceptance Letter, they agreed the areas of fundamental dispute, though possibly not all issues of detail, implementation, security and/or drafting, and set out areas for clarification.

District Judge Field held there was objective consensus on all but two matters, which were matters of detail and implementation that did not undermine the overall agreement reached. When exercising discretion as to whether the parties should be held to that bargain, the judge concluded to do so was fair and sets out a numbered list of reasons at [67].

Having concluded the court should exercise its discretion to hold the parties to the terms of H’s offer, it was still necessary to consider the second and third moments of agreement.

Moment two

After sending their acceptance letter, W’s solicitors sent H a draft letter to the court, which stated that the parties ‘have literally just reached an agreement’. **H confirmed the draft was agreed.

District Judge Field found that the effect of the correspondence was simply to record an agreement had been reached. Objectively construed, H’s agreement was in relation to the draft letter, not the terms for implementation and the court should not exercise any discretion to hold H to those terms in those circumstances.

Moment three

W’s solicitors and H went on to exchange three revised drafts of the Heads of Agreement. In respect of the Third Draft, H – among other things – communicated his agreement. Save for one point concerning clean break and dismissal of a lump sum, the district judge found the Heads of Agreement reflected the matters of substance which were agreed from H’s WP Offer.

In respect of the point regarding the clean break and dismissal of a lump sum, the Third Draft differed in substance from H’s WP Offer, where it provided that W’s ‘lump sum claims will not be dismissed until she has received the lump sum/lump sums re the [the Law Firm] monies’. **The judge set out that that provision was at odds with H’s proposal for a clean break per his WP Offer.

The learned judge could not find on an objective assessment there was an agreement on those terms between the parties. Nor did the judge find it appropriate for the court to exercise any discretion to hold the parties to those terms, nonetheless. Accordingly, the terms to which the parties were bound were those set out in H’s WP Offer, subject to points of implementation, detail and security.

Determination of points of implementation

In determining the outstanding points of implementation, the objective of the court is to achieve an outcome which ought to be ‘as fair as possible in all the circumstances’ (Lord Nicholls at 983H in White v White [2000] 2 FLR 981) having regard to the factors set out in s 25 of the Matrimonial Causes Act 1973.