HA v EN [2025] EWHC 2436 (Fam)

Judgment date: 30 April 2025

https://caselaw.nationalarchives.gov.uk/ewhc/fam/2025/2436

The Hon. Richard Todd KC (sitting as a Deputy High Court Judge).

Summary

Court varies Xydhias agreement, imposing significant contingent reduction in maintenance following change in circumstances.

Background

W (aged 40) was born in Russia. H (aged 66) was born in Kenya. The parties lived in London in a vast home worth c.£19m. They have two children, aged 15 and 13.

The couple began cohabiting in 2008, entered into a pre-nuptial agreement (PNA) on 16 December 2008, and married on 8 January 2009.

Under the PNA, W was to receive:

• £5.6m housing fund (indexed);
• £21m capitalised maintenance (indexed);
• £170,500 annual child maintenance;
• a “stop loss” clause capping her entitlement at 50% of total assets.

At the start of the relationship, H’s wealth stood at around £61m, which he claimed had reduced to £14m by the time of proceedings. In 2022, W issued a ‘notice to show cause’ application to uphold the terms of the PNA, alleging H had deliberately reduced his assets to limit her entitlement. Prior litigation history is set out in HA v EN [2025] EWHC 48.

The agreement

By 21 April 2025 the parties agreed that they had reached a Xydhias agreement. The key terms were as follows:

• FMH to be sold immediately.
• H’s illiquid assets to be realised and a series of lump sums paid to W on realisation.
• The net receipts of the family home and H’s illiquid assets to be paid out:
• 70:30 in W’s favour, until she received £3.5m.
• To clear H’s debt to HMRC.
• After W has received £3.5m there to be a 30:70 divide in H’s favour, until both parties have received £5m.
• After the £5m cap, the fund shall be divided equally.
• In any event there to be a cap on the funds received by W of £24m (reflective of the PNA stop clause).
• H to pay school fees, university fees and related living costs for the children at university.
• H to pay child maintenance of £25,000 p/a per child and additional costs for the children including a holiday top up allowance of £20,000 pa per child.
• Clean break in life and death
• Legal costs to be met from the sale of the family home.
• Liberty to apply.

A note on Xydhias

The term ‘Xydhias agreement’ comes from the well-known case of Xydhias v Xydhias [1999] 2 All ER 386.

In Xydhias Thorpe LJ made clear that ordinary contractual principles do not apply to financial remedy proceedings. He clarified that the family court is not just a ‘rubber stamp’ and it retains discretion before converting agreements into binding orders.

If a party wishes to hold another party to negotiated terms, then the court will consider the following factors:

1. Was an agreement reached?
2. Was the agreement vitiated by a factor such as material non-disclosure?
3. Does the court need to undertake the s 25 exercise regardless of the agreement?

Where there is a broad agreement on the principal terms and all that remains unresolved is either ‘mechanics or trivial’ then the court may opt to determine those smaller issues and hold the parties to the balance of the agreement.

A detailed analysis of the Xydhias jurisdiction is set out in this helpful article.

The dispute

Although the parties had agreed terms in principle, the court was asked to resolve issues that arose during finalisation of the consent order. H contended the agreement was no longer viable due to:

• higher-than-expected legal costs for W (c.£223,000 more than anticipated);
• a significant shortfall in the expected FMH sale price.

H argued that these developments made the agreed maintenance payments unaffordable. W’s position was that H was simply attempting to renege on their binding agreement.

The key issue for the court was the extent to which it could or should intervene in an agreement reached between the parties.

Legal framework

H relied on two routes:

1. That there had been a material change in circumstances warranting a revision of the agreement
2. Alternatively, that the court could vary the agreement under the lesser used ss 34 and 35 of the Matrimonial Causes Act 1973

The court undertook a comprehensive analysis of Xydhias and related case law, including Soulsbury v Soulsbury [2007] EWCA Civ 969, where Ward LJ criticised the breadth of the Xydhias approach and suggested that such agreements could form binding contracts.

Ultimately, the judge held:

• the Xydhias agreement was an agreement capable of variation under ss 34–35 MCA 1973;
• while Soulsbury offered helpful commentary, it was not necessary to resolve the tension between it and Xydhias;
• agreements between parties hold significant weight, but the court retains discretion and is not obliged to make an order merely because the parties have reached an accord.

Judgment

The judge accepted that the increase in W’s legal costs and the likely reduced FMH sale price constituted a change in circumstances under s 35(2)(a) MCA 1973.

As a result, the judge imposed a downward variation of the maintenance provision which was contingent on the sale price of the FMH. Specifically, if the FMH sold for less than £17.5m, then W’s maintenance for holidays, child costs, and child maintenance would be reduced by 50%.

Implications

Whilst the court made significant amendments to the agreement in this particular case, the judgment reinforces that once heads of terms are reached, courts will generally uphold the substance of the deal, save in ‘exceptional circumstances’ (quoting Thorpe LJ in Haines v Hill [2007] EWCA Civ 1284 at [56]).

Key takeaways

• Parties should anticipate and account for future financial fluctuations during negotiations (e.g. asset values, legal costs) to avoid ending up in a situation such as this.
• If circumstances change post-agreement, the courts retain discretion to vary the terms or, more likely, to uphold them.