JT v RL & Anor [2025] EWHC 1335

Judgment date: 23 May 2025

https://caselaw.nationalarchives.gov.uk/ewhc/fam/2025/1335

Keehan J. Application by mother to enforce a contract in relation to a property purchased for her and the parties’ child.

Background

The parties never married, but had a child, T, born after their relationship ended, who lived with M and spent time with F. There had been Schedule 1 proceedings in 2013 which resulted in an order, inter alia, that F settle the sum of £450,000 on trust for T to provide her with a home, the trust to terminate at the later of her reaching 18 or completing her tertiary education, where the mother was to be a joint owner of the property purchased with the trust money. Thereafter however M moved twice with the child. During this process F signed a letter of intent in relation to a new property, expressed to supersede the 2013 order.

In January 2020, M issued a claim in the Chancery division against F and AL, F’s former wife, seeking a declaration that F and AL held a freehold property for her as a life tenant with her daughter the residuary beneficiary. M also sought damages for breach of the ‘letter of intent’ between M and F.

In July 2020, F applied for the claim to be transferred to the family division. Despite M’s objection, the claim was transferred. F made an application to strike out the claim and for summary judgment on a counterclaim for a declaration that the letter of intent be set aside and be of no effect.

Legal principles

CPR 3.4(2) and Practice Direction 3A, the court may strike out a statement of case if it appears to the court:

(a) The statement of case discloses no reasonable grounds for bringing or defending the claim;

(b) The statement of case is an abuse of the court’s process or is otherwise likely to obstruct the just disposal of the proceedings; or

(c) There has been a failure to comply with a rule, practice direction or court order.

CPR 24.3, the court may give summary judgment if:

(a) it considers that the party has no real prospect of succeeding on the claim, defence or issue; and

(b) there is no other compelling reason why the case or issue should be disposed of at trial.

The test for creating legal relations is set out in Edmonds v Lawson [2000] QB 501:

‘Whether the parties intended to enter into legally binding relations is an issue to be determined objectively and not by inquiring into their respective states of mind. The context is all important.’

The test for a declaration, as sought in F’s counterclaim, is set out in Rolls-Royce v Unite the Union [2010] 1 WLR 318:

‘I think that the principles in the cases can be summarised as follows: (1) the power of the court to grant declaratory relief is discretionary. (2) There must, in general, be a real and present dispute between the parties before the court as to the existence or extent of a legal right between them. However, the claimant does not need to have a present cause of action against the defendant. (3) Each party must, in general, be affected by the court's determination of the issues concerning the legal right in question. … (6) However, the court must be satisfied that all sides of the argument will be fully and properly put. It must therefore ensure that all those affected are either before it or will have their arguments put before the court. (7) In all cases, assuming that the other tests are satisfied, the court must ask: is this the most effective way of resolving the issues raised. In answering that question it must consider the other options of resolving this issue.’

The law in relation to opposing applications to strike out is:

(a) on an application to strike out a claim or to order summary judgment in favour of the defendant, the court must assume that the facts relied on in support are true;

(b) there is a high bar for the defendant to surmount on a strike out application;

(c) letters of intent have been found to constitute a binding contract even if there remain terms which are to be agreed at a later date.

Judgment

The court gave considerable weight to the context in which the letter of intent came to be drafted and signed: to ensure F made sufficient financial provision to the child’s needs, care and stability, including a home; and for F, a home close to his to enable him to play a full role in her life. The negotiations in respect of this home took place in the midst of court proceedings regarding the child and the document was signed without independent legal advice or representation.

The letter of intent began with:

‘The contents of this letter are intended to be binding but are without prejudice until implemented …This agreement supersedes the Financial Arrangements Order of DJ Moss dated 23 October 2013 …’

The judge made clear that by law, insofar as it related to financial provision for the child, the letter of intent could not oust the jurisdiction of the court to make orders for financial provision for the child. It is clear the parties agreed provision for the child would be incorporated into a varied court order.

The judge found that the letter of intent did not create a binding and legally enforceable contract between M and F at all, and specifically in relation to M having a personal interest in the property purchased for her and the child. Therefore M’s claim was struck out on the basis it had no real or realistic prospect of succeeding and there was no other compelling reason why the case should be disposed at trial.