X v F [2025] EWFC 538 (B)

Judgment date: 7 March 2025

https://caselaw.nationalarchives.gov.uk/ewfc/b/2025/538

Summary

HHJ Hess considers requirements of Xydhias agreements and holds there was no such agreement in this case. Certified as citable.

Background

X and F began cohabiting in 2005 and entered a civil partnership on 22 February 2012. S, a wealthy lady, wished to leave F a substantial sum of money upon her death. To avoid Inheritance Tax, she suggested that she and F get married.

F discussed this with X, and they agreed that it would be financially advantageous (the extent to which the sum of money was promised to be shared was disputed). F and X dissolved their civil partnership on 2 September 2014. The parties continued their cohabiting relationship, however, until March 2018.

F and S never got married. Yet, upon her death in 2018, she left a large sum of money to F. X pursued a financial remedy claim against F which came to a head in 2023. In early 2023, F gave X circa £450,000 to buy property in Country A (‘Property X’); this was intended to be part of the financial settlement.

Between August 2023 and April 2024 the parties discussed the financial settlement. F later applied for X to show cause why an agreement purported to be reached between them should not be made into an order of the court.

Issue

Were communications between F and X evidence of a Xydhias agreement which should be reflected in an order, and from which F should not be allowed to resile? Or were they without prejudice offers which should not be seen as giving rise to a Xydhias agreement?

The law

HHJ Hess noted the absence of guidance from reported authorities which addresses the questions of: (1) the extent to which Xydhias extends beyond the scenario of two lawyers’ negotiations, to include negotiations between litigants in person [10(iv)], and (2) the issues which, despite remaining outstanding, do not prevent the conclusion that an accord has been reached between the parties [10(v)].

HHJ Hess, with reference to question (1), surmised that there is no reason to find that the Xydhias principles do not apply in all situations [10(iv)]. In addressing question 2, HHJ Hess made reference to the decision of Moor J in Piersburg v Piersburg [2022] EWHC 2701 which sets out that:

‘even where an overall settlement has been agreed, there might well be issues remaining. For example, as to the drafting of exact terms of the order, that the court would be able to determine without undermining the overall agreement.’

With reference to the judgment of Thorpe J in Xydhias v Xydhias [1999] 2 All ER 386, and Piersburg, HHJ Hess summarised the legal questions that the court should ask itself when considering an application for ‘Notice to show cause’; [10]:

(a) ‘Has it been established what the payee is to receive?

(b) Have the terms of the agreement been sufficiently clarified so that all that it is left to decide falls into the category of 'drafting, detail or implementation’?

(c) Have the terms of the agreement been sufficiently clarified so that the court can determine the remaining issues without undermining the overall agreement?’

HHJ Hess noted the obiter doubts of Ward LJ in Soulsbury v Soulsbury [2007] EWCA Civ 969 that the ordinary contractual principles do not apply in the Family Division when determining whether the parties have reached a concluded agreement, and as such, the Family Division has a unique test for establishing the formation of the underlying agreement. However, in the absence of later decisions challenging the principle, Xydhias remains the leading authority on the matter.

Decision

HHJ Hess dismissed the notice to show cause, finding that there was no Xydhias agreement. He addressed each of the three questions at [10] in turn.

1. It cannot be said that it had been established what the payee was to receive. At no stage could an objective observer determine with certainty that F would pay X an identifiable sum. While £2.5m as a headline figure was agreed, deductions were never agreed; [24(i)].
2. It cannot be said that the terms of the agreement have been sufficiently clarified so that all that is left to decide falls into the category of drafting, detail or implementation. F and X were apart on numerous issues including, but not limited to, the timing of instalments, the rate of interest, and when payment of interest was due to commence; [24(ii)].
3. It cannot be said that the terms of the agreement are sufficiently clarified so that the court can determine the remaining issues without undermining the overall agreement. F could reasonably say that if the disputed issues were resolved in X’s favour, the attractiveness of the overall agreement would be undermined; [24(iii)].

Next steps

HHJ Hess held that the appropriate next step was an FDR. For any necessary subsequent hearings, including a post pFDR directions hearing, all the negotiation correspondence between X and F (save where it is expressly marked as being open) should be regarded as being without prejudice.

This judgment has been certified as citable pursuant to the Practice Note (Citation of Cases: Restrictions and Rules) [2001] 1 WLR 1001.