[2025] EWHC 2436 (Fam)

THE HONOURABLE DEPUTY HIGH COURT JUDGE RICHARD TODD KC: This is a hearing to determine outstanding issues which arise from the parties' ongoing applications for financial remedy.

I am going to direct that this case should be anonymised for the same reasons of commercial sensitivity that I set out in the earlier report of this case, HA v EN [2025] EWHC 48 (Fam). Similarly, because of the background having been fully stated in that earlier report of this case, I do not propose to set out the background at any greater length here.

A final hearing had been listed for this matter to commence on 22 April 2025 with a time estimate of 9 days. The parties required more time in order to continue their negotiations with a view to achieving a compromise. I am pleased to report that with the assistance of expert legal representation on both sides, they have very largely been able to achieve a compromise. As is sometimes the case, there remain various issues between them which are subject to this court's ability to resolve because on 21 April 2025 the parties were agreed that the negotiations had reached the stage of a Xydhias agreement.

A Xydhias agreement is named after the well known case of Xydhias v Xydhias [1999] 2 All ER 386. I will return to a discussion of the law in respect of this later in this judgment.

The court gave considerable time to the parties to enable the negotiations to take place but, as already indicated, those negotiations were successful in agreeing the vast majority of issues.

I have seen a draft consent order which sets out the disagreements and agreements of the parties. This morning I was sent a further note by Mr Brazil on behalf of the husband in which he referred to additional matters being in dispute. They arise from the husband's concern as to the enormity of the liabilities that might fall on him as a consequence of inter alia the size of the legal costs incurred on the wife's behalf.

Continuing with the issues today, they really divide into two parts. There are those which arise from the agreement itself and there are those that arise from the issues that have been raised by Mr Brazil.

I will set out the contested points shortly, but by way of background to the agreement itself, the distribution of the vast majority of the parties' wealth has been resolved by agreement. The wealth itself consists primarily of the family home which I understand is being marketed for £19.95 million. The parties have received an offer of £15 million which they have both agreed to reject. The husband's particular concern is that should they achieve a good deal less than the asking price of £19.95 million, then his share is progressively reduced. It is plain that if the final price was to be as low as near the £15 million mark, then that would result in both parties receiving nothing after the schedule of liabilities, which has been provided by Mr Yates KC on behalf of the wife.

The other main group of assets is the husband's investments of which the vast majority are illiquid. These have been valued by the well-known expert Mr Tom Rodwell and he has valued them at £10.7 million. The wife cannot currently be paid out her capital claims because these assets need to be liquidated.

By way of further background there was a pre-nuptial agreement. It has been the foundation of the parties' discussions. The difficulty being, as was set out in the earlier judgment in this case, that there is simply insufficient assets to meet the Wife’s entitlement under that agreement. However that agreement anticipated that and provided for a “stop-loss” clause. This operated so that if the Husband had insufficient resources then there would be a maximum claim by the Wife. The Wife has accepted that her claims are limited by this. As such this has been reflected in the draft consent order which has been put before me.

Even whenever the illiquid assets are realised, the vast majority of the capital is still going to have to be deployed in meeting the parties' respective needs. This case has moved from being an obvious sharing case on the original assets as alleged by the wife, to much closer to a needs case as now it is.

It is said on behalf of the wife that the husband's needs are less pressing than those of hers because she is the primary carer. I do not accept this. They both have needs and there is no hierarchy between them as to needs; first consideration can still be given to the welfare of any children without prioritising one adult’s needs over the other’s. It may well be that for quantum, that one party's needs is higher than the other's but they are to be treated with equity and equality when they come before this court, when it comes to their question of needs.

I note that there is a dispute between the parties as to the extent to which the husband is seeing the children. He says that is currently restricted because of the inappropriateness of his one-bedroom flat for there to be any staying contact. I need not explore that any further because, as already indicated, it seems to me that there is a high similarity between the parties in respect of their needs and indeed the court order does seem to achieve this.

The settlement is achieved in the first instance, by the setting up a family fund. This deals not just with the longer-term but also the interim expenditure whilst they await liquidity events such as the sale of the matrimonial home and also the realisation of the liquid assets. It is agreed that all of the liquid assets, including the unusually liquid pension that the husband has, his income and the various other assets are to be placed into that family fund.

It is also agreed that one parking space separate from the family home will now be sold, if possible, in order to achieve some more liquidity. Mr Brazil has alerted me to the difficulties with selling that, but it makes no difference to the actual terms which the parties have agreed – it will either sell and the proceeds join the fund or it will not.

The family fund will meet both parties' ongoing expenditure until the later of either the family home being sold or the wife receiving £3.5 million in capital. £3.5 million is the figure which the parties agree she is going to need to rehouse herself and the children. After that is liquidated, which is referred to within the order as the "trigger day," the family fund will be liquidated and the remaining funds are divided equally less certain agreed payments which are not to be taken into account. There is then a rebalancing exercise whereby the party who has spent less is reimbursed by the other. There is a small dispute, which I will resolve, as to when that occurs.

The headlines of the agreement can be summarised as this:

Once the wife has received £3.5 million and the FMH has been sold, the family fund is liquidated, as already indicated, and the funds divided as set out above.

The husband is going to pay the school fees, university fees and related living costs of the children at university. He has also proposed to pay child maintenance of £25,000 per annum per child and then additional costs for the children, including a holiday top up allowance of up to £20,000 per annum per child. (This is one of those items that the husband has said this morning is going to prove to be too oppressive for him in the changed circumstances of either the increased calls on the family fund or alternatively should the property sell for a great deal less.) On the basis of this, it is proposed that the capital claim should be dismissed and there should be a nominal maintenance order until the wife receives £10.5 million; that figure again being retail price indexed linked. There will, in any event, be a full life and death clean break of the husband's claims.

The basis of the order is no order as to costs, save that it is agreed, and this needs to be reflected in the order, that the costs of Harbottle & Lewis are to be subject to a party and own client assessment in order to see whether that figure can be reduced. That is very much at the behest of the husband. The husband quite rightly agrees that he should incur, in the first instance, the costs of obtaining that assessment. If he were to be successful in that assessment, he should be able to recoup those costs ahead of any other division between the parties and recoup those from the reduction that there would be in the costs that would otherwise be payable in respect of Harbottle & Lewis. There is then the conventional “liberty to apply” in the order in terms of implementation and timing.

The two interim charging orders made over the FMH to secure the sums due to the parties are to be made final and I do make that order.