[2025] EWHC 2436 (Fam)

First, I am going to set out the law which arises from the case of Xydhias and upon which this Court’s jurisdiction today is founded. The case of Xydhias emphasises that this court is not just a rubber-stamp approving the agreement between the parties. This court has to exercise its discretion under section 25 of the Matrimonial Causes Act 1973 ("the 1973 Act"). In approving the parties' agreement and resolving the other issues of today, I have taken into account all of the clauses within that section of the 1973 Act. I have scrutinised the agreement and I am persuaded that the agreement achieves fairness in this case.

The Xydhias jurisprudence exists to deal with where there are either small disputes as to the exact terms of an agreement reached or its implementation (and whether they should be sanctioned by the Court) and also whether an agreement has been reached at all. I mentioned “whether an agreement has been reached at all”, because if it were the case that I find the parties had not reached a level of accord which constitutes a Xydhias agreement but in the process I had seen some without prejudice correspondence, I would not be able to continue with this matter. The matter would have to be sent to another Judge who had not seen that material. Both parties invites me to accept that they have reached a Xydhias level of accord and that the small issues between them should be resolved summarily by me.

The recent judgment of Moor J in Pierburg v Pierburg (No.2) [2022] EWHC 2701 sets out the current orthodoxy surrounding Xydhias. He said at paragraph 43:

This goes back to the original decision of Xydhias and in particular the judgment of Thorpe LJ who held that:

Mr Yates KC suggests that this is a case of the husband seeking to resile from an agreement and to justify his shift by reliance on some point which was open for him to raise within the course of the negotiations.

Before I return to the arguments which have been put before the court, it is helpful to note that the decision of Xydhias must also be considered in the light of the case of Soulsbury v Soulsbury [2007] EWCA Civ 969. In that case, Longmore LJ questioned whether Thorpe LJ was correct in saying that the passing of consideration did not apply in respect of these agreements. The factual matrix of the Soulsbury case was that there had been a consent order. Pursuant to that order, the husband had to pay periodical payments to the wife. They subsequently agreed that if the wife were to waive her entitlement to periodical payments, the husband would leave her a lump sum in his will. Although the husband changed his will in consequence, he subsequently remarried which had the effect of revoking his will. The question then was whether or not the original agreement was of no validity; it being without consideration on a Xydhias interpretation.

The two issues for the Court of Appeal were (a) whether this was a contract that purported to oust the jurisdiction of the court and was therefore invalid and (b) the application of the principles enunciated in Xydhias itself. The first observations of Longmore LJ in that case were compelling. He held at paragraph 49:

This kind of unilateral contract is quite different from an agreement for the compromise of the ancillary relief application to which Thorpe LJ was referring to as being unenforceable in law in Xydhias v Xydhias. In Soulsbury there was already the existing obligation (because of the Court order) whereas in a Xydhias situation the Court is considering the creation of the obligation.

Ward LJ reviewed the authorities and observed at paragraph 40:

The Court of Appeal go on to say that they thought there could be a valid consideration in the Soulsbury case. The conclusion of Ward LJ is found at paragraph 45:

The overall position it seems to me is that as summarised by Thorpe LJ in Haines v Hill [2007] EWCA Civ 1284 at [56]:

This proposition was established by the Court of Appeal in Edgar v Edgar as Ormerod LJ put it at 14, 17 and 25 respectively:

But what of the Soulsbury argument that because there has been in effect mutual unilateral contracts in this case that the agreement is even more binding on the parties? It seems to me that I get some guidance from two more recent cases. The first decision of King J (as she then was) in S v S [2008] EWHC 2038 where she drew together at paragraph 23 a number of propositions including that the existence of a concluded agreement is a matter of great weight. She considered the argument about consideration and how:

That is plainly right and that is going to be my guiding start for this judgment.

The second case is Independent Trustees Services Limited v GP Noble Trustees Limited & Ors [2012] EWCA Civ 195 where Patten LJ observed at paragraph 36:

The position seems to be this: in the lead up to the making of a financial remedy order, the parties are simply seeking to achieve an accord. That accord will not become binding until it has the approval of the Court. The Court will usually make it into an order. The parties’ accord is always going to be imperfect without the Court’s approval. The Court might refuse the bargain and having done so, neither party will have recourse against the other for breach of either of the two alleged unilateral contracts. There would be no contract as a condition precedent in all such negotiations (approval of the Court) would not have been met. Once the order has been made (and is effective – for example a final decree of divorce would be needed) the condition precedent has been met. There is an obligation created by the order of the Court. That usually supersedes any contractual obligation but I can see no good reason as to why after that point the parties are not also contractually bound. Mr Soulsbury was thus able to enter into a contract after the consent order on this basis.

With that considerable body of law behind me, I turn to the facts of this case. It seems to me that Mr Yates KC's argument that all these matters were known to EN at the time of those negotiations is very compelling.

Dealing with the particular matters which he raises, first of all the quantum of the costs which have been incurred on behalf of the wife by her solicitors and her legal team. The costs figures themselves have departed from the original indication which was an estimated budget of £592,468 to a current figure which is approximately £816,000. It may well be that EN sees these costs as exorbitant because he has had the assistance of expert very senior and very proficient counsel in the form of Mr Brazil. Mr Brazil has acted in this case at rates which are only marginally above that which one would expect to see incurred in a pro bono representative. By pro bono of course I mean free. It is very much to Mr Brazil’s credit that he was not prepared to see his lay client go unrepresented and agreed such a modest fee in order that his lay client was not condemned to all the difficulties that a litigant in person especially when confronted by a team of the excellence of Mr Yates KC and Mr Benson.

The total costs which Mr EN has incurred, which include Mr Brazil adopting the role of solicitor as well as advocate, within these proceedings are in the extremely modest sum of £34,200. Previously the husband had retained other legal representatives whose costs were in total approximately £200,000 but appear not to have been for anything like the quantity of work that Mr Brazil has undertaken. EN has been extremely fortunate to find Mr Brazil to act for him and to act for that very modest fee.

The agreement between the parties which is reduced to a heads of agreement is without a figure as to what the Wife’s costs might be. It simply says that the wife's costs are to be paid and they are to be paid from the family fund. I have no real doubt that the figure which is now put forward which has been broken down and explained to me by Mr Yates KC is well within what a reasonable definition of the wife's legal costs could have been expected to be. This is an immensely complicated case and the fees are commensurate with both the difficulties of the case and the sums in issue. Mr Yates KC says, “if it really had been the case that this was going to be so fundamental to the husband, he might have asked before the parties concluded their agreement for a figure or a cap to be inserted”. He could have done this on either the 15 April or 21 April during the negotiations. As it is, the husband's complaint comes in very late in the day albeit he explains this by saying that he has only recently learned that the costs are actually a good deal higher.

As it stands, what the agreement provided in schedule 1 was the debts to be discharged from the sale proceeds including the legal fees owed to Messrs Vardags and whilst other items are challenged, that item was not challenged, although Mr Brazil is right in observe that that liability was not reduced to a number. The figure is to be interpreted on a Xydhias basis of what would have been the reasonable figure to incur and I do hold that it was of the order of the figure which has been sought by Mr Yates KC today.

The secondary matter is in respect of the costs of a lady, Ms C. She has been assisting in the negotiations. She put forward her figures as being needed to be repaid and again the husband did not challenge that she should be paid. Instead what he said was he needed to see her contract. Mr Yates KC tells me there is no difficulty in the contract being produced. At the time of the pre-trial review her costs were £83,000. I am told they are now £120,000. It seems to me, again, reasonable within the scheme of the negotiation, that the figure of the £120,000 is reasonable. When I say that, both in respect of Vardags' costs and also in respect of the person who is assisting in the negotiations, I am not conducting an assessment. The parties rights in respect of any assessment are reserved to them. What I am trying to do is interpret what the parties intended within their agreement and resolve the dispute that they have agreed I should determine. The reasonable sum that was going to be paid by the wife was what the parties agreed. The reasonable sum that can be called upon for the wife to pay is as has been set out and so I do not see that as a good reason for departing from that as part of the parties' Xydhias agreement.

However, the matter does not end there because Mr Brazil has a second string to his proverbial bow. He says, if I am wrong about this about the Xydhias agreement, I would say that the agreement should be varied. He is able to say that by taking advantage of the very little used provisions which are found within the 1973 Act in sections 34 and 35. Wilson LJ (as he then was) famously said in the Court of Appeal in Radmacher v Granatino [2009] EWCA Civ 649 that he had never come across an incidence of these two sections being used at all, such is their rarity. That said, post the Supreme Court's decision in Radmacher v Granatino [2010] UKSC 427, they became more utilised.

Section 34 provides for the validity of maintenance agreements and it provides in terms:

The Xydhias agreement falls within Sections 34 and 35. Section 35 gives me power then to vary such an agreement.

Mr Yates KC says very powerfully on behalf of the wife, that this is a “no evidence application”. He complains that it has been put together very much at the last moment and it might be unfair for the wife for this to be taken into account. I have sympathy for Mr Yates KC's position but by the same token, what Mr Yates KC is really asking for is an opportunity to adduce evidence and to have the matter looked at again. That would involve another hearing. I am in no doubt at all that the last thing that both HA and EN want is another hearing and that I should if I possibly can, anticipate such changes that might result in a variation of this order. I propose to do so. To adopt such a summary approach is fully in accord with the summary Xydhias approach which both parties have embraced.

However, in doing so, I do recognise the very limited time that the wife's legal team have had to formulate their arguments and the fact they have had no time at all to produce evidence. I make it clear that what I am proposing to do. There has been no application for an adjournment to adduce further evidence.

It seems to me that there are two matters which represent the changes of circumstances which are advertised in section 35(2)(a) as being valid bases for there to be a variation in a maintenance agreement. The first is, whether rightly or wrongly, the liability which is going to incurred by those additional items, including the properly incurred legal costs is higher than EN expected it to be. The second much more substantial point is the fear that both parties have that the property is going to sell for a good deal less than they hoped it will sell for when concluding their agreement. When I come to deal with the individual parts of the order, I am going to put in contingent variations which I will explain as I deal with those parts of the order itself.