A lot of the time, married couples who split up are able to agree between themselves a financial arrangement which keeps both parties supported. In any case it is advisable for agreeing parties to draft a consent order and ask a Judge for approval, so that the agreement is enforceable. However, there may be times where a couple agrees an arrangement, but before it can be put in writing one side decides they no longer agree with the conditions and decides to withdraw. The question is, can the other side say that the agreement is still enforceable in lieu of a sealed Court order? This is where a ‘Xydhias agreement’ comes into play.
Xydhias v Xydhias [1999] 1 FLR 683: The Facts
The parties married in 1977. The wife petitioned for divorce in June 1994 and applied for ancillary relief in 1995. A 3-day final hearing was listed for the 2nd September 1996. In the weeks prior to the final hearing, negotiations between the parties continued and various agreements were made including the payment of a lump sum by instalments with security being given for deferred payments. A consent order was drafted and the wife requested the hearing be reduced to 45 minutes as the only issues left were discrete.
On the first day of the final hearing, the husband informed the Court that he withdrew all agreement and sought for the matter to be fully contested. The wife applied for an interim order and a four-day fixture in November, and for the husband to show cause as to why an order should not be made in the terms of the agreement reached in August. Her view was that, if the Court was satisfied the parties intended to be bound and the essential terms had been agreed, then the contract should be upheld (even where further significant terms were to be determined later). The husband’s view was that the question was to be determined on the application of normal contractual principles – in short, unless all the material terms were agreed or the contract included an agreed mechanism for ascertaining what was not agreed, then there was no contract.
The District Judge held that the parties had wished to be bound by an agreement and that the issues had been narrowed down sufficiently so that the essential building blocks of the agreement were reached. The Husband appealed this. On appeal, it was held that the principles of contract law do not apply to family cases, and the agreement remained enforceable.
What does this mean for my agreement with my ex-spouse?
Before going into the implications of a Xydhias agreement, it is crucially important to note that this is only relevant once matrimonial finance proceedings have been issued.
Simply having an agreement in place between two divorcing parties does not necessarily mean that a Xydhias agreement is in place. For the Court to determine whether a Xydhias agreement exists, they must be satisfied that the parties willingly agreed the terms, and that they understood the consequences that may flow from it. They will also analyse the terms of the agreement with the list set out in s25 Matrimonial Causes Act 1973, which sets out the circumstances that the Court should consider before making an order. These are:
- The income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future, including in the case of earning capacity any increase in that capacity which it would in the opinion of the court be reasonable to expect a party to the marriage to take steps to acquire;
- The financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future;
- The standard of living enjoyed by the family before the breakdown of the marriage;
- The age of each party to the marriage and the duration of the marriage;
- Any physical or mental disability of either of the parties to the marriage;
- The contributions which each of the parties has made or is likely in the foreseeable future to make to the welfare of the family, including any contribution by looking after the home or caring for the family;
- The conduct of each of the parties, if that conduct is such that it would in the opinion of the court be inequitable to disregard it;
- In the case of proceedings for divorce or nullity of marriage, the value to each of the parties to the marriage of any benefit F7… which, by reason of the dissolution or annulment of the marriage, that party will lose the chance of acquiring.
The Court will take a ‘case-by-case’ approach to determining whether a Xydhias agreement exists, looking at the individual circumstances surrounding it. There may be factors which increase or decrease the likelihood of one being found. For example, if the parties have not sought legal advice the Court may be less likely to consider that a Xydhias agreement is in place. On the other hand, and as was the case in Xydhias itself, if the parties have drafted a ‘Heads of Agreement’ setting out everything which is agreed, the Court may be more likely to determine that one is in place.
Lord Thorp highlighted that Courts must be ready to spot the ‘antics’ of a husband or wife who, having seemed to agree matters up until the last minute, suddenly backs out of the agreement. It is clear that, sometimes, a party may agree to something just to back out and prolong the proceedings for their benefit. Xydhias agreements therefore help to protect parties in these instances.
It is recommended that, when parties do come to an agreement about their financial arrangements, they put this in writing and send it to the Court for sealing as soon as possible. However, it is clear that there are protections in place if an order isn’t sought and your spouse suddenly decides to withdraw their agreement.
Members of Becket Chambers can assist with matrimonial finance issues; please contact the Clerks on 01227 786331 or via clerks@becket-chambers.co.uk for further details.
