H v W (Xydhias Agreements)

This judgment is given following the hearing on 18 March 2025 of the Respondent wife’s (‘W’) application that that the Applicant husband (‘H’) should show cause as to why a final order in these financial remedy proceedings should not be made to reflect an agreement alleged to have been reached in correspondence.

This is not a case in which there is a dispute as to whether the alleged settlement is fair, within the range of discretionary outcomes available to the court, or that there were vitiating or supervening factors which meant the agreement should not be upheld.

The dispute centres on whether or not the parties had reached a concluded agreement, subject to matters of implementation and the approval of the court.

In the “rider” to Box 3 of Form D11 making this application, W’s solicitors (‘Blanchards’) asserted that the agreement relied upon was reached in correspondence on 16 August 2024.

In his witness statement in response to the application, dated 22 November 2024, H argued that “the application has failed to specify when and how the agreement was actually reached and three different instances has been put forward” (sic).

In oral submissions at the hearing on 18 March 2025, Mr Tait on behalf of W put forward three alternative “moments” at which the court was invited to find the parties had reached agreement:

I invited Mr Macdonald, Counsel for P, to make submissions on whether I should confine W strictly to what was contended for in the application notice, or if I should allow the application notice to be amended to rely upon the three moments in the alternative. Mr Macdonald submitted that W should be confined to the case put forward in the original application and no amendment should be permitted.

I gave an ex-tempore judgment on this issue and determined that I would allow W to amend the application so as to pursue the three moments of agreement in the alternative. I allowed Mr Macdonald time to take further instructions and to formulate any additional submissions he might have.

After the break allowed for this purpose, Mr Macdonald made an application for an adjournment in order that H could submit further witness evidence, and potentially also serve W’s solicitor with a witness summons in order that she could be cross examined. I gave a further ex-tempore judgment on this issue and dismissed the application for an adjournment on the basis that:

The parties agree that, whether or not they conclusively agreed terms of settlement in financial remedy proceedings, they are not contractually binding and the court retains a fundamental role in determining whether it is fair for the parties to be held to that agreement.

The principles to be applied where there is a dispute in respect of agreements to compromise financial remedy proceedings are set out by Thorpe LJ in Xydhias v Xydhias [1999] 1 FLR 683. They are helpfully summarised in Jackson’s Matrimonial Finance (10^th Edition) at 12.66:

Whilst Ward LJ in the case of Soulsbury v Soulsbury  [2007] EWCA Civ 969 expressed that he held some doubts as to the correctness that “Xydhias has now given the Family Division a different and unique test for establishing the very formation of the underlying agreement itself”, this remains the law as it stands and it is binding upon this court.

With that in mind, the court retains a discretion when determining whether or not the parties had reached an agreement subject to court approval, and whether they should be held to that agreement.

That discretion is of particular importance in the present case. Were strict contractual principles to apply, the court’s only task would be to determine whether, objectively assessed, the correspondence relied upon established:

In the context of an alleged agreement to compromise financial remedy proceedings to which the principles in Xydhias apply, the court must “regard not only the offers and counter-offers in their terminology but also the communications with the court and the understanding of those involved” (Xydhias at 694).

The rationale for the discretion afforded to the court when deciding whether an agreement has been reached by parties to financial remedy proceedings was addressed by Moor J in Pierburg v Pierburg [2022] EWHC 2701 (Fam):

“Xydhias is authority for the proposition that, in relation to agreements reached in the family law context, ordinary contractual principles do not apply. As the final award was always fixed by the court, the purpose of negotiations was to reduce the length and expense of the legal process. The court has a discretion in determining whether an accord has been reached. Moreover, even where an overall settlement had been agreed, there might well be issues remaining, for example as to the drafting or exact terms of the order, that the court would be able to determine without undermining the overall agreement.”

Applying the principles established in Xydhias, in order to determine whether the parties have reached an agreement from which they should not be allowed to resile, I will approach each of the “moments of agreement” contended for by W as follows:

The background to this application is summarised helpfully in the written judgment of DDJ Hodson dated 8 November 2024 giving case management directions. I reproduce that summary here:

“The short introduction is that this was a long relationship. Perhaps from 1991. Marriage 2003. Separation 2023. Both in late 50s. No dependent children. Although he is acting in person now, the husband appears to be a solicitor admitted in 1994 with civil litigation experience. Form A was 12 January 2024. The first appointment seems to have been adjourned at least once by agreement. I presume disclosure was mutually obtained because on 30 July 2024 there was a private FDR by Dominic Brazil, a very experienced financial remedies barrister with the husband represented by Peter Newman and the wife represented by Philip Tait, equally highly experienced financial remedy barristers. The wife is represented by a highly regarded financial remedy family law firm. It didn’t settle.”

So far as is relevant to this application, the main assets and liabilities which were the subject of negotiation were:

On 9 August, the case was listed for an attended 1 hour directions appointment on 19 August 2024. The correspondence which is the subject matter of this application was exchanged between 13 August 2024 and 16 August 2024 and resulted in the directions appointment being vacated by agreement.

Regrettably, I consider it is necessary to quote much of that correspondence in full, in order to properly address the extent to which particular matters were agreed and, where there is a lack of agreement or ambiguity, to consider whether the nature of those matters was that of substance or, that of detail, implementation or drafting.

So far as is material, the correspondence began with an open letter from H dated 13 August 2024 in which he set out his proposal for settlement in 11, short, numbered paragraphs as follows:

In relation to Law Firm Loan, H explained “Both the Law Firm Loan and the [other] investments are matrimonial in nature and should be shared equally between us. But given they are both illiquid and the ultimate value is highly uncertain, they should be shared equally on a ‘Wells v Wells’ basis. This way, the risk of the payments being non-existent, lower than expected or later than expected will also be shared equally between us, rather than borne by just one of us – which would be unfair.”

H sent a further a letter, marked “Without Prejudice”, on 14 August 2024 (‘the WP Offer’). The terms of that offer were more favourable to W and were again numbered 1 to 11, although the numbering did not directly correspond with the numbering used in the open letter:

Prior to obtaining instructions, W’s solicitor responded on 14 August 2024 at 16.06 to request clarification in respect of that offer including:

The following day, without H having responded to the request for clarification, W’s solicitors responded to the WP Offer, apparently on an open basis (‘the Acceptance Letter’). This is the first of the three moments at which W contends that the parties had reached agreement on the fundamental disputes, but perhaps not all issues of detail, implementation, security and/or drafting. That letter stated:

“I have now obtained my client’s instructions upon your proposals received yesterday which I am pleased to say are acceptable on the basis, as raised yesterday, that there are appropriate provisions in place in relation to the [the Law Firm] monies and payment of the mortgage and loan repayments and I am, of course, still waiting to hear from you about the matters of clarification raised in my e-mail sent at 16:06 yesterday. [S] does not have the resources to pay the mortgage and basement loan repayments pending the sale of [the FMH] as an agreement has been reached you are asked to resume payment of £1,350.00 into the joint account ending *094 pending the sale of [the FMH].”

The letter went on to set out terms using numbered paragraphs 1 to 13. The letter explained that those paragraphs were to “clarify the agreement”. The numbered paragraphs read as follows:

“1.

i)

[the Cornwall Property]is to remain on the market for sale with Stacey Mann Estate Agents to be sold as soon as a mutually acceptable offer is received.

Both you and [S] have joint conduct of the sale of the property and you will both accept the advice of the selling agents about the marketing price and offers received; the agents to keep both you and [S] simultaneously informed of all viewings, offers received, and you will jointly decide whether to proceed, or not, with offers made, it being acknowledged that neither of you will refuse any sensible offers made.

ii)

The net proceeds of sale to be divided equally between you and [S]

2.

[The FMH] to be placed on the market for sale as soon as it is prepared for sale – it being acknowledged that all steps will be taken forthwith to achieve this. Once again you and [S] will have joint conduct of the sale, it being agreed that the sale of [the FMH] will take place after the sale of New Street and that the sale be co-ordinated with [S]’s related purchase.

The proceeds of sale of this property will be used to pay the solicitors costs, Estate Agents fees, redemption of the mortgage and basement loan and the balance will be divided as to 60% to [S] and 40% to you.

3.

The [the Law Firm] monies are to be shared equally with [S] and this is whether the monies are received as a single lump sum, lump sums or monthly instalments. The minutes of order to provide for the payment of a lump sum or series of lump sums amounting to 50% of each payment received/due to you.

The Order to contain what I will refer to as safeguarding provisions in relation to these payments to include that:-

a)

you will authorise the Managing Partner of [the Law Firm] and/or Financial Director to pay 50% of each sum due directly to [S];

b)

that you will send copies of all correspondence sent by you or received by you from [the Law Firm] to my client;

c)

that you authorise the Managing Partner and/or Financial Director to send copies of all communications from [the Law Firm] directly to my client and to respond to queries raised by her of them seeking regular updates about the payment of these monies;

d)

that any offers of settlement will be a matter of agreement between you; that neither of you will refuse any reasonable offer and that in particular neither of you will refuse any offer of 70% or more of the total amount, inclusive of interest due.

Please let me know if you have any additional suggestions in relation to this. It occurs to me that if [the Law Firm] know that there is a third party with an entitlement to those funds they may be more responsive to questions raised/payment of those monies, which is a benefit to you both.

4.

i)

That you and [S] retain the assets and be responsible for the liabilities in your individual name to include you retaining the [other]investments and the 15% interest in your sister’s property…

ii)

You will each retain your own cars, with you being responsible for the loan associated with your car. The Nissan vehicle … to be transferred by you into [W]’s name.

5.

i)

Upon either completion of the sale of 18 [the FMH] and so redemption of the mortgage secured over 18 [the FMH], the joint account ending *094 will be closed and the balance whether debit or credit to be divided equally between you and [S]. This account needs to remain open until then to facilitate payment of the mortgage, basement loan and other payments associated with the family home.

ii)

You will however transfer all standing orders/direct debits in relation to your personal expenses such as BT broadband, Tesla insurance, O2 and Spotify subscription which were being paid through the joint account are permanently removed from that account. If the O2 payment includes [a third party]’s mobile contract then my client is willing to pay that element if you wish until such time as a new contract can be arranged for [a third party].

iii)

Each of you and [S] to undertake not to make any withdrawals or cause any withdrawals to be made from this account other than standing orders and direct debits currently paid through that account in respect of [the FMH]. An exception to this is that both [the children] should be entitled to receive the monies credited to the joint account from their Aegon policies. This will stop once those policies are transferred to the boys.

6.

The two other joint accounts with First Direct being account numbers ending 471 and 188 to be closed forthwith. It is understood that both accounts have a nil balance.

7.

i)

The contents of [the Cornwall Property] to remain with you

ii)

The contents of [the FMH] to be divided between you such division to have regard to the needs of the children who continue to have a home with [S]. In other words the furniture used by them to remain with them. [S] will provide within 14 days an inventory of the household contents and will indicate on that the items she wishes to retain and the division will need to have regard to the fact that you have purchased new items for [the Cornwall Property] since separation. The Order should include the usual provision for matters to be referred back to Court in the event that agreement is not reached.

8.

Pending redemption of the mortgage secured over [the FMH] both you and [S] are to undertake not to make or to cause to be made any further withdrawals against the mortgage facility.

9.

The relevant Aegon policies for the provision of [the children’s] education to be transferred to them forthwith.

10.

There to be no pension sharing order.

11.

The above to be in full and final settlement of your claims against [S] for periodical payments, secured periodical payments, property adjustment and transfer orders, lump sum and pension orders. It will also be in full and final settlement of [S]’s claims for periodical payments, secured periodical payments, property adjustment and pension orders however her lump sum claims will not be dismissed until she has received the lump sum/lump sums re the [the Law Firm] monies. The Order will include the usual recitals and operative provision for the dismissal of claims.

12.

On the basis of the above each of you and [S] to be responsible for your own legal costs.

13.

i)

As mentioned above [S] does not have the income or resources to discharge the mortgage (which was only taken following the purchase of New Street) and basement loan payments and so you are asked to resume payment into the joint account in the sum of £1,350.00 until completion of the sale of [the FMH]/redemption of the mortgage. A suggestion to reduce the duration of such payments is that the mortgage and basement loan are discharged from the net proceeds of New Street. Please let me have your thoughts about this.

ii)

I understand that you are paying the premiums for the house and contents insurance for [the FMH] and for the avoidance of doubt please confirm that you are still paying this and will continue to do so until completion of the sale of [the FMH].”

Objectively construed, paragraphs 1-10 (excluding 3(c) and (d)) and 12 of the Acceptance Letter reflect the terms proposed in the WP Offer.

The differences between the wording of the WP Offer and the Acceptance Letter in respect of paragraph 1-10 (excluding 3(c) and (d)) and 12 are matters of detail and implementation. So far as this finding requires further explanation beyond a simple reading of the text:

The differences between the two letters which require further consideration are:

I consider that the terms sought at paragraphs 3(c) and 3(d) of the Acceptance Letter are matters of detail and implementation which do not undermine the basis upon which H had been prepared to settle. In particular, as H had observed in his open letter of 13 August 2024, the Law Firm Loan was “matrimonial in nature”. He considered that the risks associate with that loan should be “shared equally” so as to avoid unfairness. Were one of the parties to have greater access to information, or no say in whether particular offers were accepted, that would not be an equal sharing of risk and would be unfair.

The setting of a threshold over which offers must be accepted is a matter of detail and implementation which the court regularly determines in the context of orders for the sale of property, where the parties have otherwise reached a settlement but cannot agree on the threshold above which offers should be accepted. It might be that when invited to determine this matter of detail and implementation that the court would arrive at a different threshold or would decline to impose any threshold at all. However, that this remained in issue does not detract from the fact that, objectively construed, the parties had reached agreement on matters of substance.

I must turn then, to the deferment of the dismissal of the lump sum claims sought by paragraph 11 of the Acceptance Letter. It is said on behalf of H that this provision is at odds with paragraph 9 of the WP Offer which stated “All maintenance claims dismissed/clean break”.

H contends that the deferment of the dismissal of W’s lump sum claims is counter to his provision that there be a clean break. ‘Clean break’ is not a term which appears within any relevant legislation but it is used commonly in financial remedy proceedings as shorthand for the principle that the parties’ rights and claims against each other and their estates should terminate upon the making of the order. The Standard Form Orders for use in financial remedy proceedings use the following wording under the heading “Clean Break: Capital and Income – Applicant” provides

“Except as provided for in this order, the applicant’s claims for secured periodical payments orders, periodical payments orders, lump sum orders, property adjustment orders, pension sharing orders and pension attachment orders shall be dismissed and he shall not be entitled to make any further application in relation to the marriage for an order under the Matrimonial Causes Act 1973 section 23(1)(a) or (b) and shall not be entitled on the respondent’s death to apply for an order under the Inheritance (Provision for Family and Dependants) Act 1975, section 2”.

Counsel for W contends that the deferment of the dismissal still achieves a clean break, but simply postpones that clean break. Where the dismissal of lump sum claims will terminate upon the happening of an event which will definitely happen at a time in the future which is either reasonably certain or within the control of the parties, then I can see the force in that submission.

However, as is evident from H’s letter of 13 August 2024, he considered that there was significant uncertainty as to:

As a consequence, paragraph 11 of the Acceptance Letter would have the effect of postponing the dismissal of the lump sum claims to an uncertain date in the future which might not crystalise. In the meantime, W would be entitled to bring further lump sum claims.

In my view therefore, paragraph 11 of the Acceptance Letter was at odds with paragraph 9 of the WP Offer and, objectively assessed, there was no meeting of the parties’ minds on this issue at this point in time.

I will consider separately later in this judgment, whether this difference was a matter of substance or something which was a matter of detail, implementation or security which could be determined by the court, without undermining the basis of the agreement.

I turn then to paragraph 13 of the Acceptance Letter. which contained a “request” that H resume paying £1,350 per month into the joint account to fund the mortgage and the basement loan. H’s letter was silent on how mortgage and Basement Loan would be paid pending the sale of the FMH, whereupon they would be repaid in full pursuant to his paragraph 3.

Paragraph 7 of the WP Offer provided for “all other…debts stay where they are.” The Basement Loan was held in H’s sole name, but as I have noted the parties had proceeded on the basis that it was to be treated as a joint liability. The mortgage was held in joint names.

The effect of paragraph 7 of the WP Offer, objectively construed, would be that, pending sale of the FMH , the parties’ responsibilities in respect of the basement loan and mortgage would remain unchanged. In particular, the mortgage would be a joint liability, H would be liable to First Direct for the Basement Loan, but W would liable to indemnify him in respect 50% of those instalments, since the loan was taken out by joint agreement to fund repairs to the family home.

There was therefore a discrepancy between what H proposed at paragraph 7 of the WP Offer and what was written in paragraph 13 of the Acceptance Letter. However, it is notable that twice in the Acceptance Letter, W’s proposals in respect of the payment of the mortgage and the basement loan pending sale of the FMH was described as a “request”. In this sense, I do not consider that paragraph 13 of the Acceptance Letter is to be construed so as to contain a rejection of or even a counter-offer to paragraph 7 of the WP Offer. Rather it was, as it stated on its face, a request that H consider making those payments until the sale of the FMH for the reasons given.

Accordingly, there was an objective consensus as to liability for the loans, but no agreement as to how they would be serviced pending the sale of the FMH.

I note also that the first paragraph of the Acceptance Letter states that H’s offer was “acceptable on the basis”, that there were “appropriate provisions in place in relation to the [the Law Firm] monies and payment of the mortgage and loan repayments”. However, it did not say that the WP Offer was accepted on the basis that there were specific provisions in relation to those matters.

The objective effect of the Acceptance Letter was therefore to accept the terms contained within H’s WP Offer and signpost those further matters which they considered still required agreement or determination by the court. The numbered paragraphs later in the letter are described as being a “clarification” of the agreement reached which I consider to have been the first stage in attempting to transcribe the heads of terms in the WP Offer, into a draft order.

There were therefore two identified matters outstanding beyond the objective consensus reached through the Acceptance Letter:

It follows that I must consider whether these were matters of substance or detail, security or implementation which the court could determine without undermining the overall agreement reached.

It is apparent, when read in the context of the opening paragraph of the Acceptance Letter and Blanchards’ email the previous afternoon, that the purpose of paragraph 11 of the Acceptance Letter was to set out what Blanchards considered to be “appropriate” “safeguards” in relation to the Law Firm Loan. I read the term “safeguards” to mean terms which ensure that the purpose and intention of the agreement reached in respect of the Law Firm Loan (namely that all such payments received would be shared equally) could not be undermined, circumvented or avoided. In this sense, the purpose of the term is akin to a security. It is a term intended to ensure that the substance of agreement reached can be enforced.

It is my finding therefore, that the question of the incorporation of terms to “safeguard” those payments were terms of implementation which the court could determine without undermining the overall agreement reached between the parties.

As to the incorporation of “appropriate provisions” in relation to “payment of the mortgage and loan repayments” pending the sale of the FMH, I find that these are also matters of detail and implementation which do not undermine the overall agreement reached.

As I have already referred to, it was agreed that liability for the basement loan and the mortgage would remain unchanged. It was a matter of detail or implementation to determine how those debts should be serviced pending the sale. There are a number of ways the court could resolve that issue without undermining the overall agreement, including making no order on this issue, leaving the parties to ensure that the debts were serviced in accordance with their existing liabilities, or making an order that one party service those debts on the basis that they will be reimbursed upon sale of one of the properties.

Having found that there was an objective consensus as to the terms set out in the WP Offer and that those further matters raised in the Acceptance Letter were matters of detail, implementation or security, I turn now to the exercise of the court’s discretion as to whether or not the parties should be held to that bargain.

There are a number of competing factors which must be weighed in the exercise of that discretion.

Firstly, it cannot be ignored that, in the days immediately following the exchange of correspondence referred to above, H wrote to Blanchards on a number of occasions in strident terms to say that he considered a binding agreement had been reached:

It is apparent from the correspondence extracted above that, on 16 August 2024, H considered he and W were bound to the terms set out in his without prejudice letter of 14 August 2024. Indeed, he envisaged that he might need to issue an application to hold W to that agreement.

Mr Macdonald submits that when considering H’s subjective understanding of whether an agreement had been reached, the court should be mindful that although H is a solicitor, he is not a family practitioner and that he lacked an accurate understanding of the circumstances in which parties will be held to settlement agreements in family proceedings, or the importance of certain matters of detail and implementation, such as the timing of the dismissal of the W’s lump sum claims.

I accept that H’s subjective understanding should not be treated as that of an experienced or sophisticated family practitioner, however it is apparent from the correspondence that H appreciated the distinction between matters of substance and matters of implementation and that he was of the view that the matters of substance within his letter of 14 August 2024 had been agreed. That understanding accords with my own findings above.

There is another matter relating to H’s subjective understanding which requires consideration. Notwithstanding that I have found the objective meaning of paragraph 7 of his offer dated 14 August 2024 was that neither he nor W would be entitled to draw on the offset mortgage facility, it is apparent from H’s subsequent correspondence and his witness statement submitted in response to this application, that he either did not appreciate this fact or that he regretted not having included provision within his offer to do so. In particular by 19 August 2024 he wrote to Blanchards “It’s all agreed except I do need the [the mortgage] facility to be able to avoid bankruptcy for my tax bill as it has gone on legal costs and maintaining [S]”.

Whether it was a misunderstanding on H’s part or an attempt to renegotiate this point, in deciding whether it would be fair to hold H to the objective meaning of his earlier offer I take account of the fact that H is an experienced civil litigator who would or should have appreciated the meaning of paragraph 7 of his offer. I also take account of the fact that the point is now moot since, on 27 September 2024, H in fact drew down £20,000.00 from the mortgage facility and then on 30 September 2024, W drew down £24,850.74. As a consequence the mortgage facility was exhausted.

It is also necessary to consider the understanding of W and her solicitors at that time. Just as there is some considerable irony that H wrote in such strong terms that an agreement had been reached and he now denies this to be the case, it is notable that S, who now seeks to hold H to that agreement, previously suggested that her acceptance of H’s proposal was conditional and not binding. In particular her solicitors wrote as follows:

I have already found that upon the sending of Blanchards’ Acceptance Letter, there was objective consensus as to the matters of substance contained within H’s WP Offer and that all that remained outstanding were matters of detail and implementation. It follows that Blanchards’ position that the acceptance of those terms was conditional upon the incorporation of specific terms for implementation was wrong. It could either be that Blanchards’ genuinely believed that their letter would be construed as a counter offer rather than an acceptance, or, as I think is more likely, they were seeking to manoeuvre and place pressure upon H to secure the terms of implementation which they preferred and which were most favourable for their client.

I am mindful that Blanchards chose to respond to H’s WP Offer on an open basis. As a firm of solicitors, it is to be assumed that their correspondence would be appropriately and intentionally labelled. The decision not to mark their letter of 15 August 2024 as being “without prejudice” indicates that they did indeed consider that a concluded agreement had been reached, this being one of the exceptions to the without prejudice privilege that would otherwise have attached to that letter.

In any event, when exercising my discretion I should consider whether it is fair to allow W to enforce an agreement against H which her solicitors had previously disclaimed on her behalf.

Finally I need to have regard to what I consider to be a tension between:

On the one hand it is not in accordance with the overriding objective, or in the interests of the parties, to incur the substantial costs associated with litigating the financial remedy proceedings to a final hearing when the matters of substance have been agreed by the parties and all that remains is the determination of matters of implementation. On the other hand, parties should be free to negotiate, particularly on a without prejudice basis, without fear that the court will cherry pick from their offers, those matters which it considers to be of substance and which are agreed. In some cases, perhaps many, parties may only make concessions on matters of substance in return for agreement on matters which, whilst being of implementation in nature, are nonetheless important to that party.

Taking all of these factors into account, I am satisfied that it is fair for the parties to be held to the agreement reached by W’s acceptance of H’s WP Offer, subject to the matters of implementation I have referred to. My reasoning can be summarised as follows:

Having concluded that the court should exercise its discretion to hold the parties to the terms set out in H’s offer of 14 August 2024, it is still necessary to consider the Second and Third Moments of agreement that were contended for by Mr Tait on W’s behalf, in order to ascertain whether either of them superseded or varied the First Moment. However, they can be dealt with relatively briefly for the reasons set out below.

The correspondence so far as is relevant to the Second Moment can be summarised as follows:

Given my findings as the objective effect of the Acceptance Letter, and the parties’ subjective belief as whether an agreement had been reached, it follows that the effect of the correspondence summarised above was simply to record that this agreement had been reached and that the parties’ agreed no directions hearing was required.

Objectively construed, H’s email timed at 16.54 did not operate so as an acceptance of the detailed terms for implementation set out in Blanchards’ acceptance letter. The “draft” being referred to in H’s email was the draft letter to court. The “agreement” referred to in the draft letter to court was Blanchards’ acceptance of H’s WP Offer.

As a consequence, there was on objective consensus as to the more detailed terms for implementation contained within Blanchards’ acceptance letter. The court should not exercise any discretion it might have to hold H to those terms in these circumstances.

As I have already referred to in this judgment, the Acceptance Letter contained the first attempt to transcribe the heads of terms in WP Offer, into a draft order. That process continued in the days which followed.

On 16 August 2024 at 13.46, Blanchards sent an email to H containing draft heads of agreement within the body of that email (‘the First Draft’). It asked H to confirm “which paragraphs are agreed , which are not and in respect of those which are not what are your proposal in respect of those matters”.

At 14.57 on the same day, H replied to Blanchards attaching a copy of the heads of terms in a word document, with his amendments shown in tracked changes, together with comments in the margin (‘the Second Draft’).

At 15.39, Blanchards replied in an email marked “Revised Heads of Agreement subject to [W’s] instructions”. It attached a further amended copy of the heads of agreement (‘the Third Draft’). The Third Draft does not appear to have been prepared using Microsoft’s tracked changes feature, but does highlight the differences between the two drafts using different text colours and the striking through of some text.

H replied at 18.42:

“It’s all agreed except I do need the facility to be able to avoid bankruptcy for my tax bill as it has gone on legal costs and maintaining [S]. I hope the extent of this can be minimised and I will reimburse her for the money and interest but I can’t agree otherwise”

It is this email that W contends for as the Third Moment of agreement. W says that, by this email, H bound himself to the terms set out in the last draft heads of agreement

Save for one point concerning clean break and the deferred dismissal of lump sum claims as I address below, those heads of agreement reflected the matters of substance which had been agreed from H’s WP Offer and dealt with various matters of implementation which are not contentious between the parties, such as choice of estate agents. They also addressed the disputed matters of implementation:

In particular they set out at clause 3 of the Third Draft:

Further, at clause 8 of the Third Draft, it was recorded that until sale of the FMH , the Mortgage and the Basement Loan would be paid from the mortgage facility. Save for that purpose, neither party was to make further withdrawals against the mortgage.

Where the Third Draft does differ from the substance of H’s WP Offer is at clause 11. The text of clause 11 had remained unchanged between all three drafts of the heads of terms. It provided, inter alia, that W’s “lump sum claims will not be dismissed until she has received the lump sum/lump sums re the [the Law Firm] monies.”

As I have already determined, that provision is at odds with H’s proposal for a clean break as set out in paragraph 9 of the WP Offer.

I cannot find, on an objective assessment, that there was an agreement on these terms between the parties. The reason being that:

Neither do I consider it would be appropriate for the court to exercise any discretion to hold the parties to those terms nonetheless (beyond those which I have already found to be binding upon the parties).

Accordingly, the terms to which the parties are bound, subject to points of implementation, detail and security, are those set out in H’s WP Offer.

The outstanding points of implementation requiring the court’s determination are:

In doing so, the objective of the court is to achieve an outcome which ought to be "as fair as possible in all the circumstances" (Lord Nicholls at 983H in White v White [2000] 2 FLR 981) having regard to the factors set out in section 25 of the Matrimonial Causes Act 1973.

With that in mind, I would resolve those points of implementation as follows:

My reasons for determining these points in this way are:

Having determined those points of implementation, Counsel is invited to agree a form of Final Order to give effect to the findings within this Judgment and, if possible, the issue of costs.

In the event that the form of Final Order and/or costs cannot be agreed, the parties are asked to confirm to the court whether the 2 hour time estimate for the costs and consequentials hearing remains suitable.