Xydhias Agreement

Resolving financial settlements following a divorce can be tiring and complex. Quite often cases end up going to court where the separated partners are unable to reach an amicable solution. When an application, by one party, is made to the family court this will usually result in numerous hearings before a final hearing is listed to conclude the finances. But what happens if an agreement is made during the court process but prior to a final order being made at a final hearing? What happens in the case of a concluded agreement family law? This is where a Xydhias agreement may come into place.

Article Contents

What is a Xydhias agreement?

A Xydhias agreement is when a separating or separated partner have come to a concluded agreement  about resolving their finances following separation during negotiations, but the agreement has not been formalised by the court into an order. Despite the agreement not being endorsed in a court order you may still be bound by the agreement. A concluded agreement family law becomes binding if both parties appreciate the results and consequences of the agreement and despite this have willingly entered into this agreement. The principles of the Xydhias agreement were laid down in case law.

Xydhias v Xydhias

The case of Xydhias v Xydhias is where the principle of a Xydhias agreement commenced from. The case involved Mr & Mrs Xydhias in which the wife petitioned for a divorce in June 1994 and filed an application for financial settlement in April 1995. Following directions and hearings a three day final hearing was listed for 2nd September 1996. Mr. Xydhias had offered his wife the former matrimonial home plus a £100,000.00 in lump sum. Mrs. Xydhias rejected the offer and sought an additional £150,000 taking the lump sum payment to £250,000.00 plus an order for costs.

In August 1996 communications between both parties legal representatives continued. Following exchanges of draft agreements Mrs. Xydhias Mrs. Xydhias’ representatives wrote to the court stating “heads of terms have been agreed between the parties and subject to the agreement as to the terms of the proposed consent order and the giving of security by Mr. Xydhias to underpin his proposals, matters are agreed. Mrs. Xydhias requested a short appointment ideally for 45 minutes given the matter was complex. The following day both parties representatives had a discussion over the phone and identified the two remaining issues as:

  • Whether or not the respondent would be willing to include additional properties to the schedule of securities, and if so which, and
  • The duration of the respondent’s continuing obligations.

On the 29th August Mrs. Xydhias’ representatives wrote to court confirming the heads of ters settlement have been agreed following negotiations between counsel, the settlement involves a lump sum payment by instalments as well as other key points. The letter also requested for the case to be removed from the listing save for a 45 minute appointment. The very same day Mr. Xydhias’ representative provided a fourth version of the consent order which Mrs. Xydhias’ representative agreed over the phone.

However, on the same day Mr. Xydhias’ representatives attempted to vary the timetable for paying the lump sum. On the short hearing listed on 2nd September Mr. Xydhias’ representatives stated all offers were withdrawn and will be fully fought. Following this the wife filed an application for Mr. Xydhias to show cause why an order should not be made in the terms of an agreement reached. This application was listed to be heard on the 19th November.

In this hearing Mrs. Xydhias’ representatives relied on two principles which are: 

  1. If the court is satisfied that parties agreed to be bound by the essential terms agreed this should be upheld.
  2. It was wholly consistent with the practice and policy of the family court in upholding bargains properly made

The representative for Mr. Xydhias stated that the question to be considered that if there is no concluded agreement the application must be decided without reference to the previous negotiations. The judge considering this matter ruled that it was clear the parties wanted to conclude the agreement before the hearing listed on the 2nd September and the detailed negotiations meant that essential elements of an agreement were in place. The only two issues not agreed were the inclusion within the schedule of properties to be charged to secure the payment of the lump sum and the wife’s proposal to save taxation.  

Mr. Xydhias launched an appeal on 19th December. In deciding the appeal, it was concluded that both counsels understood they had settled the case, the solicitors understood there was no need for advocated and the court was informed the case had settled. Despite Mr. Xydhias’ representatives trying to argue the negotiations were without prejudice the court of appeal ruled that the letters from the 28th August dropped the ‘without prejudice label’ therefore the judge was satisfied that an agreement was concluded and dismissed Mr. Xydhias’ appeal.

What proposals derived from the case of Xydhias in relation to a concluded agreement family law?

The judge referred to proposals for new procedures and expressed the hope that such litigation would not repeat itself. There were 2 lessons to be learned:

  1. To differentiate the stages of negation which are: To expressly state in a head of agreement what the applicant is to received. This should be signed by the counsel and the clients or, Reduce the heads of agreement to a court order
  2. The counsel involved should agree upon whether the negotiations are without prejudice or open. If the negotiations do not achieve a concluded agreement family law, then they are likely to be considered as open correspondence and or as Calder bank.

What was the outcome of the Xydhias case?

The case of Xydhias v Xydhias made it clear that this is a good starting point to consider if there was a concluded agreement family law. When the court is considering this point, they have the power to take into account negotiations and offers including those which are without prejudice. As well as considering the Section 25 criteria.  

What is a notice to show cause?

When considering a concluded agreement family law, one party may attempt to renege from the agreement to try and work the agreement to favour them. In such a situation there may be a need for a notice to show cause. This means that one party will be asking the court for the other party to confirm why an agreement should not be made into the terms which have been agreed between the parties. The notice to show cause will be an application made by the party who is attempting to uphold an agreement and will require the defaulting party to show why the agreement should not stand. A notice to show cause is commonly used in all types of legal matters including insolvency, consumer law as well financial remedy proceedings.

How can Kabir Family Law help in responding to a notice to show cause?

A notice to show cause is an important document and requires immediate attention. If you have been served with a notice to show cause, then firstly you need to note down the date by which a response is due. The usual deadlines provided by a court tend to be 14, 21 or 28 days. However, each case is different and depending on how close a matter is listed for a final hearing this can be a lot sooner then you realise.

At Kabir Family Law, we can assist you in reviewing the notice to show cause to help you identify the date when your response is due. You must also check the details contained within the notice to show cause are correctly listed. Together we can ascertain whether any details are incorrect and if so, can assist you in communicating this to the other party who issued the notice and indeed to the court.

A notice to show cause is a complex issue. We are therefore able to provide you advice on this and discuss the implications of this on your financial settlement matter. Failure to deal with a notice to show cause can have significant financial implications to you and could also result in you losing out on finances or even a substantial asset such as property.

By working with you, our financial settlement specialist can assist you in preparing a response. We can also assist you in reviewing documents of the case to ensure you have sufficient evidence which may support your position that no concluded agreement family law has been made. Our family specialists at Kabir Family Law have vast amount of knowledge in this area and can also assist you in challenging such a notice.

What are the implications of failing to respond to a notice to show cause?

Such a notice is directly related to your financial settlement proceedings and is an important document. If you do not respond by the deadline set, then you may face financial consequences such as losing your assets in question. You may also end having to pay the other parties legal costs and any wasted costs which have arisen due to your failure to respond. As with any court documents a notice to show cause should not be taken lightly and you should seek legal advice as soon as possible.

What is a Rose Order?  

Financial remedy proceedings can be quite confusing given that there are many different types of orders. A Rose Order is another one of the many orders which is often mentioned during proceedings. Effectively a Rose Order relates to terms approved by the Judge which have been orally agreed but not yet sealed into a court order.

The Rose Order derives from the case of Rose v Rose (2002). The case involved Mr & Mrs Rose who married in 1984 and separated in 2000. The main issue to resolve within the financial proceedings was the price to be paid to Mrs. Rose for a clean break following a claim for financial remedy initiated by her in March 2000.   

An adjourned Financial Dispute Resolution hearing was listed for the 3rd August 2001. The main issues considered during the hearing where: 

  1. Whether Mrs. Rose’ needs should all be met by unrestricted payment or whether substantial portion of her needs should be met by a life interest in a trust fun
  2. The reasonable cost of buying and kitting her future home
  3. What budget she would require meeting costs of an appropriate standard of living in a new home.

For the purpose of the financial proceedings the husbands fortune was valued at £13M. The Judge, after consideration, felt that the cost to Mr. Rose for a clean break on his fortune would be £3.6M. After discussions with his representatives the husband proposed to bring the wife’s assets to £3.4M. However, without receiving any response made a further proposal of £3.7M out of which £1M would be in trust. The counter proposal by the wife’s representatives was £3.5M outright. Despite the advice from his representatives to consider the offer with some time the husband instructed his representatives to accept the counter offer of Mrs. Rose of £3.5M outright to her. 

When the court resumed the representatives of Mrs. Rose informed the court that an agreement was reached for Mrs. Rose to receive £3.5M and no trust as well as her costs paid in full. The Judge confirmed the agreement will be recorded. By this time, it was 4:00pm and the drafting of the order was not carried out at this time. The counsel for Mr. Rose prepared a first draft of the order which was dated 3rd August but sent it to the representatives of Ms. Rose on the 5th August. The representatives of Ms. Rose made some minor amendments following which the solicitor of MR. Rose sent the first payment cheque in the sum of £230,000.00. 

On the 16th August the solicitor of Mr. Rose sent a letter stating her client does not believe he can implement an agreement reached which he believed was under duress and Mr. Rose doesn’t believe the Judge was duly aware of the circumstances of the case. Ms. Rose then obtained a without notice freezing order against the assets. Following this a notice to show cause application was also made. The matter was appealed after the application for notice to show cause was settled by a junior member of the mothers’ representatives chambers who did not assert that an order had already been made by the court on the 3rd August. On appeal it was noted that the whole purpose of the FDR will be lost or compromised if parties were free to analyse and re-evaluate a decision which was made. Despite understanding the case may have been stressful for the parties. The court approved the appeal and confirmed the order made by Bennett J in terms of the which were drafted by counsel. The outcome of this case was that even though the Judge has not yet drawn up an order it will still be binding. Where there are disputes concerning the agreement being formed into a formal order the Judge can make rulings as it sees fit.

How can I protect or defend myself against a Xydhias agreement?

Our family lawyers have experience in dealing with concluded agreements as well as general communication. One of the ways they have noted a party can protect itself from a concluded Xydhias agreement is by ensuring the communication remain without prejudice prior to any agreement. A correspondence marked without prejudice means the communication is protected. Open communications are admissible at any stages of the proceedings. However, without prejudice communication are not admissible as evidence. This means this communication is protected and the courts and the judge will not be able to consider this as evidence as evidence even during a concluded agreement family law.

Without prejudice communications are a useful tool in attempting to negotiate and settle matters without going to court, if however, the matters do go to court this would not compromise your position.

How else can I protect myself against and Xydhias agreement?

Where the courts find there is a Xydhias agreement it may be difficult to challenge this. However, the courts will still consider the agreement and take into account the factors of Section 25. The courts will consider these factors to ensure the agreement reached has been properly concluded. You may well need to submit a statement to challenge the agreement. At Kabir Family Law our specialists can assist you in preparing your Xydhias statement and assist you in showing to the court how the agreement which has been deemed to be a concluded agreement should not be taken into consideration. If you have not concluded agreement and the other party claims there to be an agreement in place, then you should contact us to seek legal advice. Our experienced specialists will be able to assist you in looking to challenge this agreement and even assisting you in preparing your notice to show cause.

What is a Barder event?

A Barder event was a new principle which was investigated the case of Barder v Barder. The case involved parties reaching an agreement following which the court made an order by consent. The order allowed the family home to be transferred to the wife. This would allow both her and her children’s needs to be met. However approximately five weeks after making of the order the wife killed her two children and herself.

The husband in the proceedings following these events appealed to the court to set aside the order which related to the transfer of the family home and stated that the order was invalidated as it no longer was required to meet the needs of his wife of the children. The husband’s appeal was successful. The courts listed 4 conditions which must be satisfied for the courts to take into account a Barder event. These are:

  1. A new event must have taken place since the making of the order and this event invalidates the basis of the order being made
  2. The event must have occurred within a short time of the order being made
  3. An application for permission to appeal is made in a reasonable time following the new events occurring &
  4. Granting a leave to appeal will not in any prejudice other parties who have interest in the property mentioned within the order.

Another key factor is that the new event must be unforeseen. This therefore could include events such as a death of a party, bankruptcy, inheritance or even remarriage where at the time of negotiations there was an intention by one party to remarry but this was fraudulently concealed and kept discrete.

We can also assist you in putting forward your case if there has been a substantial change of agreements or where evidence has come to light which suggests there may have been some element of fraud or failing to disclose key financial documents.


Contact Kabir Family Law today for a free initial consultation

If you are involved in a financial settlement matter and would like to ensure you are not subject to an unfair Xydhias agreement argument, then contact us to discuss this further. Our family lawyers in Cardiff as well as across Newcastle, Northampton, Oxford and London can assist you to ensure you do not jeopardise your position and lose your right to a fair and proportionate agreement. With years of experience our specialists can both advice you on whether there is a concluded agreement family law in your favour or whether you are a party that is in need of defending an Xydhias agreement.  Contact us today to see how we can assist you in your matter and use our experience to assist you in obtaining the best outcome you want to achieve.

We provide family law advice nationally as well as internationally through telephone, email and Skype. We will also ensure you are kept up to date with your matter and assist you developing a strategy to help you succeed. Contact us today for a free initial consultation by calling on 029 2192 1400 to discuss your options or let us call you back.