Christopher Tromans considers whether ancillary relief claims can be compromised without a court order


Is an agreement to compromise a claim for ancillary relief capable of enforcement as an agreement or can it only be enforced if it is incorporated in a court order?



Historically, any agreement which ousts the jurisdiction of the court is void on the basis that it is in the public interest that a husband makes proper provision for his wife and that the court cannot be deprived by agreement of its jurisdiction to oversee those arrangements. In Hyman v Hyman [1929] AC 601, the wife had covenanted in a deed of separation not to take court proceedings for maintenance, but it was held that her right to future maintenance was a matter of public concern which could not be bartered away.



In subsequent cases, the focus has been on whether or not the consideration moving from the wife amounted to anything more than a simple promise not to exercise her right to apply to the court, in which case the Hyman principle would be engaged. More recently, the whole question has been revisited by the Court of Appeal in Xydhias v Xydhias [1999] 2 All ER 386, [1999] 1 FLR 683. In that case, draft consent orders had been circulated and substantially agreed prior to the hearing. However, at the hearing the husband indicated that all offers were withdrawn. The wife issued a notice to show cause why an order should not be made based on the heads of agreement. An order in those terms was made and the husband appealed. The Court of Appeal held that ordinary contractual principles did not apply and that the order was unenforceable. Lord Justice Thorpe at 691 put the issue in these terms:



'My cardinal conclusion is that ordinary contractual principles do not determine the issues in this appeal. This is because of the fundamental distinction that an agreement for the compromise of an ancillary relief application does not give rise to a contract enforceable in law. The parties seeking to uphold a concluded agreement for the compromise of such an application cannot sue for specific performance. The only way of rendering the bargain enforceable, whether to ensure that the applicant obtains the agreed transfers and payments or whether to protect the respondent from future claims, is to convert the concluded agreement into an order of the court.'



There matters rested, until Soulsbury v Soulsbury [2007] EWCA Civ 969, [2008] 1 FLR 90, The Times 14 November 2007. A consent order for periodical payments had been made in 1987. The parties remained on good terms and in 1989 the husband proposed that, in lieu of continuing to make periodical payments under the terms of the order, he would leave £100,000 to the wife in his will. It was eventually agreed that, on that basis, the wife would not seek to enforce the order. Although the order remained in existence with arrears continuing to accrue, the wife took no steps to recover the arrears and the husband duly included in his will a legacy of £100,000 to the wife. After the husband's death, his personal representative, the husband's second wife, refused to pay the legacy from the husband's estate and the wife took proceedings against the estate. The judge concluded that the agreement between the husband and the wife was conditional on the wife not pursuing her claims against the husband through the courts. That condition had been fulfilled. The agreement was that the wife would receive the legacy if she did not in fact claim further periodical payments and so she was entitled to recover the amount of the legacy from the estate. The personal representative appealed.



In giving the leading judgment in the Court of Appeal, Lord Justice Ward held that:



- Doubts had been expressed, which he had shared, about the cardinal conclusion that ordinary contractual principles do not apply;



- The basis of the decision in Xydhias that no claim for specific performance of a compromise agreement could be made was contrary to the earlier decision of the Court of Appeal in Merritt v Merritt [1970] 2 All ER 260, where it was held that specific performance could be ordered of an agreement between ex-spouses that the husband would transfer a property to the wife if the wife redeemed the mortgage on the property;



- Any requirement for a different approach in the 21st century is limited to cases where there is a pending application for ancillary relief before the court, as in Xydhias;



- There is no justification for the denial of relief where an agreement between former spouses is not part of the settlement of a pending claim for ancillary relief;



- The 'cardinal conclusion' that the only way of making a compromise agreement between former spouses enforceable is to obtain a court order is too wide. Even when the court is required to approve the terms of an agreement, the agreement itself is binding on the parties. It is only the implementation of the agreement which is suspended pending approval by the court;



- The correct interpretation of the agreement in the present case was that the husband's agreement to leave the wife £100,000 was subject to two conditions subsequent - the death of the husband and the failure in fact of the wife to enforce the order and to seek any further ancillary relief. Both these conditions had been fulfilled;



- There had been no express agreement by the wife not to apply to the court and so the Hyman principle did not apply. Accordingly, the appeal was dismissed.



A different approach to the agreement/court order issue can be found in Rose v Rose [2002] EWCA Civ 203 [2002] 1 FLR 978. In that case, a financial dispute resolution appointment had been listed before Mr Justice Bennett. After hearing submissions, the judge retired to consider the issues. When he returned to court, he gave a reasoned indication of the likely outcome and then adjourned again to allow for further negotiations. An agreement was eventually reached and the judge duly recorded the agreed terms and indicated that he would approve the order during the following week. The husband then sought to resile from the agreement. The Court of Appeal eventually held that the product of the appointment had been an unperfected order of the court and not just a contractual agreement and confirmed the order.



District Judge Tromans sits at Plymouth Combined Court Centre