24th February 2017
Judgment concerning outstanding disputes arising from a Xydhias agreement reached in a Schedule 1 Children Act 1989 claim
Facts:
- The parties met in 2013. On the 23rd June 2014, the mother gave birth to their daughter, L. The parties separated in 2015.
- The mother was a BA pilot, earning c. £35,000 pa net. She had savings of £76,000 and a half share in a property in Sweden. Her flights rosters required her to work away overnight and for days at a time.
- The father was from a wealthy background, and put forward a “millionaire’s defence”; subsequently he provided minimal disclosure. He was the sole beneficiary of two very substantial trusts. In the tax year 2014/2015, F received net distributions totalling ca. £2.75m. The mother also believed F and his siblings had received an inheritance of at least £350 million.
- L lives with M and spends holiday time with F in Switzerland and term time weekends in England and Switzerland.
- A Xydhias agreement was reached on the 7th December 2016 to settle the Schedule 1 claim. As a number of issues remained at large, they fell to be determined by Hayden J.
Held:
- The first issue was whether F had provided M with sufficient assurances as security for his maintenance obligations in the event of his death. Hayden J held that F had provided a letter from the New York lawyers responsible for his trust stating that in the event of his death, his daughter would become the income beneficiary of the trust. This was an adequate assurance as to security for his maintenance obligations.
- The parties disagreed as to whether the mother should be prevented from moving from London for a certain period of time. The disputed draft order restricted the possibility of a move by incorporating a clause which prevented M from obtaining a replacement property outside of England & Wales until the parties’ daughter completed her primary education.
- Hayden J held that the objective of the agreement was to provide materially and emotionally for L; this included providing a secure home for her. The restriction on the mother’s location did not give expression to the primary objectives of the parties, as a settled address was not the same as stability and security. If the parties were unable to agree on relocation in the future, the Court would decide and thus L’s best interests would be safeguarded.
- In respect of Xydhias agreements, Hayden J reiterated that there are two stages of negotiation: establishing what the applicant is to receive and expressing the heads of agreement as an order of the court.
- Where the court, at the second stage of the process, decides that an agreement is irreconcilable with the best interests of a child, the Xydhias principles will likely be disapplied.
- In respect of the restriction on relocation, Hayden J ordered that the order simply provide that M may not move to another jurisdiction without F’s agreement or order of the Court.
- The parties also disagreed about the extent of the “non-disclosure” or “privacy provisions” As the non-disclosure provisions were expressed as undertakings in the draft order, Hayden J concluded that if they were not freely given that was the end of the matter. An undertaking has the same consequences as an order, which could only be made after considering the competing Article 8 and 10 rights.
- Further, the provisions were too ambitious and the court was asked to make restrictive orders relating to documents the judge had not seen. Therefore, the restrictive orders were confined to those in the guidelines.
- In respect of the dispute over the nanny, Hayden J allowed the mother flexibility regarding employing a nanny who was unable to produce a P60 – due to the lack of evidence to question her probity.
- As regards the dispute over who should bear the (significant) costs of sale and purchase of any replacement property, Hayden J held that it would be unfair to deplete M’s housing funds where F had the father had invoked the millionaire’s defence.
- A phrase inserted to confirm that the mother had no intention of seeking a further lump sum from the father was present only to record the mother’s present intention, and was clarified as such.
