Soulsbury v Soulsbury

A binding promise to provide money on death is enforceable against the promisor’s estate where the promisee has furnished consideration and completed the required performance.

An agreement does not oust the family court’s jurisdiction merely because payment is conditional on a former spouse refraining from enforcing maintenance or seeking further financial relief. The condition leaves the spouse free to apply, although doing so forfeits the promised benefit.

The special principles governing compromise of a pending ancillary relief application do not extend to every financial agreement between former spouses. An agreement made outside pending proceedings remains enforceable under ordinary contractual principles unless it contravenes public policy.

The respondent was the deceased’s former wife. A consent order required him to make periodical payments to her. They subsequently agreed that, if she neither enforced that order nor sought further ancillary relief during their joint lives, he would ensure that she received £100,000 on his death.

The deceased included the gift in a will, but his later marriage revoked that will under section 18 of the Wills Act 1837. His personal representative refused payment. His Honour Judge Cowell held in the Central London County Court that the agreement bound the estate and awarded £116,750, including interest.

The personal representative appealed, contending that the agreement ousted the family court’s jurisdiction or was unenforceable because it had not been embodied in a court order. The central issue was whether an otherwise valid contract between former spouses was rendered unenforceable by those matrimonial-law principles.

1. Appeal dismissed unanimously. The agreement bound the deceased’s estate, and the respondent was entitled to damages representing the promised £100,000.

2. Ward LJ held that a person may contract to arrange for property to be paid on death. Where there is a binding agreement, certain subject matter and good consideration, the personal representatives must give effect to the promise. The respondent had honoured her bargain, and her contractual right became enforceable against the estate when the deceased failed to make effective provision.

3. The agreement did not oust the family court’s jurisdiction. Properly construed, payment depended on the deceased dying first and the respondent having refrained from enforcing arrears or seeking further matrimonial relief. She made no promise that she would not apply to the court. An application would not have breached the agreement; it would merely have prevented the condition for payment from being fulfilled. She therefore retained her statutory rights, consistently with Hyman v Hyman [1929] A.C. 601.

4. The principle in Xydhias v Xydhias [1999] 1 FLR 683 concerned negotiations compromising a pending ancillary relief application. Its statements that such an agreement creates no enforceable contract and that payment can become enforceable only through a court order were expressed too widely. Existing authority recognised that spouses and former spouses may make enforceable financial agreements outside pending proceedings, provided they intend legal relations and the agreement is not contrary to public policy.

5. The parties had no pending application to compromise and did not contemplate obtaining the court’s approval. Their agreement was therefore outside the special rule applicable to ancillary relief compromises.

6. Longmore LJ additionally characterised the agreement as a unilateral contract. Once the respondent began the required forbearance, the deceased could not revoke his offer. She remained free to enforce maintenance, but doing so would have deprived her of the promised sum. By the deceased’s death she had completed all possible performance. Smith LJ agreed with both judgments.

1. Court of Appeal (Civil Division): In Soulsbury v Soulsbury [2007] EWCA Civ 969, the personal representative’s appeal was dismissed unanimously.

2. Central London County Court: His Honour Judge Cowell held that the deceased’s estate was bound by the agreement and entered judgment for the claimant for £116,750, including interest.