THR v WAT

A binding financial settlement may leave the court to resolve the final form of the order, but the court must confine itself to matters falling within the agreement and cannot add substantive terms which were not raised during negotiations. An omitted term, such as interest on deferred lump sums, will not ordinarily be inserted at the drafting stage.

For child-maintenance top-up orders involving a very high earner, the court must apply first principles under Matrimonial Causes Act 1973, section 25(3), having regard to the children’s needs and all the circumstances. Children’s needs remain finite, even where the payer’s income and the family’s former standard of living are exceptionally high.

The proceedings concerned financial remedies following the divorce of the applicant wife and respondent husband. The parties reached a binding settlement during the final hearing, applying the approach in Xydhias v Xydhias, but disagreed about several aspects of the final order.

The court determined whether the wife’s interest in X Limited and anticipated legal costs affected the agreed lump sum, whether interest should be added to deferred payments, and what security should be provided. It also decided the level of child periodical payments payable under an agreed Child Support Act 1991 top-up structure. The central issues were the scope of the binding agreement and the appropriate assessment of child maintenance where the payer had substantial capital and very high income.

1. Binding settlement. The parties had reached a binding agreement within the meaning of Xydhias v Xydhias [1999] 1 FLR 683. The court’s task was to settle the final form of the order consistently with that agreement. The agreed figure of £2,090,107 represented the wife’s resources for settlement purposes without deducting the putative value of her interest in X Limited or reducing the figure by the costs she would actually incur. The husband was held to the figure stated in his offer.
2. Omitted terms. Interest provisions were not a matter of mere drafting detail. They had not been raised during the negotiations, although there had been time to raise them. They were therefore not inserted into the order. Security had also not been raised in the negotiations. The husband’s subsequent security offer was, however, reasonable in the circumstances and was imposed without requiring full security for every deferred payment.
3. Child-maintenance top-up. The parties agreed that the jurisdictional requirements for a top-up order existed under section 8(6) of the Child Support Act 1991. The court endorsed the agreed structure and considered the level of payment under section 25(3) of the Matrimonial Causes Act 1973, read with section 25(1).
4. Earlier approaches in CB v KB [2019] EWFC 78, Collardeau-Fuchs v Fuchs [2022] EWFC 135 and James v Seymour [2023] EWHC 844 were considered. The court recognised the later approach in James v Seymour, under which payments above the relevant income range should be assessed from first principles. The assessment required attention to the children’s needs, the parties’ resources and earning capacity, the children’s disability and education, the parties’ needs and responsibilities, and the family’s pre-breakdown standard of living.
5. The children’s needs were finite and the court rejected the proposed budget as excessive in several respects. Considering the substantial capital available to both parties, the husband’s very high but variable income, the children’s ages and circumstances, and the family’s standard of living, the appropriate figure was £25,000 per child per annum in addition to the CMS assessment. The order was to be formally approved after pronouncement of the conditional divorce order.

Not an appeal. The judgment determined issues arising during final financial-remedies proceedings after the parties reached a binding settlement.