FN v AC: Agreement does not ‘short-circuit’ financial remedy procedure

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In FN v AC a husband sought to ‘enforce’ a financial remedies agreement reached with the wife, via an abbreviated ‘show cause’ procedure. The court, however, was not prepared to ‘short-circuit’ the procedure in this way.

The case concerned an appeal by the husband from a case management order, following the reaching of the agreement. The appeal was heard by Mrs Justice Theis.

The circumstances in which the agreement was reached are important. As Mrs Justice Theis explained:

“It is accepted the parties met on three occasions: on 27 March 2019, at the wife's solicitor's offices; on 15 April 2019, again at the wife's solicitor's offices in the afternoon until 6 p.m., thereafter moving to the husband's business offices in a separate location until about10 p.m. then, finally, on 17 April at the husband's business offices at 4.30 p.m. with a document having been signed by them at about 9.50 pm.”

The husband’s solicitors then sent a draft order to the wife’s solicitors. They responded that the wife did not consider herself bound by the agreement. This prompted the husband to issue an application for the wife to show cause why an order should not be granted in the terms of the agreement reached between them. As Theis J also explained:

"The husband's application was issued in accordance with what [counsel for the husband] has described as the "well-trodden path" set out in the case of Xydhias [1999] 1 FLR 683, where the court in certain circumstances can direct what is termed an "abbreviated hearing" that will involve, as he said, three stages: one, to establish whether or not there was an agreement; secondly, whether there are vitiating factors of the agreement with the result that it should not be relied upon, and, thirdly, even though the parties have reached an agreement the court still has to undertake its overarching evaluation under Section 25 of the Matrimonial Causes Act 1973"

The wife opposed the application, on the basis that the agreement was unfair and that the husband had pressured her to enter into it. She claimed that the agreement amounted to a "very substantial departure from equality in a sharing case", and that the pressure that was put on her by the husband should be read in the context of what she said reflected his behaviour towards her during the marriage.

At first instance the court refused to direct an abbreviated hearing. There was "no clear substratum of established fact in this case." Accordingly, there needed to be a detailed analysis in relation to the agreement. The judge therefore directed that the matter should proceed to FDR and, if that was unsuccessful, final hearing.

The husband appealed.

Theis J concluded that the appeal should be dismissed. Her reasons included the following:

1. The judge was perfectly entitled to make the order he did, for the reasons he set out:

"Whilst there appears to be no dispute that the meetings took place and that the document was signed at the end of the third meeting, there is a significant dispute between the parties as to the circumstances of those meetings; whether, for example, the wife was placed under undue pressure."

2. Whilst the judge clearly had in mind the observations made in Radmacher about personal autonomy and the desirability of upholding agreements being entered into, that could not be determined at that hearing, due to the factual disputes on the information he had.

3. These cases are fact specific - there is no inflexible rule as to how the proceedings should be conducted:

"To suggest, as [counsel for the husband] submits, that by issuing such an application creates some kind of entitlement that the application will be heard unless doing so would serve no purpose is not supported by authority. "

She did, however, conclude with a warning to the wife:

"The appeal is dismissed on all grounds for the reasons set out. In doing so I echo the words of the Judge that dismissing the appeal is not to give the wife false hope. The existence of the agreement does not appear to be in dispute. There are and may be valid points that can be made on both sides."

You can read the full judgment here.