A recent High Court judgment in THR v WAT ([2025] EWHC 1125 (Fam)) sheds light on the complexities of financial remedy proceedings, particularly in cases where substantial wealth is at stake. His Honour Judge Hess, sitting as a Deputy Judge of the High Court, was tasked with finalizing a settlement based on a binding Xydhias agreement, following negotiations between the parties.
Background
The case concerns financial remedies following the divorce of a high-net-worth couple. Initial expectations suggested a ten-day trial commencing on 10 March 2025, but productive discussions resulted in what was believed to be a complete settlement by 11 March 2025. The parties agreed to a Xydhias binding agreement, referencing exchanged documents and a minor oral amendment.
The core issue for the court on 17 March 2025 was to resolve outstanding drafting disputes, ensuring the final form of the order reflected the agreed terms.
Key Issues Addressed
- Treatment of X Limited
The wife’s ownership of X Limited sparked debate over whether a director’s loan liability counted as a meaningful asset. The husband’s calculations had excluded its value from the wife’s total resources, leading Judge Hess to uphold that approach. - Legal Costs Deduction
The husband sought to reduce the wife’s lump sum by adjusting for actual legal costs rather than projected figures. The court held that the agreed financial terms presumed the original legal cost estimate, rejecting retrospective amendments. - Interest on Lump Sum Payments
The wife’s team sought 3.75% interest on delayed lump sum payments scheduled over 12 to 18 months. The judge ruled that this should have been raised earlier in negotiations, refusing its inclusion in the final order. - Security for Payments
Security provisions were debated, with the court concluding that the husband’s partial security proposal was reasonable. Judge Hess noted that the husband’s early £5 million payment demonstrated good faith, mitigating concerns about enforcement. - Child Maintenance Top-Up Payments
Both parties accepted the need for top-up payments beyond the statutory Child Maintenance Service (CMS) assessment (£25,064 per annum). The wife’s proposal of £50,000 per child was countered by the husband’s suggestion of £20,000 per child.
Judge Hess assessed the family’s historic standard of living, the children’s financial needs, and the parents’ resources, ultimately setting £25,000 per child per annum.
Significance of the Judgment
This ruling underscores the importance of precision in settlement negotiations. The Xydhias principle ensures that agreements reached before formal court approval hold weight, preventing last-minute shifts in financial terms. Parties must anticipate all potential complications during negotiation, as subsequent modifications are unlikely to succeed.
Additionally, the case reinforces a structured approach to high-value child maintenance claims, balancing historical family wealth with realistic financial planning.
Final Thoughts
THR v WAT serves as a critical reminder for practitioners handling financial remedy settlements—clarity and foresight are paramount. A Xydhias agreement will bind parties to their initial deal, limiting scope for later disputes over technicalities.
This case is likely to influence future rulings where late-stage financial adjustments are contested, particularly in high-net-worth divorces.
The figures and values are, of course, high but the important points are around parties being held to the agreements that they made. So, don’t make agreements that do not expect to be held to and cover all of the points in the agreement you do make. the vast majority of cases do not have this level of money floating around in them – and that can make agreements all the more important, with the impact being more significant. Get legal advice before you make agreements.