The High Court provided crucial clarity on the enforceability of informal agreements between unmarried parents in the context of protracted family litigation concerning financial provision for their child and property interests.
Background:
JT, the mother, issued a claim against RL, the father, and AL, the father's former wife. The mother sought a declaration of a life tenancy in a property with her daughter, T, as residuary beneficiary, and damages for breach of a "letter of intent" (LoI) dated December 2018. The father cross-applied to strike out the mother's claim and for a summary judgement on his counterclaim.
The mother and father were never married, and their relationship had ended by the time T was born in February 2012. T lived with her mother and spent time with her father. There has been protracted litigation in the Family Court concerning T for almost the whole of her life.
In October 2013, the District Court made a Financial Arrangements Order (FAO) under Schedule 1 of the Children Act 1989 which includes £450,000 on trust for T for a home, a payment of £20,000 for fixtures/fittings, monthly payments for T's benefit of £5,200, and the payment of T's school fees.
An LoI was signed by the parties on 11 December 2018. At this juncture, neither the mother nor the father had instructed solicitors to advise them on the terms of the LoI, nor to represent them in negotiations about the same. In February 2019, the father signed documentation for a bare trust of the property for T, although the mother did not sign the proposed tenancy agreement. The property was purchased in March 2019 and held on bare trust for T.
In July 2019, JT intended to move with T back to Wolverhampton, leading to further cross-applications, including RL seeking to prevent the move and the mother seeking to enforce/vary the terms of the 2013 FAO. The current claim was issued on 31 January 2020. In October 2023, a significant Family court order directed T to live with the father.
The core of the dispute revolved around the financial provision for their daughter, T, and the mother's alleged personal interest in a property intended as T's home.
Decision:
The High Court held in favour of the father and struck out the mother’s claim. The Judge acknowledged the high bar for strike-out/summary judgement and that he must assume that the mother's pleaded facts were true. He also accepted that, while LoIs can be binding, he noted the mother's cited authorities were all in a commercial context.
The Court gave considerable weight to the context in which the LoI came to be drafted and signed by the mother and father. It arose within the highly acrimonious and protracted litigation concerning T's living arrangements and financial provision and was drafted without legal advice for either parent.
The primary objectives for both parents were T's needs, care, stability, and, specifically, the provision of a home which ensured geographical proximity to the father.
The Judge analysed the content of the LoI and noted that, in light of all the circumstances, particularly the non-implementation of the terms, the context of intense family litigation, and the impermissible attempt to supersede a court order, Mr. Justice Keehan was satisfied that the LoI did not create a binding and enforceable contract at all, especially regarding the mother's interest in the property.
Implications:
This case serves as a stark reminder against relying on informal or poorly drafted agreements, even "letters of intent" that claim to be binding, especially when they touch upon significant financial provisions for children or property interests between unmarried parents. This decision also reaffirms that in such highly sensitive and legally regulated areas, commercial principles are unlikely to apply with the same force, and context will inevitably play a crucial role.
Any agreement, however it may be worded, that attempts to prevent the Court from exercising its jurisdiction to make or vary financial provision for children under Schedule 1 of the Children Act 1989 is thus unenforceable as a matter of law.
