Simantob v Shavleyan (t/a Yacob's Gallery)

A contractual variation is determined objectively from the parties’ words and conduct in their commercial context. A compromise of a genuinely disputed contractual claim may provide good consideration for accepting a reduced liability. Part payment alone does not satisfy a greater debt, and practical or cultural benefits will not necessarily constitute consideration where the law does not recognise them as sufficient. Where a varied agreement is repudiated and the repudiation accepted, the innocent party cannot revive and enforce the original terms; the remedy lies under the varied agreement. A claimant cannot recover twice for the same loss or debt.

The parties were dealers in antiquities who entered into a binding settlement agreement in 2010. The defendant initially agreed to pay $1.5 million, with a further $1,000 for each day of non-payment. After substantial payments, the parties’ dealings continued through consignment agreements, postdated cheques and oral negotiations.

Following summary judgment by Master McCloud for $600,000 plus interest and costs, the remaining issues were tried. They concerned whether the settlement agreement had been varied so that the defendant’s total remaining liability was capped at $800,000, whether the variation had consideration, whether the original terms revived after alleged repudiation, and whether a further $20,000 was separately recoverable.

1. Variation. The parties’ obligations were to be ascertained objectively. Their longstanding business, family and community relationships, the conventions of the London antiquities market, the postdated cheques and the written third consignment agreement showed that the 2014 oral agreement was intended to be legally binding. It varied the settlement agreement so that the remaining $400,000 principal and a further $400,000 in lieu of the daily charge were payable in four monthly instalments of $100,000.
2. Consideration. The court was bound by Foakes v Beer (1884) 9 App Cas 605 and In Re Selectmove Ltd [1995] 1 WLR 474. Practical benefits, the holding of postdated cheques, community approval and continued access to business expertise were not, without more, sufficient consideration for accepting less than an existing debt. However, the underlying liability was genuinely disputed, particularly because the daily charge might have been unenforceable as a penalty. The defendant’s forbearance in pursuing those defences formed consideration for the compromise. The variation was therefore supported by good consideration.
3. Repudiation. Even if the varied payment arrangement was later repudiated, acceptance of repudiation would not revive the original settlement terms. The innocent party could claim the remedies arising from breach of the varied agreement, but could not select the more advantageous original terms.
4. Double recovery. The unpaid $20,000 element of the dishonoured cheque formed part of the $600,000 already awarded by Master McCloud. A further award would duplicate recovery.
5. The balance of the claim was dismissed. The defendant had no further obligation beyond the judgment debt and accruing interest.

High Court (Queen’s Bench Division): Master McCloud had previously granted summary judgment for $600,000, interest and costs. The present judgment determined the remaining issues and dismissed the balance of the claim.