Bains v Arunvill Capital Ltd & Anor

A contractual breach notice must be construed in its factual and contractual context. Where the specified breach is an existing refusal to perform freestanding contractual services, an assurance of future performance does not remedy the breach; the services must actually be resumed within the contractual remedy period. A contractual entitlement to substantial compensation for facilitating settlement arises only when the agreement’s specified settlement objective has been achieved. A partial step towards resolution is insufficient where the agreement, read in context, contemplates an overall settlement removing the risk of litigation.

The appellant appealed against the County Court at Central London’s dismissal of two claims. The first concerned six months’ basic remuneration under a consultancy agreement with Arunvill Capital Ltd, following a notice alleging material breach by refusal to provide contractual services. The second concerned compensation allegedly payable by Hollbeach Solutions LLP under an agreement relating to the appellant’s assistance in resolving a dispute involving Varengold and Solo.

The first issue was whether the appellant remedied the specified breach by stating that he intended to perform in future. The second was whether the sale of Arunvill’s shares in Varengold constituted a sufficient settlement event to trigger compensation under the Hollbeach Agreement.

The appeal was dismissed on both claims.

1. The breach notice was given when the appellant had already stopped providing the contractual services and had unequivocally refused to resume them. Properly construed, the specified breach was not merely a statement of future intention. It was a refusal to resume performance.

2. The appellant’s solicitors’ letter stating that he intended to perform did not remedy the breach. The consultancy agreement imposed a freestanding obligation to provide the defined Services and did not depend on Arunvill first requesting particular work. Remedy therefore required the appellant to resume providing the Services within the 21-day period. The analogy with a jockey engaged only when asked to ride was rejected. The relevant analogy was a jockey obliged to exercise horses daily.

3. The rejection of the appellant’s previously devised strategies did not make performance impossible. The contractual Services were broader than those strategies, and the appellant had previously performed other work. The argument that there was nothing further to do failed because there was no finding that Arunvill had released him or instructed him to await further directions.

4. The Hollbeach Agreement was interpreted in its factual context. The reference to an “acceptable resolution” naturally meant an overall settlement of the dispute which removed the risk of litigation, rather than a partial resolution. The agreement’s provisions concerning joint-venture profits and upfront profit from settlement formed parts of one compensation mechanism and did not create independent triggers.

5. The sale of Arunvill’s shares to Mr Shah did not resolve the dispute and did not involve Hollbeach. It therefore did not trigger compensation. The court declined to decide in detail whether the appellant also had to be causally instrumental in achieving a settlement, since that issue had not been live at trial. On the pleaded and common factual basis, however, any such requirement had not already been satisfied.

• High Court (Chancery Division): dismissed the appeal against the County Court’s order of 26 July 2018.
• County Court at Central London: dismissed the appellant’s claims for contractual remuneration from Arunvill and compensation from Hollbeach. The respondents’ counterclaim was also dismissed, but that part of the order was not appealed.