Robert Colicci & Ors v Nora Mikhailovna Grinberg & Ors

An entire agreement clause supersedes an earlier agreement only where the earlier agreement relates to the subject matter covered by the later contract. A shareholders’ agreement governing rights between shareholders does not necessarily supersede a separate deed imposing testamentary obligations concerning the disposition of shares on death. Clearer words are required before the court will treat the later agreement as revoking that separate obligation.

Rectification for common mistake requires convincing proof of a shared actual intention, communicated between the parties, which the written instrument failed to record. Subjective intentions alone are insufficient.

The claimants, comprising the deceased’s former wife and two adult children, sought to enforce a 2016 deed under which shares in a family company were to pass to the adult children on the deaths of the deceased and his former wife.

The deceased later entered into a 2017 shareholders’ agreement with the claimants. The defendants contended that its entire agreement clause superseded the 2016 deed. The claimants argued that the two agreements concerned different subject matters. Alternatively, they sought rectification of the 2017 agreement to preserve the deed.

The central issues were whether the 2017 agreement revoked the 2016 deed and, if so, whether rectification was available.

1. Construction. Clause 18 of the 2017 shareholders’ agreement did not supersede or revoke the 2016 deed. The court applied the objective and unitary approach to contractual interpretation stated in Lukoil Asia Pacific Pte Ltd v Ocean Tankers (The “Ocean Neptune”) [2018] EWHC 163 (Comm).
2. The 2016 deed imposed obligations on Ernesto and Josephine as testators and conferred benefits on the adult children as beneficiaries. Clauses 10 and 11 of the 2017 agreement governed the parties’ rights and obligations as shareholders. They therefore concerned different subject matters and could operate alongside the 2016 deed.
3. The reference in clause 18 to superseding the 2011 shareholders’ agreement did not extend to the 2016 deed. Since the parties had expressly identified the 2011 agreement, clearer wording would have been expected if they intended to revoke the later deed. The possibility of an obligatory transfer on death did not alter that conclusion.
4. Rectification. If the construction issue had been decided for the defendants, rectification for common mistake would have been unavailable. Applying the principles derived from FSHC Group Holdings Ltd v GLAS Trust [2020] Ch 365, the claimants had to establish a common intention at execution, understood by each party to be shared as a result of communication, and convincing evidence that the written agreement failed to record it. No such accord with Ernesto was proved.
5. The court ordered enforcement of the 2016 deed. Nora held the relevant shares on bare trust for the adult children and was to transfer them to them. The shares were not required to meet the estate’s liabilities within Administration of Estates Act 1925, section 35. No stay was granted pending any possible claim under sections 2 and 11 of the Inheritance (Provision for Family and Dependants) Act 1975.