Jamie Daniel Rishover v Jason Marc Rishover & Anor

Whether a contractual obligation is subject to a condition precedent depends on construction of the agreement. The triggering event and circumstances must be identified clearly. General obligations to promote a project will not become conditions precedent without sufficiently clear contractual language, considered in its commercial context.

Where parties agree that a profit share becomes payable if a project fails to proceed for whatever reason, that wording may permit recovery even where the recipient may have breached related contractual duties. The profit-sharing mechanism can be construed as separate from any claim for damages arising from breach. Unresolved breach issues do not necessarily prevent summary judgment for the agreed payment.

The claimant and first defendant were parties to property-development arrangements concerning the Cowley and Hendon projects. Following disputes between the business partners, a Settlement Agreement provided for the claimant to receive a specified share of Hendon profits if the Cowley project did not proceed to exchange.

The Cowley project had not proceeded to exchange. The claimant sought summary judgment for the agreed profit share. The first defendant argued that payment was conditional on performance of obligations to promote the Cowley project, that the claimant could not rely on his own breach, and that any liability was subject to set-off.

The central issues were contractual construction, the effect of the words for whatever reason, and whether alleged breaches required a trial.

1. Summary judgment. Summary judgment was entered for the claimant for the agreed Hendon profit share of £1,499,850.
2. Condition precedent. The question was one of contractual construction. A condition precedent requires clear contractual identification of the event and circumstances triggering the obligation, as explained in Persimmon Homes (South Coast) Ltd v Hall Aggregates (South Coast) Limited. The Settlement Agreement contained no wording elevating its general obligations to promote the projects into a condition precedent. Its formal drafting, commercial context and the uncertainty and imbalance that would result from the proposed construction supported that conclusion. The court also considered the approach in Britvic plc v Britvic Pensions Limited [2021] ICR 1648.
3. Reliance on own breach. The relevant question was whether the agreement permitted the claimant to receive the profit share even if he had breached related contractual duties. The words for whatever reason made it impermissible to construe the agreement as preventing reliance on the specified event merely because the claimant might be in breach.
4. Separate remedies. Following Petroplus Marketing AG v Shell Trading International Ltd [2009] 2 All ER (Comm), the agreed payment machinery would be frustrated if payment could be withheld while alleged breaches were investigated. The profit-sharing arrangement was separate from any claim for damages. Alleged breach, causation and any speculative damages could be pursued separately.
5. The claimant might owe contractual duties concerning the Cowley project, including duties to promote its success and use reasonable or best endeavours. Those possible duties did not prevent summary judgment, and no right of set-off was established.