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	England and Wales High Court (Queen's Bench Division) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Queen's Bench Division) Decisions >> Simantob v Shavleyan (t/a Yacob's Gallery) [2018] EWHC 2005 (QB) (03 August 2018) URL: http://www.bailii.org/ew/cases/EWHC/QB/2018/2005.html Cite as: [2018] EWHC 2005 (QB)

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IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION

		Royal Courts of Justice Strand, London, WC2A 2LL
		03/08/2018

Mr Justice Kerr :

Summary

1. In this case I have to decide whether Mr Shavleyan, the defendant, still owes money to Mr Simantob, the claimant. They are businessmen and dealers in antiquities. Their association goes back many years. In 2010, their relations became difficult. A settlement agreement was reached that year and Mr Shavleyan paid Mr Simantob various sums under it.
2. But Mr Shavleyan did not pay all he owed. That led to this suit and to Master McCloud granting summary judgment last year, for 600,000 US dollars ($) plus $171,999 interest and assessed costs. Mr Shavleyan accepts that judgment. He did not appeal against it. The Master left open the issues which have now been tried before me over two days.
3. The main issue now is whether Mr Shavleyan's obligations under the 2010 settlement agreement have been varied and replaced by new and different obligations limiting his liability to the amounts already covered by the summary judgment in favour of Mr Simantob; or whether, as the latter contends, his obligations are unchanged since 2010 and largely undischarged.
4. As at 13 June 2018, Mr Simantob calculates his claim at $2,375,001, over and above the existing and partially unsatisfied judgment debt, of which, as at 12 June 2018, GBP (£) 266,240.59, including judgment debt interest, remained unpaid. Mr Shavleyan accepts liability only for the outstanding £266,240.59 and any further judgment debt interest, nothing more.
5. Mr Shavleyan provided certain postdated cheques, mostly not presented due to an expectation that they would be dishonoured if presented. One was presented and honoured; one, for $220,000, was presented and dishonoured. I may have to decide whether $20,000 of the proceeds of that cheque is included within the summary judgment debt or not. Mr Simantob says the $20,000 forms part of the $2,375,001 due or, alternatively, that it is in any event due.

Findings of Fact

6. The parties are of Jewish Iranian heritage. Both deal in antiquities. They communicate in Farsi and English. Mr Simantob is resident in Los Angeles. Mr Shavleyan lives in London and trades as Yacob's Gallery in Davies Street, Mayfair. Their business relations and family connections go back some 20 years. Both are part of the close knit Persian business community in London. Both parties gave written and oral evidence. There were conflicts of evidence.
7. Neither was a reliable witness in all respects; nor was either straightforwardly dishonest. Both were self-serving; neither was meticulous or accurate in matters of detail. I preferred the evidence now of one, now of the other. It was necessary to compare their versions issue by issue. I find that Mr Shavleyan had far greater expertise than Mr Simantob on the subject of antique Islamic art and the market for it, particularly the London market.
8. In 2008, Mr Simantob acquired 10 pieces of tiraz (inscribed medieval Islamic textiles) and five pieces of Savafid (17^th century Persian) and Turkish textiles, for a modest price. Mr Shavleyan said that in spring 2010 Mr Simantob told him he had acquired them for 10,000 euros (€). Mr Simantob did not wish to disclose his acquisition price, eventually denying that it was €10,000. I accept that Mr Simantob told Mr Shavleyan he had acquired the pieces for €10,000, whether or not that was the actual acquisition price.
9. He placed them with Mr Shavleyan by agreement. There is a dispute, which I need not resolve, about the terms of the placement. Mr Shavleyan said he purchased the pieces from Mr Simantob outright, for £226,000. Mr Simantob said he consigned them to Mr Shavleyan for the latter to sell in return for, according to his pleading, an unspecified "payment of a percentage of the … sale proceeds".
10. I accept Mr Shavleyan's evidence that by, at the latest, spring 2010 no buyer had been found for the pieces and that Mr Shavleyan offered to deliver them back to Mr Simantob on the basis that Mr Simantob would pay Mr Shavleyan £206,000 for them, £20,000 less than the sum of £226,000 previously identified by Mr Shavleyan (whether or not agreed) as the amount he should pay Mr Simantob for the pieces.
11. It is common ground that Mr Shavleyan then placed them for auction with Sotheby's and that the suggested guide price for the items in the auction catalogue was £300,000 to £500,000. Mr Simantob accepted that Mr Shavleyan may have "assumed" he, Mr Shavleyan, could purchase the items for £226,000. I accept Mr Simantob's evidence that he saw the guide price in the Sotheby's catalogue and objected to the sale of the items at auction.
12. I infer what I consider the most likely explanation: Mr Simantob considered the items belonged to him and feared that Mr Shavleyan did not share that view and would attempt to retain the proceeds of sale at auction, less £226,000; whereas Mr Simantob considered that Mr Shavleyan was entitled only to a much lower unspecified, undocumented percentage of the proceeds.
13. The potential for a dispute to emerge was compounded when the auction took place on 14 April 2010. The items were sold as lot number 165. The auction price achieved was £1.4 million, of which the net proceeds after Sotheby's commission of £200,000 would be £1.2 million. The question that arose was which of the parties became entitled to that amount, or the lion's share of it.
14. Mr Simantob implausibly denied feeling angry about what had happened and denied seeking out Mr Shavleyan to demand the proceeds of sale during the second half of April 2010. However, there was contact between them that month, either in Israel (where Mr Shavleyan's wife was giving birth), London or both. I accept Mr Simantob's evidence that there was a meeting at Mr Shavleyan's gallery on or about 28 April 2010 to discuss the issue.
15. I accept also and that an associate of both men, Mr David Aaron (also written as Davoud Aron), was most likely present. He trades from the David Aaron gallery in nearby Berkeley Square. I accept that it was this meeting that paved the way for a more formal mediation or arbitration meeting which, it is agreed, took place a few days later at Mr Aaron's gallery, on 1 May 2010.
16. The agreed arbitrators or mediators were Mr Aaron and a Mr Hamid Sabi. They examined the documents relating to all the claims that were the subject of the dispute. They also considered payments already made. The claims apparently included not just the dispute arising from the Sotheby's auction sale but other, lesser claims about which I am not informed.
17. An agreement (the settlement agreement) was prepared in Farsi script. I have an agreed English translation. It was signed by both parties on 1 May 2010 and it is now common ground that it is binding. Mr Shavleyan later disputed its validity on the grounds of lack of consideration and that he had signed it under duress, owing to Mr Simantob's threat to harm himself if Mr Shavleyan did not sign it. Those contentions were recently rejected in the (unappealed) summary judgment application.
18. The settlement agreement provided for payment, in full and final settlement of all claims between the parties, of $1.5 million by Mr Shavleyan to Mr Simantob. The payment had to be made in full within two days of receipt by the former from Sotheby's of the net proceeds of sale of lot number 165. The parties knew that Sotheby's had 35 days in which to pay over the net proceeds of sale to the seller. The 35 day period was therefore due to expire on 19 May 2010, so payment in full of the $1.5 million was due by 21 May 2010.
19. The settlement agreement also included a provision that in the event of non-payment by the due date, Mr Shavleyan "shall pay 1,000 dollars … to Mr. Simantob for each extra day as penalty". Mr Simantob's present claim is based on the proposition that payment has not been made in full and therefore includes a claim for $1,000 per day from 22 May 2010 up to 13 June 2018.
20. The "$1,000 a day clause", as I shall call it, has been described as setting "interest" at that daily amount. I understand Master McCloud left open what meaning and effect should be given to the clause. It was suggested by Mr James Ramsden QC, for Mr Simantob, in the alternative to his primary case, that it might provide implicitly for the $1,000 payable each day to abate in proportion to the amount of debt paid down, if payment were made by instalments.
21. But that suggestion was not pressed before me as it is not what the $1,000 a day clause states. It says what it plainly means, namely that $1,000 a day is payable for each day on which the debt has not been paid in full. As at the first day of non-payment, it represents an annual rate of interest of 24.333 per cent, a rate that is high but, it was agreed, not particularly unusual in this particular market.
22. By 19 May 2010, Sotheby's had paid the net proceeds of sale to Mr Shavleyan. Assuming the payment was made on 19 May itself, the $1.5 million became payable by Mr Shavleyan to Mr Simantob by the end of 21 May 2010. That is not in dispute. Nor it is disputed that, by the end of that date, no payment had been made and that the $1,000 a day clause therefore became operative from 22 May 2010.
23. Mr Shavleyan made a part payment of $500,000 on 9 August 2010. Contrary to the position applying a true interest provision, the daily amount payable remained at $1,000 a day despite one third of the principal amount due having been paid. That represented, in interest terms, an increased rate of interest well above the initial 24.333 per cent per annum.
24. Indeed, the effect of the clause is that the "rate" of "interest" – if that is the right phrase – increases in inverse ratio to the amount of principal remaining outstanding. Thus, if $100,000 remains outstanding, the $1,000 a day clause represents a rate of 1 per cent per day or 365 per cent per annum. And if only $1 of the principal remains outstanding, "interest" remains payable at $1,000 a day, a "rate" which is one thousand times the principal amount due.
25. The logic is brutal but it was not disputed before me that such is the clear meaning of the clause and indeed, as I have said, the claim is founded on that meaning. The claim includes a claim for "[i]nterest [sic] pursuant to the Settlement Agreement continuing at the daily rate [sic] of US$1,000 …. until judgment or sooner payment".
26. I accept the evidence of Mr Shavleyan that after the settlement agreement was concluded, relations between them became more difficult. Mr Shavleyan always regarded the agreement as unfair and unconscionable and, until Master McCloud's judgment, not binding. I accept his evidence (in a written witness statement in February 2017) that Mr Simantob was "aware that the validity of this [the settlement agreement] has been questioned from the outset".
27. On 1 June 2011, under pressure from Mr Simantob's then solicitors, Mr Shavleyan paid him a further $500,000. Mr Simantob accepted that sum "on account of the sums due to him under the [settlement] [a]greement". No further sums were paid that year under the settlement agreement. The two remained in contact, however, and were involved in other separate business transactions over the next few years.
28. Late in the following year, 2012, Mr Shavleyan gave Mr Simantob a postdated cheque in the sum of $800,000. The cheque was dated 30 March 2013 and, thus, would expire six months later, on 29 September 2013. I note that the amount of that cheque, if presented and paid, was such that the full principal of $1.5 million would have been paid, plus a further $300,000 pursuant to the $1,000 a day clause.
29. Thus, on a literal reading of the settlement agreement, the $300,000 would represent 300 days' worth of payments at $1,000 a day, although as at 13 March 2013 (the date of the cheque), some 1,026 days would have passed since the clause became operative on 22 May 2010; leaving a shortfall of some 726 days which would equate to a further $726,000 due, increasing, of course, by a further $1,000 each day.
30. March 2013 came and went without Mr Simantob presenting the cheque for payment. Mr Simantob says that is because Mr Shavleyan requested him not to present the cheque for payment. Mr Shavleyan, implausibly, denied having made this request; Mr Simantob would surely have presented the cheque for payment unless requested not to do so.
31. Furthermore, it is common ground that Mr Shavleyan gave Mr Simantob two further postdated cheques in March 2013, clearly intended to replace the existing cheque. The first replacement cheque was postdated 16 August 2013, for $100,000. The second was for $800,000 and was postdated 26 November 2013.
32. Pausing once again, the first cheque for $100,000 represented 100 days' worth of payments at $1,000 a day under the clause; the figure of $800,000 which Mr Simantob was asked to wait until November 2013 to receive, was the same figure as that of the March 2013 cheque which, I find, Mr Shavleyan asked Mr Simantob not to present for payment.
33. When August 2013 came, Mr Simantob presented the cheque for $100,000. It was honoured and cleared two days later on 18 August 2013. That meant that Mr Shavleyan had paid a total of $1.1 million under the settlement agreement, leaving outstanding a balance of $400,000 principal and the far greater sum of $1.54 million in "interest" representing $1,000 a day over the 1,540 days that had passed since 22 May 2010.
34. When 26 November 2013 came, Mr Simantob did not present the cheque for $800,000, which would have cleared the balance of principal due and contributed $400,000 over and above that amount. Again, I reject Mr Shavleyan's implausible denial that he requested Mr Simantob to refrain from presenting that cheque. It is obvious that he must have done so, otherwise the cheque would have been presented for payment.
35. Mr Simantob's evidence showed he was clearly aware that cheques presented to banks in London have a six month validity limit and expire after that period. I am therefore satisfied that he was aware that the cheque dated 26 November 2013 for $800,000 could be presented for payment at any time up to 25 May 2014, but not thereafter.
36. I am further satisfied that he would have had that expiry date well in mind in late 2013 and early 2014 when considering the position. He is careful about debts owed to him, as shown by his later prudent enquiry made in December 2014 about the applicable limitation period in English law for recovering debts; which, he discovered from online research of legislation, is six years.
37. Against that background, on 21 January 2014 the parties entered into a further agreement (the first consignment agreement), based on but modifying an earlier draft dated 14 January 2014. It was headed "Consignment Agreement" and was on the letterhead of Yacob's Gallery. The subject matter was "12 … wood beams with calligraphy probably Merinid 13-14 century in various size and two … Musherabiya wood screens".
38. These pieces were referred to in evidence collectively as "the woods". The agreement recorded that Mr Shavleyan had "potential private buyers" for the woods. The agreement was that Mr Simantob "will consign these pieces to Mr Shavleyan for a net price of 550,000 [GPB]", on an exclusive and non-assignable basis, such that auction was not permitted. The period of consignment was five months from the date of delivery (which is not clear).
39. On a sale, the sale price would become due within 60 days, failing which Mr Shavleyan would be liable for "compound interest of 20% per annum", collection costs and legal fees of Mr Simantob. If there were a sale, Mr Simantob agreed to consign two additional wood Merinid beams for 50 per cent commission on the sale price, to be determined. Ownership of the woods would remain with Mr Simantob until payment in full.
40. The last paragraph of the first consignment agreement stated:

"Also it is clearly understood that this agreement has nothing to do with any unfulfilled settlement agreement obligation of Mr. Shavleyan that was signed on May 1, 2010."

41. Later, on 11 April 2014, the agreement was altered and a different version signed on that date (the second consignment agreement). The period of consignment remained five months from the delivery date, which is not in evidence. It is therefore possible that the consignment period was extended, but not proved that it was. The net price for the woods dropped to £226,000.
42. The reference to adding two additional wood Merenid beams in the event of sale of the woods, was removed. The terms were otherwise unchanged and that wording at the end was retained, stating that it was "clearly understood" that the agreement had "nothing to do with any unfulfilled settlement agreement obligation of Mr. Shavleyan….".
43. Next, it is agreed that at some point in 2014, Mr Shavleyan provided eight postdated cheques to Mr Simantob, for $100,000 each. Mr Simantob asserts that they were by way of payment on account of Mr Shavleyan's liabilities under the settlement agreement; Mr Shavleyan says they represented a modified agreement that the total amount of $800,000 would be accepted in full satisfaction of his liabilities under the settlement agreement.
44. There is an important dispute about when Mr Shavleyan gave the eight cheques to Mr Simantob. The latter's pleaded case is that "[i]n or around March 2014 in the presence of Mr Aaron [Mr Shavleyan] provided [Mr Simantob] with the eight further postdated cheques in part-payment of his liabilities under the Settlement Agreement". Mr Simantob's pleaded case made no mention of anyone else being present.
45. In his oral evidence in chief, he went out of his way to revisit the timing:

"I think it is more towards very late March, the last days, beginning or maybe even April … I think both parties have stated it is late March. It does not change anything, but it is in March, yes".

46. Mr Shavleyan's case is that "[i]n early July 2014" at a meeting at his business premises in the presence of Mr Reza Nili, his business partner Mr Seyed Hosseini and Mr Moosa Abayahoudayan, Mr Shavleyan provided the eight postdated cheques; and that "it was agreed at that meeting that [Mr Simantob] would accept $800,000 in total settlement of all liability under the [settlement agreement]".
47. I will deal first with when and where the eight cheques were provided. As for where, that is straightforward: Mr Simantob did not dispute that the cheques were provided on a single occasion at Yacob's Gallery, Mr Shavleyan's shop. The question of when is not so straightforward and there is no contemporary written record to help me.
48. I reject the evidence of Mr Shavleyan that the cheques were provided as late as July 2014. He was asked many questions about the timing of the meeting, particularly given that the earliest date on one of the eight cheques was 16 June 2014. In the end, he responded: "… I do not remember exact dates, so do not put the date to me".
49. He called Mr Nili and Mr Abayahoudayan. Both were honest and reliable witnesses who kept to what they remembered and did not speculate or indulge in advocacy. I accept that both were present when the cheques were provided, at Yacob's Gallery. Neither could recall clearly when they were provided. Mr Abayahoudayan did say in his witness statement that the meeting was "[i]n or about early July 2014", but accepted in cross-examination that he could not say when the cheques were provided, though that happened in his presence.
50. Moreover, the earliest cheque date is 16 June 2014 and would not be postdated unless provided before that date. Yet Mr Shavleyan did not dispute that the cheques were all postdated and all provided on the same occasion. I therefore find that they were provided before 16 June 2014.
51. I find, further, that on the balance of probabilities they were provided earlier than 25 May 2014, the last day before expiry of the unpresented cheque for $800,000 dated 26 November 2013. I am satisfied that Mr Simantob would have been unwilling to wait until after expiry of that cheque and would require replacement cheques before losing such comfort as the November 2013 cheque provided.
52. However, I reject Mr Simantob's evidence that the eight cheques were provided as early as March 2014. On the balance of probabilities, they were provided after 11 April 2014, the date of the second consignment agreement, but before 24 May 2014. That is not far from Mr Simantob's plea, over two years after the event, that they were provided "in or around" March 2014. His witness statement of 3 November 2016 says it was "in around March 2014".
53. I find that on the balance of probabilities Mr Simantob did not have the eight cheques when, on 11 April 2014, he and Mr Shavleyan signed the second consignment agreement bearing that date. Mr Simantob is a careful and prudent man. If he had then had the eight cheques then, he would have made a point of referring to them in the second consignment agreement, as he later did in an amended version he drafted, set out in an email of 15 July 2014.
54. Mr Simantob's oral evidence in chief seeking to correct the timing to late March or April, was artificial and unconvincing and, in my view, based on calculation of his interest in the litigation rather than on a search for the truth. He was purporting to recall events that occurred about four years ago or more. He cited no objective support from any document or event in support of his revised recollection.
55. He wished to appear impartial while also pinning down provision of the cheques to a time before the oral variation of the settlement alleged by Mr Shavleyan. In his oral evidence, he was keen to discuss the timing of provision of the cheques and not keen to discuss the circumstances in which they were provided, nor any agreed basis for their provision.
56. Thus, in cross-examination it was put to him that after he had sent a draft agreement by email, which occurred in July 2014, there was a meeting "between yourself, Mr. Nili, Mr. Sayed Hussaini and Mr. Moosa Abayahoudayan". His response was that this was "absolutely not true". He insisted that there was "[n]o meeting at all".
57. When Mr Nili and Mr Abayahoudayan, left unmentioned in Mr Simantob's pleaded case, both gave evidence the next day, and both gave evidence that Mr Simantob and Mr Shavleyan had kissed and shaken hands on a deal during the meeting, Mr Ramsden QC, for Mr Simantob, did not ask for his client to be recalled to deal with the point and did not challenge that the kiss and handshake had taken place.
58. In submission, he said that evidence was irrelevant, using the expression "so what?" In cross-examination of Mr Abayahoudayan, he put that Mr Simantob "denies absolutely that there was any meeting in July, but he does not deny that the question of cheques and payments might have been discussed in your presence at various times."
59. Mr Simantob's plea that Mr Aaron was present when the cheques were provided, is not supported by evidence from Mr Aaron, one of the agreed arbitrators in 2010 who trades from a gallery in Berkeley Square, but was not called. It is possible that he is the person referred to by Mr Abayahoudayan in cross-examination as (according to the transcriber's spelling) "Mr. Haroon"; but if so, he has not given evidence about when the cheques were provided.
60. For those reasons, I find that the cheques were prepared, signed by Mr Shavleyan and given to Mr Simantob, at an informal meeting in the presence of, at least, Mr Abayahoudayan, Mr Nili and Mr Hosseini, at Yacob's Gallery between 12 April and 24 May 2014. The eight cheques were for $100,000 each; the dates were the 16^th of each month consecutively from 16 June 2014 to 16 January 2015 (apart from the October 2014 cheque, dated 26 October).
61. I accept Mr Nili's evidence that the purpose was to reconcile the parties and if possible settle their differences. I reject as unrealistic Mr Simantob's insistence that he was under no pressure from within his community to reconcile with Mr Shavleyan. I do not think it is coincidental that the total amount of the eight cheques is the same as the November 2013 cheque for $800,000. I will return later to what, objectively ascertained, must be taken to have been agreed, or not agreed, at the meeting.
62. In or about mid-July 2014, Mr Simantob entered into a verbal agreement with Mr Shavleyan referred to in an email of 22 July as "what we agreed last week". On 21 and 22 July, he emailed to Mr Shavleyan a written draft agreement amending the second consignment agreement of 11 April 2014. His covering email of 22 July requested Mr Shavleyan to "look at this revised draft agreement … have it printed on your letter head and signed and fax it to me to sign".
63. The draft was then, indeed, cut and pasted onto the letterhead of Yacob's Gallery and signed by both parties (the third consignment agreement). The terms relating to the woods were altered. The consignment period was extended to the end of November 2014. Sale of the woods must not now be private but at the Sotheby's annual Islamic art auction in October 2014, with a reserve price of not less than £250,000.
64. The first £226,000 of the hammer price would go to Mr Simantob; above that figure, the hammer price would be split 50-50 after deducting auction charges. Mr Shavleyan had to wire payment to Mr Simantob of the latter's share within seven days of being paid by Sotheby's. Until payment in full under the auction terms, or in the event of items not being sold, ownership of the woods would remain with Mr Simantob.
65. Mr Shavleyan would be liable for 18 per cent interest compounded annually on amounts due but not paid, and for legal costs of enforcing Mr Simantob's rights. The third consignment agreement then concluded with the following words just above the parties' signatures:

"Furthermore this agreement has nothing to do with a separate settlement agreement signed between Mr Simantob and Mr Shavleyan and any unfulfilled obligation remaining from that settlement which specifically as of June 2014 is an amount of 800,000 $ paid in 8 checks of 100,000 $ each to be deposited as agreed every month, until all paid."

66. Thus, as I have already noted, while the second consignment agreement made reference to Mr Shavleyan's unfulfilled obligation under the settlement agreement but not to the eight cheques, the third consignment agreement referred to Mr Shavleyan's unfulfilled obligation under the settlement agreement and also to the eight cheques and the intention that each would be deposited monthly in turn until all were paid.
67. Pausing there, on a literal reading of the settlement agreement, Mr Shavleyan's unfulfilled obligation was to pay an amount which, as at 15 July 2014, stood at $1.936 million and increased by $7,000 between 15 and 22 July 2014. The total amount payable under the settlement agreement as at 15 July 2014 stood at $3.063 million, of which a total of $1.1 million, i.e. the original principal amount less a shortfall of $400,000, had been paid.
68. For reasons already explained, I find that Mr Simantob had in mind during 2014 the six month expiry date for each of the eight cheques, the first falling on 15 December 2014; the possibility of presenting each cheque; the risk of dishonour if he did; the pressure on him from the local Persian business community to reconcile with Mr Shavleyan; and the influence of these considerations on his dealings with Mr Shavleyan at that time.
69. On 13 September 2014, Mr Simantob texted Mr Shavleyan at length; first, about the latter selling some Judeo Persian documents offered on a commission basis; and secondly, saying he had "patiently agreed to hold and not deposit the checks from the settlement which was to be deposited from June!" Mr Shavleyan had said he would wire part of the money soon; if he did not, Mr Simantob would deposit the cheques and Mr Shavleyan would become liable "for any penalties and interest that I was rightly entitled based on our settlement agreement of 2010 …".
70. On 24 September 2014, he texted again at length, wishing Mr Shavleyan a happy new year, saying he intended to deposit the first three cheques "tomorrow" as he would "not wait any longer". He complained of Mr Shavleyan's unreliability; the latter had not wired any money, nor sold the woods, nor suggested a sale price for the Judeo Persian documents. He did not, however, present the three cheques, or any of them.
71. On 21 October 2014, he sent a shorter text, asking that Mr Shavleyan "send at least 300 [i.e. $300k] of the settlement money this week as promised". Mr Shavleyan briefly texted back the prospect of "good news" soon; by 4 November, Mr Simantob texted referring to "more than 5 months" from the date of the first cheque, i.e. close to the expiry date. He expressed frustration at Mr Shavleyan "asking me not to deposit since you don't have the amount".
72. There is no dispute that by late 2014, none of the eight cheques had been presented; the parties met at Yacob's Gallery and Mr Shavleyan provided four cheques in substitution for the eight previously provided. The four substitute cheques were postdated 30 December 2014, for $300,000; 6 March 2015, for $170,000; 26 May 2014, for $190,000; and 26 July 2015, for $200,000. The total amount was, therefore, $860,000.
73. It was initially suggested by Mr Shavleyan that the increase in the total amount from $800,000 to $860,000 had something to do with the intended sale by Mr Shavleyan of a rare and valuable Koran to a buyer. I accept that Mr Shavleyan did, in a general sense, link in his mind the notion of raising funds from the sale of that Koran with the prospect of using the raised funds to pay them over to Mr Simantob.
74. But the Koran sale was not, as Mr Shavleyan eventually accepted, the reason for the increase of $60,000. Rather, the increase represented a notion of "interest" in the rough and ready sense of that word Mr Shavleyan used in cross-examination; namely, an additional uncalculated amount offered to Mr Simantob as a reward for the latter's patience and, more importantly, to persuade him to exercise patience and forbearance for a while longer.
75. Mr Simantob had to consider also the issue of limitation. He looked into it, researching the law on the government's legislation.gov.uk site in late December 2014. The limitation period and his patience were both running out. On 31 December, he texted Mr Shavleyan wishing him and his family a year of health, happiness and prosperity and saying he would start depositing the cheques by mid January unless payment was made. He went on to discuss the Judeo Persian documents.
76. In mid January 2015, he texted again saying he was depositing the cheque for $300,000 and was due to attend a meeting about the Judeo Persian documents, asking Mr Shavleyan once again to name his price for them. On 30 March 2015, Mr Simantob texted:

"I want to do business with you but you are not showing any good faith to settle your obligation! I need to have new checks for dates that I can be sure I can deposit them or I go ahead that [sic] put the ones you have given me as is not my problem you don't have the funds to cover them! Please lets take care of this unsettled amount you owe me, so please COME to the shop tonight."

77. By mid-2015, Mr Simantob still had not deposited any of the cheques. He accepted new cheques, as he had suggested. The pattern was repeated with a further modest increase in the total amount, to $900,000 made up of four substitute postdated cheques dated 15 September 2015 ($220,000); 16 November 2015 ($150,000); 30 December 2015 ($250,000); and 6 March 2016 ($280,000).
78. The use of postdated cheques as a form of currency combined with an element of security and comfort became an agreed method of doing business between these two men. The increases by way of "interest" rewarded the creditor's forbearance and reduced the threat that he would deposit cheques and trigger dishonour of a cheque. That could mean court proceedings, which neither party wanted and which are regarded with disfavour by the Persian art dealing community in London. It prefers its disputes to be settled in house.
79. A rupture in their business relations would deprive Mr Simantob of access to Mr Shavleyan's expertise, which he valued as shown by his willingness to deal in the woods and, subsequently, the Judeo Persian documents even though Mr Shavleyan owed him a lot of money. On the latter's side, access to Mr Simantob's funds and the antiques he owned was a useful source of business to Mr Shavleyan.
80. It was in neither's interest to fall out and they shared close community and family ties. But Mr Simantob also had to consider his legal position, including limitation. In late October 2015, he presented the first cheque for $220,000 for payment. It was dishonoured. Mr Simantob informed Mr Shavleyan and demanded payment. He was still trying on 29 December 2015, when he sent several texts. The third text complained about the bounced cheque and the failure to wire the amount of $220,000.
81. His first text that day referred to a transaction of a few thousand pounds for a "pear shaped" vase Mr Shavleyan had sold to Mr Simantob. He complained that Mr Shavleyan owed a balance of £1,600 after deducting the £5,000 to which Mr Shavleyan was entitled as the price of the vase. The fourth text complained that Mr Shavleyan had failed to contribute his share of $32,000 towards purchase of certain Ottoman embroidery and blue and white Iznik and other goods from an auction in Paris.
82. On 16 February 2016, Mr Shavleyan transferred to Mr Simantob the sum of $200,000. I accept Mr Simantob's evidence (and reject Mr Shavleyan's denial) that in about March 2016, Mr Shavleyan told Mr Simantob not to present the other three of the latest batch of four cheques, the second of which was due to expire on 15 April 2016.
83. With the sixth anniversary of the settlement agreement looming, Mr Simantob's solicitors sent a letter before claim on 7 April 2016 for the full amount due according to the terms of the settlement agreement, being then $2.378 million, of which $2.178 million, i.e. all but $200,000, was claimed under the $1,000 a day clause. The claim letter asserted that the debt was continuing to mount "at the daily rate of USD 1,000".
84. A week later, Mr Shavleyan's solicitors replied denying the claim, with the comment, among others, that "[t]here has been a long course of dealings between the clients which has not been taken into account". The $1,000 a day clause was rejected as a penalty, which if valid would have to be reduced pro rata to reflect the remaining principal balance due. The claim was then issued on 29 April 2016, shortly before the limitation period was due to expire.
85. The debate continued, including an assertion that the amounts paid to date ($1.3 million) exceeded the debt claimed by Mr Simantob, which was "only USD 950,000". The issue of security for costs was also raised, along with the suggestion that the settlement agreement had been induced by "threats of self harm". Mr Simantob's then solicitors described Mr Shavleyan's position as "incomprehensible". Mr Simantob then changed solicitors. The proceedings were then served.
86. Mr Shavleyan maintained in correspondence that he had owed Mr Simantob only £478,961 as at April 2010 but had then been put under undue pressure to sign the settlement agreement. He also claimed that the $1,000 a day clause was void as a penalty. He repeated that plea in his written defence dated 19 August 2016, in which he also said there was "no consideration" for the settlement agreement and, consistently with his case now apart from the timing, that "the amount claimed to be due under the Settlement Agreement was revised in or about the month of March 2014".
87. Mr Simantob applied on 9 November 2016 for summary judgment. In his witness statement of 9 February 2017, Mr Shavleyan said that after paying $1.1 million towards the $1.5 million referred to in the settlement agreement, Mr Simantob had pressed him for payment of the shortfall of $400,000 and also a further $400,000 for "interest" to which Mr Simantob claimed entitlement. He emphasised that the validity of the settlement agreement had been "questioned from the outset".
88. Having then paid a further $200,000, Mr Shavleyan could not, he said, on any view be liable for more than the balance of $600,000. It was for this amount that, on 17 October 2017, Master McCloud gave summary judgment in favour of Mr Simantob. She based her decision on the acknowledgment of indebtedness of $800,000 in the third consignment agreement, less the $200,000 thereafter paid.
89. I am told that Master McCloud rejected a submission that the $1,000 a day clause was void as a penalty. Her order does indeed so indicate, but her approved judgment does not. I do not have any written reasoned decision on the point, but Mr Shavleyan accepts that the penalty argument is no longer open to him in the current round of the proceedings.
90. Master McCloud also awarded interest of $171,999, and summarily assessed costs of £27,615.50. The interest calculation was certainly not based on $1,000 a day. It appears to have been calculated at 8 per cent per annum on $600,000 for 3.5833125 years, i.e. from a date in the second half of March 2014 up to the date of judgment, 17 October 2017. That meant Mr Shavleyan faced an immediate judgment debt of $771,999 including interest, plus the assessed costs.
91. He did not appeal against Master McCloud's order and said in evidence he respected it and the law. Enforcement proceedings have since been ongoing and a charging order obtained. True to form, Mr Shavleyan has negotiated with the enforcement officers and made part payments towards clearing the judgment debt and costs. As at 12 June 2018, he had paid a total of £413,115.50 in four separate instalment payments, leaving £266,240.59 due.
92. Master McCloud gave directions for the trial of outstanding issues, including further witness statements. Mr Nili was in contact with both parties, quite properly (there being no property in a witness). On 20 April 2018, the date of Mr Nili's witness statement, Mr Simantob wrote to him:

"Dear Reza, As I mentioned to you a bit earlier today after your message you sent above, first, I do not agree with the facts you are stating as true and false date and sequence of events. I know it seems you are last minute trying to help your friend Yacob, but he knows how through his lawyer to contact me and my lawyer to make an agreeable offer or solution".

93. This message to Mr Nili emerged during the latter's cross-examination. Mr Nili stated (through the Farsi language interpreter who helpfully translated): "He said Mr. Simantob asked him not to get involved and I answer him that whatever I have seen, I will do and I will swear to God that I will tell them the truth."

The Issues; Submissions

94. For the claimant, Mr James Ramsden QC made the following main submissions at the hearing:

(1) The settlement agreement was not varied by the third consignment agreement, nor orally at any meeting. The payments made, totalling $1.3 million, and those that would have been paid represented by the unpresented (and in one case dishonoured) postdated cheques, were payments on account.

(2) Mr Shavleyan repeatedly acknowledged his indebtedness by making the payments he made. He signed the three consignment agreements which included confirmation that they had "nothing to do with" obligations under the settlement agreement.

(3) The $1,000 a day clause was not particularly unusual or unreasonable; it represented an annual rate of interest of about 24 per cent which is not unusual in the London antiques market. It is inconceivable that Mr Simantob would forego the benefit of the clause.

(4) The allegation that liability was capped at $800,000 over and above the $1.1 million already paid, was made late, is opportunist and not credible. Mr Shavleyan himself offered postdated cheques exceeding the $800,000 cap for which he contended, first for $860,000 and then for $900,000; and implausibly attributed the additional $60,000 to the sale of a Koran.

(5) Even if there had been a purported variation of the settlement consideration, it was unsupported by any valid consideration; a willingness to do business in future if Mr Shavleyan chose to do so, is not good consideration: Stabilad Ltd v. Stephens & Carter (No. 2) [1999] 2 All ER (Comm) 651, per Peter Gibson LJ at 659 (and see Chitty on Contracts, Consolidated Mainwork and 2^nd Cumulative Supplement, at 4-025).

(6) Even if there was a variation to the settlement agreement supported by good consideration, capping Mr Shavleyan's liability as he alleges, he repudiated that agreement by providing postdated cheques which he then begged Mr Simantob not to present, and in one case a dishonoured cheque, thus repudiating his payment obligation.

(7) That repudiation was accepted by Mr Simantob by agreeing not to present the eight cheques for $100,000 each when asked not to do so and by his subsequent acceptance of substitute postdated cheques totalling first $860,000 and then $900,000.

(8) The effect of Mr Simantob accepting that repudiation was the position defaulted back to the settlement agreement and Mr Shavleyan's obligations under it, which once again became (if they had not been throughout) enforceable against him, including the $1,000 a day clause.

(9) Finally, Mr Shavleyan is independently liable for the amount of $20,000 in respect of the dishonoured cheque for $220,000, only $200,000 of which he replaced by a wire transfer in February 2016. That $20,000 forms part of the overall debt claim but must on any view be due even if the debt claim should fail.

95. Mr Keith Knight, for the defendant, made the following main submissions at the hearing:

(1) the settlement agreement was orally varied at a meeting attended by Mr Abayahoudayan and Mr Nili, in addition to the parties; the nature of the variation was that eight monthly instalments of $100,000 each would be provided in the form of postdated cheques and that the $800,000 represented by those cheques would discharge Mr Shavleyan from his obligations under the settlement agreement.

(2) There was good consideration moving from Shavleyan for the agreement to vary the settlement agreement: he provided Mr Simantob with the comfort of possessing the postdated cheques, the knowledge that they could be presented and, if honoured, produce $100,000 each month; and the ability to trigger dishonour and easy summary judgment if they were not honoured. This was an unconventional form of weak security but security nonetheless, for the $ 800,000.

(3) Further, Mr Shavleyan provided consideration in the form of continuing willingness to do business with Mr Simantob. This was not, said Mr Knight, discretionary or theoretical future business; it was actual and continuing business in the form of, among other transactions, the three consignment agreements, the terms of which (as to sale method, period of consignment and financial terms) changed during the consignment period, also the period during which the settlement agreement was varied.

(4) It would make no commercial sense to treat the eight cheques as mere payments on account. If that were the position, the amount of $800,000 recorded by Mr Simantob in the third consignment agreement, would not be that figure; rather, it would be a figure of nearly $2 million, which was the amount that would be due applying the $1,000 a day clause in its full rigour.

(5) Acceptance of the $800,000 payable by postdated cheques also meant that Mr Simantob would not have to defend the $1,000 a day clause in court or, indeed, any other aspect of the settlement agreement which, Mr Simantob knew, Mr Shavleyan was very unhappy about; indeed, he later sought to impugn the whole agreement on the ground of duress and lack of consideration, and sought to impugn the $1,000 a day clause as a penalty.

(6) The communications between the parties after the third consignment agreement of 22 July 2014, show that both were treating the extent of the obligations of Mr Shavleyan as represented by the amount of the eight postdated cheques, i.e. $800,000. The pattern of "new cheques for old", with increasing amounts due to the passage of time, confirmed that such was the parties' mutual understanding.

(7) The $20,000 forming the unpaid portion of the dishonoured cheque, forms part of the amount of $600,000 due under the judgment of Master McCloud, since it forms part of the $800,000 which it was Mr Shavleyan's obligation to pay. There can be no separate entitlement to the $20,000 over and above the entitlement to the total of $800,000 of which it forms part.

The Issues; Reasoning and Conclusions

96. Neither party asserted that the settlement agreement was rescinded and replaced by a fresh agreement. Both agreed that if Mr Shavleyan's obligations changed, they did so by a variation of the settlement agreement and not by a new contract wholly replacing a rescinded settlement agreement.
97. I will consider whether there was a variation, intended objectively to provide for full discharge of Mr Shavleyan's obligations under the settlement agreement; or whether there was merely an interim instalment plan for payments on account of continuing (and rapidly increasing) obligations. I will then consider whether any variation was supported by good consideration; and, finally, if so whether Mr Shavleyan repudiated the settlement agreement as varied and if so with what consequences.
98. The question for me is not what the parties subjectively believed their obligations to be but what, objectively ascertained, their obligations were. "The judicial task is not to discover the actual intentions of each party; it is to decide what each was reasonably entitled to conclude from the attitude of the other" (Gloag on Contract, 2nd ed., p.7, cited with approval by Lord Reid in McCutcheon v. David MacBrayne Ltd [1964] 1 WLR 125, at 128).
99. The objective facts providing the context in which these parties did business included their longstanding business, family and community ties; the common practices of those engaged in the antiquities trade in London; and the culture of fostering and preserving good business relations between those involved in the London antiques market; in particular, the Farsi speaking Persian community active in that market.
100. I bear in mind that this business culture had led to the settlement agreement in 2010. That agreement was the product of a climate in which good business relations are prized, unseemly fallings out strongly discouraged and rifts healed by the application of robust third party intervention and pressure. I accept that such pressure was applied to Mr Simantob by, in particular, Mr Abayahoudayan and Mr Nili in 2014, as they convincingly explained in their written and oral evidence.
101. I reject Mr Ramsden's submission that it is inconceivable Mr Simantob would willingly forego the substantial financial benefit of the $1,000 a day clause. Even if its validity had been beyond question, by ruthlessly enforcing it he would lose the appreciation of his community and risk bankrupting or inflicting severe financial damage on a close business associate on whose superior expertise and market contacts he depended for his own trading.
102. Mr Simantob was willing to accept postdated cheques as a weak form of security which provided some comfort (in the form of a sure route to swift summary judgment in the event of dishonour), while forbearing to present them and continuing to do business with Mr Shavleyan. That was a manifestation of his reluctance to burn his bridges with Mr Shavleyan and his amenability to pressure from fellow traders, as well as Mr Shavleyan's persuasive powers and refusal to acknowledge that the settlement agreement was binding on him.
103. I accept the convincing and unchallenged evidence of Mr Abayahoudayan and Mr Nili that Mr Simantob and Mr Shavleyan kissed and shook hands on a deal at the meeting in the spring of 2014. I do not think it would make commercial sense for the parties' business community to broker a deal with no legal effect. It is true that, unlike the settlement agreement, it was not put in writing and signed. But it did become evidenced in writing, albeit as part of a different contract dealing with specific antiquities, namely the woods.
104. In argument, I asked Mr Ramsden whether, if each of the eight cheques had been presented on their respective dates and honoured in full, Mr Simantob could then have gone on to sue in late January 2015 for the balance of millions of dollars due, applying the $1,000 a day clause. Mr Ramsden submitted that Mr Simantob could have done just that. The eight cheques were no more than payments on account.
105. But that would mean the brokering of the deal would have achieved no more than buying a little time for Mr Shavleyan to find upwards of $2 million, quite apart from the $1,000 a day by which his liability was increasing each day. That seems very unlikely in this commercial context. And it does not explain why the "unfulfilled obligation" described in the third consignment agreement is "specifically as of June 2014 … an amount of $800,000..."; rather than the $1.963 million that would fit Mr Ramsden's case.
106. Mr Simantob in his evidence described the eight cheques as no more than "cheques in my hand that I was holding". That is his self-serving interpretation of the status of those cheques. Whether or not he regarded as binding on him the deal sealed by a handshake and kiss at the meeting, I find that, objectively, Mr Shavleyan was entitled to regard the deal as binding and as quantifying the full amount of his liability under the modified settlement agreement, and the timing of payment by instalments.
107. In my judgment, Mr Simantob was plainly, and realistically, willing to accept a reasonable accommodation with Mr Shavleyan instead of standing on his rights under the settlement agreement. The $1,000 a day clause had the potential to drive Mr Shavleyan towards ever increasing indebtedness which he could never satisfy. For that reason, its rigorous enforcement would endanger Mr Simantob's standing in his business community and among his compatriots.
108. The objective intention that Mr Shavleyan's liability should be capped at $800,000 is also supported by the thrice recurring amount of $800,000, representing an excess of $400,000 over the principal payable under the settlement agreement ($1.1 million of the $1.5 million having been paid under it at the relevant times), which did not come close to correlating with the amount that would be due applying the $1,000 a day clause.
109. Further support for this analysis can be found in Mr Simantob's own words in a text message sent on 4 November 2014 in which he complained that more than five months had passed "from the date of your first check you wrote me for the balance of the settlement amount…"; and another text message sent on 30 March 2015, again asking "[w]hen you want to pay the balance of the settlement payment which is going now for more than 5 years" (my italics).
110. Mr Ramsden argued that the eight cheques could not represent more than payments on account of Mr Shavleyan's liability because each of the three consignment agreements stated that they had "nothing to do with" the separate settlement agreement and Mr Shavleyan's "unfulfilled" obligations under it. I do not think that argument is compelling. The consignment agreements were entered into separately from the settlement agreement and separately from the verbal agreement varying the settlement agreement.
111. Mr Simantob's phrase "nothing to do with" was put there to prevent Mr Shavleyan from relying on the consignment agreements to escape his obligations under the settlement agreement and, subsequently, the varied agreement requiring payment of the amounts represented by the eight cheques. It does not follow that the eight cheques must necessarily be treated as mere payments on account under a payment instalment plan.
112. Mr Ramsden also suggested that Mr Shavleyan's reliance on a alleged oral agreement to cap his liability at $800,000, was an opportunist late invention that did not feature as part of Mr Shavleyan's case until a late stage. However, his initial defence, before it was amended and before summary judgment was applied for, included the assertion that "the amount claimed to be due under the Settlement Agreement was revised in or about the month of March 2014".
113. Apart from the timing, which I have already addressed, that assertion is directly supported by the evidence of Messrs Abayahoudayan and Nili about the kiss and handshake at the meeting; both witnesses whose honesty and integrity Mr Ramsden rightly accepted.
114. Next, it was said that the sum of $800,000 could not have been intended to discharge Mr Shavleyan's liability in full because it was exceeded by the amounts of the cheques provided to replace the eight cheques for $100,000 each; first, by an additional $60,000 making a total of $860,000; and then by an additional $100,000, making a total of $900,000.
115. I do not accept this argument. As noted above, in my judgment the additional amounts over and above the $800,000, which on the second occasion increased by $40,000 more than on the first occasion, represented Mr Shavleyan's conception of "interest", in a rough and ready uncalculated but logical form. They were intended to reward Mr Simantob's patience and forbearance and to induce him to forbear a little longer.
116. For those reasons, I find that Mr Shavleyan has proved on the balance of probabilities that the settlement agreement was orally varied and that the variation was intended (in the objective sense) to be legally binding. The principal balance outstanding of $400,000 remained due but became payable in four monthly instalments of $100,000 each. The $1,000 a day clause was replaced by an obligation to pay a further $400,000 in four further and subsequent monthly instalments of $100,000 each.
117. This finding fits with what Mr Shavleyan said at paragraph 7 of his witness statement of 9 February 2017, the thrust of which I accept:

"I refer to the Agreement at Tab F to the Particulars of Claim [i.e. the third consignment agreement]. By that time, I had paid the Claimant $1,100,000 and therefore only $400,000 would have been due under the terms of the [settlement agreement] … . The Claimant pressed me for this payment and also said he was entitled to a further $400,000 for interest. …"

118. Mr Simantob agreed to accept $400,000 in lieu of "interest" due under the $1,000 a day clause; that clause was a major problem because the daily amount did not abate in proportion to the principal outstanding but in inverse ratio to the principal balance outstanding.
119. The variation therefore had legal effect if it was supported by good consideration. Was there good consideration here? If the variation was agreed by way of compromising a potential claim to avoid the settlement agreement, or the $1,000 a day clause forming part of it, there is no difficulty in finding good consideration; see Chitty, op. cit at 4-052: "[t]he compromise of a claim which is doubtful in law is binding as a contract."
120. However, if that is not the correct analysis, the applicable law is not straightforward. It is not necessary to undertake a full review of the authorities here because the law has recently been looked at by the Supreme Court. The following brief observations on the law suffice for this case.
121. Mr Ramsden reminded me that part payment of a debt cannot satisfy the obligation to pay the whole of the debt; for good consideration cannot be found in the performance of an existing contractual duty. The rule is conventionally traced to Foakes v. Beer (1884) 9 App Cas 605, HL, upholding, with some reluctance on Lord Blackburn's part, the rule in Pinnel's case (1601) 5 Coke Reports 117a, 77 ER 237, bearing the authority of Lord Coke himself, that:

"[p]ayment of a less sum on the day in satisfaction of a greater, cannot be any satis-faction for the whole"; though "[t]he gift of a horse, hawk, robe, &c. in satisfaction, is good"; and that "payment of part at a different place" may be "in satisfaction of the whole" (77 ER 237, at 238).

122. At the hearing, I was referred to various passages in Chitty (op. cit.), which led me to paragraphs 4-062 and 4-066 to 4-072, and in particular to the line of various cases cited at footnote 373, which I need not set out. These cases have tended to erode the rule in Pinnel's case by finding consideration in the shape of "practical benefits", following the decision of the Court of Appeal in the lead judgment of Glidewell LJ in Williams v. Roffey Bros [1991] 1 QB 1, CA.
123. A subsequent decision of a differently constituted court restored orthodoxy in In Re Selectmove Ltd [1995] 1 WLR 474, CA. Peter Gibson LJ, giving the lead judgment, indicated (at 480-1) that the decision in Williams v. Roffey Bros had to be confined to its facts and not extended to a case of part payment of a debt, to avoid a violation of the doctrine of precedent and the authority of Foakes v. Beer.
124. After the hearing before me, it came to my attention that the Supreme Court had (shortly before the hearing) delivered judgment in MWB Business Exchange Centres Ltd v Rock Advertising Ltd [2018] UKSC 24, [2018] 2 WLR 1603. The outcome of the appeal did not turn on any issue of consideration, but on the effectiveness of a "no oral modification" clause. However, Lord Sumption JSC said, at [18]:

That makes it unnecessary to deal with consideration. It is also, I think, undesirable to do so. The issue is a difficult one. The only consideration which MWB can be said to have been given for accepting a less advantageous schedule of payments was (i) the prospect that the payments were more likely to be made if they were loaded onto the back end of the contract term, and (ii) the fact that MWB would be less likely to have the premises left vacant on its hands while it sought a new licensee. These were both expectations of practical value, but neither was a contractual entitlement. In Williams v Roffey Bros & Nicholls (Contractors) Ltd [1991] 1 QB 1 the Court of Appeal held that an expectation of commercial advantage was good consideration. The problem about this was that practical expectation of benefit was the very thing which the House of Lords held not to be adequate consideration in Foakes v Beer (1884) 9 App Cas 605 : see, in particular, p 622, per Lord Blackburn. There are arguable points of distinction, although the arguments are somewhat forced. A differently constituted Court of Appeal made these points in In re Selectmove Ltd [1995] 1 WLR 474, and declined to follow Williams v Roffey . The reality is that any decision on this point is likely to involve a re-examination of the decision in Foakes v Beer. It is probably ripe for re-examination. But if it is to be overruled or its effect substantially modified, it should be before an enlarged panel of the court and in a case where the decision would be more than obiter dictum."

125. I invited brief written submissions on this passage. Mr Ramsden submitted that it confirmed that an expectation of a practical benefit cannot be good consideration for payment of part of an existing debt and that the decision in Williams v. Roffey, indicating the contrary, was probably wrong. He again emphasised that the settlement agreement and the consignment agreements were separate from each other and that a possible future willingness to do business could not be good consideration for a variation of the former.
126. Mr Knight, correctly in my view, accepted that "the law presently is that an offer to pay less than an amount already due must, in the absence of consideration, be ineffective". He reiterated his submission that the consideration here lay in the ongoing mutual dealings between the parties and in Mr Shavleyan's forbearance to run as defences his protestations against the validity of the settlement agreement.
127. It is not open to me to decide that Williams v. Roffey Bros was wrong and must be taken to have been overruled. It is binding on me, just as In Re Selectmove is. Lord Sumption JSC did not decide that either case was wrongly decided. However, Williams v. Roffey was not a case of part payment of a debt, unlike Selectmove, but of extra payment in return for an existing obligation to perform services. The narrow reading of Williams in Peter Gibson LJ's judgment in Selectmove is also binding on me.
128. Peter Gibson LJ declined to extend the reasoning derived from Williams that consideration can take the form of a practical benefit, to cases of part payment of an existing debt. I therefore take the law to be as set out in his judgment in Selectmove, at 479-480, citing from the judgment of Danckwerts LJ in D. & C. Builders Ltd. v. Rees [1966] 2 QB 617, who said at 626 that Foakes v. Beer:

"settled definitely the rule of law that payment of a lesser sum than the amount of a debt due cannot be a satisfaction of the debt, unless there is some benefit to the creditor added so that there is an accord and satisfaction."

129. I ask myself whether, in this case, there was some benefit to Mr Simantob added, over and above expected receipt of the $800,000 represented by the eight cheques provided to him by Mr Shavleyan. The expectation of receipt of that amount would not alone be enough, even though it clearly represented a practical benefit to Mr Simantob. I have considered carefully whether Mr Simantob stood to benefit from the agreed variation of the settlement agreement in some other way.
130. The first point to bear in mind is that Mr Simantob gained prestige and standing with his peers in the local business community of which he formed part. Conversely, he averted a risk of becoming increasingly unpopular with them; he was being urged to "stop bothering" Mr Shavleyan and to reach a sensible settlement with him. When he did so, he no doubt gained the approval of his peers.
131. Subject to authority, I would have been inclined to regard that as good consideration, but I do not think it is safe to do so with the law in its current state. The notion of a cultural benefit as consideration for part payment of a debt is uncomfortably close to the expectation of a practical benefit which, according to Peter Gibson LJ's judgment in Selectmove, will not do as consideration. I therefore do not base my decision on any enhanced prestige Mr Simantob gained from the agreed variation of the settlement agreement.
132. Next, Mr Simantob obtained the potential practical benefit of holding the eight cheques in his hands, as a form of security, albeit weak security, for the eight intended monthly payments. As already noted, the option of presenting them increased the pressure on Mr Shavleyan to keep his side of the bargain by ensuring funds were available when the cheques were presented. The absence of funds would lead to dishonour and easy summary judgment on the dishonoured cheque.
133. I was not taken to any case in which giving security for a pre-existing debt has been held to be good consideration for an agreement to reduce the amount of the debt (cf. the cases cited in Chitty, op. cit at 4-032, 4-048 and 4-058). I doubt whether providing the cheques added anything of substance to the promise to pay in monthly instalments the total sum of $800,000 they represented. I do not think that providing the eight cheques, without more, amounted to good consideration.
134. Mr Simantob also obtained the commercial benefit, or expected benefit, of continued access to Mr Shavleyan's expertise and contacts in the marketplace; a thing of value to him because he was not resident in London and lacked expertise and contacts to match Mr Shavleyan's. The latter's usefulness was not marred by the dispute because, in the prevailing business culture and with close cultural ties between the parties, it remained viable to continue trading with Mr Shavleyan while pressing for payment and prosecuting their dispute.
135. Mr Simantob, indeed, continued to do business with Mr Shavleyan during and after the dispute. I do not read Mr Shavleyan's pleaded case in the way Mr Ramsden invited me to read it, as confined to a plea that Mr Simantob was willing in the abstract, if he felt like it, to do business with Mr Shavleyan in the future. They were engaged in actual transactions or potential transactions before, during and after the agreed variation of the settlement agreement.
136. At the time when the variation agreement was reached orally, the successive consignment agreements relating to the woods were in force. Mr Knight submitted that the changes to their terms during the period from January to July 2014 is evidence of tangible benefits to Mr Simantob qualifying as good consideration for the oral variation of the settlement agreement; for example, the notional price was altered to £226,000, with a 50-50 split above that price.
137. I do not agree that consideration for the oral variation of the settlement agreement can be found in the changes to the terms of the three consignment agreements. They were, as stated in all three of them, separate and self-contained transactions undertaken between the parties. They had "nothing to do with" the settlement agreement and Mr Shavleyan's obligations under it, even though the separate matter of the oral variation was evidenced in the third consignment agreement.
138. Nor, in my judgment, is it safe to conclude on the current state of the law that the more general benefit to Mr Shavleyan of continued access to Mr Shavleyan's expertise and contacts qualifies as consideration. That benefit was not a direct quid pro quo for the variation. It was mainly a product of the cultural, community, family and business ties that enabled the two men to continue doing business through the dispute.
139. All that said, I have concluded that Mr Shavleyan did provide good consideration for Mr Simantob's agreement to $800,000 in full discharge of Mr Shavleyan's liability, if any, under the settlement agreement. Mr Shavleyan did not merely promise to pay a pre-existing debt. It was a disputed debt. I accepted Mr Shavleyan's evidence that he told Mr Simantob in their conversations going back to 2011, and continuing up to the variation in 2014, that he disputed the validity of the settlement agreement.
140. His challenge to the principal debt, founded on alleged duress, was obviously weak given his part payments. Much stronger was his argument that the $1,000 a day clause was penal, i.e. "a secondary obligation which imposes a detriment on the contract-breaker out of all proportion to any legitimate interest of the innocent party in the enforcement of the primary obligation" (per Lord Neuberger PSC at [32] in Cavendish Square Holding BV v Makdessi; ParkingEye Ltd v Beavis [2016] AC 1172).
141. Mr Shavleyan maintained, albeit unsuccessfully, those arguments in the summary judgment proceedings. While the arguments subsequently failed, they might – the penalty argument in particular - have succeeded or at least been found arguable. If the $1,000 a day clause had been struck down, Mr Simantob would have been entitled under the settlement agreement only to the $400,000 outstanding principal due instead of the $800,000 to which he became entitled under the settlement agreement as varied.
142. I therefore conclude that this was not a case of a promise to pay part only of a pre-existing debt. There was a "a horse, hawk, robe, &c" given in return, in the form of forbearance to run the defences that were subsequently unsuccessfully run in the summary judgment proceedings. The case is one of valid compromise involving consideration on both sides. Put another way, there was an accord and satisfaction in respect of the mutual claims and cross-claims under and arising from the settlement agreement.
143. That leaves Mr Ramsden's argument that any variation agreement was repudiated by Mr Shavleyan, that the repudiation was accepted by Mr Simantob and that the variation thereby fell away and the position defaulted back to the original settlement agreement, complete with the $1,000 a day clause. Mr Ramsden submitted that this was a consequence of the ordinary doctrine of repudiation and acceptance of contractual obligations.
144. I asked him whether there was any authority for his proposed "revival" doctrine. He did not rely on any authority; he submitted that the return of the old contract terms followed from the discharge of the replacement terms. I do not accept that proposition. It enables the innocent party to escape the deal to which he has agreed and enforce better terms than he bargained for.
145. Mr Ramsden's submission is contrary to established principles: discharge of primary obligations through repudiation and acceptance leads to the primary obligations being replaced by secondary obligations to pay damages or submit to other appropriate remedies. It does not enable the innocent party to cherry pick the original deal which he agreed to modify, in preference to the modified obligations that have been repudiated. The remedy is for breach of the modified agreement, not the original one.
146. As for the $20,000 forming part of the proceeds of the dishonoured cheque for $220,000: that must logically form part of the sum of $600,000 for which Master McCloud gave summary judgment. Mr Simantob has already made good his remedy in respect of the dishonour of the cheque. To award that sum now would be to award it twice over.

Conclusion

147. For those reasons, I decide the issues that arise in this final phase of the proceedings in favour of Mr Shavleyan and I dismiss the balance of the claim. Mr Simantob achieved his full entitlement in the summary judgment application. He should have been content with the fruits of that exercise, which were rightfully his. Interest is quite properly running on the amount still outstanding. Mr Shavleyan is under no further obligation to Mr Simantob.