"We settled those other debts, but you still owe me this one!"

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A joint venture of some complexity fell apart, as they sometimes do. 

The relevant parties entered into a “Termination Agreement” dealing with the fallout.  

P sued D for a debt of £500K. D said that debt was discharged by operation of the Termination Agreement: accord and satisfaction.  

P and D’s commercial relationship was somewhat colourful. P and P’s spouse invested substantial sums with the D - over US$15m - over a number of years: [2] - [23]  

The sole issue was: was the £500K debt among the debts released via the Termination Agreement, or did D still have to repay it?  

The Termination Agreement included that assets were to be transferred to P “… in full and final satisfaction of all rights, claims or interests [P] may have in respect of the Joint Venture and all payment obligations which any [other relevant entities] may have to [P] and/or to any person not party to this Agreement and associated with [P].”: [24]  

The Court found the purpose of the £500K loan was personal, and did not relate to the joint venture: [46]  

Over subsequent years the £500K loan was referred to as the “personal loan” in correspondence between the parties: [47] - [58]  

P said the Termination Agreement related to the joint venture and, as the £500K loan was not part of that venture, the agreement had no effect on it: [70]  

D, perhaps unsurprisingly, took the opposite view: [72]  

The court considered the clause’s two limbs. The first limb (the above extract up to the word “and”) was found to relate to the joint venture: [82]  

The second limb had no such restriction: [84]  

P submitted that various email exchanges showed the parties’ true intent in entering into the Termination Agreement was to deal solely with joint venture issues. The Court identified these exchanges as negotiation rather than binding terms and said the common objectives are best taken from the Termination Agreement itself, not earlier emails: [109]  

The Court found that on a proper construction the £500K loan fit within the description of a “payment obligation” under the Termination Agreement (the second limb) meaning the D had no obligation to pay: [115]