CANTOR INDEX LTD V THOMSON

[2008] EWHC 1104 (QB), Queen’s Bench Division, Mr Justice Tugendhat, 21 May 2008

Contract – Settlement agreement – Whether acceptance of cheque amounted to agreement to settle

The claimant was authorised to deal in contracts for differences. In June 2006 the defendant opened a trading account with the claimant. On 4 December 2006 after closing certain contracts, the claimant demanded payment of a debt quantified at £55,425.98. On 14 February 2007 the claimant wrote to the defendant’s solicitors seeking confirmation that the amount outstanding would be paid in full, failing which lawyers would be instructed. On 22 February 2007 solicitors for the defendant wrote that he was willing to settle by means of a payment of £15,000 by 1 March 2007, a payment of £20,000 by 21 March 2007 and a payment of £20,425.98 by 5 April 2007. That offer was rejected by a counter-offer dated 23 February 2007, but that was in turn rejected by the defendant on 1 March 2007 restating his original offer and enclosing a cheque for £15,000. That cheque was banked on the same or on the following day, but it did not clear. On 9 March 2007 the claimant wrote to the defendant stating that “by failing to pay the first instalment of £15,000 by 1 March, [the defendant] has not complied with the terms of the payment plan which we had agreed” and payment of cleared funds was demanded. Tugendhat J held that claimant had, by banking the cheque, entered into a settlement agreement with the defendant: the payment of the cheque into the claimant’s bank account was strong evidence of acceptance.