--- title: "Cryptocurrency Litigation Success: Compensatory Damages in Lieu of Ethereum" url: https://lexlaw.co.uk/solicitors-london/cryptocurrency-litigation-success-assessing-compensatory-damages-in-lieu-of-an-injunction-for-specific-performance/ date: 2024-07-15 modified: 2026-06-02 author: "Shumaim Rizvi" description: "We successfully represented a client in a significant cryptocurrency loan dispute. On 2 July 2024, the High Court handed down a judgment varying the valuation date for assessing damages in lieu of specific performance. Initially, the County Court had set the valuation date at the breach in 2019, which did not account for the significant increase in Ethereum's value." categories: - "Bitcoin" - "Blockchain" - "Breach of Contract" - "Case Study" - "Civil Litigation" - "Civil Procedure Rules" - "Contract" - "Costs" - "County Court" - "CPR" - "Cryptocurrency" - "Cryptocurrency Dispute" - "Cryptocurrency Loan" - "Cryptography" - "Damages" - "Digital" - "Ethereum" - "Financial Services Litigation" - "High Court" - "HMCTS" - "Litigation" - "Media" - "News" - "NFTs" tags: - "Bitcoin" - "Breach of contract" - "Case Study" - "Civil Litigation" - "Civil Procedural Rules" - "Contracts" - "Cryptocoin" - "Cryptocurrency" - "Cryptocurrency Dispute" - "Cryptocurrency Loan Dispute" - "damages" - "Ethereum" - "Financial Regulation" - "judgment" - "Litigation" - "NFTs" - "Specific Performance" - "Success" - "Valuation" image: https://lexlaw.co.uk/wp-content/uploads/Cryptocurrency-Litigation-Success-Assessing-Compensatory-Damages-in-Lieu-of-an-Injunction-for-Specific-Performance-e1720445513404.jpg word_count: 1919 --- # Cryptocurrency Litigation Success: Compensatory Damages in Lieu of Ethereum *London, UK – 2 July 2024 –* In a significant victory for our client, Mr. Southgate, the [Chancery Division of the High Court](https://www.gov.uk/courts-tribunals/chancery-division-of-the-high-court), has issued a favourable ruling in the crypto loan case of *[Oliver Southgate v Adam Graham](https://caselaw.nationalarchives.gov.uk/ewhc/ch/2024/1692)* [2024] EWHC 1692 (Ch). Our successful cryptocurrency loan agreement litigation case was pursued to judgment because Adam J Graham asserted he was practically penniless, on the verge of bankruptcy and thus unable to repay an Etheruem loan he had borrowed from our client. This is in stark contrast to his assertions of being a wealthy and successful entrepreneur - as littered all over his [https://www.adamjgraham.com/](https://www.adamjgraham.com/about/) website and elsewhere on the internet where he projects an image of financial success, sells ebooks such as: "*The Three Secrets to a Seven Figure Exit*", offers to coach others and suggests his Airtasker copycat app, [JustFix](https://play.google.com/store/apps/details?id=com.justfix.user), is groundbreaking and successful when it has hardly any comparative market penetration; e.g., see [this BBC article](https://www.bbc.co.uk/news/articles/cdxyr1qvkvqo). ![Scammer? False claims of success? Penniless? or Rich? "Adam J Graham" Justfix "The Three Secrets to a Seven Figure Exit" "The Three Secrets to Scaling your Company"](https://lexlaw.co.uk/wp-content/uploads/Adam-J-Graham-Justfix-Coaching-Books-CEO-Entrepreneur-BBC-UK-250m.jpg) ## Adam J Graham's Tales of Success & Wealth - True/False? > **Twice exited founder, Global Plc CEO, Growth Consultant and M&A Advisor** > *Adam is a serial entrepreneur with 25 years of experience in building, scaling and selling companies. With two successful exits and having run a global public company with a market cap of £250M at its peak, he currently leads JustFix – a groundbreaking new platform in the home maintenance sector. Adam also advises companies on mergers and acquisitions, leveraging his expertise to drive growth and and value creation.* > [https://www.adamjgraham.com/about/](https://www.adamjgraham.com/about/) ## Oliver Southgate v Adam J Graham [2024] EWHC 1692 (Ch) The initial court decision found [Adam J Graham](https://www.linkedin.com/in/adamgraham/?originalSubdomain=uk), the founder of Airtasker copycat app, [Justfix](https://www.justfix.app/), and a man who [claims to be a successful entrepreneur](https://www.adamjgraham.com/about/), in breach of the agreement but did not grant specific performance for the return of the ETH tokens and instead ruled it would award monetary damages. The original court's chosen valuation date for assessing damages was disputed. We argued it did not adequately compensate Mr. Southgate for the loss incurred due to the date selected by the learned Judge. Mr Justice Trower sitting in the Chancery Division of the High Court, has handed down judgment in *[Southgate v ](https://caselaw.nationalarchives.gov.uk/ewhc/ch/2024/1692)[Adam Graham](https://www.linkedin.com/in/adamgraham/?originalSubdomain=uk) *- an appeal against the date of valuation of damages determined in the judgment of HHJ Saggerson at the [County Court at Central London](https://www.find-court-tribunal.service.gov.uk/courts/central-london-county-court). Our appeal related to the date on which loss, impacted by the value of a cryptocurrency token, was to be determined in circumstances where the Court refused to order [injunctive specific performance](https://lexlaw.co.uk/injunctive-relief-interim-remedies-urgent-injunction-freezing-order-second-opinion-litigation-advice/) of a contractual token repayment obligation. The appeal court acknowledged the inadequacy of the initial valuation date which the court agreed did not accurately reflect Mr. Southgate's actual losses. They instructed the lower court to consider alternative dates, including the date of judgment, for a more accurate assessment. ## Key Points: - Southgate advanced 144 Ethereum tokens to Graham under an oral agreement. - The court had to determine the terms of the agreement and the appropriate relief for breach. - The court found in favour of Southgate on the primary issue but refused specific performance. - Damages were to be assessed at a later remedies hearing. - The original court's chosen valuation date for assessing damages was disputed. - Mr Justice Trower instructed the lower court to redetermine the correct valuation date. While the High Court affirmed the trial court's denial of specific performance, it overturned the decision regarding the damages assessment date. The timing of valuation can substantially influence the damages awarded in cryptocurrency disputes, given their market volatility. Southgate v Graham underscores that the assessment date is not fixed and may be adjusted depending on specific case circumstances and the litigation strategy adopted. ## Background to the ETH Litigation Case In the underlying litigation, our Claimant client sued to recover [Ethereum](https://ethereum.org/en/) ("ETH") tokens that he had loaned to the Defendant and the Defendant had failed to return. Given the rise in the value of ETH, the Defendant formulated a disingenuous and totally without merit defence argument that his obligation was to return the GBP equivalent of the value of the ETH loaned to him at the date of the loan; not to return the ETH (in spite of evidence of him clearly agreeing to return ETH) nor to return ETH at the later or current GBP value equivalent. HHJ Saggerson ruled in favour of our client on the critical question that the loan was to be repaid in ETH not GBP but declined to order injunctive relief instead opting for damages in lieu of specific performance. However the learned judge erred in determining the correct date for assessing loss, in this case the valuation of the ETH. The ETH had risen significantly in its price since the date of the loan. The trial Judge preferred our client's version of events, holding that the agreement required the return of the ETH as opposed to payment in GBP to the value of the ETH loaned (as at the date of the agreement). However, the trial Judge refused to order specific performance of the obligation to return the ETH and instead awarded damages in lieu of specific performance. The question then arose as to what date those damages in lieu of specific performance should be valued. Following what he described as the "date of breach rule" the Judge held that the damages fell to be valued at the date of the breach of the obligation to return to the ETH: a date in 2019. That meant that our client, the successful party, would be very significantly out of pocket since the value of the ETH was significantly less than it is worth now. Consequently, our client appealed against that finding. His appeal was successful. ## Ethereum Loan Dispute - County Court Claim Our client, the claimant in the case, loaned a specific amount of [Ethereum (ETH)](https://en.wikipedia.org/wiki/Ethereum) tokens to the defendant in 2018, with the expectation of receiving them back at a later date. However, a disagreement arose regarding the terms of the agreement. The borrower, defendant in the case, refused to return the ETH which led to a claim in the County Court. The court proceedings involved a claim initiated by our client on 6 January 2022, seeking the return of Ethereum Tokens from the Defendant. After hearing arguments from both parties, the court ruled that the Claimant was entitled to the return of the cryptocurrency tokens. However, the court decided to award damages in lieu of specific performance. The assessment of damages was to be based on the value of ETH as of midday on 1 October 2019. Our client was also entitled to recover any associated transaction fees incurred during the ETH token transfer. Our client argued that the appropriate date for assessing damages was the date of the judgment. However, the judge concluded that the damages should be quantified based on the date of the breach of the contractual obligation to return the cryptocurrency, which he determined to be in October 2019. LEXLAW lodged an appeal with the High Court, due to the rise in the value of ETH, using the breach date of 1 October 2019, for quantification would significantly disadvantage our client. We argued for a more appropriate valuation date, one that accurately reflected the true extent of the loss sustained by our client. ## Cryptocurrencies and Ethereum Explained Cryptocurrency is a digital payment system that does not rely on banks to verify transactions. Instead, it uses cryptography (complex math) to secure transactions and control the creation of new units of currency. Cryptocurrencies are decentralised, meaning they are not controlled by any single government or financial institution. Here are some key features of cryptocurrency: - **Digital**: Cryptocurrencies exist only electronically. There are no physical coins or bills. - **Decentralised**: Transactions are verified and recorded on a distributed public ledger called a blockchain, which is not controlled by any one entity. - **Secure**: Cryptography makes it very difficult to counterfeit or steal cryptocurrency. - **Pseudonymous**: Transactions are linked to unique digital addresses, but these addresses typically don't reveal the identity of the person behind them. [Ethereum](https://en.wikipedia.org/wiki/Ethereum) is a specific type of cryptocurrency, often referred to as a platform cryptocurrency. It not only functions as a digital currency (called Ether, or ETH), but also allows developers to build applications on its blockchain network. Here's what makes Ethereum different from other cryptocurrencies like Bitcoin: - **Smart Contracts**: Ethereum allows for the creation of self-executing contracts called smart contracts. These contracts can automate the execution of agreements according to predefined terms. - **Decentralised Applications (dApps)**: Developers can build applications on the Ethereum network, creating a platform for various decentralised services like finance (DeFi) and [non-fungible tokens (NFTs)](https://en.wikipedia.org/wiki/Non-fungible_token). ## Appeal to the High Court Recognising the inherent unfairness in the County Court’s decision, we lodged an appeal at the High Court. The High Court carried out a detailed analysis of the case law relating to the time at which the Court values loss. The Court found that the case law - identified by LEXLAW - made clear: (i) that the date of breach rule should not be rigidly applied when it does not adequately compensate the innocent party; and (ii) that the case law in relation to s50 of the Senior Courts Act 1981 also supported the conclusion that the starting point when valuing damages in lieu of specific performance is to take the date of judgment as the correct date of valuation. That is because the Court is awarding damages for the loss of the right to specific performance; and that such a loss ordinarily falls to be determined at the date of the refusal to provide specific performance. Instead, the Court found that the burden is on the Defendant to show that the Claimant failed to mitigate his loss by continuing to pursue the remedy of specific performance. ## Significance of the Case This case sets a valuable precedent for future disputes involving cryptocurrency transactions and breach of contract claims. It underscores the importance of a fair valuation date for damage calculations, particularly in volatile markets. Additionally, it clarifies the court's flexibility in awarding damages alongside or instead of specific performance, depending on the specifics of the case. ## Download the Judgment here [![Between: Oliver Southgate Appellant and Adam Graham Respondent [2024] EWHC 1692 (Ch) Before: THE HONOURABLE Mr Justice Trower Case No: CH-2023-000212 IN THE HIGH COURT OF JUSTICE BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES CHANCERY APPEALS ON APPEAL FROM THE COUNTY COURT AT CENTRAL LONDON ORDER OF HHJ SAGGERSON DATED 28 SEPTEMBER 2023 Royal Courts of Justice, Rolls Building Fetter Lane, London, EC4A 1NL Christopher Snell (instructed by Lexlaw Solicitors & Advocates) for the Appellant Rupert Beloff (instructed by Ashtons Legal) for the Respondent Hearing date: 21 June 2024 Approved Judgment This judgment was handed down remotely at 10.30am on Tuesday 2 nd July 2024 by circulation to the parties or their representatives by e-mail and by release to the National Archives. Mr Justice Trower Mr Justice Trower 1 This is an appeal against parts of an order made by HHJ Saggerson (the “Judge”) on 28 September 2023. The order was made at the conclusion of the trial of a dispute as to the terms of an oral agreement under which the Appellant advanced cryptocurrency to the Respondent in the form of 144 Ethereum tokens (“ETH”) sent to him in two tranches on 7 and 13 June 2018 and the consequences of its breach by the Respondent. 2 The advance was made in the context of what the Judge called the Respondent](https://lexlaw.co.uk/wp-content/uploads/Southgate-v-Graham-CH-2023-000212-Approved-judgment-02-07-2024-724x1024.jpg)](https://lexlaw.co.uk/wp-content/uploads/Southgate-v-Graham-CH-2023-000212-Approved-judgment-02-07-2024.pdf) ## Expert Cryptocurrency Dispute Lawyers If you find yourself in a similar situation, where you have loaned cryptocurrency and the borrower fails to return it as agreed, [LEXLAW Solicitors and Barristers](https://lexlaw.co.uk/) can help. Our experienced team of legal professionals can guide you through the legal process, ensuring your rights are protected and you receive the compensation you deserve. ## Legal Precedent for Cryptocurrency Loan Disputes This case serves as a precedent for similar situations involving cryptocurrency and breach of contract. It emphasises the importance of carefully selecting the valuation date when calculating damages in lieu of specific performance, particularly in cases where the value of the cryptocurrency fluctuates significantly. [LEXLAW Solicitors and Barristers](https://lexlaw.co.uk/) are here to help you navigate the complexities of cryptocurrency litigation and ensure you receive fair compensation for your losses. ## How can we help you? Has someone like [Adam J Graham ripped you off in a scam](https://www.adamjgraham.com/about/)? The crypto landscape is still largely unregulated, however, our experienced team at [LEXLAW](https://lexlaw.co.uk/) has kept itself abreast with the latest changes in the Crypto-landscape to provide our clients with the best possible advice and representation in order to help people get their money back. [Our Barristers and Solicitors](https://lexlaw.co.uk/our-people/) have decades of experience in dealing with loan disputes. If you have fallen prey to cyber fraud or in a loan dispute, please do not hesitate to contact us, so we can provide you with the best possible advice and help that you may need.