Bush and Anr v King
| Jurisdiction | England & Wales |
| Judge | Judge Kay QC |
| Judgment Date | 27 February 2013 |
| Neutral Citation | [2013] EWHC 966 (QB) |
| Court | Queen's Bench Division |
| Date | 27 February 2013 |
| Docket Number | Case No: TLQ/12/0668 |
[2013] EWHC 966 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Strand
London
WC2A 2LL
His Honour Judge Michael Kay QC
Case No: TLQ/12/0668
MR IAIN GLEN QC and MR GORDON BISHOP (instructed by LT Law) appeared on behalf of the Claimant
MR EDWARD FRANCIS (instructed by Pictons) appeared on behalf of the Defendant
Approved Judgment
On 11 th July 2006, the Second Claimant ('Baseline'), agreed to pay to the Defendant ('Mr King') £400,000 for a 50 per cent beneficial share in a six metre strip of land on the west side of Five Oaks Lane, Chigwell, Essex. That land was registered under title number EGL503590. The transaction completed on 11 th August 2006. It is the Claimants' case that Mr King deceived Baseline and the First Claimant ('Mr Bush') into concluding the agreement by a number of fraudulent misrepresentations.
The Statements of Case
At paragraph 5 of the Particulars of Claim it is alleged that Mr King represented that the strip of land was a ransom strip. He also represented that the developer of the site ('Countryside') owned or controlled - that is to say had an option to purchase - all of the land on either side of the strip which he needed to carry out the first half of the development and that consequently the developer would be willing to pay in excess of £6m to acquire the ransom strip.
In the particulars it is further alleged that Mr King said this was the deal of a lifetime and not to be missed at any cost. He represented that the strip was an all controlling strip and that Countryside owned or controlled, that is to say, held options over all the land on either side of the strip and would have to buy the ransom strip in order to commence the development. The strip was the last piece Countryside did not own but which it needed to own in order to complete the first phase of non-social housing and it therefore commanded a ransom premium.
There was also reliance on the production to Mr Bush by Mr King of a valuation of 8 th June 2006. That valuation stated that the strip was a ransom strip which needed to be acquired to release the developable land and valued it at £6,582,000. It is further alleged that on each occasion that Mr Dixon, who was a finance director of Baseline, spoke to Mr King, Mr King assured him that it was a genuine ransom strip.
It is alleged in paragraph 6 of the Particulars of Claim that, as Mr King well knew, his representation that the land was part of a ransom strip was not true. Countryside did not own or hold options over all of the land on either side of the strip and consequently the strip, of which the land was part, did not have a ransom value in excess of £6m.
In his Defence Mr King asserts that paragraph 5 of the Particulars of Claim is denied and he denies having represented to the Claimants that the developer owned or controlled all land on either side of the strip. He also avers that the Claimants were made fully aware of negotiations taking place between the owners of the strip and Countryside in relation to the onward sale of the strip at the time that the Claimants were discussing the purchase of the land from him. He asserts in paragraph 10 of the Defence that he denies that he stated that the strip was all controlling and he denies that he stated that Countryside would have to buy the strip in order to commence the development. He denies that he stated that the strip was the last piece Countryside did not own. He denies using the expressions "deal of a lifetime" and "not to be missed at any cost." He denies, in paragraph 13 of the Defence, that the term "ransom strip" was used by him. He admits in paragraph 17 of the Defence passing the valuation letter to the Claimants. He avers that he stated to the Claimants that he did not believe that Countryside would pay anything like the stated valuation of £6m.
He denies assuring Mr Dixon that the strip was a genuine ransom strip. He alleges that he stated to the Claimants that he had relied on the assurances of Mr Sweetman, a friend of many years, and he had no reason to doubt those assurances. He asserts in paragraph 19 of the Defence that at all material times he believed the assurances of Mr Sweetman to the effect that the strip was 'front line' and made no representations either as to the ownership of the land beyond the strip or as to options affecting that land. It is therefore crucial for me to make findings as to what was said by Mr Sweetman and Mr Wilden, his employee, to Mr King about the site and what Mr King then said about it to Mr Bush and Mr Dixon.
Before dealing with my findings of fact, I turn to the principles of law governing this claim which have not been in dispute. As set out in Clerk and Lindsell on Tort 20 th Ed paragraph 18-01:
"The tort [of deceit] involves a perfectly general principle. Where a defendant makes a false representation, knowing it to be untrue, or being reckless as to whether it is true, and intends that the claimant should act in reliance on it, then in so far as the latter does so and suffers loss the defendant is liable for that loss. To found an action in deceit the claimant must show a clear misrepresentation of present fact or law."
In the well known case of Derry v. Peek [1889] Law Reports, 14 AC 337, per Herschell LC at page 374:
"I think the authorities establish the following propositions: First, in order to sustain an action of deceit, there must be proof of fraud, and nothing short of that will suffice. Secondly, fraud is proved when it is shown that a false representation has been made knowingly, or without belief in its truth, or thirdly recklessly, careless whether it be true or false. Although I have treated the second and third as distinct cases, I think the third is but an instance of the second, for one who makes a statement under such circumstances can have no real belief in the truth of what he states. To prevent a false statement being fraudulent, there must, I think, always be an honest belief in its truth. And this probably covers the whole ground, for one who knowingly alleges that which is false, has obviously no such honest belief."
I was taken to further and more recent statements of law as to the principles to be applied in the tort of deceit. Those can be found in the judgment of Lewison J in FoodCo (UK) LLP and Others v. Henry Boot Developments Limited [2010] EWHC 358 Ch. In the course of his judgment Lewison J stated as follows:
"186. Normally, when the court is called upon to decide the meaning of an utterance, it determines that meaning objectively. The question is what meaning would the utterance convey to a reasonable person with the background knowledge of the audience to whom the utterance was addressed? However, where the issue is whether the utterance was fraudulently made, the question is a different one."
He referred to the speech of Lord Jenkins, in Akerhielm v. de Mare [1959] A.C. 789:
"The question is not whether the defendant in any given case honestly believed the representation to be true in the sense assigned to it by the court on an objective consideration of its truth or falsity, but whether he honestly believed the representation to be true in the sense in which he understood it albeit erroneously when it was made."
In further making this point at paragraph 199, Lewison J stated:
"199. In a case of fraudulent misrepresentation, however, it is necessary to go further. It is not enough that, objectively viewed, a prediction would be understood by the representee as implicitly representing that the maker of the prediction had reasonable grounds for making the prediction. It is also necessary to show that the representor understood the representation in that sense."
There are certain other principles which can be shortly stated. A vague statement or mere advertising puff is not a representation upon which reliance can be placed and the old authority for that proposition is Dimmock v. Hallet [1866] Law Reports 2 Ch App 21. Next, the grounds on which fraud is alleged need to be distinctly pleaded and proven. That proposition is derived from the case of Three Rivers District Council v. The Governor and Company of the Bank of England No. 3, 2003 2 AC 1. The final principle I need to apply is that allegations of fraud need only be proved to the civil standard, namely on the balance of probability. However, although the standard is the civil standard, in practice more convincing evidence will be required to establish fraud than other types of allegation. In the well known dicta of Denning LJ in Hornall v. Neuberger Products Limited 1957 1QB 258:
"The more serious the allegation the higher the degree of probability that is required."
I turn then to the evidence and my findings. There is a considerable body of evidence in this case in the form of witness statements and documentation. Many points were pursued in cross-examination and in submissions. I shall not deal in this judgment, which will be long nevertheless, with every piece of evidence, disputed or otherwise. However, it should not be considered that in reaching my conclusions I have not had regard to a part of the evidence simply because it is not referred to in this judgment. I should also state that in reaching my conclusions I have taken into account the fact that the principle events occurred in 2006 and memories have inevitably faded.
The strip of land with which this case is concerned is but a small parcel of a development site. It is an area of overgrown land extending to approximately 0.232...
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...authority has subsequently been followed in authorities e.g. ( Ahmed v Addy and another 2004 EWHC 1465 (QB), Bush and another v King (2013) EWHC 966 (QB).” (Emphasis added) 14 There was no allegation of fraud, but about forgery. Additionally, there was no allegation that the Deceased made......
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...authority has subsequently been followed in authorities e.g. Ahmed v Addy and another [ 2004' EWHC 1465 (QB), Bush and another v King [2013] EWHC 966 (QB). 31 Notwithstanding the above, Leon further relies on the case of Face v Cunningham and another [2020] EWHC 3119 (Ch) a recent UK High ......