Nicola Oberman v Shaun Collins
| Jurisdiction | England & Wales |
| Judge | Tom Leech |
| Judgment Date | 17 August 2021 |
| Neutral Citation | [2021] EWHC 2298 (Ch) |
| Docket Number | Case No: PT-2018-000293, CR-2018-004897 |
| Court | Chancery Division |
[2021] EWHC 2298 (Ch)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
PROPERTY TRUSTS AND PROBATE (CH D)
Royal Courts of Justice
Strand, London, WC2A 2LL
Tom Leech QC (sitting as a Judge of the Chancery Division)
Case No: PT-2018-000293, CR-2018-004897
Mr Jack Watson (instructed by Payne Hicks Beach) for the Claimant
The First Defendant in person
–7 July 2021
APPROVED JUDGMENT
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Remote Protocol: This judgment is handed down remotely by circulation to the parties' representatives by email, release to BAILII and publication on the Courts and Tribunals Judiciary website. The date and time for hand-down is deemed to be 10.30 am on 21 st July 2021.
Tom Leech QC:
I. Introduction
In this judgment I adopt the defined terms and abbreviations which I used in the judgment dated 21 December 2020: see [2020] 3533 EWHC (Ch). In that judgment I determined the substantive dispute between Ms Oberman and Ms Collins and held that Mr Collins held the Oberman Property, the Joint Properties and the Collins Properties on trust for himself and Ms Oberman in equal shares. I also found that Mr Collins had committed unfairly prejudicial conduct. For a summary of the findings which I made see [222] to [229].
On 29 January 2021 I made an order (the “ Order”) requiring Mr Collins to purchase Ms Oberman's shares in Bluegen to be valued at the date of the petition (which was 14 June 2018) subject to various adjustments to reflect the unfairly prejudicial conduct. I also ordered Mr Collins to account for the funds derived from the Portfolio and how they were applied and ordered Mr Collins to pay to Ms Oberman 50% of those funds which Mr Collins did not re-invest in the Portfolio (either by using them to fund the purchase of new Properties or to meet the outgoings of existing Properties).
Finally, I also ordered a further hearing to dispose of the outstanding issues and, in particular, to determine the value of Ms Oberman's shares and to determine any issues arising out of the account (in the event that the parties were unable to agree terms). I made various consequential orders including an order for costs against Mr Collins and an order for an interim payment which I suspended pending the sale of those Properties which the parties held directly.
On 6 and 7 July 2021 the disposal hearing took place remotely. Mr Watson represented Ms Oberman (as he had done at the trial). However, Mr Collins (who had been represented by solicitors and counsel at the trial) appeared in person. Bluegen was not represented at the disposal hearing (and it had not been represented at the trial although it was a party to the petition as is conventional).
At the disposal hearing I heard evidence from Mr John Cordner, Ms Oberman's expert valuer, and Mr Andrew Wilson, who also gave evidence on Mr Collins' behalf in relation to the value of Bluegen. (I return to the status of Mr Wilson's evidence below.) Neither of the active parties gave evidence although I asked Mr Collins a number of questions in argument and, in particular, in relation to the taking of the account (which he answered). Following the disposal hearing, I made an order which was intended to hold the ring until I had handed down this judgment.
II. Valuation of Bluegen
(1) Basis of valuation
Both Mr Cordner and Mr Wilson valued Bluegen on a net asset basis. Mr Cordner explained that Bluegen was an investment company, which holds investment properties on a long-term basis. He distinguished such a company from a property development company, which buys properties to develop and then sell and generates both profits and goodwill. He exhibited the ACCA technical factsheet 168 which states that in the vast majority of cases property and farming companies are valued on the basis of assets rather than earnings. Mr Wilson adopted the same approach and prepared a valuation setting out the assets and liabilities of Bluegen.
(2) The Evidence
Mr Cordner prepared a detailed expert's report which complied with CPR Part 35 and PD35 and he confirmed that he had read the Guidance for the Instruction of Experts in Civil Claims. He disclosed that since 2016 he had acted as Ms Oberman's accountant and tax adviser. But he also confirmed that this did not affect his independence or his ability to fulfil his duty to the court. I found him to be a straightforward and helpful witness and I accepted his evidence.
Mr Wilson prepared a one page valuation of Bluegen which was accompanied by a spreadsheet which set out valuations of the individual Properties. Mr Wilson confirmed that this spreadsheet had been provided by Mr Collins. In cross-examination he confirmed that he had not been engaged to give evidence as an expert witness because Mr Collins had been unable to afford to instruct an expert. But he also said that he had been asked by Mr Collins to prepare a valuation to assist the Court. I also found Mr Wilson to be a straightforward and honest witness who was trying to assist the court. He stated clearly where he had relied on Mr Collins and he also conceded points fairly when they were put to him. I therefore accepted his evidence too.
Mr Cordner and Mr Wilson produced a joint statement which identified a limited number of issues on which they disagreed and at the end of the joint statement they both produced revised valuations. Mr Cordner valued Bluegen at £1,967,441.55 (and Ms Oberman's 49% shareholding at £964,046.36). Mr Wilson valued Bluegen on a net assets basis at £1,243,539.75 (which produces a valuation of £609,334.45 for 49% of the shares).
After the joint statement and shortly before the disposal hearing Mr Wilson produced a written response to Mr Cordner on the issues on which they disagreed. He stated in evidence (and I accept) that he prepared it to answer a number of the individual points which Mr Cordner had made and not on the instructions of Mr Collins. In relation to a number of points, he conceded that a number of issues were beyond his competence or that they were matters for Mr Collins or the court. I deal therefore with the disputed issues before considering the overall valuation of Bluegen.
(3) The House Prices Index
Mr Cordner adopted the valuations of the individual Properties shown in Bluegen's audited accounts for the year ended 30 September 2018 (which Mr Wilson had himself prepared) (the “ 2018 Accounts”). However, Mr Wilson had adjusted those valuations for the increase in the national House Prices Index (“ HPI”) between 14 June 2018 and 30 September 2018. He accepted that the index only showed a broad trend. But he insisted that it provided an objective measure of valuation.
Mr Wilson accepted that he had not made such an adjustment in his report and when he was asked to explain this, his evidence was that Mr Cordner had raised concerns about the fluctuating values, he had discussed this with Mr Collins and Mr Collins had suggested that he adjust for movements in the HPI. Whilst this might have been a reason for rejecting all of these adjustments by itself, I did not do so. However, Mr Wilson conceded almost all of the relevant adjustments when was taken to contemporaneous valuations of the individual Properties. In particular:
i) In September 2019 Hunters had valued 17A Redbourne Drive and Flats 1 to 3, 49 Elmdene Road. All four valuations showed that values were falling slightly between 2018 and 2019. Mr Wilson had never seen these documents before and he accepted that they did not support an increase in value between the valuation date and 30 September 2018.
ii) Mr Cordner had placed a value of £785,000 on Flats 1 to 3, 49 Elmdene Road at the valuation date. This compared with Mr Collins' own valuation of £1,100,000 for the three flats in January 2018. When this valuation was put to Mr Wilson, he accepted that there was no reason to doubt Mr Cordner's valuation.
iii) Mr Watson also challenged the adjustment to the valuation of the freehold of the Redbourne Communal Property on the basis that it was based on the capital value of the ground rents for the flats and could not be affected by the HPI. When this was put to him, Mr Wilson also conceded this point.
iv) Mr Cordner placed a value of £210,000 on 177B Herbert Road at the valuation date. This compared with Mr Collins' valuations of £350,000 in both January and October 2018. When these valuations were put to Mr Wilson, he accepted Mr Cordner's figure.
v) Mr Cordner also placed a value of £210,000 on 75 Miles Drive at the valuation date. In September 2019 Hunters had placed a historic value of £210,000 on it for 2018 and in January 2018 Mr Collins had valued it at £235,000. When these valuations were put to Mr Wilson, he accepted Mr Cordner's figure.
vi) Mr Cordner placed a value of £60,000 on 136 Woodhill at the valuation date. This compared with Mr Collins' valuation of £100,000. When it was put to Mr Wilson, he accepted that Mr Cordner's figure was reasonable if it came from a third party valuer.
vii) Mr Watson also challenged the adjustment to the valuation of the Royal Oak offices on the basis that they were commercial premises and that the HPI had no application to them. When this was put to him, Mr Wilson also conceded this point.
viii) Mr Watson also challenged the adjustment to the valuation of 59 Sweyn Road on the basis that his original valuation was based on the fact that works were being carried out to the Property. When Mr Cordner produced the certificate of completion which shortly post-dated the valuation date (25 July 2018), Mr Wilson had to concede that his valuation was incorrect. He also had to...
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