Taray Investments Ltd v Gateley Heritage LLP
| Jurisdiction | England & Wales |
| Judge | Mrs Justice Tipples DBE |
| Judgment Date | 27 March 2020 |
| Neutral Citation | [2020] EWHC 716 (QB) |
| Docket Number | Case No: QB-2018-000888 |
| Date | 27 March 2020 |
| Court | Queen's Bench Division |
[2020] EWHC 716 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
GENERAL
Royal Courts of Justice
Strand, London, WC2A 2LL
The Hon. Mrs Justice Tipples DBE
Case No: QB-2018-000888
Mr James Newman (instructed by Irwin Mitchell LLP) for the Claimants
Mr Charles Phipps (instructed by Berrymans Lace Mawer LLP) for the Defendant
Hearing dates: 9, 10, 11, 12, 13 March 2020
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.
THE HONOURABLE Mrs Justice Tipples DBE
Introduction
This is a claim in professional negligence against Gateley Heritage LLP, a firm of solicitors (“ the Defendant”), which arises out of a failed property transaction. In November 2012 the Claimants, Taray Investment Limited (“ Taray”) and Bellevue Homes Limited (“ Bellevue”), entered into a joint venture to purchase Clare Parsonage, 130 Rotherhithe New Road, London, SE16 4AP (“ the Rotherhithe Site”), which they considered to be a valuable development opportunity. However, their desire to do so fell apart in May 2013 when it was discovered that, in preparing the report on title for Taray (and subsequently relied on by Bellevue), the Defendant had failed to spot that part of the Rotherhithe Site encroached on the footway and, in order for any development to proceed, this issue had to be resolved, ultimately by obtaining a stopping up order.
The Claimants maintain that, as a result of the Defendant's negligence, they lost the opportunity to purchase and develop the Rotherhithe Site and claim damages of over £600,000 against the Defendant. The Defendant admits breach of duty of care, but deny the Claimants' loss of opportunity claim. The Defendant says that, if the correct information and advice had been provided in the report on title in the first place, the Claimants would never have taken steps to proceed with the transaction. This is because, amongst other things, the Claimants did not have the financial resources to do so.
The Claimants' claim gives rise to the following issues, which were agreed between the parties at the start of the trial:
1) In failing to advise as to the existence of a discrepancy between the Highway Authority Search Plan and HM Land Registry Index Map Plan (“ the discrepancy”), when was the Defendant first in breach of its duty of care to: (a) Taray; and (b) Bellevue?
2) What course of events would have followed if the Defendant, in accordance with the duty of care which it owed to each of them, had brought the existence of the discrepancy to the attention of: (a) Taray; and (b) Bellevue?
3) If the Defendant had advised the Claimants appropriately, would the Claimants have taken the steps necessary to acquire and develop the Rotherhithe Site?
4) If the Claimants had taken the steps necessary to acquire and develop the Rotherhithe Site, was there a real and substantial chance (and, if so, what chance) that the Claimants would have succeeded in acquiring and developing the Rotherhithe Site in all the circumstances, including in particular the contingencies represented by: (i) the involvement of, or decisions by, the Vendor; (ii) the involvement of, or decisions by, Titlestone Property Finance Limited (“ Titlestone”); or (iii) the financial status or capability of the Claimants?
5) If the Claimants would have succeeded in acquiring and developing the Rotherhithe Site, what further discount from the Claimants' damages is appropriate to allow for general development risk?
6) Over what period and at what rate should any interest be awarded?
There is no issue between the parties as to the relevant law and the issues have been formulated by reference to the well-known case of Allied Maples Group Ltd v Simmons & Simmons [1995] 1 WLR 1602, CA, which was upheld in Perry v Raleys Solicitors [2019] 2 WLR 636, SC. There is a recent and helpful illustration of the application of these principles in Moda International Brands Ltd v Gateley LLP [2019] PNLR 27, Freedman J.
The conclusion I have reached is that:
1) The Defendant was first in breach of its duty of care to Taray on 16 October 2012 and to Bellevue on 4 January 2013.
2) The Claimants would not have incurred any costs in relation to obtaining a stopping up order, and not have proceeded with the transaction to purchase the Rotherhithe Site. This means that the answer to questions (3) and (4) is “No” and issues (5) and (6) do not arise.
The Claimants' claim is therefore dismissed.
I shall deal first of all with the evidence that I heard and then turn to my findings of fact.
Evidence
Witnesses of fact
I heard evidence from four witnesses. Mr Alexander Ealey (“ Mr Ealey”), a director of Bellevue, and Mr Lawrence Coppen (“ Mr Coppen”), a director of Taray, gave evidence for the Claimants. Mr Ealey and Mr Coppen were at all times acting for Bellevue and Taray respectively in relation to the facts that give rise to this dispute. The Claimants also called Ms Katherine Asquith-Stacey, a member of Trilandium LLP (“ Trilandium”). Mr Raymond Simpson (“ Mr Simpson”) gave evidence for the Defendant. He is a partner and solicitor at the Defendant. The evidence in chief of all of these witnesses was contained in witness statements, which they were then cross-examined on. The Claimants also relied on the witness statement of Mr Robert Orr, the CEO of Titlestone at the relevant time (“ Mr Orr”), the content of which was agreed between the parties.
The factual findings the court is required to make in this case, together with my assessment of what would have happened if the Claimants had been informed of the discrepancy, relate to events which took place over 7 years ago. In these circumstances:
1) The most important clues in relation to what did or did not happen, and what would have happened, are in the contemporaneous emails and other documents.
2) It is necessary to consider whether the witnesses can actually remember what happened 7 years ago and, to the extent they can recall what happened, whether that recollection is, or is likely to be, true.
3) I have to form a view as to the credibility of the witnesses, and decide which of the evidence I have heard is, after such a long passage of time, actually reliable and most likely to be true.
I did not find Mr Coppen to be a satisfactory witness. In particular, the evidence he gave about DJH Cap Limited agreeing to make a loan of £600,000 to Taray was untrue. This means that I am unable to accept Mr Coppen's evidence unless it is supported by other independent evidence. Ms Asquith-Stacey is a good friend of Mr Coppen and, in my view, she was seeking to assist Mr Coppen, rather than the court, in her evidence. I deal further with her evidence at paragraphs 37 to 42 below.
It is clear that Mr Ealey felt very aggrieved as a result of Mr Simpson's mistake in failing to identify the discrepancy, as he considered the Rotherhithe Site to be a real opportunity for Bellevue. This meant that, during the course of his evidence, Mr Ealey had a tendency to argue his case, rather than focus on answering what Bellevue would have done if Mr Simpson's error had been known at the outset. In terms of contemporaneous documents, the best guide as to what steps Bellevue would have taken is in the financial information available, and also the vendor's solicitors' file. I am unable to accept Mr Ealey's evidence, if it was inconsistent with this evidence or any other contemporaneous documents.
Mr Simpson was a careful and measured witness and I am quite satisfied he gave truthful answers to the questions he was asked. I accept his evidence.
Expert evidence
The parties adduced evidence from the following six expert witnesses: (1) Ms Faye Allen and Mr Michael Ulyatt, quantity surveyors for the Claimants and the Defendant respectively; (2) Mr James Hewetson and Mr Malcolm Kempton, valuation experts for the Claimants and the Defendant respectively; and (3) Mr David Griffiths and Mr John Bridge, funding experts for the Claimants and the Defendant respectively. Both the quantity surveyors and the valuation experts agreed figures between them and the parties agreed that it was unnecessary or disproportionate to adduce oral evidence from any of them.
As for the relevant figures: (1) the expert quantity surveyors agreed that £778,633.28 represented a reasonable estimate of the development cost; and (2) the expert valuers agreed that, based on a gross development value of £2,485,000, the projected profit of the development as at 30 June 2014 was estimated at £822,305.
However, issues remained between the parties' funding experts as to the Claimants' financial status or capability. Mr Bridge and Mr Griffiths therefore gave oral evidence at trial, and were cross-examined. Nevertheless, in the light of the conclusions I have reached on the facts there is no need for me to decide whether I prefer the evidence of Mr Griffiths or Mr Bridge. In any event, there was very little between them and, in my view, they were both trying to assist the court in the evidence they gave.
Findings of fact
The Rotherhithe Site and the parties
The Rotherhithe Site was, until 2014, freehold land owned by the South London Church Fund and Southwark Diocesan Board of Finance (“ the Church”). The Rotherhithe Site was registered at HM Land Registry with two titles, LN136517 and 377770. In or about 2010 the...
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