Zabihi v Janzemini and Others
| Jurisdiction | England & Wales |
| Judge | Lord Justice Moore-Bick,Lord Justice Sullivan,The Chancellor |
| Judgment Date | 30 July 2009 |
| Neutral Citation | [2009] EWCA Civ 851 |
| Docket Number | Case No: A3/2008/3114 |
| Court | Court of Appeal (Civil Division) |
| Date | 30 July 2009 |
[2009] EWCA Civ 851
The Chancellor of the High Court
Lord Justice Moore-Bick and
Lord Justice Sullivan
Case No: A3/2008/3114
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT, CHANCERY DIVISION
Mr Justice Blackburne
HC06C2426
Royal Courts of Justice
Strand, London, WC2A 2LL
MR NIGEL HOOD (instructed by Roshanina Payman Int'l) for the Claimant/Respondent
MR DAVID LEWIS (instructed by Middleton Potts) for the Defendant/Appellant
Hearing date: 23 June 2009
Introduction
The claimant, Mr Zabihi, and the first defendant, Mr Janzemini are both members of the Iranian community resident in London. On 12th September 2002 in his flat in Ruislip Mr Zabihi handed to Mr Janzemini four sets of jewelry comprising matching necklace, earrings, ring and bracelet (though one of them may have lacked the bracelet) (“the Jewelry”) in order that Mr Janzemini might sell them on behalf of Mr Zabihi. Shortly thereafter Mr Zabihi left London on a business trip to Iran. (His return to London was delayed until February 2006 due to some unexplained problems with the government in Iran.) A few weeks after his departure Mr Zabihi rang Mr Janzemini and was told by him that the jewelry had been stolen. Mr Zabihi put the matter in the hands of solicitors, Shaidy & Co, who wrote to Mr Janzemini on 30th January and 28th February 2003 and 13th January 2004. Mr Janzemini did not respond to any of them. After his return from Iran Mr Zabihi instructed new solicitors, Roshanian Payman International, who wrote to Mr Janzemini on 11th May 2006 demanding compensation for the loss of the jewelry. Mr Janzemini did not respond to that letter either.
On 20th June 2006 the claim form in this action was issued. In it Mr Zabihi asserted that the Jewelry was antique and worth £2m in 2002. In his particulars of claim he alleged that he had acquired the Jewelry from a business associate in Iran, Mr Nima Zandieh, in discharge of a debt of US$2m due to him by Mr Zandieh. Mr Zabihi relied on a letter dated 28th April 1999 written to him by Mr Nima Zandieh (“the Zandieh Letter”) in which Mr Zandieh described four sets of jewelry each comprising a necklace, bracelet, ring and pair of earrings in some detail, including the number of jewels contained in each, their weight in carats, colour and grade. Mr Zandieh indicated that the jeweller recommended by Mr Zabihi had offered £500,000 for them and thanked Mr Zabihi for accepting them in satisfaction of Mr Zandieh's debt of £2m.
On 3rd July 2006 the solicitors for Mr Janzemini wrote to those for Mr Zabihi to inform them that Mr Janzemini was still in possession of the jewelry the subject of Mr Zabihi's claim. This was confirmed by an affidavit sworn by Mr Janzemini on 12th July 2006. Mr Zabihi, his solicitor and a jeweller of his choice were invited to inspect them. Mr Zabihi instructed Mr Peter Buckie, a valuer of jewelry of considerable experience, and the three of them inspected the three sets on 21st July and what Mr Janzemini contended was the fourth set on 6th September 2006. Mr Zabihi denied that any of the four sets of jewelry he then inspected had been handed over by him to Mr Janzemini on 12th September 2002.
The Particulars of Claim were amended on 6th November 2006 and the defence and counterclaim of Mr Janzemini was re-amended on 22nd May 2008 so as to admit the handover of four sets of jewelry by Mr Zabihi on 12th September 2002 but to put him to strict proof of their value. Thus the principal issue in the action was not whether but what jewelry was handed over on 12th September 2002 and its value. The claim was tried by Blackburne J over 19 days between 11th June and 11th July 2008. In his judgment handed down on 28th November 2008 he found that the Zandieh Letter had been concocted by Mr Zabihi. In addition he concluded that none of the jewelry inspected in July and September 2006 (“the Proffered Jewelry”) had been handed over by Mr Zabihi to Mr Janzemini.
In paragraphs 277 to 280 of his judgment Blackburne J described the problems which arose in consequence of those conclusions. He said:
“277. That still leaves the question: if the jewellery which was handed over was not the proffered jewellery then what was it and how is it to be valued?
278 [Counsel for Mr Janzemini] submitted that if I should reject Mr Zabihi's detailed account, by reference to the Zandieh letter, of what the jewellery comprised, and also Mr Janzemini's, the court could not properly find that the jewellery handed over was of some other quite different kind (what he described as “a third set”). To do so, he said, would be to find that it was of a nature and appearance which Mr Janzemini would not have had the chance to consider and comment upon in the witness box.
279. The logic of [Counsel for Mr Janzemini]'s approach is that, given my findings of fact, Mr Zabihi's claim must be dismissed or, at most, he should recover no more than nominal damages on the footing that, although he has established that his jewellery was converted, he has failed to establish what his loss is that flows from the conversion.
280. I do not accept that my conclusions must lead to that result. [Counsel for Mr Zabihi] submitted, by reference to a passage from McGregor on Damages, 17 th Edition, paragraph 8–002, that the court must do its best on such evidence as it feels able to accept to place some kind of value on jewellery which, on this footing, Mr Janzemini would be shown to have converted even if its precise identity cannot be established and therefore its value must be in doubt. Otherwise, he submitted, Mr Zabihi would end up establishing that conversion of his jewellery had occurred yet would fail to recover anything in damages, other possibly than nominal damages, because of an inability to establish exactly what it was that he had handed over. I see great force in that.”
Faced with that dilemma Blackburne J concluded:
“281. As I have mentioned, it was common ground that four sets of jewellery were handed over even if, as one side contended, one of the sets lacked a bracelet. I am satisfied that the jewellery included a number of diamonds and gold mountings. I am further satisfied that it must have had a value of at least £30,000 (the open market value placed upon the proffered jewellery by the experts) since, having lost or disposed of the true jewellery, Mr Janzemini would not, I think, have acquired jewellery, by way of replacement, which was of greater value or, if he had, he would surely have pointed this out to Mr Zabihi. Mr Janzemini himself understood from Mr Zabihi at their meeting on 12 September that he was expected to sell the jewellery for £340,000. For his part, according to Shaidy & Co's letter of 30 January 2003, Mr Zabihi believed, assuming (as I have no reason to doubt) that the letter accurately reported his view at the time, that the jewellery had a value of between £350,000 and £500,000.
282. The experts were in agreement that there is a difference between (1) what Mr Buckie referred to as the open market value (and Mr Stocker [the expert jewelry witness for Mr Janzemini] as the disposal value) of jewellery, and (2) its retail value, namely the price which the jewellery might be expected to achieve if sold privately, i.e. otherwise than by auction. Mr Buckie put the mark-up at between 1.5 and 3 times open market value. (See paragraph 9.3 of his supplemental report and valuation.) The figures in Mr Stocker's report indicate a mark-up of 5 times disposal value. Given those levels of mark-up and doing the best I can on the very limited information that I have about the true jewellery, I have reached the conclusion that it had an open market or disposal value of between £100,000 and £150,000 at the time of its delivery to Mr Janzemini in September 2002. I cannot be more precise than that. Such a range of value would have justified Mr Zabihi's belief, based upon Shaidy & Co's January 2003 letter, that up to £500,000 could have been achieved for the jewellery. It would also justify Mr Janzemini's recollection that Mr Zabihi was expecting him to obtain £340,000 for the jewellery. In what is necessarily (given the evidence) a very difficult task I therefore find that the open market value of the jewellery in September 2002 was £125,000 (the mid-point of the range of value). The experts were agreed that values have not materially altered since that date.
283. I do not consider that in reaching this conclusion I am putting forward a “third set” of jewellery; I am merely endeavouring to reach a conclusion as to the open market value (which is the figure I am concerned to establish) of the four sets of diamond and gold jewellery that Mr Zabihi handed to Mr Janzemini. Interestingly, Mr Sadoughi said (in his untested witness statement) that the jewellery which he says he entrusted to Mr Zabihi was professionally valued at £100,000 to £120,000 and that Mr Zabihi told him he could sell it for £300,000, i.e. a mark-up of almost 3 times the valuation. This ratio of professional valuation to retail value was a matter to which [Counsel for Mr Janzemini] referred (see paragraph 249 above).”
In paragraphs 284 and 285 Blackburne J added:
“284. There are two further matters which I should mention.
285. The first was a submission by [Counsel for Mr Zabihi], based on the authority of Armory v Delamirie (1721) 1 Strange 505, that it should be presumed against a bailee who does not produce the bailed goods that the goods are of the highest value (“…unless the defendant did produce the jewel,...
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