Case No: HC 01889 1999
 
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

Royal Courts of Justice
Strand, London, WC2A 2LL

Date: 30th November 2001

B e f o r e :

THE HONOURABLE MR JUSTICE ETHERTON 

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	(1) Ivor  Laurence COHEN
(2) Josselyne Fortunee COHEN	Claimants	
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	(1)TSB BANK PLC
(2)SMITH & WILLIAMSON (a firm)
(3) WINKWORTH (a firm)	Defendants	

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Mr Cohen, litigant in person (for First Claimant)
Mr Adam Tolley (instructed by Eversheds Solicitors for the Second Defendant)
Mr Edward Denehan ( instructed by Freeman Box solicitors for the Third Defendant)

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JUDGMENT: APPROVED BY THE COURT FOR HANDING DOWN (SUBJECT TO  EDITORIAL CORRECTIONS)

	Mr Justice Etherton:

	Introduction

1.	In these proceedings the Claimant, Mr Ivor Laurence Cohen (“Mr Cohen”), claims that two partners in the Second Defendant firm, acting as receivers appointed by TSB Bank  plc (“the Bank”), sold 7 Newcourt Street, St John’s Wood, London NW8 and 28 Woronzow Road, St John’s Wood, at a substantial undervalue and so caused him loss as a guarantor pursuant to an unlimited guarantee in favour of the Bank  dated 18th January 1990.

2.	The Bank was formerly the First Defendant  in these proceedings; but Mr Cohen’s claims against the Bank were struck out by Master Moncaster on 10th December 1999.

3.	The Third Defendants  are letting and selling agents carrying on business at premises in St John’s Wood. At the material time Mr Andrew Kay and Mr Richard Woolf were the partners in the Third Defendant firm. The receivers appointed the Third Defendants their selling agents for 7 Newcourt Street and 28 Woronzow Road .

4.	Mr Cohen claims against the Second Defendants and the Third Defendants damages for breach of duty, or compensation in equity. The claims of the Second Claimant against the Second Defendants and the Third Defendants  were struck out by order of Master Moncaster on 24th July 2000.

5.	Mr Cohen  has acted for himself at the trial of the proceedings. The Second Defendants were represented by Mr Adam Tolley, counsel. The Third Defendants were represented by Mr Edward Denehan, counsel.

	Brief summary of the factual background
6.	Mr Cohen, a chartered accountant, was formerly a partner in two accountancy practices, which he established, namely, Ivor Barry & Co. (“IBC”) and Ivor Barry Associates (“IBA”).

7.	 Prior to about October 1991 IBC occupied premises at 36 Linhope Street, London NW1. The freeholder of those premises was Ashford Management & Investments Limited (“Ashford”). 

8.	In 1989 Ashford gave IBC notice that it intended to sell 36 Linhope Street and that it required IBC to leave those premises. 

9.	In 1989 Ashford  decided to purchase and re-develop 7 Newcourt Street. It acquired Ryhald  Property Investments Limited (“Ryhald”) to be the vehicle for the purchase.

10.	7 Newcourt Street had previously been a public house known as “The British Flag”. Ryhald wished to carry out substantial works of renovation and conversion to the building by the construction of restaurant premises on the ground floor and basement, and offices on the first and second floors, with a potential to add a new third floor in the future. 

11.	Prior to completion of the purchase of 7 Newcourt Street, Mr Cohen
	agreed with Ashford that his accountancy practice would rent the first floor of 7 Newcourt Street, when redeveloped, and, when the third floor was developed, Mr Cohen would purchase from Ryhald a 999 year lease of that floor. In return, Mr Cohen agreed to pay Ryhald one fifth of the construction costs and of the purchase price of 7 Newcourt Street. Further, Mr Cohen agreed that he would act as guarantor in respect of proposed borrowings by Ryhald from the Bank for the purchase price and the costs of redevelopment. 

12.	Ryhald  completed the purchase of 7 Newcourt Street on 18th January  1990, with the assistance of a loan facility from the Bank of £740,000. It was a condition of the loan facility that Ryhald would grant a first legal charge over 7 Newcourt Street in favour of the Bank. It was a further condition that Mr Cohen would give the Bank an unlimited guarantee in respect of Ryhald’s liability to the Bank. 

13.	On 18th January 1990 Ryhald duly charged 7 Newcourt Street to the Bank as security for all its liabilities to the Bank actually  or contingently  due on any account and whether due  presently or in the future (“the Newcourt Street Charge”). The Charge conferred on the Bank express power to appoint a receiver at any time after the Bank gave Ryhald notice demanding payment of its liabilities to the Bank.

14.	On 18th January 1990 Mr Cohen gave an unlimited guarantee to the Bank in respect of all liabilities of Ryhald actually or contingently due to the Bank on any account and whether due presently or in the  future.

15.	On about 28th August 1990 the Bank agreed to increase Ryhald’s facility to £1,000,000 in order to enable Ryhald to proceed  with the proposed development of 7 Newcourt Street.

16.	By about July 1991 Mr Cohen had taken an option to purchase all the issued shares in Ryhald.

17.	There were significant delays to the redevelopment of 7 Newcourt Street. The project ran over budget. Ryhald’s borrowings from the Bank were considerably higher than had been budgeted for.

18.	At the request of  the Bank, Mr Cohen procured the execution on 8th August 1991 of a charge over 28 Woronzow Road in favour of the Bank, as security for Mr Cohen’s liabilities to the Bank actually or contingently due on any account and whether due presently or in the future (“the Woronzow Road Charge”). 28 Woronzow Road was a freehold residential property which had been purchased by  a Mr Joseph Caplan, and then subsequently vested in Mr Caplan and Mr Robert Van Kleef jointly, on trust. Mr Cohen, who was a beneficiary under the trust, was living in the house. Under the terms of the charge of the Woronzow Road Charge, the Bank was given express power to appoint a receiver of the property at any time after the Bank gave notice to Mr Cohen demanding repayment of his liabilities to the Bank. 

19.	In October 1991 Mr Cohen appointed the Third Defendants and Behr and Butchoff joint sole selling agents of 28 Woronzow Road, and instructed them to quote an asking price of £575,000. Mr Woolf and Mr Kay had commenced carrying on business as a partnership under the Winkworth name in October 1991. They operated under the name of Winkworth in the St John’s Wood area pursuant to a franchise agreement. 

20.	By October 1991 about two thirds of the office space in 7 Newcourt Street was useable. IBC took possession of the first floor, and a tour operator, Dreamscape Vacations, took the space on the second floor. The restaurant and basement and one third of the office space were not at that stage ready for occupation. 

21.	Towards the end of 1991 Mr Cohen gave instructions to commercial property agents, Baker Lorenz, to let or sell the remaining office space. The estate agents Davis & Coffer had already been instructed to market the restaurant area. Behr and  Butchoff were also retained on a limited basis in relation to the restaurant.

22.	Sometime in or after January 1992 the asking price for 28 Woronzow Road was reduced to £495,000. 

23.	During 1992 Mr Cohen sold IBC in order to discharge some of his personal debts.

24.	Later in 1992 Mr Cohen instructed commercial agents  Anthony Green & Spencer, and also Simmons Heath & Co., to market the office accommodation on the first and second floors of 7 Newcourt Street.

25.	In June 1992 Dreamscape Vacations and IBC went out of occupation of 7 Newcourt Street as a result of damage to the services in the building caused by flooding in the basement.
	
26.	On 13th August 1992 the Bank demanded payment by Mr Cohen  of £143,669.01 then due in respect of three accounts in his name with the Bank.

27	By the end of August 1992 the asking price for 28 Woronzow Road was reduced to £425,000.

28.	On 12th February 1993 the Bank made a formal written demand of Ryhald to repay  £1,672,770.30 which had been advanced by the Bank. On the same day the Bank made a written demand of Mr Cohen for the same sum, pursuant to his guarantee. 

29.	Also on 12th February 1993 the Bank appointed Iain Allan and Peter Mills, partners in the Second Defendant firm, joint receivers of  7 Newcourt Street and 28 Woronzow Road, pursuant to the Newcourt Street Charge  and the Woronzow Road Charge  respectively.

30.	By letter to Mr Kay dated 15th February 1993 Mr Allan confirmed that the receivers wished the Third Defendants to continue to market 28 Woronzow Road, and formally instructed them to market 7 Newcourt Street.

31.	On 10th June 1993 the receivers procured the exchange of contracts for the sale of 28 Woronzow Road to Holmdale Trading SA (“Holmdale”) for £335,000. That sale was completed on 7th July 1993. 

32.	On 28th October 1993 the receivers procured the exchange of contracts for the sale of 7 Newcourt Street to Mr Hansjorg Mayer for £550,000. That sale was completed on 27th January 1994. 

33..	In his re-amended Statement of Claim Mr Cohen claims that 28 Woronzow Road was sold by the Second Defendants at between £115,000 and £75,000 below market value, and that 7 Newcourt Street was sold by the Second Defendants at  £410,000 below market value. 

34.	On 28th February 1995 Mr Cohen entered into an Individual Voluntary Arrangement (“the IVA”) with his creditors, including the Bank, under Part VIII of the Insolvency Act 1986. The IVA  was expressed to last for 4 years, during which Mr Cohen was to pay £15,000 to his creditors annually.

35	At the time of his IVA Mr Cohen’s indebtedness amounted to more than £7.5 million pounds. His Estimated Statement of Affairs as at 29th November 1994 disclosed capital assets comprising only alleged  causes of action against various potential defendants, and an estimated deficiency as regards unsecured creditors of £5,174,537. 

36.	One of the elements of Mr Cohen’s IVA was that he was to pay to his creditors 49% of the proceeds of his causes of action against the Second and Third Defendants in these proceedings. Mr Harold Newman, Mr Cohen’s IVA supervisor, and Mr Cohen himself consider this remains an outstanding  obligation under the IVA, notwithstanding expiry of four years since the commencement of the IVA. The Second Defendants and the Third Defendants do not accept that any obligations remain outstanding under the IVA, and maintain that the IVA has now been fully completed. 
	
37.	On 16th April 1999 the writ was issued in these proceedings.

38.	As I have already said, on 10th December 1999 Master Moncaster struck out Mr Cohen’s claims against the Bank .

	The issues in these proceedings
39.	In his re-amended Statement of Claim Mr Cohen alleges that the Second Defendants owed him a duty to take reasonable care to obtain a proper price for, that is to say, the true market value of, 7 Newcourt Street and 28 Woronzow Road. He alleges that, in breach of duty, they failed to do so. 

40.	Mr Cohen claims that the Third Defendants owed him a duty to take reasonable care to ascertain the true market value of 7 Newcourt Street and 28 Woronzow Road,  and to market them so as to obtain their market value. Mr Cohen alleges that, in breach of duty, the Third Defendants failed to do so.

41.	In the re-amended Statement of Claim, Mr Cohen claims that the true market value of 7 Newcourt Street as at October 1993 was in the region of £960,000, and that the sale of that property to Mr Mayer was, therefore, at an undervalue of £410,000. He further claims that the true market value of 28 Woronzow Road as at July 1993 was in the bracket £410,000 to £450,000, so that its sale to Holmdale was at an undervalue of between £75,000 and £115,000. He claims to have suffered loss and damage equal to the undervalue in each case, by virtue of which, as he puts it in paragraph 25 of the re-amended Statement of Claim, his “liability under his said guarantee was increased pro tanto”. 

42.	By their re-amended Defence the Second Defendants deny that they were under any duty to Mr Cohen. In his oral submissions at the trial, Mr Tolley, for the Second Defendants, withdrew from this extreme position, to the extent that he accepted that a receiver owes a duty, in equity, to the guarantor of a mortgagor’s debt to act honestly and in good faith for the purpose of realising the security, and that  duty may be more extensive, depending on the facts of any particular case. Mr Tolley accepted that, on the facts of the present case, subject to the exclusion clauses to which I shall refer, the Second Defendants owed Mr Cohen a duty to take reasonable care to obtain the best price reasonably obtainable for the properties in the circumstances. The Second Defendants  submit that any such duty was duly discharged. The Second Defendants  submit that the properties were sold at or above their market value at the material time. 

43.	In addition, the Second Defendants rely upon exclusion clauses, which are contained in the Newcourt Street Charge and the Woronzow Road  Charge, which exclude any liability on the part of a receiver other than in the case of fraud.

44.	 Finally, the Second Defendants submit that Mr Cohen has suffered no loss for which he should be compensated, since sale of the properties at the values alleged in the re-amended Statement of Claim to be their open market values would not have discharged the full indebtedness of Mr Cohen to the Bank. The Second Defendants say that the effect of Mr Cohen’s IVA is that the Bank is no longer in a position to claim from Mr Cohen the amounts outstanding under his guarantee.

45.	By their re-amended  Defence, the Third Defendants deny that Mr Cohen’s re-amended Statement of Claim discloses any cause of action against them. They submit that, as selling agents appointed by the receivers, they owed no duty in equity to Mr Cohen, and, since they had no actual knowledge of the existence of his guarantee, there was insufficient proximity between themselves and Mr Cohen to found any duty of care at common law. Alternatively, the Third Defendants claim that, if they were under any duty to Mr Cohen, it was a duty to act bona fide and to take reasonable care to obtain the best price reasonably obtainable for the properties. The Third Defendants submit that they did indeed discharge any such duty. Further, the Third Defendants, like the Second Defendants, also allege that, in the light of Mr Cohen’s IVA and the inability of the Bank to pursue Mr Cohen in respect of the sums outstanding under his guarantee, Mr Cohen has suffered no loss. 

	The evidence
	Evidence of fact
46.	Mr Cohen gave oral evidence at the trial. Oral evidence was also given, on his behalf, by the following witnesses: Mr John Skok, a friend of Mr Cohen, who made an offer for  properties on behalf of one of his companies; Mr Michael Alculumbre, Mr Cohen’s brother-in-law, and a partner in IBA; Mr Paul Halpin, a friend of Mr Cohen, who made enquiries in 1996 about the assistance that  Winkworth could give in connection with commercial property; Mr George Mitchell, an architect and, between 1986 and 2000, a partner in the firm  Pantelli Mitchell Associates, who were appointed by Ryhald as supervisory agents for the final stages of the refurbishment of 7 Newcourt Street and who also undertook certain remedial work to 7 Newcourt Street  in 1993; and  Mr Simon Rubens, a commercial property estate agent  who sought to obtain instructions from the Second Defendants to act as their selling agents for 7 Newcourt Street. Witness statements were made by all those witnesses. 

47	In addition, Mr Cohen relies on witness statements made by Mr Francis Elson,  Mrs Dawn Hibbert, and Mr Bruce Green. Mr Elson was engaged by Mr Cohen as the site agent of Ryhald in connection with the development of 7 Newcourt Street, and he made enquiries about purchasing 28 Woronzow Road in November 1994. Mrs Dawn Hibbert inspected 7 Newcourt Street in October 1993 with a view to the possibility of purchasing that property. Mr Green was a valuation surveyor, who, according to Mr Cohen and Mrs Hibbert, accompanied Mrs Hibbert when she inspected 7 Newcourt Street. Mr Cohen said that he had been unable to contact Mr Elson with a view to ensuring his attendance at the trial, and he believed that Mr Elson was seriously ill. Mr Cohen said that he had been contacted by Mrs Hibbert, who said she would be unable to attend the trial at the time scheduled for her evidence since she would be in the United States at that time. I understand that attempts to locate Mr Green have been unsuccessful.

48.	Oral evidence was given on behalf of the Second Defendants by the following witnesses: Mr Allan, one of the two joint receivers of the properties, and who was, for all practical purposes, the only active receiver; Mr Stephen Tancock, who is now an associate partner in the Second Defendant firm and had day to day responsibility for the receiverships of the two properties from about the middle of March 1993; Miss Amanda Hay, who is now employed as an assistant director by the Second Defendants and was a junior member of the Second Defendants’ team dealing with the receiverships of the two properties; and Mr Mayer, to whom the receivers procured the sale of 7 Newcourt Street in 1993. All those witnesses made witness statements. 

49.	In addition, the Second Defendants rely on witness statements made by Mr Peter Mills and Ms Kate Mann. Mr Mills was the other joint receiver of the properties, and who was, for all practical purposes, inactive in the receiverships. Ms Mann is an information officer employed by the Royal Institution of Chartered Surveyors. Mr Cohen did not insist upon the attendance of Mr Mills  and Ms Mann at the trial, and did not oppose their witness statements being used in evidence. 

50.	Oral evidence was given, on behalf of  the Third Defendants, by Mr Woolf and Mr Kay. They also made witness statements. 

	Expert evidence
51.	Expert evidence was given, on behalf of Mr Cohen, by Mr James Hewetson, a member of the Royal Institution of Chartered Surveyors, and a partner in the firm of Matthews & Goodman, chartered surveyors. Mr Hewetson’s evidence related to the marketing and open market values of both 7 Newcourt Street and 28 Woronzow Road.

52.	 Expert evidence was given, on behalf of the Second Defendants, by Mr Maurice Walsh and Mr Roger Arnold. Mr Walsh holds a degree in surveying from Trinity College, Dublin, and is a Professional Associate of the Royal Institution of Chartered Surveyors. He is a partner in the firm Robson & Walsh, chartered surveyors. He  gave evidence in relation to 7 Newcourt Street. Mr Roger Arnold is a Fellow of the  Royal Institution of Chartered Surveyors, and is a partner in The Bowen Partnership. He gave evidence in relation to 28 Woronzow Road.

53.	Expert evidence, on behalf of the Third Defendants, was given by Mr Ian Aarons. He  is a Fellow of the Royal Institution of Chartered Surveyors. He is a consultant with Shelly Sandzer and was formerly a partner in the firm  Baker Lorenz. He gave evidence concerning  7 Newcourt Street.

	Were the properties sold for a proper price?
54.	As I have said, the Second Defendants and the Third Defendants deny that they owed any duty to Mr Cohen in relation to the disposal of  7 Newcourt Street  and 28 Woronzow Road.

55.	The Second Defendants accept that, but for the exclusion clauses in the Newcourt Street Charge and the Woronzow Road Charge, they would have owed the same duty of care in equity to Mr Cohen , as guarantor, as is owed by a mortgagee to a mortgagor in the realisation of the mortgage security:  Standard Chartered Bank Ltd v Walker [1982] 1 WLR 1410: Medforth v Blake [2000] Ch. 86. They maintain, however, that the exclusion clauses negated any such duty. 

56.	The Third Defendants maintain that there is no duty of care owed by selling  agents of a receiver in favour of a guarantor of the liabilities of the debtor, at least not where the selling agents are unaware of the guarantee.

57.	 If those defences based upon absence of duty are wrong, however, then the duty of the Second Defendants and the Third Defendants cannot have been greater than that which is owed by a mortgagee to a mortgagor. It is now well settled that the extent of the mortgagee’s duty in equity to the mortgagor is to take reasonable care to obtain a proper price, that is to say, the true market value, of the mortgaged property:  Cuckmere Brick Limited v Mutual Finance Ltd [1971] 1Ch 949. It is equally well established that, once the power has accrued, the mortgagee is entitled to exercise his power of sale whenever he chooses to do so (save, possibly, that he should not ignore the consequence if a short delay might result in a higher price). He has the right to realise the security by turning it into money when he likes. He is not a trustee of the  power of sale for the mortgagor. If his interests, as he sees them, conflict with those of the mortgagor, the mortgagee can give preference to his own interests.  His obligation is to take reasonable precautions to obtain the true market value of the mortgaged property at the date on which he chooses to sell: ibid; Metfah v Lloyds TSB Bank  plc [2001] EGCS 44. Further, it is entirely a matter for the mortgagee to decide whether to exercise all or any of his powers. He is entitled to decide to exercise none of his powers of enforcement or only some of them: China and South Sea Bank Ltd v  Tan  Soon Gin [1990] 1 AC 536.

58.	At  the heart of these proceedings lies the issue, which is one of fact, whether the respective sale prices procured by the receivers  for 7 Newcourt Street and for 28 Woronzow Road were their true market value, that is to say the best prices reasonably attainable at the time of sale. I have come to the clear conclusion that the properties were sold for their market value by the receivers.

	7 Newcourt Street 
59.	As I have already said, 7 Newcourt Street was purchased by Ryhald in January 1990. It was built in the 19th century, and was formerly a public house known as “The British Flag”. By the time that contracts were exchanged on 28th October 1993 for the sale of  7 Newcourt Street to Mr Mayer for £550,000, the property had been extended and converted so as to provide restaurant premises at basement and ground floor levels, and offices at first and second floor levels. It had the benefit of planning permission for the erection of a new third floor for use as a three bedroom residential unit. The refurbishment of the property was to a high quality specification. The restaurant was completed to a shell finish. The building had provision for a lift in the future; and the services were installed to facilitate the construction of the third floor extension. The property is currently occupied, as to part, as offices of what has been referred to during the trial as “the Tibetan Government in Exile”, and, as to part, for residential use, and, as to part, by a centre for oriental medicine.
	
	The condition of the property.
60.	There was a conflict of evidence at the trial as to the condition of the premises at the time of the sale to Mr Mayer. It is not in dispute that, in about June 1992, the basement, or part of it, flooded. Mr Mitchell’s evidence was that this was due to defective workmanship by the original architects employed on the refurbishment. Remedial work was carried out in February or March 1993, and a certificate of practical completion in relation to that remedial work was issued on 7th April 1993. Although Mr Mitchell’s evidence was that the problem was then resolved, I find that it was not. Mr Mayer gave evidence that, at the time of the sale to him, the property did not show at all well. It smelt damp. The basement was again flooded. He gave evidence that water had also leaked through the roof over the second floor. There were damp patches and condensation on the walls.  He said that the office space was damp, and the floors were uneven, possibly due to expansion as a result of the moisture. He referred to cracking of plaster-work, both internal and external. I accept his evidence in relation to all those matters. I find, however, that the cracking was not related to any structural defects. Mr Walsh gave evidence that a reasonable estimate of the cost of repairing those matters at the time would have been £15,000 for the roof, £20,000 to £30,000 to remedy the flooding in the basement, £5,000 in respect of damage to the upper floors caused by damp and condensation, and £5,000 in respect of cracking. I accept that those are reasonable estimates. 

61.	There was a dispute of evidence as to whether the refurbishment of 7 Newcourt Street by Ryhald had been carried out in all respects in accordance with Building Regulations. It is plain, from a letter from the City of Westminster’s Department of Planning dated 4th May 1993 to the receivers’ solicitors, that the City of Westminster believed that there were substantial outstanding breaches of the Building Regulations. Mr Mitchell’s evidence was that, apart from one or two points, the various matters raised by the City Of Westminster in its letter of the 4th May 1993 had been dealt with. Mr Mayer, however, gave oral evidence that, in his discussions with the local authority, allegations were made of a number of  breaches of planning permission and Building Regulations. It is sufficient for me to say that any prospective purchaser of 7 Newcourt Street would have been under the impression that there was a distinct possibility that sums would have to be spent in complying with outstanding breaches of the Building Regulations. 

62.	On 17th May 1992 the London Fire & Civil Defence Authority wrote to Ryhald specifying various matters which it would be necessary to carry out and complete before a fire certificate would be granted for 7 Newcourt Street. There is no documentary evidence that a fire certificate was granted in respect of 7 Newcourt Street by the time of the sale to Mr Mayer. Mr Cohen indicated, during the course of the trial, that he believed a fire certificate had been issued. Taking the evidence as a whole, however, I consider it probable that a fire certificate had not been issued, and that a potential purchaser of the property would consider that further sums would have to be expended in order to obtain such a certificate.

	State of the market
63.	Mr Hewetson’s evidence was that, by February 1993, the collapse in the UK economy and of the property market in London and the South East of the country, which characterised the years 1990 to 1992, appeared to have drawn to an end. He said, in oral evidence, that 1993 was a year of  quite sharp optimism In my judgment, that is an overly optimistic approach. The Hillier Parker Indices for secondary property show, in respect of rental value, a decline in fringe West End properties from 380 in November 1989 to 136 in May 1994 and in suburban London properties from 273 in May 1990 to 159 in November 1993, and, in respect of office yields, a deterioration in fringe West End properties between November 1989 and November 1993 and in suburban London properties from 8.5 in May 1989 to 10.1 in November 1993, and, in respect of capital growth for offices, a fall in fringe West End properties from 411 in November 1989 to 138 in November 1993 and in suburban London properties from 262 in November 1989 to 141 in May 1993, rising to only 154 by May 1994. 

	Market Value
64.	In the re-amended Statement of Claim it is alleged that the true market value of 7 Newcourt Street, as at October 1993, was £960,000. This is based upon the view of Mr Hewetson that there was potential for converting the entirety of the building to flats, and that, in the light of its gross development value as residential accommodation and the costs of such development, the property had a net site value of £960,735. Mr Cohen sought  to reinforce this approach by emphasising that the refurbishment of 7 Newcourt Street had been carried out in such a way, for example the provision and layout of services, as to facilitate the conversion of 7 Newcourt Street to residential use. Further, Mr Cohen and Mr Hewetson relied upon evidence that Mrs Hibbert was interested in acquiring 7 Newcourt Street  for conversion into flats and, on 12th October 1993, indicated to Mr Kay that she was prepared to make an offer of £800,000 and subsequently left a telephone message for the Third Defendants that her offer was increased to £850,000. That evidence was given in Mrs Hibbert’s witness statement and by Mr Cohen. Mr Kay denies that any such offer or offers were made by Mrs Hibbert.	

65.	I reject the evidence of Mr Hewetson, and the case of Mr Cohen, that the open market value of 7 Newcourt Street, as at October 1993, should be measured by reference to its potentiality for conversion to residential use. At that time 7 Newcourt Street had planning permission for A3 restaurant use of the basement and ground floor, A2 office use of the  second and third floors, and for the erection of  a new third floor in connection with the A2 use of the first and second floors. Accordingly, conversion of the whole of 7 Newcourt Street to residential accommodation would have required a wholesale change of planning permission. I was informed that, following service of their initial reports, Mr Hewetson  and Mr Aarons were agreed that “planning consent would have been obtainable to allow the conversion of the ground and upper floors for residential use” (see para 4.3 of Mr Hewetson’s second report). On the evidence, however, I find that it  is speculative whether such fresh planning permission would have been granted, and unlikely that it would have been granted without an appeal.

66.	 The planning policy for the City of Westminster was that, for residential development generally, the Council required a minimum provision of one off-street car parking space per dwelling; and the council might require a higher level of provision where car ownership was likely to be in excess of one car per dwelling. In relation to residential conversions or extensions, the Council’s policy was that, where there was a serious deficiency of on-street parking places, and off-street had not been provided, planning permission would normally be refused if there was a likelihood of additional demand for on- street  parking arising from the proposed extension or conversion. There was no provision or capacity for off-street parking at 7 Newcourt Street. Further, when Mr Mayer applied for change of planning permission  in order that the first and second floors of 7 Newcourt Street could be converted into residential units, planning permission was granted on 15th March 1994 subject to a condition that the permission was personal to the “Office of Tibet” and should not inure for the benefit of the land. This indicated a cautious and restricted approach of the local authority to conversion of use to residential use. A similarly cautious and restricted view is evidenced by the restriction of the previous planning permission for the erection of a new third floor for use as a three bedroom residential unit “in connection with the use of the first  and second floors for A2 purposes”. Mr Hewetson himself accepted, in cross examination, that the City of Westminster would have been likely to refuse planning permission for conversion to residential use, and there then would have had to be an appeal. He accepted that the whole process of obtaining planning permission for such use could have taken 12 months. He also accepted , in cross examination, that  it was speculative whether 7 Newcourt Street would have been of interest to developers of residential property.

67.	In my judgment, no matter how widely or extensively or enthusiastically 7 Newcourt Street were to be advertised and marketed as a potential residential development, nobody would have been prepared to purchase that property  in or before October 1993 for a price calculated by reference to its potential conversion to residential accommodation. I can place no weight, in this regard, on the alleged oral offers by Mrs Hibbert. There is an acute conflict of evidence as to whether any offers were, in fact, made by her. Mr Kay categorically denies any such offers. Even taking Mrs Hibbert’s witness statement at face value, her offers were never reduced to writing and she never pressed them. In his witness statement Mr Green appears to have no recollection of any such offers. Mr Cohen gave evidence that he personally overheard Mrs Hibbert’s offer of £800,000 made to Mr Kay. The tentative nature of his evidence in his witness statement, however, is to be noted: “Mrs Hibbert...said...that she...wished to make an offer, I think, of £800,000” (see para 80 of his third witness statement dated 10th February 2001). In these circumstances, and in view of the fact that Mrs Hibbert’s evidence in her witness statement could not be tested by cross examination, I can place no weight on her alleged oral offers as support for a valuation approach based on, at best, a highly speculative potentiality of  7 Newcourt Street for conversion to residential accommodation. 

68.	Furthermore, the calculations of Mr Hewetson, as to the net sale value of  7 Newcourt Street at £960,375 based on conversion to residential use, assume sale values based on £300 per square foot, and that a third floor would be constructed which would cover three quarters of the second floor area. Mr Hewetson candidly admitted that he had not  based the figure of £300 per square foot on any comparable evidence in relation to flats in the area. It was based purely upon his experience of house values. Mr Hewetson said that he had based the estimate of £300 per square foot on “the general tone” of the housing market in St John’s Wood. In my judgment, the evidential basis for the projected sale values of the residential accommodation  at £300 per square foot has not been made good in Court.

69. 	Furthermore, there is no basis for an assumption that a residential developer would have contemplated and intended the construction of a third floor. The evidence is that, in about December 1991, contracts were exchanged for the grant by Ryhald to Barglamis Ltd (“Barglamis”) of a 999 year lease of the air space above 7 Newcourt Street, within which the third floor was to be created, for a purchase price of £50,000. The evidence is that the Bank was aware of, and consented to, the contract with Barglamis. It further appears that completion was due to take place by either 6th March 1992 or 14 days after the completion of certain structural works, and that £5,000 was paid on exchange of contracts, and that contractual completion took place on 14th July 1992. At the time of the sale of 7 Newcourt Street to Mr Mayer, Barglamis was still asserting its right to the air space above the second floor. It transpires that, once Mr Mayer had purchased 7 Newcourt Street, Barglamis no longer persisted in claiming an interest in 7 Newcourt Street. It was, however, a term of the sale to Mr Mayer that a proportion of the purchase price was retained by him until the issue of Barglamis’ interest was resolved. 

70.	Further, Mr Mayer gave evidence that the local building control officers advised him, concerning the possibility of adding a third floor, that he would need to add an external fire escape and comply with other fire regulations, in addition to adding an internal staircase. He formed the view that it was going to be expensive and complicated, and so he decided not to proceed with it. 

71.	 In my judgment, as at October 1993, no potential purchaser of 7 Newcourt Street would have been prepared to purchase that property at a price which placed any value on the potentiality to construct a third floor. 
	
72.	In his first report Mr Hewetson  said that, if Mr Kay had advised Mr Allan appropriately, the receivers would have sought to obtain planning consent, or at least a clear indication from the planners as to the availability of planning consent, for residential use before selling, in order to maximise the proceeds of sale. As a matter of law, the receivers had no obligation to seek to obtain such planning consent. For the sake of completeness, I find that, even if the receivers had tried to do so, the receivers would not have obtained, by October 1993, either planning consent or any clear indication from the planners as to the availability of planning consent for residential use. 

73.	Mr Hewetson  has put forward an alternative valuation based upon the use of 7 Newcourt Street for the purposes for which planning permission existed at that time, namely as a restaurant on the ground floor and basement, as offices on the first and second floors, and the creation of a third floor. Mr Hewetson’s evidence, in his second report, was that he would have recommended seeking offers in the region of £830,000 on this alternative basis (reduced from £850,000 in his first report). While I am satisfied that Mr Hewetson was doing his best to assist me, this alternative valuation unfortunately proceeded on a fundamentally false premise. It proceeded on the basis that the receivers should have procured the grant of a long lease of the restaurant, and one or more occupational leases of the office accommodation, and then sold the freehold reversion. It is quite clear, however, as a matter of law, that the receivers were under no obligation to exercise their powers to grant occupation leases, and were entitled to market the property as a vacant freehold property in the condition in which they found it. Furthermore, the Defendants in fact took the view that to attempt to find occupational tenants of 7 Newcourt Street, prior to selling the freehold, might well result in the property remaining empty for a substantial period. I consider that this view was a reasonable one. 

74.	There was disagreement between the expert witnesses as to the rental value of  7 Newcourt Street, as at October 1993. They all agreed that the restaurant would be a “destination” restaurant; that is to say, a restaurant to which the public would be attracted because of its particular reputation or chef. Mr Hewetson considered that the ground floor restaurant had a rental value of £20 per square foot. Mr Walsh considered that it had a rental value of £18 per square foot. Mr Aarons considered that it had a rental value of £15 per square foot. All three valuers agreed that the rental value per square foot of the basement kitchen area would be a proportion, varying between a third and a quarter, of the ground floor restaurant rental value.

75.	 Mr Aarons, whose values were the lowest  in relation to the restaurant and kitchen areas, based his views on two comparables. The first was the restaurant in Oslo Court, which faces 7 Newcourt Street. He considered this comparable was the best available guidance to the value of the restaurant premises in 7 Newcourt Street. He relies upon the rent payable under the lease of Oslo Court restaurant pursuant to its 1990 rent review, and originally calculated that the reviewed rent equated to £14.55  per square foot. Mr Aarons also relied upon  restaurant premises at 29A Baker Street  and 5A Melcolmbe Street, London NW1. In my judgment, those premises are too distant from 7 Newcourt Street  to be of any value as comparables.  

76.	Mr Hewetson, for his part, initially concluded that the reviewed rent of the Oslo Court restaurant equated to between £17.50 and £22 per square foot. After their initial reports, I was informed that the experts agreed that the 1990 reviewed rent for Oslo Court restaurant equated to £16.56 per square foot. Mr Hewetson considered that the rental value ascribed to Oslo Court restaurant in 1990 reflected its lack of visibility, the restricted  floor area and the fact that the business was entirely based on the goodwill generated by the existing operators, none of which factors, in his view, would have applied to 7 Newcourt Street. 

77.	Mr Walsh did not rely upon and did not comment on Oslo Court restaurant as a comparable. For his part, Mr Walsh relied upon the  rental agreed in about April 1993  for retail premises at 36 Church Street, St John’s Wood, as evidence to support his opinion of the rental value of the restaurant premises at 7 Newcourt Street. The problem with this comparable is that it was not a restaurant, and therefore not strictly comparable. 

78.	All three experts agreed that there was a dearth of comparable evidence. On this exiguous and conflicting evidential material, I find that the  most appropriate rental value for the ground floor restaurant premises at October 1993 is that put forward by Mr Walsh at £18 per square foot, which lies between the two extremes of Mr Hewetson and Mr Aarons, but which reflects the passing rent for Oslo Court restaurant .I also find that Mr Walsh’s valuation  of the  rental value of the basement kitchen area, at £6 per square foot, is the appropriate value for that area. 

79.	Turning to the office accommodation on the first and second floors of 7 Newcourt Street, Mr Walsh suggested a rental value of £10 per square foot as at October 1993. Mr Hewetson and Mr Aarons agreed that £12 per square foot was the right figure. All three experts agreed that 7 Newcourt Street was not an established office or commercial location, and that the area was residential in character. Again they agreed that there is a dearth of useful comparables. There was a consensus among them that 151b Park Road, NW8, was probably the most useful comparable. In his report, as originally served, Mr Walsh showed that property as commanding a rent per square foot of £10.52. His evidence was that that property was in a better location than 7 Newcourt Street. Those factors would account for his opinion that the appropriate rental for the offices at 7 Newcourt Street in October 1993 would have been £10 per square foot At the trial, however, Mr Walsh accepted that there had been a mathematical error in his calculation of the rental value of  151b Park Road,  and that the correct  figure was £12.50 per square foot. In the light of that error, and in the light of the comparables relied upon by Mr Hewetson  and his oral evidence as well as that of Mr Aarons, I find that the rental value of the office accommodation on the first and second floors of 7 Newcourt Street, as at October 1993, was £12 per square foot.

80.	For the reasons mentioned in paragraph 69, that is to say, the prior agreement for the sale of a long lease to Barglamis, a potential purchaser would not have attributed any rental value or development value to a new third floor at 7 Newcourt Street .

81.	It follows, from my findings as to the rental value of 7 Newcourt Street, as at October 1993, that the annual rental value of 7 Newcourt Street at that time was £77,304. 

82.	In order to establish the open market value of the freehold of 7 Newcourt Street, it is necessary to consider the appropriate investment or rental yield for the property at that time. Mr Hewetson originally carried out his calculations on the basis of a yield of 9.5% in respect of the restaurant premises on the ground floor and basement, and a yield of 10.5% in respect of the office accommodation. In his second report, he considered an average yield for the entire property of 10% would be appropriate. Mr Walsh and Mr Aarons consider that a yield of 12% in respect of all the accommodation at 7 Newcourt Street would be appropriate.

83.	 It is convenient to consider, first, the office accommodation. Mr Hewetson conceded that the yield of 10.5% was only appropriate on the hypothesis, upon which his valuation is founded, that the receivers should first have let the accommodation before sale of the freehold. He did not dissent from the view that 12% would have been a reasonable yield if the property was sold with vacant possession. This reflects the fact, upon which the experts agreed, that the yield takes into account the uncertainty of obtaining tenants, the quality of the tenants that might be obtained, and the contents of the lease which might be granted. 

84.	In connection with determining the appropriate yield, one fact which a potential purchaser would have borne in mind was that the planning permission  for the property restricted the first and second floors to A2 use. The expert witnesses agreed that this was unusually restrictive, and that such a restriction would normally have been appropriate to the ground floor of High Street premises. Mr Hewetson and Mr Aarons further agreed that a consent for B1 office use would probably have been successful “following normal planning procedures” ( see para 4.2 of Mr Hewetson’s second report). A potential purchaser would, nevertheless, have recognised that there was some uncertainty as to whether, and, if so, precisely when such consent would be given. If it was necessary to go to appeal, the process of obtaining revised planning consent would have taken several months, at the least.

85.	 Furthermore, the yield would reflect market performance and optimism. As I have said, Mr Hewetson was of the view that 1993 was a year of quiet optimism, after a lengthy period of recession. I have already mentioned that his view does not fully reflect published indices as to market performance. In this context, it is to be noted that, in a report on the value of 7 Newcourt Street, which was prepared by Mr Hewetson for use in other proceedings and is dated 28th May 1999, Mr Hewetson expressed the view that a sensible yield to adopt  for 7 Newcourt Street in September 1990 fell within a bracket of 10% to 12.5%, “appropriate to a speculative secondary mixed use investment”. As I have said, the Hillier Parker Index of yields on secondary office property shows a deterioration in yields from May 1990 to November 1993.

86.	 Having regard to all the evidence, and in particular the critical fact that Mr Hewetson has suggested or adjusted  his yield on the, legally incorrect, hypothesis of a letting  to occupying tenants prior to sale of the freehold by the receivers, I find that the appropriate yield for the first and second floors of 7 Newcourt Street, as at October 1993, was 12%.

87.	Mr Hewetson suggests a yield of 9.5%. for the restaurant premises on the ground floor and basement  of 7 Newcourt Street. Mr Walsh and Mr Aarons suggest a yield of 12% for those premises. The yield of 9.5% suggested by Mr Hewetson is based on the Hillier Parker Index for yield movements of shops, of secondary quality, in the inner suburbs of London. In my judgment, that is not an appropriate basis for determining the yield of the restaurant premises. The Hillier Parker Index relates to “All Shops”, whereas the experts agreed  that the yield in respect of a “destination” restaurant  in a residential area, such as 7 Newcourt Street, was likely to turn upon its own particular circumstances. Mr Hewetson  himself accepted, in cross examination, that there could be a wide variation in yield between shops and restaurants, and that the “All Shops” Index was not entirely appropriate for a restaurant . I find that a purchaser of 7 Newcourt Street in the open market, as at October 1993, would have based the price for 7 Newcourt Street on a uniform yield of 12% across the entire accommodation. 

88.	All three experts agreed that a purchaser of 7 Newcourt Street would expect to have no rental return for the first year after purchase. Such a purchaser would anticipate that it would take approximately six months to obtain occupying tenants of the property, and that it would be necessary to grant such tenants six months rent free.

89.	All the above factors produce a value of £575,172.87 for 7 Newcourt Street as at October 1993. That figure takes no account of the expense that a purchaser would expect to incur in relation to the disrepair I have mentioned earlier in this judgment, namely the leaking roof, the flooded basement, the warped floors of the office accommodation, and internal and external cracking. Nor does it take any account of the cost that a purchaser would expect might have to be incurred in order to comply with Building Regulations and to obtain a fire certificate. Mr Hewetson himself accepted that, if 7 Newcourt Street was in the condition described by Mr Mayer in his evidence, the purchase price obtainable would have been affected. The costs and expenses to remedy the disrepair would be estimated by a purchaser, in my judgment, to amount to not less than £50,000. Nor does the figure of £575,172.87  take into account the costs of obtaining occupational tenants, such as advertising and letting fees, or of interest, notional or actual, on the cost of repairs or the purchase price until the premises would be let  or rent would be payable. Nor does it include any allowance for legal fees and other related expenses associated with the purchase. In my judgment, the open market value of 7 Newcourt Street is to be ascertained on the footing that a purchaser would make an allowance for those items or most of them. Accordingly, in my judgment, the open market value of 7 Newcourt Street, as at October 1993, was not more than £525,000. That figure is less than the £550,000 paid by Mr Mayer. The reason why, in my judgment , Mr Mayer was willing to pay in excess of the market value lies in the fact that he was a special purchaser. He was not a property speculator, developer or investor. He is a long standing supporter of the interests of the Dalai Lama and what has been called the “Tibetan Government in Exile”. He wanted to acquire premises, near to his place of residence, for use as an embassy to represent their interests. He considered that 7 Newcourt Street would be well suited to meet those particular purposes.

90.	There were put in evidence a number of valuations of 7 Newcourt Street carried out between September  1990 and April 1993. They ranged from £1,650,000, as the anticipated value of 7 Newcourt Street after completion of the development, in a report by Alan De Maid Limited in October 1991, to a valuation of £340,000 to £400,000 by Hampton Commercial in April 1993. In view of the extraordinary range of values given in those valuations, and the fact that none of the makers of those valuations attended in Court for cross examination, I am not assisted in any way by the existence of those valuations. Nor did I understand Mr Hewetson to suggest, at any stage, that those valuations were of probative value in any particular respect. 

91.	Mr Cohen sought to support his allegation as to the true value of 7 Newcourt Street by reference to offers which had been made from time to time to purchase the whole or part of 7 Newcourt Street, prior to the sale to Mr Mayer in October 1993. It appears, for example, that an offer was made to purchase 7 Newcourt Street in June 1990 for £750,000, and a Mr Willis offered £750,000 in February 1992, subsequently increased to £785,000 ( and later reduced to £690,000 after the flooding of the basement), for the restaurant part of 7 Newcourt Street.  Mr Cohen also alleges, as I have already stated earlier in this judgment, that Mrs Hibbert offered £800,000, and was willing to pay up to £850,000, for 7 Newcourt Street in October 1993. There were numerous other offers made from to time. In my judgment, none of those offers has any probative value in establishing the open market value of 7 Newcourt Street in October 1993. For one reason or another, none of those offers matured into an actual sale. None of the persons making the offers attended court for cross examination as to their views, intentions and beliefs in making those offers. I have already explained why, in the case of Mrs Hibbert, I can place no weight on the evidence as to her offers. In the case of Mr Willis, Mr Hewetson himself accepted that his offers were considerably above the market value of the restaurant at the time they were made. In the circumstances, it would be quite wrong, in my judgment, either to bolster or to undermine the expert evidence that was given at the trial, on behalf of each of the parties, by reference to those offers.

	28 Woronzow Road 
92.	This property is a small terraced house constructed in the 1840s. It is constructed on the ground and two upper floors, with substantial rear extensions at ground and first floor levels. Following the acquisition of 28 Woronzow Road on trust for Mr Cohen in 1990, Mr Cohen procured a substantial refurbishment of the property. Mr Cohen’s evidence was that the house was purchased for £300,000, and some £270,000 was spent on renovating it. It is not in dispute that the work carried out was of an extremely high standard, and that the property, on completion of refurbishment, was of outstanding quality. The work included the construction of a conservatory on the ground floor which provided a dining room. The conservatory covered just under half of the rear garden. There were four bedrooms, a bathroom and a shower room, as well as a kitchen and main reception room. The house had a gross internal area of 1,520 square feet. 
	
	The market	
93.	FPD Savills Index of capital values for prime central London residential capital values shows that, in respect of the area covering St John’s Wood, Regent’s Park and Hampstead, the Index fell from 173.1 in June 1988 to a low of 113.3 in March 1993. There was then a steady increase to the figure of 150.5 in June 1995, when the index reached a plateau, before moving upwards in March 1996. I find that there was an improvement in the residential market in the St John’s Wood area after March 1993, but, at the date of exchange of contracts with Holmdale in June 1993, that improvement had only just begun, was slight and tentative, and the market would still have been seen by property professionals as highly depressed and with an uncertain future. 

	The  condition of the property.
94.	Shortly after the receivers were appointed on 12th February 1993, the Third Defendants were instructed to value 28 Woronzow Road. On 24th February 1993 the Defendants sent the receivers a valuation carried out by Mr J.H.Goulde FSVA. Mr Goulde valued the freehold at £295,000. In his report he stated that the property “was well refurbished but has been the subject of vandalism and we understand unoccupied for some time”. His report stated that, in the kitchen, numerous fittings, including the central heating boiler, had been removed and there might be some difficulty in matching the damaged tiling. The report also stated, with regard to the bathrooms, that washbasins, taps and a hot water cylinder had been removed and considerable damage caused, and again there might be some difficulty in matching the damaged tiling. He further stated that some redecoration would have to be carried out and, if the tiling in the kitchen and the bathroom could  not be matched, then they would have to be retiled at considerable cost. He estimated the cost of remedial works to be in region of £30,00 to £50,000. 

95.	Mr Cohen’s evidence is that he vacated 28 Woronzow Road, as his home, only a short time before Mr Goulde’s report. He said that he took out of the house certain free-standing white goods, such as the washing machine, tumble dryer and fridge, the curtains, and also the fitted carpets in the sitting room and on the first and second floors. He maintains that the property was otherwise in good order when he left. Mr Cohen’s case is that the vandalism must have been caused by, or on the directions of the Third Defendants, possibly in order to provide an excuse to obtain a sale at under the market value, in consideration of some personal undisclosed commission by a purchaser. 

96.	The Third Defendants’ case is that they knew nothing of the vandalism, including the removal of the central heating boiler and bathroom fittings, prior to their appointment as selling agents by the receivers. They maintain that Mr Cohen, who accepted in evidence that he was suffering from clinical depression at that time, must have removed those items and caused the vandalism prior to his leaving the house.

97.	The evidence discloses that Miss Hay inspected 28 Woronzow Road, accompanied by Mr Kay, in the week prior to 25th February 1993. Her evidence, which I accept, is that the property looked quite dilapidated when she visited it, and there was a gap in the kitchen, where the boiler had been. She was unaware, however, that  the property had been vandalised. 

98.	In view of the fact that there was no evidence of forced entry to the property, after Mr Cohen ceased to occupy it, I conclude that the boiler in the kitchen and the bathroom fittings were removed by someone who had the keys to the property. The burden of proof lies on Mr Cohen  to substantiate the serious allegation that the boiler and bathroom fittings, and any acts of vandalism on which he relies, were caused by, or on the instructions of, the Third Defendants. The evidence falls far short of establishing that, on a balance of probabilities, the removal of the boiler and the  fittings and any vandalism were so caused. The boiler and the fittings could have been removed, and damage caused, by anyone who had access to, or was given, the keys to the property, prior to the locks being changed, including employees of the Third Defendants and of Behr and Butchoff, or persons to whom such employees might have given the keys or copies of them. In my judgment, it was not unreasonable for the Third Defendants and the Second Defendants to conclude, when they first learnt that the boiler and the fittings had been removed and damage had been  caused to the property, that this had occurred prior to the appointment of the receivers and  the Third Defendants’ appointment as the receivers’ selling agents. Accordingly, I must consider what was the open market value of 28 Woronzow Road in the condition in which it was seen by Mr Goulde when he carried out his valuation for the purposes of his report dated 24th February 1993. 

99.	Mr Hewetson and Mr Arnold both agreed that there were few comparables, due to the sluggish state of the market and the absence of sales of similar properties sufficiently close to 28 Woronzow Road in quality, location and time of sale to make useful comparisons. Mr Hewetson  considered that the best comparables were 4 Woronzow  Road, which was sold in June 1994 for £410,000, and 4   Henstridge Place, which was sold in June 1993 for £375,000. Having regard to those comparables, Mr Hewetson’s first report concluded that “the house refurbished to the high standard undertaken by Mr Cohen, but not  lived in for 18 months, should have been able to achieve a price in the order of £410,000”. The report further stated that, if “28 Woronzow had been restored to  its “new” appearance by redecoration... and other repairs that might have been required”, Mr Hewetson would have expected it to have sold for a price between £425,000 and £450,000.

100.	Mr Arnold agreed that 4 Woronzow Road and 4 Henstridge Place were, together with another property, 27b Elsworthy Road, London NW3, the most useful comparables. He concluded that the open market value of the freehold interest in 28 Woronzow Road, with vacant possession, as at June 1993 , “in assumed good condition”, was £360,000. 

101.	The valuations of both Mr Hewetson and Mr Arnold proceeded on a false basis, in so far as they assumed that the condition of 28 Woronzow Road was any different to its actual condition. As I have said, I find that its actual condition was that all the removable white goods in the kitchen had been removed, as had the central heating boiler, and the bathroom fittings  mentioned by Mr Goulde in his report of 24th February 1993, and there was damage to the tiling in the bathroom and in the kitchen. In addition, the fitted carpets had been removed from the sitting  room, and the first and second floors. The property did not, however, in my judgment, require as much as £30,000 to £50,000 to be spent upon it, as indicated by Mr Goulde. I find that it would not have been necessary to pay more than £10,000 to install a new boiler, and to reinstate other fittings and damaged tiles, and to redecorate and make good where necessary.
	
	Market value
102.	Mr Hewetson accepted, in his oral evidence, that the value of 28 Woronzow Road, in the actual state of disrepair I have described, would have been £360,000 to £375,000 in June 1993.

103.	Mr Hewetson and Mr Arnold both agreed that, of all the comparables available, the most suitable and helpful was 4 Henstridge Place. I agree. In my judgment, each of the other comparables mentioned in the experts’ reports is unsatisfactory in view of the substantial adjustments which need to be made to take account of location, date of sale, amenities, size and quality. Of the three comparables which the experts consider to be of greatest value, I find that 27b Elsworthy Road provides little assistance since it is in a quite different location, is a larger and modern house, has a much larger garden and has an open aspect at the rear over Primrose Hill.  In addition, there is the curious and unexplained fact that, having been sold in March 1993 for £450,000, it was resold in June 1993 for the substantially increased price of £540,000. I find that 4 Woronzow Road is of little assistance, as a comparable, since it was sold in June 1994, a year after contracts were exchanged for the sale of 28 Woronzow Road, and at a time when, according to the FPD Savills Index, the market in the area had improved considerably.

104.	There is disagreement between Mr Hewetson and Mr Arnold as to whether the gross internal area of 4 Henstridge Place should be calculated by including the area occupied by a car port at the front of the property. Mr Arnold considers that the car port space should be included, since it had potential for incorporation within the main building so as to provide additional living accommodation. Mr Arnold accepted, however, in cross examination by Mr Cohen, that there was a possibility that the planning authority might not permit that alteration to the building in the light of the fact that 4 Henstridge Place was in a parade of houses, which were architecturally uniform in their external appearance, and in respect of none of which had the car port been incorporated within the building so as to provide additional living accommodation. In my judgment, in all the circumstances, it would not be appropriate to calculate the gross internal area of 4 Henstridge Place, for the purpose of using that property as a comparable, by including the space occupied by the car port.
 
105.	The significance of 4 Henstridge Place, in relation to the valuation of Mr Hewetson, can be seen from the fact that, on  the information available at the commencement of the trial, he extracted a price per square foot for 4 Henstridge Place of £257 which, when applied to 28 Woronzow Road, produced a figure of approximately £410,000 for the latter property. That was the very figure for which he contended in his evidence, and which was reflected in the alleged open market value of  28 Woronzow Road specified in the re-amended Statement of Claim. By the end of the trial, however, Mr Hewetson and Mr Arnold had agreed that the gross internal area, on which Mr Hewetson had been relying, was incorrect. They agreed, having obtained access to the inside of 4 Henstridge Place during the course of the trial, that the price per square foot of 4 Henstridge Place, without any adjustment to take account of differences between that property and 28 Woronzow Road, was £235 rather than the £257 on which Mr Hewetson had previously been relying.

106.	4 Henstridge Place is a modern town house, whereas 28 Woronzow Road is a period property. Mr Hewetson made no adjustment for the difference in that respect. His evidence was that there were simply different markets for modern properties and for period properties. I agree that there should be no adjustment to the price per square foot of 4 Henstridge Place to take any account of the difference between the styles of the two houses. I agree with Mr Arnold, however, that it is appropriate to make some adjustment to the price per square foot of 4 Henstridge Place for the purpose of comparing it with 28 Woronzow Road, to take account of two features. First, and most important, it had off-street parking, whereas 28 Woronzow Road did not. Second, as a subsidiary matter, it had a south-facing back garden, whereas a large part of the garden of 28 Woronzow Road was taken up by the newly constructed conservatory, leaving only a small patio garden to the rear. In my judgment, in view of those matters, an adjustment of not less than 5% to the price per square foot of 4 Henstridge Place is appropriate in order to make a comparison with 28 Woronzow Road.  That produces a value for 28 Woronzow Road of £356,000.

107.	The adjusted valuation of £356,000, and Mr Arnold’s valuation of £360,000, were on the footing that 28 Woronzow Road was in good condition.  It was not, however, in good condition.  As I have mentioned, Mr Hewetson was willing to accept that, if  28 Woronzow Road was to be valued in the condition in which I found it was at the time of sale, it would be appropriate to reduce his valuation from £410,000 to between £360,000 and £375,000.  In my judgment, by the date of sale to Holmdale in June 1993, 28 Woronzow Road would have presented quite poorly.  It was in the state of disrepair which I have already described.  It had been vacant since at least February 1993.  Furthermore, it had been on the market since 1991. I find, taking all the above factors into account, that the open market value of 28 Woronzow Road, if properly marketed, was between £310,000 and £356,000.

108.	The sale by the receivers to Holmdale was for a price of £335,000. Accordingly, I find that the sale was not below the open market value of 28 Woronzow Road.

109.	Alan De Maid produced valuations of  28 Woronzow Road in August 1991 and June 1992. Those valuations are, in my judgment, of no assistance in establishing the  proper value of  28 Woronzow Road, in the condition which I have described, at the date of the sale to Holmdale in June 1993.  Mr Fox, who produced those valuations, did not give oral evidence or make any witness statement  for the purpose of these proceedings. Mr Cohen and the Defendants sought to rely, in support of their respective views of the proper value of 28 Woronzow Road, on offers for the property or enquiries about the purchase of the property made from time to time. In particular, Mr Cohen relied upon an offer to purchase by a Mrs Rosa  Reitzer for £575,000 made in or before November 1991, an enquiry from a Mrs Chew in November 1991, and an offer of £500,000 from  Mr and Mrs Sutherland in December 1991. In my judgment, those offers and the enquiry from Mrs Chew (which never in fact matured into an actual offer to purchase), made at a much earlier point of time, and when the property was in a very different condition, and which never proceeded to a completed sale, provide no assistance to me in valuing the property as at June 1993.

110.	Mr Cohen also relied upon evidence that in 1994 28 Woronzow Road was advertised for letting at a rent of £44,200 per annum. He also relied upon an attempt by Mr Elson  to purchase the property in 1994. That evidence is also of no probative value as to the value of 28 Woronzow Road in June 1993. In particular, no expert evidence was given as to how the rent advertised  for 28 Woronzow Road in 1994, apparently after various works had been carried out to the interior of the property, would assist me in establishing the freehold value in June 1993. 
		
 111.	For their part, the Defendants rely upon a number of offers received for the property after the appointment of the receivers in February 1993. Those offers ranged from £311,000 to £356,000. In my judgment, those offers, which were in response to the attempts of the Third Defendants to sell  28 Woronzow Road after the appointment of the receivers in February 1993, do provide some support for my conclusion that the value of 28 Woronzow Road, in the light of all the other evidence I have mentioned, was between £310,000 and £356,000 as at June 1993.

	Mr Johnson’s offer
112.	In April 1993 a Mr Michael Johnson offered £356,000 for 28 Woronzow Road. He subsequently reduced his offer to £350,000, and then later increased it to £351,000. Initially, Mr Johnson had made clear that, in order to purchase 28 Woronzow Road, he would need to sell his own flat. His final offer of £351,000 was on the footing that he would be able to purchase the property without first selling his own flat. The Third Defendants forwarded to the receivers details of Mr Johnson’s offers. By the time that Mr Johnson made his final offer, on the basis that he would be able to proceed to exchange of contracts without having to arrange the sale of his own home, the receivers had already accepted, subject to contract, the offer of £335,000 from Holmdale. Holmdale was a cash buyer. The receivers apparently decided that they did not wish to take the risk of losing the sale to Holmdale, by giving further latitude to Mr Johnson. It is important to note that it has never been alleged by Mr Cohen, in his Statement of Claim, that the offer by Mr Johnson should have been accepted by the receivers. Further, none of the witnesses for the Defendants were cross examined by Mr Cohen about the circumstances in which, and the reasons why, the receivers rejected  Mr Johnson’s various offers. Accordingly, it is not necessary or appropriate for me to make any finding as to whether the receivers were at fault in rejecting Mr Johnson’s offer of £351,000.

	The ‘secret commission’ allegation
113.	It has been an important theme of Mr Cohen’s complaints against the Defendants, and his case against them in these proceedings, that he suspects that Mr Kay deliberately sold both 7 Newcourt Street and 28 Woronzow Road  at less than open market value, in order to procure a secret commission for himself or the Third Defendants.

114.	There is no evidence whatsoever that either Mr Mayer, in respect of the purchase of 7 Newcourt Street, or Holmdale, in respect of the purchase of 28 Woronzow Road, had any dealings or association with Mr Kay or Mr Woolf at any time prior to their respective purchases. Mr Mayer gave evidence to that effect at the trial. No person gave oral evidence on behalf of Holmdale, but there was no evidence to contradict the oral evidence on behalf of the Third Defendants that they had no such prior dealings or association with Holmdale, or with those acting on its behalf. There is, in fact, no evidence at all that either Mr Mayer or Holmdale offered, let alone gave, any secret commission to Mr Kay or to the Third Defendants.

	Conclusion on market values
115.	For the reasons set out in this section of my judgment, I conclude that both 7 Newcourt Street  and 28 Woronzow Road  were sold  by the receivers  for a proper price, that is to say their true market value, at their respective dates of sale. Accordingly, Mr Cohen can establish no loss due to the conduct of the Second Defendants or the Third Defendants, and the proceedings fail.

	Marketing
116.	In view of my findings as to the market value of 7 Newcourt Street and  28 Woronzow Road at their respective dates of sale by the receivers, it is not strictly necessary for me to analyse, and reach findings on, Mr Cohen’s numerous allegations as to the improper marketing of those properties by the receivers and the Third Defendants.  It is, however, appropriate that I comment on the following matters.

117.	Mr Cohen,  supported by his expert witness, Mr Hewetson, maintains that it was inappropriate for the receivers to select the Third Defendants as the selling agents for 7 Newcourt Street. Mr Cohen’s evidence was that he complained about their appointment in a number of telephone calls to the Second Defendants. His evidence was that he was always told that Mr Allan was unavailable to speak to him, but that his comments would be passed on to Mr Allan. Those conversations were with a woman who, he believes, was Miss Hay. Miss Hay’s  evidence was that she has no recollection of any such telephone conversations. Mr Allan’s evidence was that he was unaware of the complaints and concerns of Mr Cohen. I find, on a balance of probabilities, that such telephone calls by Mr Cohen  and telephone conversations with Miss Hay did take place. Although there is no record of them in any attendance note, it is clear that there were other  telephone conversations from time to time which were not recorded, or fully recorded, in attendance notes of the Second Defendants.

118.	There were a number of Winkworth estate agencies in London at that time. Most carried on business under the name Winkworth  pursuant to a franchise agreement. This was the case with the Third Defendants in respect of the St John’s Wood area. Although Mr Kay gave evidence that, between October 1991 and 1993, the Third Defendants sold several commercial properties, the evidence, both factual and expert, shows, and I find, that Winkworth agencies were known to the public and to property professionals as  residential sales agencies. I find that Winkworth agencies, including that carried on by the Third Defendants in St John’s Wood in 1993, had no reputation among property professionals, at the relevant time, as agents for selling commercial property. 

119.	The rationale which has been put forward, on behalf of the Defendants, to justify the appointment of the Third Defendants as the receivers’ selling agents for 7 Newcourt Street is that, in fact, Mr Kay personally had considerable experience in selling and dealing with commercial property and, indeed, following the creation of his partnership with Mr Woolf and the acquisition of the Winkworth franchise in St John’s Wood, he continued to act for various clients dealing with commercial property for whom he had acted in the past.  He gave evidence that, by 1993, he had built up a database of some 400-500 clients and contacts interested in commercial property. Furthermore, the Defendants maintain that it was appropriate to instruct a local agent in relation to the sale of 7 Newcourt Street, since a prospective purchaser was most likely to be a local person, bearing in mind that St John’s Wood was not a recognised area for office accommodation. Indeed, it can be pointed out that there was justification in that view, since the ultimate purchaser, Mr Mayer, did live locally and was interested in 7 Newcourt Street precisely because it was located near his home. Furthermore, Mr Hewetson himself accepted, in cross examination, that, in the case of 7 Newcourt Street, the local element was likely to be quite an important section of the market. It has not been suggested by Mr Cohen that there was any other local agency specialising in the sale of commercial property. For those reasons given by the Defendants, I consider that it is not possible to maintain that the decision of the receivers to retain the Third Defendants to sell 7 Newcourt Street, as well as  28 Woronzow Road was outside the scope of a legitimate and reasonable exercise of the receivers’ decision making powers. 
	
120. 	On the other hand, the way in which the receivers went about making their decision to retain the Third Defendants to sell 7 Newcourt Street was, on the evidence, both curious and unsatisfactory. The decision appears to have been made by Mr Allan during a conversation with Mr Kay, in which Mr Allan asked simply whether the Third Defendants were able to sell 7 Newcourt Street, as well as 28 Woronzow Road. Mr Kay replied in the affirmative. That was the basis of the decision. Mr Allan acknowledged, in his oral evidence, however, that he had never worked with Mr Kay before and that, so far as he was aware, the Second Defendants had never previously placed a commercial property with a Winkworth agency. There was no evidence that anyone else within the Second Defendants had ever previously worked with Mr Kay.  Mr Allan was unaware of whether or not Mr Kay had any professional qualifications. Nor did Mr Allan ask  Mr Kay whether he had any experience in dealing with restaurant premises. There is no evidence that the receivers made any general enquiries amongst property professionals, expert in the sale of commercial properties, as to whether the Third Defendants were the most suitable persons to market and sell 7 Newcourt Street. As I have already said, a number of commercial property agencies, including Davis & Coffer, who had particular expertise in dealing with  restaurant premises, were involved in attempting to sell 7 Newcourt Street prior to the appointment of the receivers. There is no evidence that the receivers contacted any of those agents, or considered whether they should be appointed to market and sell 7 Newcourt Street on behalf of the receivers. Nor does it appear that either of the receivers enquired into, or sought any kind of verification of, the Third Defendants’ expertise and experience in selling commercial property, or that of Mr Kay, or as to his database of contacts. In short, it does not seem to me that the receivers went about making the decision to appoint the Third Defendants to sell 7 Newcourt Street in a methodical or professional manner. One of the consequences of this was that the Second Defendants were either unable or unwilling to provide Mr Cohen with a sensible or detailed explanation as to why they had decided to appoint the Third Defendants as selling agents for 7 Newcourt Street, despite the fact the Third Defendants had no reputation in that field.

121.	When the receivers appointed the Third Defendants to act as their selling agents in respect of 7 Newcourt Street and 28 Woronzow Road, they asked the Third Defendants to give their views as to the proper marketing of the properties. In his letter to Mr Allan of 25th February 1993 Mr Kay advised that there were three different ways in which the properties might be marketed. One of those options was to market 7 Newcourt Street and  28 Woronzow Road as a “package”. In early March 1993 Mr Allan instructed the Third Defendants to market the properties in that way for £850,000, with a view to selling them for £800,000. By 18th March 1993 Mr Kay had informed Mr Allan that he had received two offers for the “package” of the two properties. One offer was for £700,000, and another was for £750,000. By the end of  March 1993, the decision was taken to market the properties separately.

122.	 Mr Kay’s explanation, at the trial, for his advice that the properties could be marketed as a “package” was that he considered 7 Newcourt Street to be particularly difficult to sell, and he thought it might make it easier to sell that property if it was combined with 28 Woronzow Road. None of the experts at the trial supported the disposal of 7 Newcourt Street in that way. They all agreed that a “package” sale was unlikely to produce the best price for 7 Newcourt Street, and Mr Hewetson went so far as to say that the proposal was so extraordinary as to indicate that the Third Defendants were wholly unsuitable to be entrusted with the task of selling that property. Mr Cohen’s surmise is that the proposal was calculated to expose the properties at the earliest possible date to a “vulture” purchaser, who would only be willing to purchase at rock bottom prices. In my judgment, Mr Cohen’s assessment is correct. In my judgment the decision to market the two properties as a “package” was not a proper way to proceed to achieve their respective market values. 

123.	In the event, the decision to act in that way caused no loss since a different marketing strategy was decided upon within a few weeks. I am satisfied that the subsequent marketing of the properties, in particular by way of advertisement in the Estates Gazette and in the local newspaper, the Hampstead and Highgate Express, which produced over 150 responses, together with the access to Mr Kay’s database, and also the Second Defendants’ own database of potential purchasers of properties, amounted to a sufficient and proper marketing of 7 Newcourt Street. Nevertheless, the initial decision to adopt the “package” sale option will have served only to reinforce Mr Cohen’s misgivings about the appointment of the Third Defendants as selling agents for the receivers.

124.	One of the two offers for the “package” of the two properties emanated from a Mr John Skok, on behalf of his company, the First London Property Company.  Mr Skok was a friend of Mr Cohen. IBC were his accountants. Mr Skok was a property dealer and developer. In an affidavit sworn on 17th October 1994, in Mr Cohen’s application to the Court for the approval of his IVA, Mr Skok gave evidence of a conversation with Mr Kay in March 1993 in which Mr Kay asked, in effect, for a secret commission in return for selling 7 Newcourt Street and  28 Woronzow Road at less than their true values. The affidavit describes how Mr Skok then recounted that information to Mr Cohen, who immediately, and in his presence, telephoned and spoke to Mrs Bevan  at the Bank to complain about the conduct of Mr Kay. Mr Cohen subsequently wrote a letter to the Bank on 30th April 1993 (incorrectly dated 30th March 1993) formally raising this complaint. 

125.	Mr Skok  has been convicted of conspiracy to defraud, involving mortgage frauds, for which he received and has served a custodial sentence. He pleaded guilty  to that offence at Southwark Crown Court on 4th October 1994, and was sentenced to 42 months’ imprisonment, of which he served 21 months. 

126.	At the trial before me, Mr Skok  said that he could not, in fact, now remember any part of the conversation with Mr Kay, in which Mr Kay sought a secret commission. If there had been any such conversation, I am satisfied that it would have been remembered by Mr Skok, particularly in the light of the fact that he apparently remembered it in considerable detail and recorded it in his affidavit in 1994. Accordingly, I am driven to the conclusion that either the contents of Mr Skok’s 1994 affidavit were not true in relation to the alleged conversation with Mr Kay, or alternatively Mr Skok did not tell the truth when he said, at the trial, that he could not remember the details of that conversation as set out in his 1994 affidavit. 

127.	By letter dated 18th March 1993 Mr Kay forwarded to the receivers details of Mr Skok’s offer of £700,000, on behalf of First London Property Company, and also details of an offer of £765,000 from Firstview  Estates. This appears to be inconsistent with any subterfuge or secrecy by Mr Kay in relation to the offer from Mr Skok.

 128.	Mr Cohen  also placed reliance, in the context of the allegation that Mr Kay invited a secret commission from Mr Skok, on the alleged failure of Mr Kay to forward to the receivers a revised offer by Mr Skok of £700,000 for 7 Newcourt Street alone. It was said by Mr Cohen, and by Mr Skok, that this revised offer was made in a letter dated 27th April 1993. The only copy of that letter which was put in evidence at the trial was exhibited  to Mr Skok’s 1994 affidavit. That copy of the letter is unsigned, unlike the earlier letter of 11th March 1993 containing the offer of £700,000 for the two properties . Furthermore, Mr Kay’s name in it is misspelt “Kaye”, again unlike the earlier letter of 11th March 1993. There has not been put in evidence any written acknowledgement of receipt of the letter by Mr Kay or the Third Defendants. Furthermore, Mr Skok’s evidence, both in his witness statement and in re-examination at the trial, was that he was told by Mr Kay not to increase his original offer of £700,000 for the “package” of the two properties. Taking the evidence as a whole, I find that, on a balance of probabilities, the letter dated 27th April 1993 exhibited to Mr Skok’s 1994 affidavit was never sent, and an offer of £700,000  for 7 Newcourt Street alone, on behalf of First London Property Company, was never communicated to Mr Kay or the Third Defendants.

129.	In view of this uncertain and unsatisfactory state of Mr Skok’s  evidence, it is  impossible for me to conclude that Mr Cohen has established, on a balance of probabilities, that Mr Kay did in fact demand from Mr Skok a secret commission. What I find of particular concern, however, is the way the receivers dealt with Mr Cohen’s complaint and allegation. I find that, when they learned of the serious allegations made by Mr Cohen concerning Mr Kay, the receivers  did not seek to investigate the matter further, either by asking Mr Kay for his observations on the allegations, or by seeking further details from Mr Cohen, who could have put them in touch with Mr Skok himself. Although Mr Tancock’s evidence was that Mr Allan would have raised the matter directly with Mr Kay, Mr Allan has no recollection of doing so, and indeed, in his cross examination, he said that Mr Tancock had spoken to Mr Kay. There is no attendance note or letter indicating that there was any conversation between Mr Kay and Mr Allan or Mr Tancock about the allegation by Mr Cohen that  Mr Kay had sought a secret commission from Mr Skok. Mr Kay’s evidence was that the allegation was never raised by Mr Allan or anybody else with him directly at the time, and the first he was aware of the allegation was when the present proceedings were commenced. I find that the receivers did not discuss the allegation with Mr Kay. I find that they decided, in consultation with the Bank, to dismiss the allegation merely on the assumption that Mr Kay would have been unlikely to risk his professional reputation by seeking a secret commission. In my judgment, this was a wholly inadequate response to the allegation of serious impropriety which Mr Cohen, in good faith, in my judgment, placed before the Bank, and, through the Bank, the receivers. Mr Cohen never received a response from the Bank or the receivers in relation to that allegation. The receivers’ conduct in that respect was unprofessional, highhanded and insensitive.

130.	 Taking into account the matters to which I have already referred in this section of my judgment, as to the selection of the Third Defendants as the receivers’ selling agents of 7 Newcourt Street, and the Third Defendants’ suggestion that the two properties  might be sold as a “package” together, it is not surprising that, in the light of the wholly inadequate way in which the allegation of a secret commission was handled, Mr Cohen was left with a deep seated and abiding mistrust in the competence and motives of the receivers and of the Third Defendants. That, in my view, is the human factor which has ultimately led to these proceedings by Mr Cohen.

131.	Finally, so far as concerns 7 Newcourt Street, Mr Cohen and Mr Hewetson were highly critical of the decision of the Third Defendants to remove all existing  “For Sale” boards outside the building and not to erect a “For Sale” board of their own. The evidence is that they were concerned about squatters being alerted to the fact the building was empty and that the removal of the “For Sale” boards was part of a plan to undertake a new short, sharp and fresh marketing campaign for the property. I agree with Mr Cohen and Mr Hewetson that the decision not to erect a “For Sale” board, especially when the local market was perceived to be of particular importance, would undoubtedly strike many property practitioners as, at best, curious and, at worst, simply misconceived. It is not possible, however, in my judgment, to characterise the decision as one which no reasonably skilful selling agent could properly have made.

132.	So far as concerns the marketing of 28 Woronzow Road, evidence as to the steps taken to market the property by the Defendants is extremely exiguous. There is no evidence that, after appointment by the receivers as selling agents for the property, the Third Defendants advertised the property. There is no evidence as to whom they circularised particulars of the property. At one point, the precise date of which is not clear on the evidence, between the appointment of the receivers and the sale to Holmdale, the Third Defendants’ “For Sale” board of 28 Woronzow Road either fell down or was pulled down. I find that was through no fault of the Third Defendants. There is a conflict of evidence as to whether the board was re-erected. There is evidence in the correspondence of a sealed tender, but the  decision to have a tender and the way in which it was conducted were not explained in the evidence. In fairness to the Defendants, Mr Kay was not cross examined by Mr Cohen on those matters.

133.	 For the sake of completeness, I should state my finding that, however extensive the marketing of 28 Woronzow Road could have been, there was no real prospect that it would have produced, by the date of acceptance of the offer from Holmdale, a cash offer higher than the £335,000 made by that company. I bear in mind that, whatever form the marketing took, it did in fact produce a reasonable number of bidders for the property between February 1993 and June 1993 in a poor market. Further, I bear in mind that the property had been exposed to the market since October 1991, and would have been well known to anyone seeking a property of that kind in the St John’s Wood area. I further bear in mind the misplaced optimism of Mr Cohen during the entire period since 1991, and indeed up to and including the trial of these proceedings, as to the value of 28 Woronzow Road. The evidence is that the property was originally placed for sale with Ellis & Co. in March 1991 at £650,000, then with two other agents in the autumn of 1991 at an asking price of £575,000, and then in October 1991 with the Third Defendants and Behr and Butchoff at the same asking price, and that the asking price was then reduced to £495,000 by January 1992, and was then further reduced to £425,000 by September 1992. It would appear that, at every stage, Mr Cohen fixed the asking price at a figure that was too high for the market, so that the price always chased and lagged behind the falling market.

	Other Issues
134.	In the light of my findings in this judgment, it is not necessary to consider the other issues that were the subject of submissions at the trial, including whether, and if so what, duty of care was owed by the Third Defendants to Mr Cohen, and the Defendants’ arguments based on the effect of the exclusion clauses in the Newcourt Street Charge and the Woronzow Road Charge and the effect of Mr Cohen’s IVA on Mr Cohen’s claim for damages, and the argument of the Second Defendants that they are not vicariously liable for any defaults of the Third Defendants.

	Decision
135.	For the reasons set out in this judgment, I dismiss the proceedings.