Dean v Barclays Bank Plc

This case concerns the alleged under-realisation of a property known as Deanswood, Little Hallingbury near Bishop's Stortford in Hertfordshire (“the property”). It was sold by the first defendant as first mortgagee of part (“the dwelling”) and as the holder of a charging order absolute over the remainder (“the larger plot”) for a gross consideration of £245,250 on 20 May 1999. Completion took place on 14 June 1999.

The claimant, Mr Dean, was the sole freehold owner of the larger plot and jointly with his ex-wife Julie, who is therefore joined as second defendant though no claim is made either by or against her, the freehold owner and mortgagor of the dwelling. By his claim he alleges that the first defendant (“the Woolwich”, the name by which it was commonly known throughout the relevant period) failed in its equitable duty to take reasonable care to obtain the best price reasonably available when it chose to sell, namely between late December 1998 and May 1999, and that its true value at the time was £585,000, as initially pleaded and apparently supported by expert evidence of Mr Snow, or at least £448,000, as advanced at trial and supported by the expert evidence of Mr Smith.

There are, in essence, three matters in dispute, the complaints pursued at trial being those identified in the claimant’s helpful opening skeleton argument. Issue 1 is the physical condition of the property at the end of 1998 and early 1999. The second issue is whether the marketing of the property was sufficient to amount to taking reasonable care to obtain the best price reasonably available for the property at the time it was sold, which in the normal case such as this is one and the same thing as the current market value. Issue 3 is: what was the property’s current market value when sold? This question must be resolved in the event that the claimant succeeds on issue 2, because the amount of what might loosely be called damages, or more strictly the amount of credit to be given in equity, would have to be assessed, but it will be convenient for me to address this issue in any event, in case the matter goes further.

Given the terms both of the witness statements filed by the claimant and of certain passages in the skeleton argument submitted on his behalf, I think it would be helpful for me briefly to identify certain matters which are not ultimately in issue. First, no complaint is made as to the sale together of what were technically two different titles; this was clearly beneficial in the circumstances here (and see Halsbury’s Laws of England, volume 32, 2005 reissue, title Mortgage, at paragraph 661). Second, no complaint is pursued before me about the so-called ‘delay’ by the Woolwich in selling the dwelling, or about the time of year when the property was put on the market, although both have been the subject of critical comment in passing. Mr Stephen Walsh, appearing for the Claimant, recognises that a mortgagee is free to decide if and when to exercise its power of sale. Third, similarly, no complaint was pursued about the so-called ‘failure’ to expend money on the maintenance and upkeep or repair of the dwelling after it was repossessed in May 1992. Fourth, no complaint is made about the unsuccessful application to remove the occupancy condition from the dwelling, nor the unsuccessful appeal on that matter. Ultimately, Mr Walsh realistically accepted that the advice so to apply was good advice.

The claimant is a man with many contacts in the equestrian field, who had built up such equestrian business as was conducted at the property. He had ridden in National Hunt and Cheltenham Gold Cup festivals, and ran horses from the property in the Cheltenham Festival and other major steeple chases. He had taught jumping in the outdoor manège, where there were rails, and he employed a number of people at the equestrian business (to which I shall refer in greater detail below) up to about 1990. Mr Dean gave his evidence in a pleasant manner, but was someone who demonstrated a tendency to say what appeared best to suit his cause at the time he was saying it. However in the event, there appears to be little by way of controversial assertions of primary fact of direct relevance to the issues. My general approach would be to treat his evidence with some caution so far as it was controversial and self-serving. I will simply refer to three examples of what I have mentioned.

Firstly, the references to the property being vandalised made at two places in his first witness statement (see paragraphs 29 and 39-41), and the subsequent ‘rowing back’ from them when it became clear that his advantage was to the opposite. Secondly, the evidence both of himself and of a Squadron Leader Morley filed on his behalf in the divorce proceedings in 1994 (to which I shall refer below). Thirdly, an element of what might politely be called ‘blowing hot and cold’ so far as co-operation with the Woolwich is concerned. By the time of trial he was anxious to emphasise respects in which he did co-operate with the Woolwich, and there were some. However, there had in the past been numerous examples of conduct which had been very much to the opposite effect, including setting up a potential ransom over the dwelling in respect of the supply of services, the creation of leases over the larger plot, and the creation of a charge in favour of his own son.

Mrs Ketteridge, through her husband, had known Mr Dean for about 30 years. He was a business contact of her husband’s. She was a straightforward and genuine witness who nevertheless looked back at Mr Dean’s family home and equestrian business in its heyday of late 1989 to mid 1990 ‘through rose-tinted spectacles’. One example of this was her highly favourable commentary on the quality of the building work at the house, a substantial part of which Mr Dean had, as I understand, undertaken himself, in marked contrast to the several professional observers who commented to the opposite effect, i.e. on its poor quality. Oral evidence proved important to explain or put in context passages from the admissible parts of her witness statement. Subject as aforesaid, her evidence from recollection was genuine, and generally reliable.

Mr Mullucks FRICS was involved with the property over a period in excess of eight years, between about late 1990 and 1999. He impressed me as a straightforward witness who was not afraid to speak about matters in direct terms. As Mr Walsh chose to ask him about some matters in the nature of professional opinion during cross-examination, I should also record that he impressed me in that regard as well, and in particular had a clear appreciation of the significance of the occupancy condition with regard to the property’s value. He was not afraid to recognise matters about which some witnesses might have been defensive, for example, the inaccuracy in factual assertions, no doubt honestly made, in his letters to the local planning authority in January 1999. Again, his evidence from recollection was genuine and generally reliable. He was, however, wrong in his recollection of the total stabling capacity of the property when he first saw it. That may be explained by his not being aware that the so-called ‘barn’ was capable of accommodating over 20 horses.

Mr Ambridge, an experienced estate agent, albeit without formal qualifications, had worked as such since 1985. He worked for GE Sworders in Bishop Stortford from that year until they were taken over by Savilles in the year 2000. He remained with Savilles for a few years before transferring to the firm of Fine & Country, where he is now. He had considerable knowledge of the housing market in the Bishop Stortford area given the period of time he had worked there. He had a quieter of manner than Mr Mullucks. Little of what he said was factually controversial in any event. His evidence from recollection was genuine and reliable.

Mr Livesley is a solicitor who was admitted in 1981 and has been a partner in Birkett Long since 1984. He took over conduct of this matter and related matters on behalf of the Woolwich in or about May 1995. As I put it at trial, intending neither disrespect nor implied criticism, he offered himself up, in large part, as a vehicle for the convenient presentation of evidence which is contained in paperwork originating over a number of years and located on a number of different files. He also answered questions from Mr Walsh with regard to his client’s approach to the matter at various stages. Little in what he said was controversial, and both his witness statement and his oral evidence appeared to me to give a fair and objective account of the underlying material from which it was drawn. I am grateful to him for it.

Mr John Smith FRICS was between 1990 and 1999 the sole principal of John Grant Smith & Co, a firm operating in Stansted, Essex. He became Managing Director of Hanover Report based in Bishop Stortford in 1998, dealing with specialist valuations across a range of commercial business premises, and subsequently held senior positions with Pinder Specialist Business Valuers, Countrywide Commercial, and Dedman Professional, based in Southend on Sea. More recently he has been appointed head of general practice for The Livermore Partnership. He has experience in agency work, albeit - as he emphasised – only in the residential sector. Since the dates I have mentioned, he has specialised in valuation work including in particular commercial valuation work.

Mr Smith was instructed to give evidence for the claimant in consequence of the claimant’s concern, understandable in a forensic sense, as to the contents of the joint report which his former expert, Mr Snow, agreed with Mr Cowlin, and after his next chosen expert, a Mr Hopson of Cluttons, was ultimately not instructed for whatever reason. Mr Smith made it clear that he had felt that there was inadequate time for him to prepare his own valuation from scratch, which of course, like any professional, he would have preferred to do, and that he had therefore only been willing to accept instructions to provide a commentary on the valuation work already undertaken by Cowlin and Snow. He spells out his position in this respect in his report at paragraph 2.1, where he states:

“My instructions and having regard to the limited time available were to review the previous Expert Witness Statements together with my own knowledge of the market and the locality at all appropriate dates.

In summary I was asked to advise on the appropriateness of the agreements between the two Expert Witnesses and whether the sum realised was the proper price for Deanswood Lodge and Deanswood Equestrian Centre at the date of sale, being 20 May 1999 when contracts were exchanged.”

The method he adopted to arrive at a figure was straightforward enough. He started with the £585,000 figure mentioned in the joint statement of Snow and Cowlin. It should straightaway be noted, however, that the factual premise on which that figure had been based was undoubtedly false as at the relevant period in 1999, as will appear when I make my findings on Issue 1, and as to the cessation of the nursery and equestrian businesses. He then applied a 20 per cent reduction for the stigma factor of the sale taking place in the context of a repossession, which, he realistically recognised, would be impossible to hide from those in the market. Thus, it may be observed that his method of valuation made no direct allowance for the cost of works to the property which, bearing in mind his own view of the matter as essentially a business sale rather than a residential sale, would have been a considerable figure (a matter to which I shall come later), and also made no allowance for the much increased significance of the occupancy condition over the dwelling, given the absence of any business activity on the larger plot at the time the sale came to take place.

His report assumed marketing commencing in April/May, apparently a more advantageous time of the year than January, and a marketing period of four to six months. After being questioned by me as to the effect on his figure of assuming marketing commencing in January, and over an expected period of, say, four to six weeks rather than four to six months, and having had the short adjournment to think about his answer, he gave, after protest at the premise of my question, a suggested reduction of 5 per cent. I find such a modest suggested reduction surprisingly low, given the importance he had apparently attached to the said factors at paragraph 6.2 of his report. It should also be noted that in paragraph 20 of his joint statement with Mr Cowlin, and again orally, Mr Smith declined to answer the question of what was the value of the property, if its condition was as assumed by Mr Cowlin. In the circumstances, that was not helpful.

I also note a number of other matters in Mr Smith’s report. At paragraph 5.4 he made the observation that the apparent failure of the ultimate purchasers of the property to recommence business activity on the larger plot was “equally interesting” (his words) when clearly, in reality, hindsight evidence of that nature could be of no assistance on the issue of valuation. Second, he made critical comment of the periods of delay with regard to the sale when, in reality, they were no part of the claim. Thirdly, and perhaps most concerningly, he asserted in paragraph 6.2 of his report, which he verified orally without modification or alteration in this respect, that, in his view, the sales particulars put forward by GE Sworders and Mullucks Wells had “deliberately created” (his words) a “a very negative impression” of the property. When asked by me why he had said that, he described his own evidence in that regard as “overkill”. Fourthly, he raised the question of possible advertising in the Sunday Times for the first time in his joint experts’ statement with Mr Cowlin, and then the suggestion of advertising in Dalton’s Weekly for the first time during his oral evidence. Also in his oral evidence he gave for the first time his estimate of the costs of replacing the dismantled and removed loose boxes, but confirmed that he had not given consideration to any other possible costs that a purchaser might have had to incur in respect of the larger plot. Given his own emphasis on the business aspect of the sale, that is a surprising omission. The overall conclusion which I have reached is that Mr Smith’s evidence, including both the report and the joint statement which he signed, was not as fully thought through as it might have been.

Mr Cowlin FRICS, a corporate member of the Institute of Revenues Rating and Valuation, has worked in the well known firm of Strutt & Parker since 1973. He was an Associate Partner from 1989 and relatively recently has become a consultant. I find him to have been a thoughtful witness, who gave both his written and his oral evidence in a careful and measured manner. The extent to which the contents of his report have ended up being accepted in both the joint statements is noteworthy.

His valuation method was spelled out orally in his evidence in chief. He explained that in his discussion with Mr Snow they had started with the figure of £585,000, as explained in Mr Snow’s report and their joint statement. Having considered the significance of the occupancy condition, they had both agreed that it was much more serious given the absence of business activity on the larger plot. They agreed that a deduction of 35 per cent was applicable in respect of it. That took the figure down from £585,000 to £380,000. Mr Cowlin, then made a further deduction of £100,000 to take into account factors such as the condition of the house, the absence of the dismantled and removed loose boxes, the fact that the property had been repossessed, and its general neglected appearance, although he was careful to point out that he could not specifically confirm that this had also been Mr Snow’s reasoning. That took the figure down to £280,000. He then took off 4 per cent, as he felt that purchasers would have taken into account the incidental costs of purchase, including stamp duty, in arriving at their offer, which got him to a figure of £268,800. He then compared that with the result of actual market experience, which had produced in round terms £245,000, and found that to be (in his words) “in the right area”. That approach seems to me to be one and the same thing as what lawyers refer to as ‘the bracket approach’: a figure of £245,000 is within 10 per cent of the figure £268,800.

Mr Walsh drew attention to the exact wording at the end of paragraph 7 of the joint statement of Cowlin and Snow. Having looked at this matter carefully with both counsel during their closing submissions, the conclusions I draw are these: (i) that no figure was agreed between Cowlin and Snow as to what the value of the property would have been after the cessation of business activity on the larger plot, but without any occupancy condition on the dwelling; (ii) that being so, the direct application of paragraph 7 of their joint statement as stated was not possible; (iii) it follows that, strictly, Mr Cowlin’s oral evidence in chief as to the deduction of 35 per cent was not the application of paragraph 7 as such, but closely parallel reasoning; (iv) therefore, again strictly, that reasoning is not something which Mr Snow can be taken necessarily to have agreed; (v) therefore, (a) Mr Cowlin’s most immediately relevant evidence of valuation method was that in his oral evidence in chief, as opposed to paragraphs 6 and 7 of his joint statement with Mr Snow, and (b) Mr Snow has not necessarily agreed the application of a 35 per cent deduction in the manner Mr Cowlin indicated in his oral evidence (although, of course, it must not be overlooked that Mr Snow did agree the same ultimate figure of around £245,000, albeit without spelling out the exact reasoning by which he got there).

Where there are differences in opinion or approach between Mr Cowlin and Mr Smith, I have a clear preference for the evidence of Mr Cowlin over that of Mr Smith.

Mr Snow BSc (Estate Management), FRICS, FAAV, had originally been instructed on behalf of the claimant pursuant to court directions for expert evidence. Given what he agreed in the joint statement, the claimant did not persevere with him. However, as is provided by CPR 35.11, where a party has disclosed an expert’s report, any party may then use that expert’s report at a trial. Therefore, his original report, and the joint statement he subsequently agreed with Mr Cowlin, are admissible (though not of course binding), and were relied on at trial by the Woolwich.

As to the expert evidence more generally, I would draw attention to the importance of the two agreed joint statements, that of Cowlin and Snow, 25/26 May 2006, and that of Cowlin and Smith, 12 March 2007, being the first day of the trial. I shall only refer to particular passages in this judgment, but anyone looking at the case should read my judgment in the context of the entirety of those two important documents.

Further, it should be noted that the overwhelming majority of experts who have looked at the value of this property have concluded that it is not one in respect of which comparables form a useful part of the valuation exercise. Insofar as any are available, Mr Snow’s appendix 3 provides them, and it would appear that the first, fifth and sixth there listed would be the more relevant. However, neither of the experts who gave oral evidence before me relied on comparables.

The dimensions, extent and position of the property are agreed to be as set out in section 3 of Mr Cowlin’s report. That includes the passage where he records his calculation that the property comprises 4.8 acres in total, of which about 1 acre is occupied residentially (this is what I refer to as “the dwelling”), and about 3.8 acres (to which I refer as “the larger plot”) which comprised the former Deanswood Equestrian Centre, and before that the Rainbow Lodge Nursery. The property lies in west Essex, close to the Hertfordshire border, Bishop's Stortford and the M11 as shown on an attached plan.

The property is conveniently depicted on a site layout plan produced in October 1988, which appears in the bundles at 2/453. An annotated extract from it appears at 2/349 and its comprehension is assisted by reference to the photographs taken by Mr Mullucks on 23 December 1993 at 9/2739-43, and by Mr Gearing FRICS in February 1995 at 6/1522-23. This plan, 2/349, is aligned north to south (looking at the sheet in landscape format), and by reference to that, I would shortly describe the property as follows.

Towards the northern boundary, by far the largest block depicted is the site of ten greenhouses, perhaps occupying an acre between them. As will become clear later, they are at all relevant times fairly described as “dilapidated”. To their west were two buildings. The northern one comprised a kitchen, canteen and toilet facilities which, in their time, have been used first in connection with the nursery and then in connection with the equestrian business. Immediately to its south was another building, rather confusingly perhaps referred to as “the Barn”. It was in reality a brick walled and asbestos roofed building, the general appearance of which appears in the top photograph on page 1523. Heading east along the southern side of the greenhouses, there is firstly a tack room, and secondly the site of a mobile home, which was in its time used by staff. Then adjacent to each other, aligned east/west, are two very large oil tanks and then a boiler house housing large boilers which Mr Dean described, whether literally or metaphorically (it does not matter) as “ship’s boilers” and then, to the east of that, a tall chimney. These may be seen in the photographs, in particular on page 1523, as indeed may the greenhouses (viewed from that area).

To the east of the chimney was the first of three blocks of stables, perhaps more correctly referred to as loose boxes, each of which blocks comprised 12 or thereabouts. To the northeast of that, as is depicted with the caption on the roadway, is an area fenced off and set up with some floodlighting as an outdoor manège. I was given 200 by 100 feet as approximate measurements. It is visible, in the distance, in one of the photographs.

Returning to the stables which I have so far mentioned, to the south of those were the two further blocks of stables. It appears that the eastern one was a bit bigger and the western one a bit smaller. These again were loose boxes: see the photograph on page 1522. The 2 blocks were divided by a small feed room, which appears to be the remains of one of the further greenhouses which formerly stood, prior to being dismantled, on the area where numbered bays 1 to 54 appear on this plan. The feed room protruded somewhat south from the line of the loose boxes, as appears from photograph 8 on page 2741.

The 54 bays are an area which, after the old greenhouses were dismantled, was set aside as a parking area, and surfaced with loose chippings but not with sealed asphalt or anything of that nature.

On the south-eastern corner of the property stands the house which was erected in about 1989, with its detached garage. A driveway to the house, again without a sealed surface, was formed, running west/east from the vehicular access to the property as a whole off Goose Lane, just to the western end of the boundary between the two. Goose Lane itself runs closely alongside, and parallel to, that driveway.

There is a significant area of land between where the dwelling house was built and the 54 bay parking area. Notwithstanding the captions shown on the plan we have, this was, in reality, an area of open grass. The caption “indoor manège” refers to its intended use pursuant to a planning consent which I will mention in due course. The lower photograph on page 1523 and photograph 9 on page 2741 assist in depicting this area. There are photographs of the house, viewed from the north on photograph 2 on 2739, and viewed from the south on 1522 and 2739, and of the detached garage, including the middle photograph on 1522.

Whilst trying to keep this section of the judgment within reasonable bounds, I propose to give a fair amount of detail, taking into account the absence of any detailed chronology from the parties setting out this material, and the fact that the documents which reflect much of it are not gathered in chronological order in the bundles.

In March 1983 the claimant’s mother, Winifred Edith Dean, bought the property. Later that year, on 28 October, she executed a declaration of trust in respect of the same in favour of the claimant. On 7 March and 23 May 1983, there were grants of conditional planning permission for the erection of stables and the formation of a riding school, attracting different numbers from the local planning authority. I do not know what the differences between the two permissions were, nor which of the two was ultimately implemented, but this appears to be of historical interest only.

Once the stables were up and the riding school was formed, the claimant and the second defendant, then his partner, by whom he already had at least one child, and later his wife, ran the same together. In May 1986 they incorporated a limited company named Deanswood Equestrian Centre Limited, to run the business. It is possible that the buying and selling of horses was kept outside the scope of the company’s activity, but there is no evidence to suggest that any other aspect of such equestrian business as was carried on was also kept outside it.

On 3 June 1987, a conditional planning permission, reference UTT/412/87, was given for the construction of the dwelling subject to five conditions, one of which, condition 4, was the occupancy condition with which I shall deal in detail later. I note in passing that Mr Dean did not appeal against the imposition of condition 4, as he would have been able to do under the Town and Country Planning Act. He stated in his evidence that the architect who had been assisting him with planning matters sadly died at about the time, and there is a question, which I need not resolve, as to how fully that architect kept his client informed of the exact outcome of his application, and of its significance. Three days later, the claimant’s mother conveyed the property to him.

In its financial year ending in 1987, the limited company reported in its statutory accounts a turnover of £16,490 and a profit of £117. The claimant and the second defendant were married in 1988. On 15 July that year, he obtained an approval of reserved matters, with no additional conditions imposed, in respect of UTT/412/87, and, on the same day, conditional planning permission for the formation of an indoor manège and a new vehicular access. The latter permission was never implemented. In its financial year ending 1988, the limited company reported a turnover of £26,474 and a loss of £1,030.

1989 would appear to be at or near the peak of such business as was ever conducted at the Deanswood Equestrian Centre. There was plainly a lot of activity. That gave Mrs Ketteridge the impression that the business was in a financial sense successful, although in her oral evidence she readily accepted that she was not in a position to know what in truth its profitability was. This limited company did not file annual accounts for 1989, which was its apparent peak, or indeed ever again. On all the evidence (and a number of further, related findings follow) I confidently conclude that this business was never one which generated a substantial profit.

In February 1989, a firm of solicitors, G Houghton & Son, which was already acting for Mr and Mrs Dean, reported to the Woolwich that the dwelling would be suitable security for an advance of £200,000. That advice, certainly for anybody who sat through the trial of this case over 4½ days last week, was self-evidently flawed, as is reflected by their subsequent consent to paying damages to the Woolwich, to which I shall come.

The first relevant mortgage application was made on 8 February 1989. It was for a £75,000 loan declared to be the cost of a new building for the dwelling. It may be noted that the joint income of Mr and Mrs Dean reported on that mortgage application form, in circumstances where the declarants had an interest in demonstrating a sound income, was only £30,000.

On 15 February, a Mr West ARICS provided a valuation of the dwelling for the Woolwich at £350,000. However, having reviewed that document and the material around it carefully, and in accordance with the views of Mr Cowlin, I consider it most unlikely that Mr West was aware of the occupancy condition at the time he provided that valuation. If he was, it was, in my view, a serious over-valuation.

On 28 February, the mortgage over the dwelling in favour of the Woolwich was executed by the claimant and the second defendant, and the initial advance of £75,000 made. Subsequently that year two further advances of £25,000, for each of which (subject to some unexplained discrepancies as to the date) we have the application forms within the court bundles, were made. Then later in the year, on 19 September 1989, a fourth and final application form for a further £75,000 loan was submitted. It stated that those monies were required for the purposes of the business, although it does appear that those monies were much more likely to have gone on completing the erection of the house, at least in substantial part. Such erection was completed early in 1990, and sadly it was but a matter of months later, in June of that year, when the claimant and the second defendant separated. Mrs Ketteridge had fond and happy memories of the house as a family home, in what must therefore have been the first half of 1990. A month after the separation the second defendant commenced divorce proceedings against the claimant out of the Principal Registry, and a number of documents from those proceedings are within the court bundles.

By September of that year, the defendants went into arrears and stopped paying the Woolwich mortgage, which is but one indication of their then financial circumstances. The mortgage which existed in favour of the Cheltenham & Gloucester or its predecessor over the larger plot was serviced throughout, although, as Mr Dean was keen to emphasise, this was not necessarily a matter of giving preferential treatment to the Cheltenham & Gloucester, but more a reflection of the fact that, as a practical course, the rent paid by Mr Powlay, to whom I shall come, went directly to the Cheltenham & Gloucester. In any event, though Mr Walsh was careful and fair not to claim that this was a conscious policy adopted by his client as such at the time, given the effects of the occupancy condition, to which I shall come, there was considerable benefit to all parties before the court in ensuring that the larger plot was not exposed to the possibility of repossession action by a different mortgagee.

By the end of that same year, 1990, the claimant himself had consulted Mr Mullucks of Mullucks Wells in connection with the value and possible marketing of the property. It may be noted that this was at a time just after the peak of the business activity on the larger plot, and while it was still under way. Mr Dean alleges that it was as a result of his initial instruction of Mr Mullucks that he came to learn of the occupancy condition for the first time. It is not necessary for me to make any finding about that, and therefore, given the limited material available to me on that question, I shall not do so.

On 26 January 1991 the claimant, in telephone conversations with an officer from the Woolwich, stated that the business at the time was not very good and not going well. He is also recorded as having said that he “won’t” (that is the word used) pay the regular instalments due in respect of the Woolwich mortgage at the time. Those observations in January 1991 tie in with the evidence of Mrs Ketteridge, who indicated that this was when the stables were, to use her words, “folding up”.

On 5 February 1991, the second defendant’s solicitors in the divorce proceedings, Messrs Winter Johns, wrote to the claimant’s solicitors in those proceedings, Messrs Pellys, a letter to be found at 11/3603-4, in part for the purpose of enclosing an ex parte injunction which had been obtained. For present purposes it is the third paragraph of that letter which is the most significant, in that it records that the mortgage was £35,000 in arrears, that the company overdraft exceeded £12,000 and that the equestrian centre business owed approximately £15,000 to various creditors. The claimant has not suggested that this was in any way inaccurate.

Later that month, Mr Mullucks paid his first visit to the property with a colleague, Mr Wells, and met Mr Dean there. I shall refer later to some of the observations which he recorded on that occasion. However, following the visit Mr Wells wrote a letter of advice to Mr Dean, dated 20 February. We have that at 9/2744 and following, and passages in it are worthy of note. As to value, Mr Wells records that he and Mr Mullucks:

“… believe a value of the property lies in the region of £300,000, although we accept that a specific or ideal purchaser might pay a little more and therefore we would suggest seeking a guide price of £350,000, although if you were relaxed regarding timing we might try it in the market a little higher, say £375,000. I think if you were to ask too close to £400,000, and certainly in excess, the property and its position will make it very unlikely that people will make enquiries or an initial inspection.”

Under the heading “Advertisements”, he wrote:

“We would, within our own marketing campaign, cover local and regional property publications, although a certain amount of national advertising would be useful, particularly in equestrian type publications, and the most favourable would appear to be The Horse and Hounds. I would suggest a quarter page insertion would be quite adequate for our purposes.”

Under the heading “Planning” he wrote:

“We understand from you and our discussions with the Planning Authority that the house has the disadvantage of a restriction insisting that the house and business are run as one operation … it is a restriction that will prevent many potential residential purchasers from taking any serious interest … It will be essential for us to have a copy of the planning consent prior to marketing …”

It is clear from that text that, at the time the letter was written, the exact terms of the planning consent were as yet not available to the authors. Under the heading “Land”, Mr Wells wrote:

“It will be important prior to marketing to approach the farmer to ascertain clearly whether he will part with the 15 acre paddock behind your property, because there is little doubt this question will be asked by any one who is seriously entertaining Deanswood. We are not suggesting the house is unsaleable without this area of land, but it is a further complication in a difficult package, as although at present it would seem extremely likely that you would be able to continue to rent the paddock for some time to come, most purchasers will be looking at the worst scenario and not the most favourable position, and indeed if the farmer decided he wished to use the land for cereals rather than, say, a paddock, any investment in the equestrian establishment could potentially be wasted without the use of paddocks close by.”

The letter from the claimant’s own accountant at 11/3802 suggests that, from the start of the tax year 6 April 1991, his overall income was so low that he had no liability to income tax. On 22 April 1991, the claimant’s bankers wrote to his solicitors in the divorce proceedings setting out the details of two accounts, both joint accounts between the claimant and the second defendant. On one, the ‘trading as Deanswood Horse Sales’ account, there was an overdrawn balance of £11,300 odd; on the other, designated the personal account, an overdrawn balance of £1,700 odd.

On 26 April 1991, a valuation of the property was obtained for the claimant via his divorce solicitors, Messrs Pellys, from the firm of Cheffins Grain & Comins. Obviously in terms of the dates, this is a long way removed from the time with which we are immediately concerned, and I shall simply note that the suggested valuation of the property as a whole was £400,000. The important part of this letter for present purposes is the last sentence of the same paragraph:

“Had this planning condition been applied our valuation would have to be reduced very, very steeply.”

A further letter from Pellys to Winter Johns in June 1991, which could only properly have been written on the claimant’s own instructions, includes, towards the end of its third page, the assertion that before the second defendant’s departure from the matrimonial home, the company was already trading insolvently. That provides, effectively from the claimant’s own mouth, confirmation of the finding I have already made that its business was never one which generated a substantial profit.

Pellys wrote to the Woolwich Building Society on the claimant’s behalf on 11 November 1991. Their letter included this:

“It is also understood that services to the Deanswood Property cross [the larger plot] but no formal agreement or other Deed of Grant has been made in this regard and if the Deanswood Property were taken from Mr and Mrs Dean the services would cease.”

That is the origin of the reference to, in effect, the possible ransom of the dwelling by the larger plot to which reference is made inter alia in the witness statement of Mr Livesley.

On 20 November 1991, an order for possession of the dwelling, to be given by 20 January 1992, was made in the Bishop’s Stortford County Court. Possession was ultimately obtained pursuant to notification of a bailiff’s appointment on 11 May 1992. Mr Wells, on behalf of Mr Mullucks, attended on that occasion and the claimant himself, in a document at 4/1081, stated (for the purposes of impressing the planning inspector who was to determine an appeal brought by the claimant, was founded on his own personal circumstances) that such re-possession had caused him to move to a mobile home located on the larger plot. In the meantime, one month later, the limited company had been wound-up on a petition from HM Customs & Excise in respect of unpaid VAT.

In May 1992, Mr Mullucks recommended that application be made to have the occupancy condition over the property removed. In the same month, Mr Wicksteed inspected the property on behalf of the Woolwich, and his findings are recorded in memoranda at 2/379 and 2/380. On 15 July 1992 Mr Wicksteed identified the difficulties of selling this property unless the occupancy condition was revoked, as was recorded in a memorandum at 4/897. Accordingly, in February 1993, Mr Kushel of HKL Associates, acting on behalf of the Woolwich, made application for the removal of the occupancy condition. It was refused by the Upminster District Council (“the local planning authority”) on 22 April. On the same day, an application made by the claimant to site a mobile home on the larger plot was granted, but only for a three month period.

Mr Kushel wrote a follow-up letter to the local planning authority, enquiring whether they would consider a variation of the wording of the occupancy condition rather than outright removal, but that enquiry produced a negative response on 14 May: see 5/1103-5.

On 4 May 1993, an order made by District Judge Maple in the divorce proceedings required that 14 horses be sold, one by the second defendant and the remainder by Mr Dean, and that two more be transferred to their daughter Sarah. The order included undertakings for the progression of the marketing of both the larger plot and the dwelling. Mr Dean attaches some significance to the making of this order.

On 23 September 1993, Mr Dean’s appeal against the three month limit on his permission for siting a mobile home was rejected by a planning inspector. However, the decision letter is of value as a record of the appearance of the condition of the property at the time, and I shall make short reference to it later. On 26 October 1993, the Woolwich appealed against the refusal of their application to remove the condition. That appeal was in due course unsuccessful.

In the meantime, Mr Kushel reported to Walker Morris, the solicitors then acting for the Woolwich, that he had been told by the claimant that he intended to close down the business on the larger plot. Whilst of course Mr Dean could not be expected in 2007 to have a specific recollection of something he may or may not have said in November 1993, this entirely fits in with the other material available to indicate when his equestrian business finally closed.

On 5 December 1993, the claimant granted his first, and only written, 12 month lease to Mr Powlay, the subject property being in essence seven stables within the building known as the Barn. The lease is at 11/3733. The same month, HE Hanscombe Ltd, reputable local builders known to be reliable for these purposes by Mr Mullucks, provided an estimate of the works which they considered necessary to put the dwelling into reasonable repair. I shall refer to its content later, but the amount was just under £13,000 plus VAT, with some exclusions. A quotation for fencing of just over £2,000 was obtained at the same time. Later the same month Mr Mullucks took the photographs at 9/2739-2743.

A file note made by Mr Barlow, still then acting for the Woolwich, dated 4 February 1994 records information imparted by Mr Kushel as to the state of the land at the time. It includes reference to a second hand car business. This is somewhat peripheral to the main issue. Suffice it, therefore, for me to say that the relevant occupier appears to have been a Mr Kenningdale, and that Mr Dean’s explanation may be found in his witness statement at 2/339.

On 1 March 1994, Squadron Leader Morley, in a communication to the Woolwich, made reference to Mr Mullucks have placed a value of £225,000 on the dwelling, after refurbishment. That was confirmed in writing later in the year. By 28 March 1994, the claimant’s income, according to a schedule of assets served within the divorce proceedings, was a mere £45 a week, £2,340 per annum.

In July 1994, Squadron Leader Morley, made a written offer, addressed “To whom it may concern”, to purchase the whole of the property for £180,000 (7/2178). Later that month Squadron Leader Morley made reference in a letter to the Woolwich to a further valuation having been obtained for Mr Dean; if that was a written valuation, it is not in evidence. In August 1994, in further support of his offer, Squadron Leader Morley made it clear that his offer was subject to the house and garage “not being allowed to … be further vandalised”. On 16 September is the invoice, headed “Bill of Sale”, from, in effect, the claimant to a Mr Fitzgerald, for 35 second hand loose boxes, in the sum of £3,000. It seems that they were dismantled after that invoice was drawn up, in part to achieve a reduction in the rates liability of the property. The letter from Mr Mullucks confirming his valuations at this time is dated 26 October, and to be found at 5/1392.

It is clear that by November 1994 someone, presumably Mr Kenningdale, had made a retrospective planning application to change the use of a “redundant agricultural building” to the storage and repair of classic cars, because the local planning authority sent out the related circular letter at 5/1399. On 24 November, the claimant filed an affidavit of Squadron Leader Morley within his own divorce proceedings to evidence and support an offer of £180,000. It was that affidavit which exhibited a number of the documents to which I have already referred. Thus those documents were, in effect, being put forward to the divorce court by Mr Dean.

That same month, on 25 November, the local planning authority responded to an enquiry, I note not a formal application, from a Mr Kelly, who I infer, from the terms of paragraph 33 of Mr Dean’s witness statement at 2/338, was an agent for Squadron Leader Morley, in respect of possible use of the property for dog kennels. Contrary to what I was initially told during the trial, this document came from the defendant’s disclosure list, and there is no evidence one way or the other as to whether a copy was lodged on a publicly accessible planning file.

Mr Dean’s evidence is that Mr Powlay’s yearly tenancy was renewed on 5 December 1994, albeit without a document being drawn up. The same day, a curious form of lease was issued in favour of Squadron Leader Morley, which appears at 11/3790-4. Given its fate, to which I will come, I will not take time describing its contents. Also on the same day, the claimant created a legal charge over the larger plot in favour of his own son.

On 7 December 1994, Mr Mullucks wrote to Barlows, still then acting for the Woolwich. The letter effectively added an addendum to their valuation advice of 26 October 1994. It is interesting that, as early as this, Mr Mullucks referred to the “somewhat dilapidated state of the equestrian centre site”.

What I have presumed was Mr Kenningdale’s planning application was refused on 8 December 1994 and, within a matter of days, the Woolwich was given leave to intervene in the divorce proceedings. An order was made for the sale forthwith of the larger plot, with the claimant required to give vacant possession within 14 days of any exchange of contracts. The claimant’s own evidence makes it clear that he understood that a joint marketing campaign was required by the court.

In February 1995, enforcement notices were issued in respect of the storage and repair of motor vehicles, albeit giving an extended period for compliance of no less than 12 months. Again, there is no need for me to go into the detail of this; the documents at 2/375-7, 5/1460 and 6/1587-9 adequately evidence what went on in this regard.

On 21 February 1995, Mr Gearing FRICS inspected the site of the property on the joint instructions of Woolwich, the claimant and the second defendant. He was concerned to see that the claimant was even then dismantling the first of the three blocks of loose boxes, and immediately contacted Barlows to report that. The record of that conversation is at 6/1485. The dwelling had already been boarded up by this stage, because Mr Gearing required the assistance of a carpenter to enter and inspect it. His report is valuable. It appears at 6/1515-23 and includes some photographs. I shall make limited reference to it later.

Early in 1995 but after Mr Gearing’s inspection, the claimant completed his removal of all 35 or 36 loose boxes. On 21 March, Mr Ambridge viewed the property. Again, I shall later make reference to what he observed. On 17 July 1995, the claimant reported to his bank that he was on income support, see 11/3814. As part of a strategy to achieve legal control over the larger plot as well as the dwelling, in order to facilitate a beneficial sale, the Woolwich commenced proceedings for a money judgment against the defendants on 25 August 1995. They had considerable difficulty serving the present claimant, but obtained an order for substituted service in January of the following year, leading to a money judgment for £385,000 odd being entered by Master Weingarten on 22 April. In the meantime, the claimant had commenced a possession action against Mr Kenningdale in the High Court, Chelmsford District Registry.

In May 1996, by consent, judgment on liability was entered in an action commenced on 17 February 1995 by the Woolwich against G Houghton & Son: see 8/2297-8.

In 1997, yet further proceedings generated by this litigious property (if I may call it that) were commenced on 25 June, which sought avoidance of what I shall call the Morley lease, vacant possession against both the claimant and Morley, and a sale at the court’s direction pursuant to the charging order (for short, “the 1997 action”) : see 8/2306-10. On 17 March 1998, Master Bragge made a consent order against Squadron Leader Morley for vacant possession: 8/2448. It seems that in July 1998 a further break-in occurred at the dwelling: see 2/381 and paragraph 15 of Mr Mullucks’ witness statement at 2/471.

On 5 August 1998, by order of Deputy Master Farringdon (8/2534-5), the December 1994 lease to Squadron Leader Morley was set aside pursuant to section 423 of the Insolvency Act 1986. The claimant was ordered to give vacant possession within 28 days. There was an order for sale in accordance with the advice of the Woolwich’s professional advisers, absent discharge of the debt secured by the charging order within 28 days, and as a matter of title preliminary to such sale, an order was made pursuant to section 90 of the 1925 Law of Property Act in favour of the Woolwich.

The property was inspected in September 1998 by Mr Ambridge, and in late 1998 by Mr Mullucks: see their respective witness statements.

Interestingly, in a letter to Messrs Birkett Long on 15 September 1998, the claimant wrote that he had had no personal involvement with the Deanswood Equestrian Centre for some considerable time: see 7/1900. However, it does seem that he played some part in persuading Mr Powlay to give up vacant possession of the larger plot, and having done so, promptly rang Mr Livesley to report that fact. This is one of the instances where the claimant does seem to have taken active steps to assist the Woolwich.

Anticipating the sale, the Woolwich then commissioned two valuation reports in respect of the property. On 20 November, following an inspection the day before, Mr Redman of Hockley’s Professional provided the report which we have at 7/1953-7. He recommended advertising the property at the figure of £150,000, and thought that was the sum which the property would realise on exposure to the market for 180 days. The text which he wrote included these phrases: the house was “adjacent to a derelict nursery”, and was “a typical repossession in poor order”. He priced the overhaul of the roof, the decoration, and the services, at £5,000 to £7,000.

On 21 December 1998, pursuant to an inspection on 16 November, Mr Stearn of Messrs Ekins also reported a valuation figure of £150,000. However he thought that the figure would be £10,000 lower if 120 rather than 180 days were allowed for realisation. He nevertheless recommended advertisement at a higher figure, £195,000. He too recommended that the roof be overhauled, though he did not price the work required.

It is convenient to note what Mr Stearn wrote in his general remarks, having inspected the property on 16 November 1998:

“… apart from one or two timber sheds and a concrete commercial building to the rear left hand flank of the site which has been used as “loose boxes”, the only other signs of activity of a commercial nature on this site are the dilapidated and now redundant greenhouses which would have originally formed part of the nursery. Realistically, these cannot be put back into use as a nursery as the cost of glass and heating would be prohibitive.”

Formal instructions to commence marketing were given to joint agents on 23 December 1998. I must deal in detail with the history of the marketing period later in this judgment and therefore, for present purposes, I move forward to May 1999 when contracts were exchanged with the Reynolds for the figure of £245,250 which I have already mentioned.

A further order was made in the 1997 action by Master Bragge on 2 March 2000: see 8/2588-9. In 2002, by private statute, the Woolwich became, or became part of, Barclays Bank plc, the name in which it is sued as first defendant in this action. In July 2004, by a Tomlin order made by Deputy Master Mark, the Woolwich’s proceedings against G Houghton & Son were compromised. A payment of £175,000 was made to the Woolwich, which approximately equated to the amount which the Woolwich were still owed by the claimant and the second defendant after the application of the net proceeds of sale of the property in reduction of that indebtedness. Pursuant to paragraph 3 of the same Tomlin order, the following month the Woolwich’s rights under its previously mentioned money judgment against the claimant and the second defendant were assigned to the Solicitors Indemnity Fund.

The property, which the Woolwich, and the professionals it engaged to act on its behalf, came to sell, was an unusual and difficult one to deal with. Taking the matter shortly, I would refer to its planning history, and most particularly the occupancy condition and the failure of the application for its removal, both before the local planning authority and on appeal to the Secretary of State’s planning inspector. The nursery business had not traded for some time, it seems since about 1990. The equestrian centre, which had never been significantly profitable, had rapidly declined after the claimant separated from his second wife in the summer of 1990, and had ceased trading altogether in or about late 1993. So there was no going concern to sell, whoever the vendor. The dwelling was subject to an occupancy condition, compliance with which was apparently dependent on the existence of such businesses on the larger plot, and the only past trading accounts of which there is any evidence would hardly have been encouraging to a prospective business purchaser.

The quality of the construction of the dwelling was noted as being poor by a number of professionals. It had been empty for 6½ years, subject to some damage, and broken into on several occasions. On any view of matters, the larger plot was not in a good state.

Two aspects must be dealt with in greater detail, first the occupancy condition, and second, the physical condition of the property in December 1998 and early 1999 (issue 1).

The Occupancy Condition.

The occupancy condition, condition 4 on the outline planning consent to which I have already referred, together with its stated reason, reads thus:

“The occupation of the dwelling hereby permitted shall be limited to a person or persons engaged on the existing nursery and Equestrian centre as shown edged blue on the approved plan.

Reason

The site lies within an area where additional dwelling units are not normally approved and permission is only granted because of the particular circumstances of the present case.”

It is obvious, even on a moment’s reflection, that the exact extent of that obligation, if I may express it that way, with regard to occupancy of the dwelling, is susceptible of considerable argument. Is it really, one might rhetorically ask, dependent on the continued existence of a particular business which existed back in 1987? Would it, on the other hand, be adequately satisfied in law by someone in the dwelling keeping a couple of horses for private use somewhere on the larger plot? After some discussion with counsel at trial, it is common ground that it is not for the court now to resolve, in the abstract, the true construction of that planning condition, if indeed that was a practical thing to do. Rather, it is for the court to note, as any potential purchaser of the property would have had to note in early 1999, the existence of an occupancy condition in those words, and the existence of room for doubt as to its true extent and operation.

The impact of this occupancy condition was only exacerbated by the splitting of the property as it originally stood into two separate titles, different in ownership insofar as one was co-owned and the other solely owned by Mr Dean, and different as to who held the first charges over it.

While the Deans’ business was still trading, the condition’s impact on the value of the property, though there was some, was not very great. For example, in Mr Mullucks' valuation advice of 26 October 1994, although he considered there to be £100,000 difference (on a higher figure of £175,000 to £190,000) in the value of the dwelling sold as a separate unit, depending on whether or not the occupancy condition was present, under headings 3 and 4 in the same letter, which dealt with the position whilst the business was actively trading, the value of the whole property was depressed relatively little by the presence of the condition (by £25,000 in a total higher figure of £250,000). However, on cessation of the business, the significance of the occupancy condition for the value of the property became much greater.

One consequence of this, it should be noted, is the considerable difficulty that would arise if it became necessary to apportion the proceeds of sale of the whole property between the two parts. On the facts this difficulty has not thus far arisen, because the realisation made was well short of the total debts owed to the Woolwich by the Deans. There is an interesting, and I find helpful, discussion of the difficulties raised in Mr Gearing’s report at page 1519. Whether or not one agrees with his conclusion as to what approach to apportionment might best be taken, this passage in his report is helpful in identifying some of the difficult issues raised.

By 1999 the dwellinghouse was undoubtedly the primary attraction of what was to be found on the land comprised in the property, but its lawful occupation was entirely dependent on what I will call the qualifying use of the larger plot by the occupiers of the dwelling. There are in evidence before me the views of a number of experts, and I shall shortly rehearse a number of them, taking them in the chronological order in which those experts looked at the property.

In April 1991 Mr Harrison of Cheffins Grain & Cummins referred, in a passage I have already quoted, to the application of the planning condition causing the valuation otherwise attributable to the property to be “reduced very, very steeply”.

Mr Mullucks in paragraph 35 of his witness statement said this:

“The single most limiting issue about the site, however, was the planning restriction. Most buyers would view this as equivalent to an agricultural tie and, in my judgment, a restriction of this nature would lead to a 30 or 40% depression in the value of the property from an identical site without the restriction.”

See also his valuation advice of 26 October 1994, to which I have already referred.

Mr Cowlin in paragraphs 5.4 to 5.5 of his report in these proceedings dealt with the matter thus:

“In my view this planning restriction is serious, affecting both the marketability and value of the property. The house is probably un-saleable on its own and the Woolwich were right to insist the Equestrian Centre was marketed at the same time as the house. The restriction limits the occupation of the house to persons ‘engaged’ on the Equestrian Centre which I think strictly means employed or engaged in business on it. Most parties looking for a large modern house such as Deanswood Lodge would be refused mortgage funding if they were not taking on the derelict Equestrian Centre as well and many would certainly be put off by its derelict nature. They would also be refused mortgage funding if they were not in the equestrian or nursery business.

In some ways, I think this restriction is worse than the normal agricultural restriction frequently seen on such planning consents. Depending on the exact wording, frequently those properties can be occupied by anyone currently or previously employed in agriculture anywhere. Here this condition is much more specific and limits occupation purely to the adjoining property.”

Fourthly, in the joint report of Mr Snow and Mr Cowlin, at paragraphs 6 to 7 they said this:

“6.

On the assumption that the property was in good order, as was advised to Mr Snow [good order here includes an active business trading at the time] the effect of the occupancy condition restricting occupancy of the house to the owner of the business would be small. Mr Snow thought it would be negligible whereas Mr Cowlin thought the effect might be perhaps [a] 5% reduction, because it would knock out those buyers who needed to borrow the maximum amount.

7.

The effect of the occupancy clause would be far more serious in the event that the property ceased to be manifestly an equestrian property, and thereby relying on a wider market to achieve a sale. In this situation it was agreed that the effect of the occupancy clause would be a reduction in the region of 35% from the value of other non restricted property.”

Finally, Mr Smith’s remarks on this topic should not be overlooked. At paragraph 10.4 he said this:

“The outcome is that the house has to be approached as a composite entity with the nursery and that any endeavours to segregate the house from the nursery would ultimately result in an unlawful residential occupancy. This would have a very grave effect on the value or saleability of the house.”

Among the consequences are that the property would be a very difficult one on which to obtain mortgage finance, as several of the witness observed, and secondly that what I will call, in no sense disparagingly, ‘ordinary purchasers’ such as the Ketteridges, who were looking primarily to occupy the dwelling for their own purposes and pleasure, but with a view to being able to sell it for a good price when in later life, to use the contemporary jargon, they down-sized, would be bound to be put off, even if they themselves had enough horses, or possibly horticultural interests, to satisfy the local planning authority. The response of the Ketteridges to finding out the true position with regard to the occupancy condition, namely ceasing to be interested as prospective purchasers, is an instructive, factual indication of the practical importance of the matters which I have just rehearsed.

So far as the house is concerned, we have a description from Mr Mullucks going back to an inspection on 20 February 1991. His evidence includes these phrases, that the property was “in better condition than when repossessed”, that the house itself was “not presentable” and that “the grounds were, to say the least, a shambles”. Repossession had occurred in May 1992. I have already given the references to two notes of Mr Wicksteed’s observations. It is also worth noting what Mr Dean says in his first witness statement at paragraph 41.

“On numerous occasions after the First Defendant obtained possession of the property [the dwelling] … burglars broke into the property, and the property was open to vandalism.”

By 16 September 1992, Mr Wells of Mullucks Wells was noted by Mr Wicksteed, 2/380, to have reported that the property had deteriorated somewhat. On 10 December 1993 the builder’s listing of remedial works to which I have already referred was provided. It is headed “Schedule of Dilapidations”, though its commercial function was that which I have indicated earlier. I will not take time to read it out, though it is an important document in these proceedings upon which Mr Walsh placed particular reliance. It is a useful collection of indications of works required at that time. Later the same month we have Mr Mullucks’ photographs of the property.

I infer, from material at 2178 and 2170, that the property was boarded up at some time between July and November 1994.

By February 1995, Mr Gearing described it thus:

“It has suffered some vandalism and requires general refurbishment. … I understand that estimates have been obtained to put the property into good repair at around £15,000 and I would not disagree with this.”

The next month Mr Ambridge inspected the property. In his witness statement he said this:

“It was a house suitable for refurbishment or renovation … The house itself was not in good condition … it appeared to have been deliberately damaged … A number of internal doors were removed or damaged, radiators were missing and electrical fittings had been removed.”

The file note available at 2/381 records Mullucks Wells being told on 8 July 1998 that:

“The front door has been kicked in and the windows un-boarded. It might be vandalism or squatters - no way to tell. No-one there at present…”

Mr Mullucks, speaking of his inspection of the property in late August 1998 said (paragraph 16 at 2/471) :

“I noted that a number of roof tiles were missing on one hip end, that fences appeared to have been removed and that horses were grazing round the entire garden of the house. Other than that, the property was still boarded and secured.”

The general tenor of this material, which clearly was in no sense artificially, let alone maliciously, generated, is to be borne in mind alongside the generally agreed estimate of £20,000 to £25,000 (in 1999 prices) to carry out the works identified by Messrs Hanscombe, including roofing and perhaps fencing works.

The claimant has argued that the problems with the condition of the dwelling have been exaggerated. At its kindest to the claimant, this might be regarded as a matter of semantics, depending on the degree of damage which is connoted by the words “vandalism” and “trashed”. However the term “vandalism” is used twice by the claimant in his own witness statement. Squadron Leader Morley, whom I think is fair to describe as an associate of Mr Dean at the time, said in his fax message to the Woolwich of 15 August 1994 (page 2176) that his then offer was:

“… subject to [the dwelling] not being allowed to further deteriorate nor be further vandalised”.

In his letter of 3 November 1994, at page 2169 reading to the top of 2170, he wrote this:

“Since my first offer [4 July 1994 - see page 2178] Deanswood Lodge has been further vandalised which resulted in the Woolwich arranging for the ground floor windows and doors to be boarded, which itself must have caused further damage where the boarding is fixed to the interior of the house.”

Those were both documents exhibited to the witness statement lodged on behalf of Mr Dean in the divorce proceedings.

Mr Ambridge stated in his summary of the position at paragraph 37 of his witness statement (2/464) that:

“[The property] had stood empty for several years and had the appearance of being trashed.”

I find that by the time the property came to be sold the dwelling was in relatively poor condition, and that the descriptions of its state by Messrs. Mullucks, Wells, Gearing and Ambridge were fair and realistic.

Secondly with regard to physical condition etc, I turn to the nursery facilities. The greenhouses had not been in use for a considerable period. Some had already been knocked down, in what became the designated car parking area, save for the small part of one which came to be used as a feed room. There is clear evidence that nursery activity in the remaining ten greenhouses would not have been economically viable in any event, even had they been in good repair: see the oral evidence of Mr Dean himself and of Mrs Ketteridge, the witness statement of Mr Mullucks at paragraph 36 (2/477), and the related remarks in Mr Stearn’s report of 21 December 1998, from which I have already quoted. I would infer that some nursery business was still being carried on in 1987 from the phraseology of the occupancy condition formulated by the local planning authority. However, on Mr Dean’s own evidence it seems unlikely that by 1990 any such business was operating, and certainly there is no suggestion that it can have been doing so by 1992: see 2/399, paragraph 5.

Mr Dean himself observed that the maintenance of these greenhouses required expenditure of £1,000 per annum on glass alone. I am confident that no such expenditure can have occurred since 1990 at the latest, not least given Mr Dean’s financial circumstances, to which I have made reference in my chronological review of the evidence.

On 23 September 1993, the Secretary of State’s planning inspector, in the report to which I have already referred, used the phrase “apparently derelict greenhouses”. Mr Gearing’s photographs taken in February 1995 include one clear shot of the greenhouses (page 1523). When this photograph was put to Mr Dean in evidence, he said that he would not describe the greenhouses it depicts as ‘dilapidated’. Well I would, and so I believe would any objective observer of that photograph.

By 19 November 1998, Mr Redman FRICS of Hockleys Professional wrote (at 7/195) that the house was “adjacent to a derelict nursery”. On 4 January 1999, Mr Mullucks, in writing to the local planning authority (page 2879), asserted from his own knowledge that the nursery had not been used for many years. That observation was not refuted by the local planning authority in their response, unlike his equivalent observation in respect of the equestrian centre.

In February 1999 a Mr and Mrs Claydon, persons offering for the property, wrote this on the second page of their offer letter:

“The existing glass houses in our opinion are beyond safe repair and would be removed to be replaced with poly tunnels, 3 of which we have at present.”

I fully appreciate that any offeror in this circumstance has what might be regarded as an incentive to play down the value of the property, but in light of the other evidence to which I have referred I am quite satisfied that this was an entirely realistic observation by persons who, as their letter records, were interested in running a plant nursery on the larger plot.

In his oral evidence to me, Mr Smith observed, “My experience is that at the time there was very strong demand for both horticultural and equestrian property.” So far as that observation was intended to be applicable to this particular property, as opposed to some generalisation about horticultural activity in modern poly-tunnels with a high level of automation, I regard it as entirely unrealistic, out of line with the evidence of at least three witnesses whom I have mentioned, and directly contradicted by Mr Mullucks’ evidence on the same point, which I accept.

As early as February 1991, Mr Mullucks observed (at 2/467) that there was a considerable amount of rubbish around in the stables. In a later passage in paragraph 35 of his witness statement (at 2/477), he said this:

“The planning position committed a purchaser to trying to make a living from the site which was really not large enough for it. For a genuine equestrian centre, there was just not enough land as the generally accepted rule of thumb is an acre per horse. A site for some 5 or 6 horses [assuming five acres or so] could not generate a living. It might have been possible to create a livery establishment. That is charging a fee to groom, feed and house horses for others. That sort of establishment does not need as much land because many such units use a livery wheel to exercise the horses. Further, Hatfield Forest close by does provide a potential exercise area. However, there is only a limited demand for livery and, as far as I am aware, there is an ample supply in the local area.”

This entirely accords with the advice he gave to Mr Dean in the letter of 20 February 1991 from which I have already quoted, urging him to attempt to secure the availability of an adjacent 15 acre paddock in connection with any equestrian centre.

On 23 September 1993, the Secretary of State’s planning inspector observed that the stables and associated buildings were extensive and appeared to be under-occupied, 4/1081. On 7 December 1994, Mr Mullucks, writing to Messrs Barlows, referred to the “somewhat dilapidated state of the equestrian centre site”.

By 1994 at the latest, there was no continuing maintenance of the outdoor manège. Mr Powlay’s usage of the Barn did not amount to an equestrian centre, or indeed an equestrian business, but was on a much smaller scale. Mr Gearing’s photographs (at 1522 and 1523) of February 1995 support Mr Mullucks’ description of the “somewhat dilapidated state” of the site. As Mr Gearing pointed out in his report (at page 1517):

“… once these loose boxes have been sold there is very little left of the original Equestrian Centre other than the concrete frame asbestos roof outbuilding of about 40 feet square [referred to in these proceedings as “the Barn”] together with a tack room and some old outbuildings adjacent.”

The photographs further show, as Mr Cowlin observed in his evidence, that the concrete in the stables or loose box area was significantly cracked.

Mr Ambridge in his evidence, speaking of an inspection on 21 March 1995, said this (2/458 paragraph 10):

“As for the Equestrian Centre, this was in extremely poor condition. The outhouses were badly maintained and many of the greenhouses had broken glass. This would have needed cleansing for use for equestrian purposes as broken glass just is not acceptable with animals. My view was that they would have to scrape off the whole topsoil and replace it.”

The cost of 36 loose boxes, erected to replace those dismantled and sold off at the end of 1994/beginning of 1995, was put by Mr Smith at £50,000 to £60,000. As to the position in 1998/1999, Mr Ambridge stated (page 2/465):

“… the Equestrian Centre was run down and dilapidated, there was no obvious stabling for horses and there was no business operating at the time of the sale here.”

I have already commented on the external appearance of the building referred to as “the Barn”.

Mr Mullucks at paragraph 34, 2/476, said this:

“The Equestrian Centre was also an opportunity but in poor condition. Everything which was moveable had been taken from the site and there was limited stabling or paddock land available. All greenhouses on the site were not useable and the whole greenhouse area would not have been useable for horses because of the glass. In my view, the whole site would have needed decontamination and that would have been quite expensive.”

As to the overall physical condition of the property, it seems unlikely that any money would have been spent on maintenance, let alone improvements, since the mid-1990s. Mr Mullucks’ description as at 20 February 1991 was realistic, and given that the claimant, and Mr Smith, his expert, placed such emphasis on the business potential of the site, it is right to remember that Mr Mullucks’ description of the grounds (as opposed to the dwelling) as being “to say the least a shambles”, was contained in advice written at a time that he was acting for Mr Dean. As to the position in November 1998, I have already quoted the passage from Mr Stearn FRICS’s valuation at page 1961.

As to the implications for marketing as at December 1998, Mr Mullucks’ witness statement, in the latter part of paragraph 34, puts the position concisely and, in my judgment, accurately:

“Again, the work that would be required to the site to make it useable is a significant deterrent, as most people would just not want that aggravation. Further, it would clearly need a major investment of capital to create a viable equestrian or livery establishment or a nursery. Most of the site would have to be cleared, new greenhouses erected or new stabling and support buildings installed.”

I would also refer to the summary description of the property given by a Mr & Mrs Geraghty in their letter at page 3376 offering £190,000, albeit again noting their potential interest as offerors in down-playing its quality:

“… detached dwelling house with double garage, both in a vandalised state, obsolete nursery, equestrian sheds and grounds in disrepair and non operational …”

Mr Cowlin, in his oral evidence, suggested that a purchaser looking to put the dwelling and the larger plot into reasonable order, would have had to allow for expenditure of, say, £150,000. I find that figure to be by no means unreasonable. I have already mentioned Mr Smith’s own estimate of the cost of replacing the loose boxes, and he had not himself even attempted to cost either the removal or, if economically viable, the refurbishment, of the greenhouses. To put the matter another way, there was no substantial infrastructure legacy by reason of the past capital investment in either an equestrian or a fortiori a nursery business.

Following the valuations obtained in November/December 1998 to which I have already made reference, Mr Ambridge recommended the adoption of an indicative offer value of £185,000 anticipating the realisation of £175,000, 2/460-1. His firm, together with Mullucks Wells, were instructed to act as joint agents. I simply refer, without quoting, to the evidence of Mr Mullucks at 472 and of Mr Ambridge at 460 on this point. Mr Mullucks, correctly identifying the grave implications of the occupancy condition for the property’s value, undertook correspondence with the local planning authority about that condition. I simply refer, without quoting, to the letters of 4, 19 and 25 January 1999 and 5 February 1999 at pages 2879, 3230, 2896 and 3395 respectively. As Mr Cowlin confirmed, having initially queried it in his report, a board was put up outside the property, albeit that Goose Lane is a road which would attract local traffic but not a main road.

Sales particulars were prepared and in due course circulated, in the form we have at pages 2590-5. Their terms are important and relied on by the claimant, but the document is available and I do not think it would assist anybody if I read all its text into my judgment now.

Messrs Mullucks Wells had on their database the names of 110 persons who had registered interest in properties within the area with equestrian facilities, and the sales particulars were sent to them. Messrs Sworders sent the sales particulars to a further 71 people whose names they already had, of whom Mr Ambridge estimated that about 20 per cent (which equates to 14 or 15) were potential business users. In addition we know, as one would expect but was confirmed by the experience of the Ketteridges, that sales particulars were available at the property for viewers.

Advertisements were placed in the Herts and Essex Observer on 21 and again 28 January 1999. A copy of the earlier advertisement has not survived, but there is no reason to believe that the text differed from the later, save as to the viewing date(s). The newspaper is one which circulates throughout the eponymous counties, albeit that it is presented in a slightly different form by reference to the particular town in which it is sold, far from an uncommon feature for local newspapers. The placement of an advertisement in it apparently carries with it a repeat advertisement in what was describe as the sister newspaper, the Harlow Star.

The form of advertisement, which appears conveniently at 2/394, reads thus, under the name and address of the property:

“Six bedroom Country Property requiring refurbishment, standing in approximately 4 acres. The occupancy of the property is subject to a condition in the original planning consent.

GUIDE PRICE: OFFERS IN THE REGION OF £185,000

Open for viewings [the relevant dates and times appear].

Best offers will be required in writing by Tuesday 2^nd February, 12.00 noon. Following this, by Direction of the Mortgagees, a 7 day notice announcement will be published on Thursday 4th February.”

Calls and letters came in from persons interested in the property. Considerable interest was generated for the viewings, and I refer to the witness evidence of Mr Mullucks and his letter of report of 26 January 1999, which we have at 9/2897. By the suggested last day for written offers, a total of 30 or so offers had been received, as is described at paragraph 22 of Mr Mullucks’ statement (on page 473), and paragraph 23 of Mr Ambridge’s statement (on page 461). Miss Katherine McQuail, appearing for the Woolwich, fairly characterised that evidence as “offers largely clustered around £200,000.” Mr Walsh makes the point that the guide price had to some extent pre-ordained the area of the offers. Nevertheless, the willingness of those offering and showing serious interest to go higher than the guide price, but only so far higher, as was demonstrated by subsequent events, showed that it did not in any sense impose or produce an unwanted cap on the figure to which offerors would go.

Most of the offerors, to use Mr Mullucks’ phrase, played their cards close to their chest as to what their reasons and plans were. However, a number of individual examples were extracted from the extensive documents before me to show that they included both persons from outside the immediate locality and persons interested in some business or equestrian use of the site. Again, given the length of this judgment, I will not take time to read that material out, but it is important and I would therefore make some short reference to it.

On the oral evidence of Mr Mullucks, the Bartons, who offered £195,000 (see 10/2963) were interested in equestrian useage. So were the Brookes, who viewed the property more than once, and lived 40 minutes drive away by cross country road. Mrs Brookes worked in an equestrian business 40 minutes drive away by motorway at Enfield. They made three offers between 25 January and 15 February, climbing from £185,000 to £230,000 (see 10/2924, 2965 and 3029). The Geraghtys from North Finchley, the furthest offerors away who have been specifically identified, were interested in getting an equestrian centre operational, “on a reduced scale”, and offered £190,000 (see 11/3376). The Gregorys also had equestrian interest, as Mrs Gregory was involved in carriage driving. They intimated by telephone that they would make an offer nearer the time (see 10/2928), though no such offer eventuated. Mr Mynott, a local businessman from the Sawbridgeworth area who had an eponymous company, made alternative offers on 1 February, and subsequent offers on 15 and 16 March. He wrote again on 17 March, and made a further offer on 24 March (see in volumes 10 and 11 at pages 2955-7, 3493-4, 3500-1, 3513-4, and 3526-7). Mr and Mrs Weir, whose interest was equestrian, offered £185,000 on 25 January (see 10/2930). Mr and Mrs Claydon of Bishop’s Stortford, to whose letter I have already referred, were interested in starting a plant nursery, and offered £155,000 on 2 February (see 10/2966-8).

On 4 February 1999, notices appeared in the Herts and Essex Observer from each of the agents concerned, emphasising that further offers would be received prior to exchange of contracts. In the event, the factual evidence showed that several offerors felt able to put in an offer after 2 February had passed : see Mr Ambridge’s witness statement at 2/462. On 11 February 1999, letters, such as that which we have at page 3017, were sent to offerors, seeking higher offers. All offerors were so written to, and it seems that five offerors (between the two agents) submitted increased offers.

On 4 March 1999, a further notice was published (11/3480), with a picture of the property, and its address stated in capital letters. The caption which followed read thus:

“The above property is subject to an offer of £233,987. Any higher offers must be submitted in writing prior to exchange of contracts. REPLY TO G.E. SWORDER [and the address is given].”

This was a reference to the then highest offer received, which was from a Mr Nixon Moss, and was clearly designed to generate further and higher offers, and thus competition. The notice certainly made it clear that further offers would be received, and it appeared in a similar format to the earlier advertisements in the same property page of the same newspaper. It was, so far as is in evidence, the nearest thing to the seven day notice which had been intimated in the original advertisements from January 1999 as in fact ever appeared.

By 12 March 1999, 12 named offerors had been contacted, apparently by telephone, again in an attempt to develop competition between them or some of them. As result, by some stage on 15 March 1999, the highest offer, again from Mr Nixon Moss, had risen to £246,000. That was accepted subject to contract. On the same day, it is not clear whether just before or just after the Nixon Moss offer was accepted, Mr Mynott’s company offered the fractionally greater figure of £246,500. In the event, the Woolwich’s agents chose to proceed with the Nixon Moss offer. The next day Mynotts raised their offer to £250,000 plus £100 contribution to costs. Legal & General, for the Woolwich, chose not to gazump the Nixon Mosses for a figure of £4,000, a decision which it is hard to criticise given the sums involved.

On 17 March 1999, Mynotts wrote again. It seemed they had got, or at least were affecting, as Mr Walsh might say, to have got, to the top figure that they were prepared to offer. They effectively wished the vendor good luck in actually getting an exchange of contracts at what they (wrongly) assumed must be a figure above £250,100, whilst carefully recording their interest if no such exchange took place. Mynotts were either regular players in the market or prescient, because within days the Nixon Moss offer was withdrawn following an adverse survey, which, I note, seems to give further support for the observations of the professionals as to the poor quality of construction of the dwelling.

Thus, once again the Woolwich through its agents went back to the other offerors. Mr Mynott, after a further viewing of the property, made a fresh offer of £240,000, which was rejected in favour of the ultimately successful offer of £245,250.

Although the Particulars of Claim allege simply that a proper price would have been £585,000, and that the actual realisation was a mere £245,250, at trial, in order to make out a breach of the relevant duty, the claimant has relied on four complaints, which appear under the headings (a) to (d) in his opening skeleton at pages 5 to 6: “(a) the manner in which the 2 properties were described”, “(b) the manner in which the 2 properties were advertised”, “(c) the market at which the 2 properties were pitched in view of the planning use of DEC for a nursery and an equestrian centre and the terms of condition 4 applicable to DL requiring it to be occupied by a person or persons engaged in the nursery and equestrian centre at DEC”, and “(d) the very limited time allowed to purchasers to put in offers”. I must therefore at this stage remind myself of and record the law which it is for me to apply.

The Woolwich had a statutory power of sale as legal mortgagee by virtue of s.101(1)(i), Law of Property Act 1925, and in consequence of the equivalent term of years conferred by the court order to which I have already referred. A mortgagee can act in its own interests in deciding whether or not to exercise the power of sale, and if so when to do so. If it does exercise the power of sale, it is under a specific duty to take reasonable care to obtain the best price reasonably obtainable at the time: see Fisher & Lightwood Law of Mortgage, 12^th Edition (2006) at paragraph 30.23. The expression “best price reasonably obtainable” is synonymous with “a proper price”: see Lord Templeman in Downsview Nominees [1993] AC 295 at 315C, and Robert Walker LJ (as he then was) in Yorkshire Bank v Paul [1999] 1 WLR 1713 at 1728E-F, and with “the true market value”: see Salmon LJ (as he then was) in Cuckmere Brick v Mutual Finance [1971] Ch 949 at 968. The duty is owed in equity, not in tort or under any implied contractual term: see Yorkshire Bank at 1728D-E, Medforth v Blake [2000] Ch 86, Raja v Lloyds TSB Bank [2001] Lloyd's LR (Banking) 113. Accordingly, as is stated in Fisher & Lightwood loc cit at page 634:

“The remedy for breach of the equitable duty is not common law damages, but an order that the mortgagee account to the mortgagor and all others interested in the equity redemption, not just for what he actually received, but for what he should have received.”

The burden of proof is on the claimant to prove a breach of duty. To succeed in his claim, he must satisfy me that the bank, acting by itself and its agents, did not take reasonable care to perform the duty I have just identified.

There is a very helpful statement of what that general rule connotes in practice in the lengthy paragraph 30.23 in Fisher & Lightwood op cit, with short additional passages at 30.27 and 30.29. Given the time we have already reached this afternoon, I will not (as I had intended) read those out.

The judgment of Jonathan Parker LJ in Michael v Miller [2004] 2 EGLR 151 contains a helpful analysis of the court’s best approach to deciding the question of liability in a case, such as the present, where the property has actually been exposed to a market. Again, to save time but without in any way indicating a lack of regard to the contents of that judgment, I shall not read them out, but the crucial passages to which I have paid careful attention are at paragraphs 141 and 138. The only other case to which I would make specific reference, in addition to the helpful summary in Fisher & Lightwood, is that on which Mr Walsh places particular reliance, the well known decision of the Court of Appeal in Cuckmere Brick v Mutual Finance, the reference to which I have already given. It is helpful for its statements of principle and I note, as Mr Walsh pointed out at one point, that, at least at first blush, there appears to be some factual similarity between that case and some of Mr Walsh’s complaints raised here.

In addition to the head-note, and again simply to save time (having prepared to read all these out), I note in particular in Salmon LJ’s judgment, the passages at 958H to 959E, 960A to just above D, 965 just above G to just below G, 966A to just below C, and 968H to 969C; in the judgment of Cross LJ that at 972G to H with its cross reference to the cases in the previous paragraph; and in the judgment of Cairns LJ those at 978A to E and the first line of the new paragraph, and then picking up below H through to the paragraph ending just above B on the next page.

Miss McQuail has not sought to argue that the very fact that the first defendant instructed competent agents to sell the property is itself sufficient to discharge its duty, see Halsbury’s Laws of England op cit paragraph 660, and Cuckmere Brick per Salmon LJ at 969A-E, Cairns LJ 980B-D, and Cross LJ at 973A-F on this point, but has simply dealt with the actions of the first defendant’s agents on their own merits. Equally, the claimant has simply sued the first defendant, without joining its agents directly in tort.

Of the four heads of complaint, head C is the most convenient place to consider the most fundamental question, the resolution of which affects consideration of Mr Walsh’s other three complaints. I shall therefore take it first.

As this complaint is developed in Mr Walsh’s skeleton argument, paragraphs 26 and 28 remain relevant, though paragraph 27, in my judgment, cannot be sustained in the light of the oral evidence of Mrs Ketteridge. Head C was that most emphasised and developed orally by Mr Walsh. His approach follows the evidence of Mr Smith, who ultimately confirmed, in answer to my question, what seemed to be suggested by his report, namely that he regarded the primary market for this property as business users planning to commence a nursery or equestrian business straightaway, or as soon as practicable, following purchase, and that this was not a property for which the residential market was the primary market. Contrary factual evidence was given by Ambridge and Mullucks, and contrary expert evidence by Mr Cowlin and, through the joint statement, Mr Snow.

There is in the abstract a certain logic to Mr Smith’s approach in the sense that he was starting from the wording of the occupancy condition and looking to the need for compliance with it. But those selling the property had to start from the position actually prevailing at the beginning of 1999. There had been no nursery business on the larger plot for some nine years. A nursery business under traditional greenhouses of the sort present, even if fully restored (an expensive project indeed), would have been wholly uneconomic. Nor had there been an equestrian centre worthy of that name for seven to eight years. There was a quite inadequate area for such an equestrian centre at 3.8 acres, without the confirmed use by freehold or leasehold ownership of the 15 acre paddock adjoining. There had been no equestrian business at all for at least five years. Very considerable immediate expenditure would have been required from such a purchaser, of which the best and only evidence I have is Mr Cowlin’s estimate, which I have accepted as an entirely reasonable figure, of £150,000. I have already described in detail, and made my findings as to, the condition of the larger plot.

The dwelling, relatively speaking, required a good deal less expenditure, at 1999 levels say, £20,000 to £25,000. Purchasers of the dwelling could take, to over-simplify, one of two approaches to the occupancy condition. They could set up at least modest personal equestrian or horticultural use in the hope that the local planning authority would accept it as compliance and, indeed, I note that at least one of the offerors, whom I have identified earlier, received just such an indication from the local planning authority before making their offer. Secondly, there were those who were referred to by Mr Mullucks in his oral evidence as “the optimists”, and by Counsel in legal argument, more bluntly, as “the flouters”. It is possible on the evidence, although they are not present and I certainly make no finding about it, that the ultimately successful purchasers fall into the latter category. I do not know for sure. It does not matter for the resolution of this case whether that is or is not the position.

The question for me is whether it was within the scope of reasonable professional judgment for the Woolwich by its agents to approach the sale of this property as a residentially focused sale.

As to that, I have in evidence the joint statement of Messrs Cowlin and Snow at bundle page 325 where they state this:

“It was agreed that the marketing campaign held by Messrs Mullucks and Sworders was appropriate for the marketing conditions and for the state of the property as reported in the witness statements of Messrs Mullucks and Ambridge.”

In paragraph 9 (to save time I will omit the first part):

“… Mr Cowlin … indicated that in the event that the property was only to the standard as is represented by the witness statements and in poor general condition, that this argument [recorded in the earlier part of the paragraph] could not apply and that the marketing campaign was appropriate as was in fact put in hand.”

Mr Snow agreed in that eventuality. I should add, for the avoidance of any doubt, that it follows from the findings which I have already made, that the premise for those propositions was indeed the true factual position.

Accordingly, faced with that evidence of both Mr Cowlin and Mr Snow, the answer is that it was clearly within the scope of reasonable professional judgment to approach the sale in the manner in which the agents instructed in fact did. Furthermore, for what it is worth, I find that the judgment they made was the better one, particularly in the light of the evidence of Mr Cowlin and of Mr Mullucks. A business focused marketing campaign was more likely to have produced a lower realisation than a higher one. On analysis the relevant factual circumstances here are very different from those in the Cuckmere Brick case.

Having dealt with the fundamental point, I should briefly mention some more detailed complaints which followed from it. As to the selection of agents to conduct the sale, Mr Cowlin’s evidence at paragraph 6.2 is strongly supportive of the Woolwich’s actions. It is noteworthy to me that Mr Dean himself, who stated his familiarity with land and land value issues in the area in one of the affidavits to which I have already referred, chose to consult none other than Messrs Mullucks Wells when he still had some sort of equestrian business running in 1991. Mr Mullucks, whilst not a specialist in the sale of going concern equestrian businesses, did have significant experience of dealing with properties with equestrian facilities, as is reflected by the fact that he had 110 names of people interested in properties with some equestrian facilities listed. As to Mr Ambridge’s position, I refer to his evidence at page 2/460.

Second, Mr Smith (see page 284) suggested that national firms should have been used to sell this property. Messrs Savilles, one of the firms whom he suggests, were in fact considered, though I do not know the circumstances in which they ultimately were not instructed. The other, Strutt & Parker, happens to be Mr Cowlin’s own firm, and in the joint statement at page 326B, paragraph 13, he indicated doubt that they would have been interested in selling such a property, evidence which I do not find remotely surprising.

At best, what the claimant has established is that there was potentially an alternative, distinct and different marketing strategy available for the sale of the property as effectively a business opportunity, given the planning permission for stables and a riding school, and the established use as a nursery. Had it been appropriate for that to be the focus of the sale, then one might have considered different firms, as to which see Mr Cowlin’s evidence. The form and wording of advertisements would no doubt have been different, and so would the form and wording of the sales particulars. However, to use what I hope is not an inappropriate metaphor, for agents to ride two horses in this situation, and try simultaneously to market the property on both bases, would have been difficult indeed.

I have nevertheless considered whether perhaps two parallel campaigns could have been run in this case. The nearest suggestion to this to be found in the expert evidence is simply Mr Smith’s reference to the scattergun approach in advertising. Could there have been different advertisements appearing in different publications, two different sets of sales particulars, and so forth? At the end of the day, no-one with professional experience in the area, including Mr Smith, suggested that this should have been attempted. It was not argued for as such by Mr Walsh, and there is no sufficient evidential basis for me to find that such an attempt should have been made, let alone for me to find that any reasonable vendor or agent would have so attempted.

The focus on the dwelling as the principal aspect of the selling was certainly not an unreasonable approach and, in my view, so far as relevant, was indeed the better course.

It is convenient next to take complaint A, the manner in which the properties were described in the advertisement, and I refer to the claimant’s skeleton at paragraphs 20 to 22. I have already described the form of the advertisements, which appears at page 394. The references to “approximately 4 acres” and then to an occupancy condition do give some hint to the educated reader that there is likely to be some related planning permission or established use in respect of all or part of the land, but no more than that. This was a reflection of the decision to focus on the dwelling.

Given the decision to make the dwelling the primary focus of the marketing, the advertisement was, in my judgment, a perfectly reasonable one. Some might, and others might not, have included some express if passing reference to the planning consent, the occupancy condition and so forth in the advertisement. However not to do so, particularly given the target of attracting as much initial interest as possible, was certainly well within the scope of reasonable professional judgment. Mr Cowlin did not believe that the inclusion of some such reference in the advertisement would have produced a higher offer.

As to the suitability of the accommodation for the use of staff, etc, that was not a matter for express reference in a newspaper advertisement. The sales particulars give an accurate description of the property in this respect, albeit that they do not specifically mention, as any viewing would have disclosed, that there was a separate external door affording access to this accommodation. It was not necessary, in my judgment, for the sale particulars to spell out that that annexe was ideal for staff quarters. To do so might equally have put off others, who had solely private residential use in mind.

As to the complaint that the guide price was low, there are two aspects to this. The first is a matter of tactics. The tactics which these two joint agents chose to adopt was to pitch it relatively low, in order to achieve a lot of interest. Mr Cowlin, very significantly in my judgment, observes that he would have made the same judgment: see at 2/300. The second aspect is the actual figure taken. It was not, in my view, unreasonable. The prior advice from two valuers from different firms who were not then involved as selling agents was, respectively, £150,000 and £195,000. The Woolwich, through Legal and General, then took the advice of Mr Ambridge and settled at £185,000. That is clearly well within the bracket constituted by the two figures that I have already mentioned, and is just (£7,000) below the bottom figure of the 20 per cent bracket to which I shall refer later in my judgment in relation to Issue 3.

As to the success of these tactics, I refer, without reading them out, to paragraphs 28 to 30 of Mr Mullucks’ witness statement at pages 474-5, and to paragraphs 8 and 9 of Snow and Cowlin’s joint statement at page 325. I accept the evidence of those witnesses in this regard as reasonable. Orally supplementing this head of complaint, Mr Walsh made the point that the sale particulars do not cure any default in the advertisement in this respect. So far as the complaint is that no clue was given, as to which I have already made my observations, they clearly would cure that. Several ‘clues’ are given in the sales particulars, not least the quotation of the occupancy condition. What could fairly be said is that the sales particulars did not make the permitted and established uses of the larger plot a major feature of the marketing.

The sales particulars have independent relevance, because they were sent out to over 180 people, quite apart from people who asked for them in response to the advertisement or picked them up when viewing the property.

As to head of complaint B, the manner in which the property was advertised, one aspect of the mortgagee’s duty is generally to ensure that the property is advertised in appropriate publications. However, what publications are appropriate for a particular property is a matter of professional judgment, subject to that judgment being exercised reasonably. I have already referred to the Herts & Essex Observer. It was plainly the appropriate newspaper circulating in the area. None other has been identified as such. Mr Walsh’s attempts to limit the circulation of this newspaper to Bishop’s Stortford were somewhat opportunist, being based on how one particular person referred to the newspaper, commendable for their zeal, but not supported by substance.

The first more particular complaint is that the property was not publicised in a national newspaper. The one name ultimately mentioned, save in the context of specialist publications, was The Sunday Times. It was the experience of Mr Ambridge in particular that such advertisements produced very little response. As for Country Life, if that is not regarded as within the category of a specialist publication, Mr Mullucks’ evidence was that this property was simply “not grand enough” for Country Life. That may be to put his point bluntly, but I entirely accept it nevertheless. This was not a property which, in my judgment, any reasonable professional would have concluded either required, or justified the cost of, such national advertising.

The second more particular complaint is that the property was not advertised in the specialist press. So far as Horse & Hound is concerned, Mr Mullucks confirmed that he had recommended its consideration in early 1991, at a time when there was an active business trading: “At the time I advised its consideration, Deanswood Equestrian Centre was an up and running business.” It was a wholly different matter, however, eight years on in January 1999, and I detect no inconsistency between the advice he gave in 1991 and the view he took in 1999. His oral evidence was that he rarely places properties in Horse & Hound, that he has never sold one himself through Horse & Hound, and that he believes that other agents have similar experience.

So far as The Grower is concerned, the name had not even been mentioned in either evidence or argument until, the day after I had ignorantly inquired what the horticultural equivalent to Horse & Hound was, it formed part of a question from counsel. Mr Mullucks’ evidence, which again I accept, is that he did not consider The Grower as there was not a going concern business in that field operating at the time. Nor, I would add, had there been such for many years.

Then Mr Smith raised the question of whether there should have been advertising on a still wider basis, something which he ultimately chose to characterise as “the scattergun approach”. I would simply quote the words of Jonathan Parker LJ from the Michael v Miller case, to which I have already given the reference, at paragraph 132:

“Thus (as the judge recognised [as referenced in] his judgment) there is no absolute duty to advertise widely. As he [the judge] correctly put it:

“What is proper advertisement will depend on the circumstances of the case”.”

Given the state, condition and circumstances of the property, with which I have already dealt at very considerable length, the scattergun approach does not appear to me to have any justification. I would certainly reject any suggestion that scattergun advertising would have been undertaken by any reasonable agent in the circumstances, which is the test which the claimant must meet.

I should here deal with Mr Smith’s suggestion from the witness box that advertising might have been placed in Dalton’s Weekly. Dalton’s Weekly, as he readily acknowledged, might have been an appropriate publication for going concern businesses, but would on no view have been an obvious place in which to advertise the property as it in fact stood. That suggestion was, to my mind, but one indication of the extent to which Mr Smith’s evidence was not fully thought through.

Then there is the complaint of the failure expressly to mention the planning permission or the established use as part of the sales particulars. Once it had been decided that the business potential of the property was not to be the primary focus of the marketing campaign, the extent to which such material should have been included was again a matter of judgment. One matter that the professionals concerned had to take into account, was to be careful not to do more harm than good. It is clearly and necessarily implicit in the sales particulars that the larger plot may lawfully be used for both nursery and equestrian purposes. The wording of the occupancy condition is quoted. In both these respects, the position is entirely different from the Cuckmere Brick case. There what was being sold was as yet undeveloped land, there were two distinct types of residential development available, and notwithstanding the various matters of fact which are recorded in the first passage from Salmon LJ to which I have made reference, the agents set their face against referring to one of the two. Again, the answer to this point is found in paragraphs 8 and 9 of the joint statement of Cowlin and Snow.

Finally from the skeleton argument, the suggestion is tentatively put that the selling agents should have proffered advice about the scope of condition 4. In my judgment, that would have been dangerous territory for any agent to enter onto. Mr Mullucks had made further enquiries about the occupancy condition in the January to February correspondence to which I have referred, having previously been the source of the recommendation that an application to remove be made. There was nothing in the letters which he obtained that would have sent a positive message to interested persons in the market. I go further than saying that proffering such advice is not something that any reasonable agent should have done. I am not even persuaded that any reasonable agent would or should have got onto such dangerous territory.

Finally complaint D, the short time allowed for offers, as to which see paragraphs 29 to 31 of the claimant’s skeleton. The high point of the claimant’s case is that the gap between the second advertisement, 28 January, and the initial date for receipt of offers, 2 February, was too short. I agree, and indeed Mr Cowlin acknowledged that it was too short. But many other factors offset the harm to the marketing process which might otherwise have resulted. 180 or so potential purchasers received the sales particulars by post. Most readers of the property section of the Herts & Essex Observer would have seen the advertisement on 21 January, although there would always be some who missed the newspaper that week, for example being on holiday skiing or whatever. It is clear that intended offerors did have time to take professional advice, make enquiries of the planning department of the local planning authority and so forth: see the documents concerning individual purchasers to which I have already made reference.

The raising of mortgage finance on this property, as opposed to other property owned by a potential offeror, was going to be highly problematic in any event. The form of the advertisement which appeared on 21 and 28 January made it clear that 2 February was not going to be the last opportunity for purchasers, referring, as it did, to a subsequent seven day notice. The notices of 4 February in the newspaper gave a further opportunity. They made it clear that there was still going to be an opportunity to offer. So too did the form of advertisement placed on 4 March. I conclude that this property was exposed to the market for an adequate length of time, namely initially from early January 1999 to the acceptance of the Nixon Moss offer on 15 March 1999, a fortiori when coupled with the effect of the notices indicating that offers would still be accepted up to exchange of contracts, which we know in the event did not occur until May.

The property was sold quite quickly. However, given all the circumstances, it was not, in my judgment, sold with unreasonable haste.

In case my approach has been wrong, for completeness I should deal briefly with the question of the value of the property. Much of my reasoning is covered by what I have already said, and I will not take time in repetition. If and insofar as necessary, like Mr Cowlin and Mr Snow, I would value this property at, say, £240,000 at the time when the mortgagee sold it. Given the difficult and unusual nature of the property, I would regard a variation of at least plus or minus 20 per cent (a wider bracket than would be appropriate for a more ‘usual’ property) as representing an acceptable bracket. That suggests figures of £192,000 to £288,000. Mr Cowlin’s £268,800 figure, the derivation of which I have already explained, is of course well within it. He himself, without being a lawyer, effectively applied the bracket approach and concluded that the actual sale price of £245,250 was “in the right area”.

I note that this suggests that the figures given by Mr Redman, of £150,000, and by Mr Stearn (for the same marketing period of 120 days) of £140,000, were too low. That is the conclusion which I have reached. However, Legal & General for the Woolwich accepted the advice of Mr Ambridge in setting £185,000 as a guide price and, given the adoption of the marketing tactics which I have explained (attracting as much initial interest as possible), and which are endorsed by Mr Cowlin, that appears to have been a perfectly reasonable figure at which to arrive, just (£7,000) below the bottom of what I shall call “my bracket”. I regard Mr Smith’s figure of £448,000, with or without his modest reduction of 5 per cent to allow for January marketing and an attempt to sell over, say, four to six weeks not four to six months, as far too optimistic. In any event, it suffers from the two flaws in methodology to which I have already referred.

There are numerous other valuations in evidence and it would be quite excessive for me to attempt to make express comment about each and every one of them. I will however briefly refer to a few.

Mr Mullucks’ advice of 26 October 1994, topped up by the further letter of 5 December 1994, has already been mentioned earlier in this judgment. It is a matter of some interest that, at just this period, Mr Dean, in the context of his divorce proceedings, was suggesting that Mr Mullucks’ figure of £225,000 for the whole property, subject to the occupancy condition, was, in Mr Dean’s own local knowledge, excessive, and that £180,000 would have been a much more reasonable figure. I would interpolate here, and the same point is applicable in other places, that if one is comparing figures some years apart from the date immediately in issue in this case, namely early 1999, the best material to assist with the movement of prices over the period in the relevant locality is to be found in Mr Cowlin’s expert report at paragraphs 9.12, 10.4 and 10.5.

Mr Gearing’s advice in February 1995, in response to joint instructions, included a figure of £250,000 for the whole, including 24 loose boxes which we know were removed virtually immediately after he had carried out his inspection.

Finally, there has been included in the bundle a short letter to Mr Dean from a firm called Wright & Co, written in 2003, which suggests a much higher value for the whole property, namely £700,000. We know not the scope of their instructions, nor the extent of their knowledge of the property and the occupancy condition, nor what reasoning they have applied. On any view their figure is so far out of line from all the other figures mentioned, including Mr Smith’s figure of £448,000, that I can attach no evidential value to it.

For the reasons set out above, my conclusions are as follows.

(Issue 1) The condition of the property in question at the very end of 1998 and early 1999 was as I have found it in the detailed sections earlier in my judgment. The property was in any event going to be a difficult one to sell given the occupancy condition, the negative impact of which was gravely aggravated by the absence, for some years prior to the sale, of any active nursery or equestrian business on the larger plot.

(Issue 2) The Woolwich, acting by the agents I have mentioned, did take reasonable care to obtain the best price reasonably available when it decided to and did market the property. The very most that the criticisms have established is that some agents might have played up the existence of planning consent for stables and a riding school, and of an established use as a nursery, more, or even made them the primary focus of marketing. However, it is far from clear that that would have resulted in a higher price being achieved. The actions of the mortgagee and its agents in this case, as endorsed by Messrs Cowlin and Snow in the terms I have indicated, were within the scope of reasonable professional judgment, and were certainly not, to apply the words of Salmon LJ in the Cuckmere Brick case, plainly on the wrong side of the line.

As I have indicated, so far as it is necessary for me to do so, which in law I believe it is not, I would judge their approach to have been the better one.

(Issue 3) The market value of the property as a whole was £240,000, and, given the unusual and difficult circumstances, a reasonable bracket around that figure would be at least plus or minus 20 per cent.

For those reasons, and having reached those conclusions, this claim fails and I shall dismiss the action accordingly.