Guy v Mace & Jones & Ors

This is the trial of claims for professional negligence against three firms of solicitors. The claimant, Trevor Guy, has the ability to identify and acquire development sites which can be turned to profit by cleaning them up with a view to their onward sale. This litigation is concerned with a derelict brownfield site comprising approximately 47.5 acres (much of it a former brickworks) at Ten Acres Lane, Newton Heath, in Manchester (“the Land”).

Mr Guy first got to know of the Land in 1998. Believing it to have development potential he kept an eye on it and was eventually able to acquire it in three separate lots over the course of 2003. He alleges that it was fraudulently transferred from his ownership to Ten Acre Ltd (“TAL”), a Gibraltar company controlled directly or indirectly by a Mr Shaid Luqman. Mr Luqman was its sole director. He alleges that the defendant firms are each liable to him for the value of Land and associated costs because their negligence facilitated that transfer.

Mr Guy accuses Mr Luqman of the fraud. At the time, Mr Luqman was a director of, among other companies, Pearl Holdings (Europe) Ltd (“Pearl”), a lender which specialised in short-term financing. Mr Guy’s acquaintance with Mr Luqman dated back to 2001. He began to borrow from Pearl in 2002. It was with finance provided by Pearl that he was enabled to acquire the Land.

In November 2004 Pearl changed its name to Lexi Holdings Plc (“Lexi”). In October 2006 Lexi went into administration owing many millions of pounds. In 2007 Mr Luqman was disqualified from being a company director for 15 years in connection with his conduct of another company. He was described by Patten J as “completely dishonest”. In 2007 and again in 2009 he was committed to prison for contempt. In 2011 he was given a ten months’ suspended prison sentence in connection with a passport offence. Not long afterwards he fled the jurisdiction and has not since returned. It is important to emphasise, however, that at the time of the transfer of the Land to TAL in June 2004 Mr Luqman was regarded as a rising star in the business community of the North-West. There was no reason to question his integrity. In particular, in October 2004 he was named “Young Entrepreneur of the Year” at an annual event sponsored by Ernst & Young. Mr Guy told me that this is regarded as a prestigious award in business circles in the North-West. I have no reason to doubt that that is so.

The Land was made up of four separate titles. The transfer of the land to TAL was dated 22 June 2004. An application to register the four titles in TAL’s name was made on 30 July 2004 and was completed by registration some time later. Mr Guy accepts that he signed the transfer at a meeting with his then solicitor, Paul Bibby of the second defendant, on 19 April 2004 but contends that, when he did so, the document contained no reference to the Land or to the price for it. He contends that, at the same meeting, he signed a form of contract for the sale of the Land. He says that this too contained no reference to the price to be paid for it. Mr Guy also alleges that at that meeting he signed a blank piece of paper on a representation by Mr Bibby that it would be used for a power of attorney in Mr Bibby’s favour to enable Mr Bibby to complete what Mr Guy accepts was an intended sale of the Land to TAL. That evening, he flew from Manchester to London and, early the next day, took a flight to Grenada in the Caribbean. He was there for ten days. He claims that the purpose of the power of attorney was to enable Mr Bibby to complete the intended sale and transfer to TAL during his absence in the Caribbean. This was on the basis that the transaction was one of urgency. He alleges that a price of £15 million was subsequently added to the draft contract and draft transfer that he had earlier signed and that on 22 June 2004 and without his authority the Land was indeed transferred to TAL. He further alleges that the consideration in fact agreed for the Land was £10 million and not £15 million. He alleges that the transfer occurred as a result of Mr Luqman’s fraudulent machinations. This, in the event, was some time after his return from abroad. By then, he alleges, the proposed transaction had been aborted. He alleges that the transfer bearing his signature and the price of £15 million came into the possession of Mr Luqman who then passed it on to Mr Varun Maharaj of the first defendant firm which, by then, had been instructed by Mr Luqman to act for TAL in the transaction. It was Mr Maharaj who dated the signed transfer and subsequently sent it to the Land Registry to complete the matter. By then, the second defendant was no longer acting for him. Instead Michael (known popularly as Mick) Hewitt of the third defendant was acting.

Mr Guy blames the three defendants in the respective persons of Mr Maharaj, Mr Bibby and Mr Hewitt for having allowed the transfer to proceed when each had the means of preventing this from happening. He claims that this occurred in breach of the duties of care which each owed to him. He seeks to recover from the respective firms by which these three persons were then employed the loss which he says he thereby suffered. He assesses that loss as the value of the Land at the time he would subsequently have sold it (giving credit for various amounts he owed Pearl). In the alternative he seeks to recover the value of the Land at the time he was deprived of its ownership less certain borrowings but together with certain other items including his “proportion of the development profit arising in due course” from the Land. This alternative is advanced on the basis that the agreed price for the Land had been £10 million. An “updated” schedule of loss dated 25 October 2011 and served by the solicitors who were still acting for Mr Guy at the time (and bearing the names of leading and junior counsel then retained on his behalf) estimates the loss as either, on the one basis, £5.3 million or, on the other, a figure which Mr Guy was unable to particularise “until after expert evidence as to the value at the time the [L]and would have been sold on had the sale completed as agreed is obtained.” In either case he also claims various costs and expenses he says he incurred in his unsuccessful attempts to recover the Land. The updated schedule sets out these costs and expenses. They total just over £2.7 million.

The first and second defendants each deny any liability and, in any event, deny causation and loss even if liability were to be established. Indeed, the first defendant denies even that it ever acted for Mr Guy or otherwise assumed any duty of care to him. The third defendant admits a breach of duty by Mr Hewitt but maintains that this caused no loss. Like the first and second defendants it raises other issues on causation and loss.

Mr Guy appeared before me in person. Until November 2011 he had been represented by solicitors and counsel. He was well able to address me and conducted a vigorous, if at times rather off-target, cross-examination of the defendants’ witnesses. He had the able assistance of Ms Victoria Gregory (of Janes Solicitors) as a Mackenzie Friend. Ms Gregory shared with Mr Guy the cross-examination of the defendants’ witnesses. She also prepared detailed written closing submissions on Mr Guy’s behalf. Mr Guy also prepared a written closing note. I shall refer to those two documents simply as Mr Guy’s closing submissions. Mr Guy was also assisted by a Mr Parrington who intervened from time to time on his behalf.

A frequent refrain by Mr Guy was that he and his two assistants had had very little time since receiving the numerous trial bundles in mid-December 2011 (following the termination of his legal representation) to master their contents. By the end of the trial there were nearly 50 lever-arch files, supplemented by several supplied by Mr Guy, and 8 lever-arch files of core documents. I had some sympathy with Mr Guy’s plight but it was evident that, assisted by Ms Gregory, he had no difficulty in identifying documents to which he wished to refer. When he was unable to locate precisely where the document was he and his team had ready assistance from counsel for the defendants so that on no occasion was there a document which it was not possible to find. I also gave Mr Guy and Ms Gregory plenty of time during the trial, usually by rising for five or ten minutes or longer if needed, to enable them to collect their thoughts. They were given plenty of advance notice of the order in which the defendants’ witnesses were to be called. Finally, I gave Mr Guy a further four working days, making in all just over a week, following the conclusion of the defendants’ closing submissions, which were for the most part in written form, within which to prepare his own written closing submissions. In all the circumstances, I consider that Mr Guy had ample time to prepare his case, present it to me as he would wish and respond to the defendants’ evidence and submissions.

Sensibly, the three legal teams representing the defendants co-operated with one another in the presentation of their respective cases. Mr Mark Simpson QC (who with Mr Spike Charlwood appeared for Mace & Jones) cross-examined Mr Guy and Ms Gregory. Ms Gregory’s evidence was material, principally on issues relevant to causation, because having for some time assisted Mr Guy in his handling of other disputes she had been present at meetings between him and his then legal advisers, and had taken notes, when matters had been discussed and instructions given. Mr Gatt QC (who with Mr Mark Cooper appeared for George Davies Solicitors (“George Davies”)) cross-examined the two expert witnesses called by Mr Guy and examined and re-examined the two experts jointly relied on by the three defendants. Mr Patten QC (who with Ms Sian Mirchandani appeared for Weightman Vizards (“Weightmans”)) acted as the main channel of communication between the three defendants and Mr Guy in matters of trial management. Counsel presented jointly agreed written closing submissions on issues common to the three defendants and each team prepared short individual written closing submissions on points specific to that team’s client defendant. All of this greatly assisted in the smooth running of the trial and I am grateful for it.

Twice during the hearing – once during the oral evidence and again just before closing submissions – an issue arose out of the fact that Mr Simpson was acting for Mace & Jones. It appears that in March 2009 he had been approached by Ms Gregory on behalf of Mr Guy to act pro-bono on a possible appeal to the House of Lords in negligence proceedings which Mr Guy had brought (and which had been dismissed) against Pannone & Partners (the well-known Manchester solicitors). Having read the Court of Appeal’s judgment in the case, and no more, Mr Simpson (as he told me and I accept) took the view – and so indicated to Ms Gregory on behalf of Mr Guy – that he was unwilling to act on the proposed appeal. There, it seems, the matter rested until September 2009 when Mr Simpson was again approached by Ms Gregory, this time prompted by bankruptcy proceedings brought by Pannones against Mr Guy. The view expressed by Ms Gregory was that disclosures made in the bankruptcy proceedings might enable Mr Guy to persuade the Court of Appeal to re-open its earlier judgment. This further approach did not result in Mr Simpson agreeing to take up Mr Guy’s cause.

When subsequently and quite coincidentally he was asked to represent Mace & Jones in the defence of Mr Guy’s claims in the current proceedings, Mr Simpson sought the Bar Council’s confirmation that there was no reason why he should not accept the instructions. Mr Simpson set out for the Bar Council the brief history of the matter as I have related it and emphasised that, as I accept, he had no recollection of reading any material which might compromise his ability to act for a defendant in the present proceedings. The policy officer of the Bar Council’s professional affairs department confirmed Mr Simpson’s view and on 20 January 2011 Beachcroft LLP (Mace & Jones’s solicitors) wrote to Bridgehouse Partners, who were acting for Mr Guy in his claim and continued to do so until November of that year, to say that Mr Guy had approached Mr Simpson in 2009 to act pro-bono for him, that he had declined to act (all as I have earlier described) and that Mr Simpson did not believe that in the process he had been given any relevant confidential information “the possession of which would preclude him from acting in the present claim, or that there is any other reason which precludes him from acting.” Ms Gregory confirmed to me that Bridgehouse received this letter. It is common ground that Bridgehouse did not take issue with its contents.

No more was heard of the matter until, as I have mentioned, Mr Guy raised it again before me. On the second occasion that he did so it was, as I understood matters, with a view to him seeking to cross-examine Mr Simpson. A particular question which arose in this context was whether certain documents concerning the Pannone proceedings and which might have been confidential to Mr Guy had been sent to Mr Simpson and, if they had, whether he had read them. Those documents were supplied to me. I did not read them. Mr Simpson indicated that he had no recollection of receiving them at that or any other relevant time, much less of having read them, and, for reasons that I do not need to explain, submitted that it was most unlikely that any attempt had even been made to send them to him.

I made clear to Mr Guy that, on the basis of what I had been told by Mr Simpson and read in the various e-mail exchanges in 2009 between him and Ms Gregory, I had no reason to think that Mr Simpson had been placed in a position of conflict and no reason to question the propriety of his decision to accept instructions on behalf of Mace & Jones. When this matter arose for the second time before me I pressed Mr Guy to indicate whether he was making any application to me arising out of these past events. Mr Guy indicated that he was not and that he was content to leave the matter to me. As I have stated, I could see no objection to Mr Simpson having acted and continuing to act for Mace & Jones.

I have set out this episode so that there can be no further issue over the fact that Mr Simpson has acted for Mace & Jones and to record that, in the event, no objection to him having so acted was pressed.

I start with Mr Guy. As I have mentioned, by agreement between the defendants in order to save time, he was cross-examined only by Mr Simpson. It was rarely possible for Mr Simpson to get a straight answer out of him. Mr Guy ducked and weaved and twisted at nearly every turn. He would seek to answer a question by responding with a question of his own (frequently irrelevant to the matter he was being asked about). He resorted occasionally to jokes, delivered irrelevant comments on the state of the world, launched attacks on lawyers in general and the firms who had acted for him in this and other matters in particular and endeavoured to paint himself as the innocent victim of the mendacity or incompetence of those with whom he dealt or on whom he relied for advice. None of this could conceal a quick mind, a ready turn of phrase and a shrewd business mind. Contradictory explanations of events, often within the space of a few questions, did not seem to bother him, nor did the obvious improbability of many of his assertions. I had the impression that his conduct both as an advocate in his own cause from his position in counsel’s row and as a witness on oath from the witness box was all part of a grand performance, designed to charm where that was thought appropriate, deny or disclaim knowledge where that was the safest course when faced with some uncomfortable fact, or mislead or insinuate where that suited the moment. It follows that I have felt quite unable to place any reliance on the evidence of this colourful person except where there was other evidence to give credence to what he was saying or there was really no dispute about the matter.

The contrast between Mr Guy and the other witnesses was striking. All of them, including Ms Gregory (although she was only in the witness box for a very short time but I had plenty of time to watch and listen to her as she lent assistance to Mr Guy from the front row), were obviously and transparently truthful. They were careful to qualify their answers where they had difficulty in recalling events or had to rely on emails, letters, handwritten notes and annotations on documents or other documentary material to aid their recollection.

I would particularly pick out for mention Alex Megaw. His evidence went exclusively to Mr Guy’s conduct long after the Land had been transferred when Mr Megaw’s then firm, Pannones, had been consulted by Mr Guy on a variety of matters, including a claim in negligence against the solicitors (not one of those involved in the current proceedings) who had acted for him when he had bought the Land. Mr Megaw was concerned to advise Mr Guy as a litigation solicitor both in Mr Guy’s pursuit of claims against others, such as those former solicitors, and in his defence of claims brought against him. Mr Megaw’s evidence, which related mostly to 2005, was relevant to what Mr Guy then said about the price for which he said he had agreed to sell the Land, his dealings with Mr Luqman and others with the Land both at the time of the transfer of it to TAL and subsequently, his knowledge of the price stated in the transfer which he had signed, the time when he became aware that the Land had been transferred to TAL and, not least, the instructions he gave to Mr Megaw about the action to be taken to safeguard his claim to the Land. Mr Megaw came in for particular vilification by Mr Guy. It was said that he should not have acted for Mr Guy owing to what was said to be a conflict of interest as a result of information he had about Mr Luqman dating back to 2003 and a concern which he entertained about the morality of Mr Luqman’s business dealings. At times, notwithstanding assertions to the contrary, it appeared almost as if Pannones were on trial. Throughout Mr Megaw remained calm and polite. He was fair to Mr Guy when in his recollection of events this was justified, firm in his rejection of allegations of misconduct (for example, of concocting attendance notes or deliberately misstating the sequence of time to which the events in the notes had related) and impressive in his ability to recall, often in some detail, what had happened in the course of his dealings with Mr Guy. The accuracy and reliability of Mr Megaw’s evidence came to be tested in a wholly unexpected way when, at the conclusion of the evidence, a file came to light which had been in Mr Guy’s possession and which contained attendance notes by Mr Megaw missing from the trial bundles. It led to the recall both of Mr Megaw and of Mr Guy. The documents in the file supported Mr Megaw's recollection of events given by him earlier in his cross-examination.

I should also mention Mr Hewitt. All told he was questioned by Mr Guy and Ms Gregory for roughly four and a half hours. He came in for much criticism by Mr Guy with scarcely veiled attacks on his honesty. As my recital of the relevant facts will later make clear it was Mr Hewitt’s conduct in allowing Mr Luqman to retain the transfer of the Land after it had been signed by Mr Guy and TAL but before the transaction had been completed which enabled Mr Luqman to pass the transfer to Mr Maharaj as a preliminary to the completion of the transaction. Understandably he was closely questioned about this and a host of other matters.

Unfortunately Mr Hewitt was not in good health when he gave his evidence. At 1745pm the eighth day of the trial, having repeatedly urged Mr Guy and Ms Gregory to use the time available that day to cover the topics on which they wanted to question Mr Hewitt, I called a halt to the day’s proceedings. Their cross-examination of Mr Hewitt had still not finished. The next day, as had been made clear earlier in the trial, Mr Hewitt had a medical appointment in Manchester. It emerged the following day, as had been intimated might happen, that Mr Hewitt was diagnosed with a condition which meant that he could not return to court. So it was not possible for him to conclude his evidence. A medical certificate was produced to support what I was told about his state of health. I nevertheless allowed Mr Guy to submit a questionnaire to Mr Hewitt which he completed and returned to the court. In the circumstances that was the best that could be done. I am satisfied that this has not caused Mr Guy any injustice: he had ample opportunity to question Mr Hewitt, so long as he was in court, about the matters that he wished to raise with him. I am satisfied that in his evidence Mr Hewitt attempted as fully and as honestly as he could to recall his part in the events which led to the transfer of the Land to TAL.

I will deal with the expert witnesses when I come to consider their evidence.

There is one further matter that I should mention. At several points in the course of the defendants’ evidence, when I urged Mr Guy and Ms Gregory to use the time available to ask the questions that were important to the claim, Mr Guy complained that he had been in the witness box for something approaching 5 days and that it was only fair that he should have the same amount of time to question the defendants’ witnesses. If this was intended to mean that he should have five days with each witness the complaint was obviously ill-founded. In fact Mr Guy had the best part of five days to question the defendants’ witnesses, and certainly sufficient time to raise with them any matters of relevance to his claims against them. It is worth pointing out that one of the reasons why it took Mr Simpson so long to complete his cross-examination was Mr Guy's reluctance to answer simply and straightforwardly the questions put to him. It was a constant struggle to get him to focus on the matter in hand. This was in very marked contrast to the evidence of all the other witnesses who dealt shortly and squarely with what was asked of them, even if in the process Mr Guy was unable to get from them the answers that he hoped to elicit. I am therefore satisfied that Mr Guy had ample opportunity to put his case and question the evidence of the other side. Although in his closing submissions Mr Guy has not suggested that he was denied this opportunity I make the point out of an abundance of caution.

Among the matters explored in the cross-examination of Mr Guy and debated in the defendants’ submissions, both in opening and in closing, were the basis upon which Mr Guy acquired the Land and the nature of his dealings with Mr Luqman. I refer to his “dealings with Mr Luqman” because there is no doubt that Shaid Luqman, acting either directly or through Pearl or TAL, was the person with whom Mr Guy mainly dealt and with whose financial assistance (strictly that of Pearl) he was enabled to acquire the Land in the first place. In particular, a theme of the defendants’ submissions (and as pleaded in their defences) was that Mr Guy acquired and held the Land as nominee for Mr Luqman/Pearl (it is not necessary to differentiate between the two) and accordingly that his claim to have suffered loss as a result of Mr Luqman’s actions in arranging, without Mr Guy’s approval (assuming that to be so), for the transfer of the Land to TAL fails at that initial hurdle: he had no beneficial interest in it to support such a claim.

Rather than explore in detail the evidence bearing on the capacity in which Mr Guy came to acquire and thereafter hold the Land, I prefer at this stage to proceed on the basis that Mr Guy’s acquisition of the Land was as beneficial owner and that it was as such that in mid-April 2004 he gave instructions for its sale to TAL which is the point at which the three defendant firms, so far as Mr Guy complains of their conduct, came to be involved. I will return to the topic of beneficial ownership insofar as it is necessary to do so when I come later to consider questions of causation and loss.

It is sufficient at this stage to say that by early March 2004 Mr Guy was the registered proprietor of the Land and that he had acquired it in three tranches which he held under four separate titles, GM632058, GM748978, GM868172 and LA57319. The instructions given by Mr Guy and Mr Luqman to their respective solicitors were that the Land should be transferred to a company to be separately incorporated for the purpose and that the transfer should be in consideration of a sum running into many millions.

Mr Guy’s claim against each defendant is self-standing: it is not dependant on his claims against the others; there is no allegation in his pleaded case of any conspiracy; there is no allegation of dishonesty. His claim against the defendants is, in each case, of a negligent breach of a duty of care owed to him by the firm in question. For this reason and at the risk of some overlap and repetition, I approach separately the role played by each of the three firms. I start with Mr Guy’s instruction of George Davies (in the person of Mr Bibby) to act for him on the sale.

Mr Bibby’s introduction to Mr Guy was through Mr Hewitt (at the time employed by Weightmans). Mr Bibby and Mr Hewitt had known each other socially for several years but had not worked on a transaction together. Mr Hewitt contacted Mr Bibby on Thursday 15 April 2004 to ask if he would act for Mr Guy in relation to a sale of the Land. Mr Bibby was given to understand that Mr Hewitt could not act because of a conflict of interest. Mr Hewitt was, at the time, acting for Mr Luqman in the transaction. Mr Bibby was further given to understand that the transaction was to proceed on an expedited basis with completion on 23 April, a mere eight days later, and, importantly, that the sale price of the Land was £15 million to be paid in full on completion.

That afternoon, Mr Bibby spoke to Mr Guy to confirm his instructions. Among other matters, Mr Guy confirmed that the purchase price was indeed £15 million. This last point is of importance. Mr Guy denied that £15 million was at any time the price: he maintained that it was £10 million and no more. He denied having told Mr Bibby that £15 million was the price. I do not accept Mr Guy’s denial. I do not accept that he told Mr Bibby that the price was no more than £10 million. There is an abundance of evidence over and above Mr Bibby’s clear recollection of what he was told by Mr Guy that £15 million was indeed the price. I accept Mr Bibby’s case that at no point during the course of his involvement was it ever suggested to him that the price was other than £15 million.

Later that same day, Thursday 15 April, Mr Bibby wrote to Louise Bartle, Mr Guy’s PA, to confirm that completion was to be on Friday 23 April and that he was therefore to deal with the transaction as a priority. He went on to deal with matters such as client identification and Money Laundering Regulations. This was because Mr Guy was new to George Davies.

The following day, Friday 16 April, Mr Hewitt sent to Mr Bibby official copies of the register entries relating to the four titles and a certified ID of Mr Guy. He also promised to pass on when received all relevant local searches and enquiries relating to the Land for which expedited application had been made. Mr Hewitt’s letter confirmed that the Land qualified for zero-rated stamp duty.

As he understood the matter to be urgent Mr Bibby wasted no time in getting on with the necessary formalities. During the late morning of 16 April he sent a draft contract to Mr Hewitt. £15 million was the purchase price contained in the draft. It is not necessary to chart the versions of that document or of the draft form of transfer (the so-called TR1) supplied by Mr Hewitt. That too showed £15 million as the purchase price. In due course TAL was supplied as the name of the intending purchaser. Suffice it to say that every version passing between them of the contract and of the TR1 showed £15 million as the price.

Mr Guy placed some reliance on the existence of a draft contract and draft TR1 for the Land showing the price of £10 million. Whatever the origin of those documents, it is clear – and I find – that the draft contract did not emanate from George Davies and that there is no evidence that the draft TR1 showing £10 million only was seen by Mr Bibby. (Moreover, the draft TR1 in question was produced on a different form from the one which was used in the communications passing between Mr Bibby and Mr Hewitt.)

Aside from the draft contract and TR1 and the recollections of Mr Bibby, Mr Hewitt and, as will later appear, Mr Maharaj that the agreed price was £15 million, there is an abundance of other evidence which shows that £15 million was indeed the stated price. It is sufficient to point to (1) George Davies’ engagement letter of 23 April 2004 to Mr Guy which referred in terms to Mr Bibby being “instructed in relation to the sale of the Property to Ten Acre Ltd on an unconditional basis at a price of £15 M…” (2) an admission subsequently made by Mr Guy when consulting counsel in April 2005 of his awareness that the TR1 showed a purchase price of £15 million and (3) attendance notes from the file of Alex Megaw, the partner in Pannones, where reference is made to £15 million as the price. I should also add that I am satisfied that, despite claims to the contrary, the engagement letter came to Mr Guy’s notice. Not least is this evident from the fact that one of the copies of that letter available at the trial had on it the handwriting of Ms Bartle, Mr Guy’s PA. I am not persuaded that merely because Mr Guy was abroad when the engagement letter arrived, and remained abroad several days thereafter, he did not see the letter when he returned.

By 23 April, the date of the engagement letter, the transaction had proceeded to the point where the documentation had been agreed and, subject only to sorting out the payment of the purchase price, the matter was ready to complete. This was largely achieved as a result of a flurry of activity which took place on Monday 19 April. That activity took place in anticipation of the departure of Mr Guy for the Caribbean the following morning.

During the course of the afternoon of 19 April, Mr Bibby and Mr Hewitt exchanged several faxes and emails in order to finalise the contract and TR1. In the late afternoon, when the terms of those two documents had been fully agreed and drawn up ready for signature, a meeting took place at the All Bar One, a bar in King Street in Central Manchester. It seems that this was a convenient location for those who attended the meeting. They were Mr Guy and Mr Bibby together with Mr Luqman and Mr Hewitt. There is a suggestion that Waheed Luqman, Shaid Luqman’s brother, also attended. I do not think it matters whether he was or was not present. For what the point is worth, however, Mr Bibby who had not met Shaid Luqman before had no recollection of Waheed being there. Mr Hewitt thought that Waheed was present but as his recollection of the meeting was, as he later accepted, defective in other respects I prefer Mr Bibby’s recollection. Mr Guy denied that the meeting took place in the late afternoon at all. His evidence was that it had been in the late morning. I am satisfied that the meeting was in the late afternoon sometime after 1639pm. This is because the last entry in Mr Bibby’s time recording sheet before that time was in another matter. It began at 1627pm and lasted 12 minutes. Mr Bibby stated, and I accept, that he went home after the All Bar One meeting without returning to the office and without therefore completing that day his timesheet for the meeting. The evidence of Neil Kavanagh, senior systems engineer in George Davies’ IT department, which was admitted without challenge, explained that the time entry relating to Mr Bibby’s meeting with Mr Guy took place after the (unrelated) matter which had lasted 12 minutes and which had started at 1627pm. I should also add that a note of matters discussed at a consultation with James Guthrie QC many months later, on 8 December 2005, records Mr Guy stating that he and his son, Dax, were on their way to Manchester Airport when he signed the document. The uncontroverted evidence was that Mr Guy flew to London that evening (his flight being booked for 2050pm) and that the following morning he flew to Grenada.

I find that at the meeting at the All Bar One the following occurred. Mr Bibby took Mr Guy to one side to complete his client identification and money laundering checks. Mr Bibby then took Mr Guy through the contract and TR1 explaining the main terms to him to ensure that they accorded with his understanding of the transaction. These included that the purchase price was £15 million. Mr Guy confirmed to Mr Bibby that he understood the documents and was happy with them. On that basis, Mr Bibby advised Mr Guy to sign the two documents to facilitate simultaneous exchange and completion in accordance with his instructions. Mr Guy proceeded to do so by signing the finalised TR1 and a counterpart of the finalised contract. I say “finalised” because the counterpart contract had been typed out on special paper and was in bound form. Mr Bibby signed the TR1 as Mr Guy’s witness. The only terms left blank on the signed counterpart were its date which, with simultaneous exchange and completion, would have been the date that the transaction completed (a date unknown at the time of the meeting on 19 April, although planned for 23 April, so rendering exchange of contracts perhaps unnecessary but nothing turns on that), George Davies’ internal reference number (a matter of no materiality) and the absence of any amount by way of deposit (and since exchange and completion were intended to be simultaneous, no deposit would be required in any event). The TR1 was in all material respects also complete in that, following signature by Mr Guy, it lacked only a date (being the date of intended completion) and execution by TAL.

There is an abundance of evidence that the documents were duly signed by Mr Guy as Mr Bibby testified. Mr Guy’s case, however, was that at the meeting which, as mentioned, he recalled had taken place late that morning the contract and TR1 were blank, at any rate as regards price. In the course of his cross-examination on this point, Mr Guy gave implausible and contradictory accounts of just how it came about, as he claimed, that he signed the documents without the inclusion of the price. I reject his evidence on this, as I have on when the meeting took place. These accounts were clearly intended to distance him from any knowledge of the insertion of £15 million as the contract price. To make it wholly clear, I reject Mr Guy’s claim that the figure of £15 million was only added to the documents he signed after he had signed them.

It may be wondered why, as vendor, Mr Guy should have been so concerned to establish that, so far as he was aware, the price he was to receive for the Land was £10 million rather than the significantly greater figure of £15 million. This is a topic I shall return to at the end of this judgment when I consider the issue of ex turpi causa concerned with the extent to which, all else being decided in Mr Guy’s favour, it is open to Mr Guy to claim any relief arising out of the circumstances in which the Land passed into TAL’s proprietorship. It is relevant to this topic, however, to recount another event which occurred at the meeting on 19 April in the All Bar One. It relates to a letter which was handed to Mr Bibby. I come to this episode after I have dealt with other matters.

At the meeting on 19 April Mr Guy also said that he was asked by Mr Bibby to sign a blank piece of paper. He said that he did so on the understanding that it would be used to complete a power of attorney to enable Mr Bibby to complete the transaction during Mr Guy’s absence abroad. I reject this evidence. In fact, Mr Bibby had earlier prepared a power of attorney for signature by Mr Guy (the draft document was located on the file, as was the signed counterpart contract which, in the event, was never used) but there was no need to have it completed. This was because, having obtained Mr Guy’s signature on the contract and TR1, Mr Bibby had all the signatures (and the authority) he needed to complete the transaction in Mr Guy’s absence. In any event, if Mr Bibby had further need of a signed power of attorney, he could easily have brought it with him to the meeting at the All Bar One or, if he had forgotten it, arranged for someone to come with it from his office which was only minutes away, rather than resort to the bizarre and haphazard expedient of getting Mr Guy to sign a bank piece of paper.

The signed counterpart contract was retained by Mr Bibby pending an exchange of contracts assuming that this was to happen. In the event this never occurred and the signed document remained on his file until the file was released to Pannones, by then acting for Mr Guy, in mid-April 2005. The file was available in court and the signed counterpart produced for my inspection.

The signed TR1 followed a different path. It required execution by TAL and that involved two signatories. Although present at the meeting, Mr Luqman’s signature alone was insufficient. Mr Bibby therefore agreed to release the document to Mr Hewitt so that the latter could arrange for it to be signed. He did so, he stated, on the implied basis that its release would be solely for the purpose of obtaining its execution by TAL and that it would otherwise be held to his order. Mr Bibby accepted that nothing to this effect was actually stated, much less put in writing, but, as he put it in his witness statement:

“It is part of normal conveyancing practice for documents, including TR1s, which have been signed by one party, to be released to the other party for signature either by sending them to the other party’s solicitor or by providing them to the other party’s solicitor in person where, for example, there is a signing meeting and one or more of the signatories for the other side are absent. In both cases, the documents concerned are released subject to an implied undertaking that they are to be used solely for that purpose and otherwise held to the order of the releasing party's solicitor.”

Mr Bibby went on to state that at no subsequent time did he release the signed TR1 from his order or consent to its use for any purpose other than obtaining its execution by TAL.

Initially, Mr Hewitt doubted, because he stated that he had no recollection of this happening, that Mr Bibby had handed him the signed TR1 for the purpose of obtaining TAL’s execution of it and, consequently, was unable to accept that he had given any undertaking (implied or otherwise). In a subsequent witness statement produced when the trial was in its second week Mr Hewitt accepted, after reading a witness statement of Gareth Atkinson, that Mr Bibby did indeed give to him the TR1 bearing his signature, although he had no actual recollection of this event. Mr Hewitt surmised, probably accurately (I will come later to his role in these events), that “I must have provided it [the draft TR1] to Mr Luqman at the meeting [on 19 April] in order for him to get it signed by a second officer of TAL.” He went on to state that he had no recollection of leaving the meeting with the TR1 and no recollection that it was on his file. He also added:

“I cannot recall why I did not ask Mr Luqman for the draft TR1 back”

It is this admission that is the basis for Weightmans’ concession of a breach of duty but, as will appear, a breach which Weightmans has contended did not cause Mr Guy to suffer any recoverable loss.

Mr Atkinson is a solicitor who at the time was an associate in the real estate department of Halliwell Landau. His firm was instructed by Mr Luqman on behalf of TAL in May 2004 in relation to the onward sale of the Land by TAL in anticipation of TAL’s acquisition of it. It is one of the peculiarities of the manner in which Mr Luqman operated that different firms of solicitors were engaged to act for the same entity - in this case TAL - in respect of different dealings with the same parcel of land. This resulted, in this case, in Halliwell Landau acting for TAL on the sale of the Land and in Weightmans acting for TAL at the same time on its purchase. In the course of his witness statement, Mr Atkinson mentioned that at a meeting with him on 10 May 2004 Mr Luqman showed him a TR1 “in respect of TAL’s purchase of the [Land] which I recall had been signed by Trevor Guy.” Mr Atkinson recalled Mr Luqman telling him that he had acquired the document from Weightmans. A copy of an executed TR1 transferring the Land from Mr Guy to TAL (which Mr Atkinson exhibited to his witness statement) was, he inferred, the same as the TR1 which he saw at his meeting with Mr Luqman and of which he had taken a copy. He was able to make the inference because he recalled – and pointed out in an email to Mr Luqman dated 10 May - that the document he saw on 10 May 2004 had an incorrect digit in one of the four registered title numbers comprising the Land transferred by the TR1. Mr Atkinson noticed that this was corrected in someone’s handwriting (as indeed it had been) in the copy of the executed TR1 exhibited to his witness statement. (It would appear that the correction was made some time between then and completion.) On the basis of this evidence, which I have no reason to doubt, Mr Hewitt’s concession that he did hand to Mr Luqman the TR1 bearing Mr Guy’s signature would seem to have been rightly made.

Mr Bibby recalled that after signing the TR1 and the counterpart of the contract Mr Guy told him that TAL had already paid him £5 million of the consideration for the Land and produced a letter dated 19 April (the date of the meeting) confirming that that payment had been made. As much attention was directed to this letter in the course of the trial and it is very short, I set it out in full. It bears the name “Trevor Guy Properties” – the trading name used by Mr Guy – at the top followed by an address in Harrogate and telephone and fax numbers. It is addressed to George Davies and marked for Mr Bibby’s attention. It stated as follows:

“Dear Paul

Re: Sale of Land at Ten Acres Lane to Ten Acre Limited

This is to confirm that I have received consideration of the sum of £5 million directly from the purchaser, Ten Acre Limited, in relation to the sale of the above.

As you are aware the sale price is £15 million and the outstanding amount £10 million will be forwarded to Pearl Holdings (Europe) Limited on completion of the sale to discharge my outstanding indebtedness to that Company.”

The letter was described as being “by hand”. It was signed by Mr Guy.

Mr Guy, while accepting that the signature was his, disputed that he had handed any such letter to Mr Bibby. He questioned the genuineness of the letterhead (saying, as I accept, that it was not in the style he used) and disputed the accuracy of the letter’s contents. In his closing submissions he described the letter as a “smokescreen”. He speculated that Mr Luqman had had it prepared, had then handed it to Mr Brislen who in turn handed it to himself and that he then passed it to Mr Megaw at the meeting they had on 18 April 2005. He invited me to find that Mr Bibby was mistaken in his recollection of how and when he came to see it. He stoutly maintained, as earlier mentioned, that the price for the Land was £10 million and submitted that the letter was being used to fix him with knowledge that, when he signed the contract and TR1, the stated price for the Land was £15 million.

I accept Mr Bibby’s evidence that Mr Guy handed him the letter. I do so notwithstanding that Mr Hewitt stated that he was never shown it. I accept Mr Bibby’s evidence not least because (1) there is no conceivable reason why he should fabricate or be mistaken about this recollection, (2) according to Mr Megaw’s evidence there was what he (Mr Megaw) believed to be the original of that letter on the transaction file when Pannones received the file from Mr Bibby in April 2005 (the original, if that is what it was, having subsequently gone missing, although a copy was available), (3) on or about 29 April 2004 (the document I am about to refer to is undated but it is plain that it must have come into existence on or about that date) Mr Bibby prepared a handwritten “to-do” list (I come to this in more detail later) on which was stated, as item 7, “evidence £5m cheque from Pearl cleared in Trevor Guy bank account”, (4) in an attendance noted dated 21 June 2004 of a conversation he had with Mr Bibby and which I come to later, Mr Maharaj referred to Mr Bibby stating that he had been told that Mr Guy had already received £5 million and (5) a typed attendance note made by Mr Megaw’s secretary of a meeting between Mr Megaw and Mr Guy on 4 January 2006 (the note with other documents came to light at the very end of the evidence as part of the file which Pannones had created when advising Mr Guy) recorded that “in relation to the £5,000,000 letter this is the original. David Brisland [sic] has said he has pulled it off the file”. The reference to David Brisland was to David Brislen, an associate of Mr Guy, who had dealings with and a hoped-for interest in the Land at around this time. George Davies’ legal team pointed out in their written closing submissions, the note did not indicate any challenge by Mr Guy to the authenticity of the letter but rather that, as recorded elsewhere in the note, “Pearl were to use £5,000,000” - referring to that as the sum mentioned in the letter – “towards the Widnes deal at that time”. That was a reference to another land transaction in which Mr Guy and Mr Luqman were involved.

The fact, as he understood it to be, that £5 million of the £15 million consideration had been paid and that the balance was to be satisfied by discharging the sums due by Mr Guy to Pearl concerned Mr Bibby. He said that he discussed the transaction with his department head at George Davies and that they agreed that he could continue to act subject to Mr Guy providing evidence of the payment of £5 million into his bank account and an appropriate structure found for the balance of the consideration. Relevant to this concern is that in his engagement letter to Mr Guy Mr Bibby had recorded that the proceeds of sale of the Land were to be applied by him to “redeem existing borrowings to Pearl… and Isaac Razak” both of whom held registered charges over the Land and, having deducted George Davies’ costs and disbursements, “account to you [Mr Guy] for the balance of the sale proceeds to your personal account.”

In the meantime the urgency of the matter appears to have abated: 23 April – the originally envisaged completion date – came and went. It was put back a few days but still did not complete. By the end of that month Mr Guy was back from his overseas trip. On 28 April Mr Bibby received from Mr Hewitt various additional enquiries and updated searches in relation to the Land. On reviewing these Mr Bibby made the perhaps surprising discovery that pending against Mr Guy was a bankruptcy petition in the Harrogate County Court. Mr Bibby was able to establish that the petition had been withdrawn and an order to that effect was later forthcoming from Ms Bartle. It was subsequently to emerge that Pearl had provided the money needed to discharge the creditor which had presented the petition. Pearl also paid the £200,000 or so needed to discharge Mr Razak’s loan.

The next day, or it may have been a little later, Mr Bibby drew up a handwritten “to-do” list in the following terms:

“1.

Valuation re: Newton Heath.

2

Letter from Weightmans explaining structure of consideration.

3.

Title for Welsh property.

4.

Valuation for Welsh Property.

5.

Redemption statements for both properties.

6.

DS1s for both properties

7.

Evidence £5m cheque from Pearl cleared in Trevor Guy bank account.”

The reference at point 2 to a letter from Weightmans explaining the structure of the consideration reflected Mr Bibby’s uncertainty as to what charges were to be released on completion and how much cash was to be paid. By then there was talk of redeeming on completion a charge in Pearl’s favour over a property in Wales called Plas Brereton. This explains the references to the “Welsh Property” and to redemption statements and DS1s (in the plural) in points 3 to 6. I have already commented on point 7. Such, however, was Mr Bibby’s uncertainty over these matters that he began to wonder whether a suitable structure for the consideration could be found.

Then or shortly thereafter the matter went quiet for almost a month. It became alive again on 26 May when, according to his timesheet, Mr Bibby had a meeting with Mr Hewitt about the transaction. The upshot of that meeting, a discussion with Mr Guy and further consultation between Mr Bibby and his department head was that Mr Bibby felt that he would need to have further information about how the transaction was to be structured, meaning as I understood it how the price was to be satisfied, if he was to continue to act. By then a proposed onward sale of the Land to a company known as Morris Homes Ltd was not proceeding and Mr Hewitt and Mr Bibby were discussing what George Davies’ “abortive” fees were for having acted thus far in the matter.

Shortly thereafter Mr Bibby and his department head took the decision to terminate the retainer. They did so for several reasons: (1) the transaction was taking longer to complete than had originally been envisaged and they saw no prospect of completion in the near future, (2) the transaction was becoming increasingly complicated as Mr Guy and Mr Luqman tried to take account of other borrowings connected with the consideration for the Land, and (3) Mr Bibby had the feeling that because he was not involved in discussions between Mr Guy, Mr Luqman and Mr Hewitt as to the transaction’s structure he was only being supplied with information and instructions on a piecemeal basis such that he did not feel able to advise Mr Guy properly.

Mr Bibby called both Mr Guy and Mr Hewitt to inform them that he was terminating the retainer. It was not clear in the evidence precisely when this occurred as no contemporary note was made of the conversation. Mr Bibby was at pains to point out, and I accept, that the termination of the retainer was not because there was any suspicion of anything untoward in the transaction. But he was clear in his recollection of the impression which he gained from speaking to them both that the parties remained committed to doing the transaction. I accept that that was the impression which Mr Bibby gained. It is consistent with what subsequently happened. I draw attention to this point because Mr Guy made much play of Mr Bibby’s treatment of the transaction as “abortive” and to references in contemporary George Davies documents to “abortive” fees. He fastened upon those references as indicating not only from George Davies’ point of view but also from his own that the proposed sale of the Land was no longer to proceed and that George Davies therefore had a duty to recover the transfer which carried his signature. But, as I have explained, the matter was only abortive so far as George Davies’ role in it was concerned. As regards Mr Guy and TAL/Mr Luqman, the matter was, as Mr Bibby understood it, still live.

That ended Bibby’s involvement in the matter save for one matter, to which I now come, and the transaction file was closed. That one matter was that on 17 June 2004 Mr Bibby received a letter from Mr Guy. It was on Trevor Guy Properties headed notepaper. Bearing what to all intents and purposes looks like Mr Guy’s signature, the letter stated that it should be taken as authority for Mr Bibby to “deliver all documentation including file notes etc held with George Davies Solicitors to Pearl Holdings (Europe) Ltd.” The letter went on to promise payment of George Davies’ fees upon receipt of the file. (In due course, on 2 July, Mr Bibby wrote to Mr Guy “further to the abortive transaction” thanking him for arranging for payment of his firm’s fees which, it appears, were funded by Pearl.)

Mr Bibby had no reason to doubt the authenticity of the letter. On the basis of the authority in it he supplied to Pearl or to Mr Luqman or to someone acting on their behalf (he could not recall which it was) photocopies of some at least of the documents on the transaction file but retained the file itself. It subsequently emerged that the letter had been sent at the instigation of Mr Luqman. It was Ms Bartle, Mr Guy’s PA, who had typed it and arranged for a scanned copy of his signature to be placed upon it. At one stage it was being suggested, although the suggestion was later dropped, that it was Mr Bibby’s response to this letter which had enabled Mr Luqman to come into possession of the signed TR1. Nothing turns on this letter because Mr Guy accepted that he became aware within a short time of the sending of the letter that it had been sent and raised no objection to the fact that it had been sent. In my view, there is no basis for criticising Mr Bibby for having acted on a letter which had every appearance of coming from Mr Guy.

I need mention only four further matters. First, on 21 June 2004 Mr Maharaj rang up Mr Bibby. By then Mace & Jones in the person of Mr Maharaj was acting for TAL in the transaction. Mr Bibby was not available when Mr Maharaj called but returned the call later that day. Mr Maharaj’s purpose in calling was to establish whether Mr Bibby was still acting for Mr Guy. Mr Bibby said that he was not but offered to call Mr Guy to find out who was. Mr Bibby could not recall what steps he then took but the following day, 22 June, there was a message for Mr Bibby to the effect that Mr Maharaj understood that Mr Hewitt was acting for Mr Guy.

The second matter concerns Mr Bibby’s transaction file. It remained in George Davies’ custody until 15 April 2005 when Mr Bibby sent it to Mr Megaw of Pannones pursuant to a written instruction from Mr Guy. The file remained with Pannones, who held it to Mr Bibby’s order, until it was returned on 13 July 2006. It was released the following day, 14 July 2006, to solicitors called Shulmans pursuant to a written instruction from Mr Guy. On this occasion the file was not held to Mr Bibby’s order: Shulmans pointed out, correctly, that George Davies had no lien on it as their fees had been paid.

The third matter concerns the signed TR1. As I have mentioned, it had been handed by Mr Bibby to Mr Hewitt at the meeting in the All Bar One on 19 April 2004. Mr Bibby’s understanding was that it was held by Mr Hewitt to his order. At no time did he release the undertaking. By the time – in mid-April 2005 – that he passed the transaction file to Pannones and subsequently in mid-July 2006 when he passed it to Shulmans, Mr Bibby had forgotten that the signed TR1 was not on the file but was being held, as he understood it, to his order. It is quite possible that he had already forgotten that this was so when George Davies’ retainer by Mr Guy was terminated at the end of May 2004 (or very early the following month – the precise date is not clear). At the time, Mr Bibby had no reason to think that the transaction would not proceed. I will examine later whether Mr Bibby’s failure to obtain the return from Mr Hewitt of the signed TR1 constituted a breach of duty by him and, if it did, whether any consequences flow from that failure.

The final matter is simply to record that in June 2007 Mr Bibby, by then a partner in George Davies, provided a witness statement about his involvement in this transaction. He did so for the purpose of proceedings (claim number 6LS30411) brought by Mr Guy in this Division against TAL which by then was in administration. In some respects that statement differs from his witness statement in these proceedings. In particular, in his earlier statement, Mr Bibby thought that he had possibly included the draft TR1 in the documents provided to Mr Luqman (or someone connected with him) pursuant to the letter of 17 June bearing Mr Guy’s scanned signature. Mr Bibby said to me, and I accept, that his earlier witness statement was prepared without him having the opportunity to review the full range of documents to which he had access when preparing his witness statement in these proceedings. In particular it is clear, as I have stated, that the signed TR1 was passed by him to Mr Hewitt on 19 April 2004 and could not therefore have been handed to Mr Luqman (or to anyone on his behalf) in compliance with Mr Guy’s letter of 17 June 2004 even if on that occasion originals rather than copy documents had been delivered. I accept therefore that Mr Bibby’s witness statement in these proceedings represents a much fuller and more accurate account of his participation in this matter. Having seen him in the witness box I have, as I have mentioned, no doubt that his evidence before me was a totally truthful and, so far as I can judge, reliable account of his involvement. To the extent that it differs from his earlier statement his later witness statement is to be preferred.

Mr Maharaj was a partner in Mace & Jones at the time relevant to these proceedings. He had qualified in 1991. Mace & Jones has since merged with Weightmans and Mr Maharaj is now a partner of the merged firm. He was and is a specialist in commercial conveyancing.

Mr Maharaj’s involvement in the matter effectively spanned no more than a few days in June 2004. It began on Friday 18 June when Mr Luqman telephoned him to ask if he could take over a file that Mr Hewitt had been handling. Mr Luqman and Pearl were by then reasonably well known to Mr Maharaj as he had been introduced to Mr Luqman the previous year and knew him to be a well respected and rising member of the business community in the North West. He had already handled a large number of matters for Pearl, usually on the instructions of a Miss Dyson who was a Pearl employee, but occasionally on the instructions of Mr Luqman personally (or of his brother Waheed) if the matter was particularly important or urgent.

Mr Maharaj agreed to act. Mr Luqman said that he would send over the file. The file arrived later that day or on the Monday, 21 June. The file in question was the purchase file which had been opened and kept by Mr Hewitt while he was acting for TAL/Mr Luqman in the matter. Mr Maharaj found the file to be in a mess and thought it would be quicker to ring Mr Luqman to establish what he was to do. He spoke initially to Waheed and subsequently to Shaid Luqman. From this he was given to understand and duly noted down in his handwriting on a typed attendance note of his earlier conversations with Mr Luqman and Waheed (1) that Mr Guy had already been paid and (2) that the only matters he, Mr Maharaj, was required to do were pre-completion searches, preparation of a legal charge for TAL to sign and the various formalities needed to ensure that all was in order from TAL’s end. He also needed to ascertain who was acting for Mr Guy. He was given to understand that TAL was intending to sell the Land to Redrow Homes, a housing developer, but with a lengthy, delayed completion.

Mr Maharaj noticed that although there was no contract in the file there was an original signed but undated TR1. So the document was to hand which would enable the sale of the Land by Mr Guy to TAL to be completed. In broad terms Mr Maharaj understood from his conversations with Mr Luqman and from what was in the file that he was being asked simply to complete a transaction that was already well advanced. He needed to prepare TAL’s loan document with Pearl to secure TAL’s borrowing of the completion monies which, as I have mentioned, he understood to have been already paid. He also needed to obtain Mr Guy’s authority to complete the transaction.

By a letter to Mr Maharaj dated 22 June Mr Luqman confirmed “that no money will be payable to the seller to complete the purchase” and “that Pearl’s charge over the [Land] will be replaced by a charge to be granted to (sic) [TAL] on completion of its purchase.” Mr Luqman went on to instruct Mr Maharaj to “proceed to exchange and complete today”. In a letter from Mr Maharaj to Mr Luqman, also dated 22 June, Mr Maharaj recorded that Mr Luqman had asked him “to exchange and complete today which I will do as soon as I have spoken to Mick Hewitt to confirm that he has similar instructions from his client.”

This letter was probably written between 1225pm and 1240pm that day. For, as a result of a conversation with Mr Luqman at 1225pm Mr Maharaj established (as his typed-up attendance note put it) that “George Davies is no longer acting – Mick Hewitt acting for seller”. This is reflected in a handwritten postscript to the letter in which Mr Maharaj refers to Mr Hewitt having stated that “I [Mr Maharaj] can exchange + complete”. (The reference to “exchange” was, as Mr Maharaj accepted, an error in that there was to be no exchange. His reference to “exchange” was, he said, made “reflexively” as being the usual parlance of conveyancers in the course of property transactions.)

In his witness statement Mr Maharaj stated that he knew by 22 June that Mr Hewitt was acting for Mr Guy (as indeed, in one sense, he was) and that, as he put it in his statement, he was “untroubled” by the fact that in the case of the proposed transfer of the Land by Mr Guy to TAL there had been a transfer of Mr Guy’s instructions to him. This switch in Mr Hewitt’s role from acting at one moment for TAL and at another for Mr Guy (as Mr Maharaj understood to be the case) is something that I comment upon later.

Mr Maharaj’s typed-up attendance note goes on to note that at 1240pm that day, just 15 minutes after being given to understand that Mr Hewitt was acting for Mr Guy in the matter, he spoke to Mr Hewitt. He did so, he thought, having been given his telephone number by Mr Luqman. (Relevant to this is that, prior to this trial, Mr Maharaj had not met Mr Hewitt and, as I understood it, had not dealt with him in any matter before being instructed to act in the transaction on 18 June.)

Mr Maharaj’s evidence, supported by his typed-up attendance note, is that he spoke to Mr Hewitt, confirmed that Mr Hewitt was acting for Mr Guy, informed Mr Hewitt that he had received instructions to act for TAL in the transfer of the Land and held a TR1 signed by Mr Guy. He asked Mr Hewitt to confirm whether he was in a position to complete that day. Mr Maharaj went on to say that having been given to understand during their conversation that Mr Hewitt was indeed acting for Mr Guy he acted thereafter on that basis.

The attendance note goes on to record, as Mr Hewitt also recalled in his witness statement, that he would need to speak to Mr Guy and would call back. This he did, at 1255pm which was only a few minutes later. According to the attendance note and Mr Maharaj’s witness statement Mr Hewitt confirmed in the subsequent call that he had instructions that exchange and completion could take place the same day. Mr Maharaj’s understanding was, as he put it in his witness statement, that “this was an unconditional confirmation on behalf of Mr Guy that I could complete by dating the TR1 and submitting it to the Land Registry. It was not dependant on any further agreement.”

Following receipt of Mr Luqman’s letter that same day Mr Maharaj proceeded to date the TR1 and attend to various post-completion matters, including the cancellation of certain charges in Pearl’s favour and the registration of the Land in TAL’s name and of a new charge over it in Pearl’s favour. In fact those registrations were not completed until several weeks later.

Some days after 24 June Mr Maharaj received a request from Halliwell Landau to assist with pre-contract enquiries in relation to TAL’s intended sale of the Land to Redrow. I have already mentioned that Mr Maharaj was aware that a sale to Redrow was envisaged. This led to a request from Halliwells for any deeds that Mr Maharaj held for the Land and to an approach for the deeds by Mr Maharaj to Mr Hewitt (who, he understood from Waheed Luqman, knew where the deeds were) and to a return call by Mr Hewitt confirming that the deeds were being delivered by Weightmans. By then Mr Hewitt had left that firm and was working for another firm called the Betesh Partnership.

Mr Maharaj went on in his witness statement to say that there was no record on his file of Mr Hewitt calling back and that the deeds to the Land were never delivered to him.

That was effectively the end of Mr Maharaj’s involvement in this matter. At no stage in his evidence was there any suggestion that the consideration for the transfer of the Land was understood by him to be other than £15 million, the figure stated in the TR1.

Mr Hewitt represented Weightmans in the transaction. He had qualified as a solicitor in 2001. He had worked in a family business and in industry until his mid-20s when he took up studying and training for a career in the law. After qualifying he worked mainly in the residential and commercial property field, joining Weightmans in June 2003 where he remained, working in its property department, until 26 June 2004 when he moved to the Betesh Partnership. That was just four days after the transfer of the Land to TAL was completed. Mr Hewitt remained with the Betesh Partnership, working in its property department, until February 2011. In August of that year he took up employment with an international company.

It was while Mr Hewitt was working for another firm of solicitors, Wacks Caller, that he was first introduced to and did work for Pearl/Mr Luqman. The work involved short term secured bridging finance. At the time Pearl/Mr Luqman was viewed as a blue-chip client. When Mr Hewitt and a colleague moved to Weightmans the Pearl work came with them. It was through Pearl/Mr Luqman that Mr Hewitt was introduced to Mr Guy. Mr Hewitt understood that he had a history of dealing in contaminated land sites.

Weightmans acted for Pearl in connection with the provision of the finance that enabled Mr Guy to purchase the various parcels that were to make up the Land. Mr Hewitt understood that it was as a result of a falling out between Mr Guy and the firm of solicitors who had acted for him in the purchase of the Land that in late 2003 Mr Guy came to instruct Weightmans on his proposed sale of the Land. At the time, as Mr Hewitt understood matters, Mr Guy and Pearl/Mr Luqman were acting together in relation to the Land and Mr David Brislen was also involved. I do not think that for present purposes the precise details of all of this greatly matter. Weightmans also acted for Mr Guy on his purchase of a residential property at 20 Waterside, Knaresborough, which he was enabled to do with the aid of loans from Pearl.

As regards the sale of the Land by Mr Guy to TAL, Mr Hewitt’s understanding was that Mr Guy had agreed that it was to be sold to a special purpose vehicle to be set up by Mr Luqman. (This eventually materialised in the shape of TAL, a Gibraltarian company). Mr Hewitt stated that, because each side needed separate representation and he regarded his instructions to act as coming from Pearl/Mr Luqman whom he viewed as his primary client given the many instructions that he had had from them in the past, he indicated to Mr Guy that he could not act for him in relation to the Land as well. Because, Mr Hewitt said, he could not act for Mr Guy on his sale to TAL he was asked by Mr Guy to recommend a solicitor who could act. He recalled that he sent details of several solicitors to Mr Guy from whom Mr Guy selected Mr Bibby at George Davies.

That led in turn to Mr Hewitt ringing Mr Bibby on 15 April 2004 to enquire whether Mr Guy had been in touch with him. It resulted, as appears from my recital of the facts as they relate to George Davies, in Mr Guy instructing Mr Bibby to act for him. It also resulted in Mr Hewitt sending Mr Bibby, under cover of a letter dated 16 April 2004, copy entries on the registers of the four titles making up the Land, a “certified ID” of Mr Guy and a promise of the searches which Mr Hewitt had already sent out for information about the Land as soon as they were returned. He, like Mr Bibby, understood that the parties wanted the matter to proceed quickly although, in Mr Hewitt’s recollection, this was with a view to completion on 1 May 2004. I consider that Mr Hewitt was mistaken in that recollection and prefer the evidence of Mr Bibby, which is supported by contemporary documents, that completion was initially envisaged for 23 April.

In the course of Friday 16 and Monday 19 April Mr Hewitt and Mr Bibby were able to agree the terms of the contract and transfer, including – at 1513pm on 19 April - TAL’s name and registration details. These appear on the TR1 and contract which, as I find, Mr Guy signed at the meeting later that afternoon at the All Bar One.

Mr Hewitt’s recollection of the price to be paid for the Land was less clear than that of Mr Bibby. In paragraph 38 of his witness statement he said this:

“My understanding was that the purchase price for the … Land was to be mix of payment and consideration by means of redemption of other charges held by Pearl/Shaid Luqman over the …[L]and and other properties belonging to Trevor Guy. The total sum due was not clear. I recall at one point the price was set at £15 million. I recall Shaid Luqman informing me of this price. I also recall mention of the price being at £10 million, this was in the course of discussions between me and Shaid Luqman.”

The reference in that statement to £10 million was, as he explained in cross-examination, to the figure which had featured in what he described as “the initial discussions in relation to the transaction” whereas he was in no doubt that in the various drafts that passed between him and Mr Bibby between 16 and 19 April £15 million, and no less a figure, was the price. He went on later to explain that the instruction that the price had increased to £15 million came from Mr Luqman and reflected, he was told, increased interest in the site. Mr Hewitt went on in his next paragraph to say:

“This [sic] was not to my mind an issue over the actual sum to be paid for the Land, it concerned the mix of the proportion of actual payment and redemption of other charges. This proved to be something that Shaid Luqman and Trevor Guy could not agree.”

Mr Hewitt understood that Pearl’s forgiveness of the loans made to Mr Guy to enable the Land to be acquired was to form a part of the consideration for the sale of the Land to TAL. He also understood that a further part of the consideration was to be the £200,000 which Pearl was to pay, and in early May 2004 did pay, to discharge the loan secured on the Land which Mr Isaac Razak had provided to Mr Guy. Mr Hewitt vaguely recalled understanding that other sums owed to Pearl by Mr Guy were to be included but he was far from clear what they were.

Mr Hewitt recalled the meeting on 19 April – at the All Bar One – which he attended with Mr Luqman. He recalled that Mr Bibby and Mr Guy were also present. He thought that Waheed Luqman was there. He was of this view as he was only aware of one meeting at which Waheed was present and recalled that this was at the All Bar One. I have already concluded that it is probable that Waheed was not present although I do not think it matters if he was at the meeting. Mr Hewitt’s recollection of what happened at the meeting that afternoon was at best hazy: he stated that he was “aware” that Mr Guy signed a contract and TR1 at the meeting but did not recall him doing so, had no recollection of Mr Luqman signing TAL’s part of the contract at the meeting (it is more probable than not that Mr Luqman did not) and did not recall Mr Bibby giving him the TR1 signed by Mr Guy to enable him to obtain its execution by TAL. Nor, he said, did he recall being asked for any undertaking in relation to it. In his evidence, it is to be recalled, Mr Bibby did not suggest that he asked for an undertaking, merely that it was implicit in his action in handing over the document to Mr Hewitt to enable it to be executed by TAL that pending completion it was to be held to his (Mr Bibby’s) order. It follows, not surprisingly, that Mr Hewitt had no recollection of being asked for, much less of giving, any such undertaking. Nor had Mr Hewitt any recollection of the letter dated 19 April bearing Mr Guy’s signature in which reference is made to £5 million having already been paid. He believed that he would have recalled such a letter if it had been shown to him. Perhaps it was not shown to him. At all events, I have no doubt that, as I have already stated, the letter was handed to Mr Bibby on that occasion and that it was in the terms that I have earlier described. Mr Hewitt’s poor recollection of events is scarcely helped by the absence of any attendance note by him of the meeting.

Mr Hewitt did however recall that it had been mentioned to him that Mr Guy was going away on holiday and that he was to be executing the contract documents so that completion of the transaction could take place in his absence.

Coming to events after the 19 April meeting Mr Hewitt had only a vague recollection of any communications in connection with the transaction between the meeting on 19 April and the events of 22 June 2004 when the transfer was completed. He recalled discussing with Mr Bibby, in or about late May, the need for further information. He also recalled a concern which both of them shared that Mr Guy and Mr Luqman seemed unable to agree how the consideration was to be structured. He recalled that there was talk of the transaction not proceeding. He also recalled a later conversation with Mr Bibby in which Mr Bibby stated that he no longer wished to act as he was troubled by the absence of agreement on the consideration, concerned at the time the transaction was taking and believed that it was probably unlikely that the transaction would proceed. He recalled that in about mid-June 2004 Mr Luqman called him to say that he urgently required the file in the matter for “audit purposes”. He stated that having received such requests in the past he did not think there was anything unusual about it, not least when he believed that the matter was not proceeding. Accordingly, he did as he was requested and passed the file over. The file in question was of TAL’s purchase side of the transaction. Like Mr Guy and others who received instructions from him or dealt with him at this time he had no reason to doubt Mr Luqman’s honesty.

His next recollection in the matter was when, as he put it in his witness statement, he received a call “out of the blue” from Mr Maharaj at lunchtime on 22 June 2004. He recollected the call because he was enjoying some “leaving drinks” with colleagues at, as it happens, the All Bar One when it was made. This was because he was due to leave Weightmans’ employment four days later on 26 June 2004 to move to the Betesh Partnership.

According to Mr Hewitt’s recollection, Mr Maharaj asked him whether he acted for Mr Guy to which he replied that he did. In his witness statement Mr Hewitt said that he so replied “with the recent Plas Brereton file transfer to Betesh Partnership fresh in my mind”. This was a reference to the fact that on moving to Betesh he would be taking some of the files relating to other transactions in which Mr Guy was involved. Mr Hewitt went on in his witness statement to say that Mr Maharaj stated to him that he had received an instruction in relation to the Land and asked if he, Mr Hewitt, knew what was happening. To this Mr Hewitt replied that he did not but would call Mr Guy to ask him and would then ring Mr Maharaj back. Mr Hewitt said that he called Mr Guy who told him that he was in Manchester and close by and that he would come to the All Bar One to meet him. He thought that he explained to Mr Guy about the call from Mr Maharaj and that he asked him what was happening. Mr Hewitt went on to say that when Mr Guy arrived at the All Bar One he again mentioned the call that he had received from Mr Maharaj and asked him what was happening. Mr Guy, according to his recollection, explained to him that there was still an issue on the consideration for the Land, saying that he would be “happy to exchange and complete however the breakdown of the completion monies was still in issue and he would need to speak to Shaid Luqman to agree the breakdown of the amount to be paid.” Mr Hewitt stated that in the presence of Mr Guy he then returned Mr Maharaj’s call and explained that Mr Guy was “happy to exchange and complete this matter today however the breakdown of the completion monies was still in issue.” He pointed out that he did not enter into “either a Formula A or B exchange on completion” but “merely passed on to Varun Maharaj the message Trevor Guy had just given to me, out of professional courtesy.” In his cross-examination Mr Hewitt accepted that it was very unusual to be suddenly called by a solicitor he did not know and be asked if Mr Guy was ready to exchange and complete but emphasised that he took the call as a “mere enquiry”.

The itemised bill for his mobile phone was in evidence and this showed a call at 1245pm lasting just over one and a half minutes to a number which Mr Hewitt identified as Mr Guy’s and a call eight minutes later, at 1253pm, to Mr Maharaj’s number lasting some 45 seconds. He identified the later of those two calls as his return call to Mr Maharaj to which I have just referred. This coincides with Mr Maharaj’s account of having spoken to Mr Hewitt at 1255pm during which, according to Mr Maharaj, Mr Hewitt confirmed that he had instructions that exchange and completion could take place that very day.

That was, it seems, the end of Mr Hewitt’s involvement in this transaction although when he was with the Betesh Partnership he received instructions to act for TAL in relation to a proposed advance from Pearl, by then renamed Lexi, with Mr Maharaj acting for Lexi. That was, said Mr Hewitt, Betesh’s (and, I inferred, Mr Hewitt’s) last involvement in the Land.

So much for my findings of fact. I come now to the claims. I shall again consider each defendant separately but dealing with them this time in the order in which they appear on the record. I start with Mace & Jones.

It was Mr Maharaj’s action in dating the TR1, treating the transaction as completed and applying in due course to the Land Registry to register the transfer that was the immediate cause of the fact that Mr Guy ended up deprived of his ownership of the Land. Mr Maharaj was therefore very much a target of Mr Guy’s attempt to make good the loss which he claimed to have suffered as a result. But an obvious obstacle in his path is the fact that Mr Maharaj was not retained by Mr Guy to act for him in the transaction: Mr Maharaj received all his instructions from Mr Luqman and he (and therefore his firm) acted for TAL and no other. Mr Simpson and Mr Charlwood reminded me in their closing submissions that, until the start of the trial, Mr Guy had neither met nor spoken to Mr Maharaj. Nor was there any evidence or suggestion of any reliance by Mr Guy on Mr Maharaj or of any conscious assumption of responsibility by Mr Maharaj towards Mr Guy. Without a duty of care to him the claim must fail, however careless Mr Maharaj may have been. How then did Mr Guy put his case against Mace & Jones?

In his closing submissions, conscious of this obstacle, Mr Guy invited me to find that a duty of care to himself was assumed by Mr Maharaj “due to the exceptionally unusual nature of a £15 million overnight transaction carried out on fraudulent instructions and with wholly insufficient supporting documentation” in circumstances where Mr Maharaj “knew or should have known that Mr Guy was not represented… by a solicitor”. (By “overnight transaction” I understood Mr Guy to mean a transaction concluded in haste.) It was submitted that if Mr Maharaj had not been in such a rush to complete the transaction “he would have been able to satisfy himself that the instructions and information provided [by Mr Luqman] were in fact false and fraudulent”. My attention was drawn to the following additional matters in support of the supposed duty of care: (1) the fact that all documentation and instructions were provided by Mr Luqman (and his brother Waheed), (2) the fact that the documentation in question had been generated by Mr Hewitt while acting for TAL, (3) the absence of any direct communication from Mr Guy, (4) Mr Maharaj’s failure to make any enquiry as to why the transaction had not completed when Mr Hewitt and Mr Bibby had been acting, (5) Mr Maharaj’s action in completing the transaction “without having any or any sufficient instruction concerning payment of the consideration” in that no part of the £15 million passed through his firm, (6) Mr Maharaj’s failure to obtain written confirmation from Mr Bibby (to whom he spoke only briefly) of the reported receipt by Mr Guy of £5 million. (7) Mr Maharaj’s action in proceeding to a transfer without first exchanging contracts despite having referred in his attendance notes and elsewhere to “exchange and completion”, (8) Mr Maharaj’s action in completing the transaction in reliance on (a) an instruction from Mr Luqman that Mr Hewitt was acting for Mr Guy even though earlier in the same transaction – indeed only days previously – Mr Hewitt had, to Mr Maharaj’s knowledge, acted for his client TAL and (b) on a very brief conversation with Mr Hewitt whom he had not previously met or dealt with and (9) Mr Maharaj’s failure to realise that a £6.7 million loan to TAL to enable the transfer to complete was in breach of section 330 of the Companies Act 1985. He further supported his submission with a reference to what was said in White v Jones [1995] 2 AC 207 at 275 and 294 where it was established, putting it shortly, that a duty of care is assumed by a solicitor, instructed by a client to draw that client’s will, towards the intended beneficiaries under that intended will at least where the solicitor knows that the exercise of his skill and care may cause loss if carelessly exercised and the beneficiary is wholly dependant upon the solicitor to act with proper skill.

I hope I have captured the essence of the submission. To some extent it differed from Mr Guy’s pleaded case.

In their closing submissions Mr Simpson and Charlwood accepted as arguable that a duty of care might have been owed by Mr Maharaj to Mr Guy if it could be established that Mr Maharaj knew or should have known that no solicitor was acting for Mr Guy and that, as far as Mr Guy was concerned, the matter was no longer to proceed. But, they submitted, these factual premises were not made out. This was because, as my findings clearly demonstrate, Mr Maharaj - aware that Mr Bibby no longer acted from Mr Guy - was given to understand that Mr Hewitt was acting instead, and was given so to understand not least by Mr Hewitt himself in the course of the two conversations between them on 22 June 2004. Moreover, Mr Maharaj was given by Mr Hewitt to understand in the course of the second of those two conversations that he, Mr Maharaj, was authorised to complete the transaction.

In my judgment this answer to Mr Guy’s invitation to find that Mr Maharaj assumed a duty of care to him is correct and is fatal to his claim against Mace & Jones. It distinguishes this case from White v Jones where, to the solicitor’s knowledge, the intended beneficiaries under the client’s proposed will necessarily relied (inevitably without any awareness at the time) on the solicitor to act with proper care and despatch in carrying out their intended testator’s instructions.

It is true that Mr Maharaj failed to ensure that any money consideration was received by Mr Guy on completion but this was because he understood, as his evidence showed, that following his instruction from Mr Luqman and his two telephone conversations with Mr Hewitt on 22 June the transaction was to be completed that day and that no money was to pass; he had been given by Mr Luqman to understand that it had already been paid. Instead, he was authorised to complete the transaction simply by dating the transfer and submitting it to the Land Registry together with the necessary form substituting Pearl as lender to TAL (and no longer to Mr Guy) on the security of the Land. I see no grounds for implying, or being the more willing to imply, an assumption of a duty of care because Mr Maharaj was willing to act on his client’s instruction (as for this purpose Mr Luqman was).

Might it be said that his acceptance from Mr Luqman, without troubling to obtain confirmation from Mr Hewitt, that no money was to be paid on completion, the consideration having already been paid, should have caused Mr Maharaj to pause and question the matter further? I think not. Having once established, as he understood the position to be, that Mr Hewitt was acting for Mr Guy, there was no duty on Mr Maharaj to raise with Mr Hewitt the question of the consideration and obtain some explicit confirmation from him (prudent though that might have been) not only that he was indeed acting for Mr Guy in the matter but also and for good measure that no payment was to be made. From Mr Maharaj’s standpoint, it would have been for Mr Hewitt to raise the non-payment of any money on completion if in fact (and contrary to Mr Maharaj’s understanding) some or all of the consideration was still outstanding. Much less was there any duty on him to speak to Mr Guy to obtain confirmation of what he was given by Mr Hewitt to understand.

What then of the fact that Mr Hewitt, having previously acted for TAL in the matter, was now on the other side of the transaction, acting for Mr Guy (and doing so in place of other solicitors who had previously acted)? I confess that this switch in Mr Hewitt’s role struck me at one stage as odd. Should this have been a concern to Mr Maharaj (he stated in his evidence that he was “untroubled” by it) and, if so, what should he have done about it? Should he have declined to act further in the transaction without establishing the reason for the switch? I think not. If anyone was to complain, for example of some improper conflict of interest, it was for TAL to do so on the basis that when he began to act for Mr Guy Mr Hewitt might have carried with him information of a confidential nature which he derived from having previously acted for TAL. Mr Luqman was evidently untroubled by this possibility. Moreover, it was Mr Luqman who in his letter of 22 June had stated to Mr Maharaj that Mr Hewitt was acting for Mr Guy. Over and above that there was on the evidence before me no basis for Mr Maharaj to question the honesty and good faith of Mr Luqman who, as Mr Guy repeatedly emphasised, was regarded at that time as a rising business star.

Does it matter that Pearl’s loan to TAL, secured by a charge of the Land, was in breach of section 330 of the Companies Act 1985? This circumstance, if true, was irrelevant to the existence of any duty of care owed by Mace & Jones to Mr Guy.

For completeness, I should mention two of the other points raised by Mr Guy. The first is that Mr Maharaj’s two conversations with Mr Hewitt were at best very short, the second lasting no more than 45 seconds, and that nothing was confirmed in writing. I agree that the conversations were brief but I do not see why that fact should serve to make any difference to the question whether in all the circumstances Mr Maharaj assumed a duty of care to Mr Guy. Short and informal as the communications between them were, they nonetheless occurred. In the course of them Mr Maharaj was given to understand that Mr Hewitt acted for Mr Guy. That knowledge runs quite contrary to the assumption by Mr Maharaj of some duty of care to Mr Guy.

The second is the fact that there had been no exchange of contracts even though prior to completion of the transaction Mr Maharaj had himself referred (in his letter to Mr Luqman of 22 June) to “exchange and completion”. I can see nothing in this point. I accept Mr Maharaj’s evidence, set out earlier, that his reference to “exchange and completion” was made “reflexively”. In my view, it is a matter of no consequence.

On the facts therefore it is not possible, in my judgment, to conclude that Mr Maharaj owed any duty of care to Mr Guy in connection with completion of the transaction or with the manner in which this was to be accomplished, much less to advise him about any aspect of the transaction. Nor was any other factual basis established on which, whether articulated or not by Mr Guy, a duty of care by Mr Maharaj to Mr Guy might be said to have arisen.

In the result, Mr Guy’s claim against Mace & Jones fails.

In contrast to Mr Maharaj who was not retained by Mr Guy and did not owe him any duty of care, Mr Bibby was retained by and did come under a duty of care to Mr Guy. There is not dispute about that. The issue is whether he was in breach of that duty.

In his particulars of claim Mr Guy contended that the duty of care continued at least until 13 August 2004. In his closing submissions he argued that a consequence of Mr Bibby’s failure to state clearly to Mr Maharaj, when the latter rang him on 21 June 2004, that he was no longer acting for him (Mr Guy) there arose a fresh duty of care to him.

It is impossible to reach such a conclusion based on so brief an exchange. It is impossible not least because Mr Bibby made clear to Mr Maharaj that he was no longer acting for Mr Guy. Mr Guy’s submission overlooked Mr Bibby’s evidence about that call. Moreover, the following day Mr Maharaj understood from Mr Luqman that, as Mr Bibby had stated, the latter was indeed no longer acting and that Mr Hewitt was instead. In so far therefore as Mr Guy’s claim against George Davies proceeded to any extent on an assumption that Mr Bibby’s duty of care towards Mr Guy continued until 22 June or later based on what was said in those brief conversations the claim is without foundation. Mr Bibby’s retainer had ended well before he received Mr Maharaj’s call.

Aside from that issue, Mr Guy relied on 15 separate allegations of negligence arising out of events occurring at a time when Mr Bibby undoubtedly did act for Mr Guy. They can be grouped into the following: (1) advising and allowing Mr Guy to sign the contract and TR1, (2) allowing the transaction file to be delivered to Mr Luqman without proper authority from Mr Guy, (3) failing to take adequate steps to ensure that the signed contract and TR1 could be used without Mr Guy’s authority and (4) failing to take adequate steps to prevent the contract and TR1 from being used to complete the transaction after Mr Bibby “received instructions [from Mr Guy] that the sale was to be aborted…” (See paragraph 25.10 of the particulars of claim.)

No criticism is to be levelled at Mr Bibby for getting Mr Guy to sign the contract and TR1 when they met on 19 April. It is standard, indeed good, practice in conveyancing transactions for a solicitor to get his client to pre-sign documents, once they have been agreed, to be used in an impending transaction, rather than wait until the day when the transaction is to be completed before doing so. There was an added reason for obtaining Mr Guy’s signature on 19 April: he was about to leave for a ten-day trip to the Caribbean and would therefore be absent when the transaction was to be completed. There is nothing in this head of complaint.

Nor is Mr Bibby to be criticised over his action, upon receipt of the letter to him dated 17 June, in supplying to Mr Luqman copies of his transaction file. The letter which requested him to do so carried Mr Guy’s signature. Even though Mr Guy said that he had not authorised the sending of that letter he accepted that he raised no objection to it when he discovered a day or two later that it had been sent. Mr Guy did not take any steps to countermand the authority in that letter. More to the point, the originals of the signed contract and the TR1 were not among the documents supplied to Mr Luqman. There is nothing therefore in this head of complaint either.

What of the complaint that Mr Bibby failed to take adequate steps to ensure that the signed contract and TR1 could not be used without Mr Guy’s authority? The original contract remained on the transaction file and was never used. The signed TR1 was handed to Mr Hewitt at the meeting in the All Bar One on 19 April. As I have mentioned, it was handed over to enable Mr Hewitt to obtain TAL’s execution of it in readiness for completion of the transaction a few days later. I accept that, although nothing was put in writing to this effect, the TR1 was handed to Mr Hewitt on an implied understanding that its release to him was solely for the purpose of obtaining its execution by TAL and that it would otherwise be held to his, Mr Bibby’s, order. (That, of course, was subject always to the instructions of Mr Guy for whose benefit the document was held to Mr Bibby’s order.) It would have been better if this understanding had been confirmed in writing. But I do not consider that it was a breach of duty on Mr Bibby’s part to have failed to arrange for this. Not the least of the reasons for saying this is that the matter was proceeding at speed: completion was envisaged for 23 April, a mere four days later. In my judgment, there is nothing in this head of complaint.

That leaves Mr Bibby’s failure to prevent the signed TR1 from being used to complete the transaction when he (and his firm) ceased to have any involvement in the matter. In substance, this is a complaint that Mr Bibby failed, in breach of duty, to obtain the return of the signed TR1. Was this a breach of any duty owed by him to Mr Guy arising out of his retainer? Arguably it was. Although Mr Bibby understood, when his firm terminated Mr Guy’s retainer of it to act for him in the transaction, that the transaction would be proceeding (others at the time appeared to take the view that it would not be), it might fairly be said that he should have called on Mr Hewitt to return the signed TR1 rather than rely on any implied understanding that the document was held (and would continue to be held) by Mr Hewitt to Mr Bibby’s order. It would certainly have been neater to have done so. But if it was a breach it was not causative in law of any loss. This is because the fault here lay in Mr Hewitt’s action in allowing Mr Luqman to retain the TR1 after its delivery to him to obtain a second signature to complete TAL’s execution of it. Mr Bibby’s failing was at most the occasion for its subsequent use by My Luqman, not the effective cause of that conduct. It is also to be noted - and is a matter I return to later when I consider Weightmans’ liability for breach of duty - that when Mr Maharaj, acting as TAL’s solicitor, came into possession of the signed TR1 he did not assume that he could proceed to complete without further enquiry of Mr Guy or his solicitor: he took the precaution of ringing Mr Hewitt, who by then was acting for Mr Guy (if only in other matters), and establishing whether it was agreed that the transaction could complete. In short, Mr Maharaj acted as if the TR1 continued to be held to Mr Guy’s order.

In these circumstances, I consider that this head of complaint does not assist Mr Guy. His claim against George Davies must therefore fail as well.

As appears from my narrative of its role in this transaction Weightmans, acting by Mr Hewitt, was originally retained by TAL. Mr Hewitt acted for TAL, on instructions from Mr Luqman, during the negotiation and agreement of the terms of the contract and TR1 culminating in the meeting at the All Bar One on 19 April. At that stage of the transaction completion was envisaged for 23 April which was the Friday of that week. But completion that day did not occur, nor did it occur in the days that immediately followed. Mr Hewitt’s involvement on behalf of TAL continued though with very little happening until late May. According to both his and Mr Bibby’s evidence they were in communication about the transaction towards the end of that month when Mr Bibby rang Mr Hewitt to say that he and his firm would be ceasing to act for Mr Guy. There was then a further lull. By the time the matter came alive again in the second half of June, Mr Hewitt no longer acted for TAL: he had been replaced by Mr Maharaj. Mr Maharaj’s evidence established that his firm was retained in the matter on 18 June.

After the end of May, according to Mr Hewitt’s evidence, his role in the transaction ceased except for (1) the two conversations which took place between him and Mr Maharaj between 1240pm and 1255pm on 22 June when he was at the All Bar One for drinks with colleagues to mark his departure from Weightmans’ employment at the end of that week and (2) his call to Mr Guy and subsequent meeting with Mr Guy at the bar in the few minutes that separated his telephone conversations with Mr Maharaj. By then, although no longer acting in the transaction relating to the Land, Mr Hewitt was once again acting for Mr Guy. The fact that he was so acting was to give rise to some confusion when he was rung up by Mr Maharaj.

At my request Mr Patten and Ms Mirchandani prepared a note setting out just what instructions Mr Hewitt had from Pearl, Mr Luqman and Mr Guy while with Weightmans. From that note it appears that Weightmans acted for Pearl in 2003 when Mr Guy, acting by another firm, became the registered owner of the parcels which make up the Land. Pearl lent the monies to enable the purchases to be made. When Mr Hewitt joined Weightmans in June 2003 he became involved in the matter. In September 2003 he acted for Pearl on the loan of £1.2 million to Mr Guy (acting by other solicitors) to enable him to acquire Plas Brereton. He accepted joint instructions from Pearl and Mr Guy (although Mr Guy disputes that he too gave any instructions) on a proposed sale of the Land (by then in Mr Guy’s ownership) first to one possible purchaser and then to another. In December 2003 he acted for Pearl on the advance of monies to enable Mr Guy to acquire 20 Waterside. This transaction was completed on 14 May 2004. He also acted for Pearl when, a few days later, Pearl made a further advance to Mr Guy secured against that property. In January 2004 he acted for Mr Guy in relation to a loan agreement with a Mr Harrison and on a proposed purchase (which did not proceed) of a property in North Wales. In February 2004 Mr Guy instructed Mr Hewitt to act for him on a proposed sale of Plas Brereton and, in March, in connection with an agreement with Mr Brislen. That same month, March 2004, Mr Guy instructed Mr Hewitt on the proposed sale of the Land to a Pearl/Luqman controlled company (not TAL) when other solicitors acted for Pearl. This did not proceed. And then, in April 2004, came Mr Hewitt’s instruction from Mr Luqman to act on the acquisition of the Land by what was shortly thereafter to be identified as TAL. During the course of this instruction Mr Hewitt acted for Pearl on the payment to Mr Razak of what Mr Guy owed him and, with that repayment, on the discharge of Mr Razak’s charge over a part of the Land. In May 2004 Mr Hewitt was instructed by Mr Guy in relation to a land transaction in Cheshire and on his purchase of a car. When towards the end of June 2004 Mr Hewitt moved to the Betesh Partnership he was asked by Mr Guy to take Mr Guy’s (and Trevor Guy Properties’) files with him. By mid-June 2004, with the transfer of Weightmans’ file on TAL’s purchase of the Land to Mr Maharaj, Mr Hewitt ceased to act for Pearl/Mr Luqman. In late 2004 he was in touch with Mr Guy in connection with a redemption statement in respect of further advances to him by Pearl which had been secured against 20 Waterside. Mr Guy later transferred his instructions in the matter to Pannones.

With such a background of instructions from both Pearl/Mr Luqman and Mr Guy, it is perhaps not surprising, although an easy source of confusion, that when Mr Maharaj, acting for TAL, rang Mr Hewitt on 22 June to ask if he was acting for Mr Guy, Mr Hewitt answered that he was even though only a week or so earlier he had been acting for TAL in the same matter. With the benefit of hindsight it can be seen that this switching of roles was scarcely wise. But I do not consider that, in itself, this constituted a breach of duty by him.

Mr Guy’s particulars of claim allege, in paragraph 16, that when he asked Mr Hewitt whether he (Mr Hewitt) was acting for Mr Guy Mr Maharaj was informed that he was not. That allegation cannot stand in light of the evidence I have heard. As I have mentioned, Mr Maharaj and Mr Hewitt both agreed that Mr Hewitt informed Mr Maharaj that he acted for Mr Guy. That said, it would appear that there was an element of misunderstanding about this: Mr Hewitt had in mind that he was acting for Mr Guy in relation to his dealings with Plas Brereton whereas Mr Maharaj was concerned to know whether Mr Hewitt acted for Mr Guy in relation to the sale of the Land to TAL. (Over and above that confusion, there was, as I have already mentioned, a difference between Mr Maharaj and Mr Hewitt over just what Mr Hewitt said to Mr Maharaj about Mr Guy’s willingness to exchange and complete that day on the sale of the Land to TAL: it is common ground that Mr Hewitt said that Mr Guy was so willing but Mr Hewitt maintained, although Mr Maharaj stated that he had no recollection of this, that the breakdown of the completion monies was still in issue.)

In paragraph 28 of his particulars of claim Mr Guy sets out allegations of negligence in respect of the two periods of Mr Hewitt’s involvement with the Land. First there are allegations in connection with his dealings with the TR1 which Mr Guy had signed at his meeting with Mr Bibby at the All Bar One on 19 April. Second, there are allegations concerned with what Mr Hewitt said to Mr Maharaj on 22 June. Mr Guy’s pleaded case as regards the events on 19 April has been overtaken by my findings of what actually occurred that day. It is now clear, and I have found, that Mr Bibby handed the signed TR1 to Mr Hewitt to enable the latter to obtain its execution by TAL. Execution by TAL could not take place there and then because Mr Luqman was the only authorised signatory of TAL present at the meeting whereas two signatures were required. It was accepted that Mr Hewitt passed the TR1 to Mr Luqman to obtain the second signature which, as it happens, was subsequently provided by Mr Luqman’s sister. Mr Guy’s pleading does not deal with this: but no point was taken over this failure. The gist of the complaint, which Weightmans accepted must be dealt with, is that Mr Hewitt failed to obtain the return from Mr Luqman of the signed TR1, by then executed also by TAL, or, if he did (the evidence on this was not clear), that he allowed Mr Luqman to obtain the file containing the executed TR1 since it was in it when the file was passed by Mr Luqman to Mr Maharaj on or about 18 June. Without going into the question of what precisely Mr Hewitt’s obligation was as regards his receipt and retention of the signed TR1 which, it was accepted, he had been handed by Mr Bibby at the meeting on 19 April, Weightmans accepted that Mr Hewitt should have called for its return before the time that Weightmans was dis-instructed in the matter and should not therefore have allowed it to come into Mr Luqman’s possession. Weightmans accepted that this failure amounted to a breach of duty.

That brings me Mr to Mr Hewitt’s communications with Mr Maharaj and Mr Guy on 22 June. The only question here is whether Mr Hewitt acted in breach of duty to Mr Guy by giving Mr Maharaj to understand that Mr Guy was willing to exchange and complete that day on the sale of the Land to TAL. Mr Guy’s case that he was not consulted at all by Mr Hewitt on the matter and did not come to the All Bar One that day. I have found that he was indeed consulted by Mr Hewitt and did indeed come to the bar as Mr Hewitt has maintained. I have also found that Mr Guy informed Mr Hewitt, who then passed on to Mr Maharaj, that he, Mr Guy, was willing to exchange and complete that day. I consider that Mr Hewitt may be criticised for failing to make clear to Mr Maharaj that, although he was acting for Mr Guy and had been asked by Mr Guy to transfer his instructions to the Betesh Partnership when, a few days later, he moved to that firm, he had no instructions in relation to the Land and that, in any event, the breakdown of the consideration was still unresolved. Having seen both Mr Hewitt and Mr Maharaj give evidence I am satisfied that Mr Hewitt did not make either of these matters clear and that Mr Maharaj understood by the end of his second telephone conversation with Mr Hewitt at about 1255pm (a) that Mr Guy was willing for the matter to be completed that day and (b) that there was no outstanding matter that needed to be attended to (whether over consideration or otherwise) before completion could occur.

I find it difficult to characterise Mr Hewitt’s failure to make clear these matters as a breach of duty on his part. He could be forgiven for thinking that, in replying as he did, he was doing Mr Guy and Mr Maharaj a favour. He was no longer acting in the matter. Although Mr Maharaj may not have appreciated this, Mr Hewitt happened to be relaxing over a drink at a farewell get-together with colleagues when Mr Maharaj’s call came through to him.

I shall nevertheless assume that Mr Hewitt’s failure to state clearly that he was not instructed by Mr Guy on the sale of the Land and that, in any event, there were matters to be sorted out before completion could take place did constitute a breach of duty by him just as much as it is accepted that he acted in breach of duty in allowing Mr Luqman to retain the executed TR1. Weightmans accepted that, as his employer at the time, they were responsible for those breaches.

That brings me to the topics of causation and loss: whether these breaches of duty caused Mr Guy to suffer loss and, if so, whether he has established what that loss was.

It follows from my findings about Mr Guy’s visit to the All Bar One on 22 June 2004 and Mr Hewitt’s conversation with him and Mr Maharaj between 1245pm and 1253pm that day that Mr Guy knew and approved of the transfer of the Land to TAL completed later that day. On that footing his claims against the defendants fail and he cannot be heard to complain of their involvement in the transaction even if it might be said that Mr Hewitt was at fault in failing to retrieve the TR1 after he had given it to Mr Luqman for execution by TAL in readiness for completion and that Mr Bibby was at fault in failing to secure the return of the TR1 from Mr Hewitt after he had arranged for it to be executed by TAL. Those failings, it may be said, were overtaken by Mr Guy’s willingness in the event to proceed straight to completion.

There is, I confess, something a little unsettling about so simple a conclusion. On 22 June Mr Guy was not in fact being represented in the transaction; Mr Hewitt was not seeking to be other than helpful to Mr Maharaj when the latter rang him at the All Bar One that day; on what was on any view a brief conversation carried on over the telephone with someone he had not met or dealt with previously Mr Maharaj felt able to complete the transfer; it is quite possible that Mr Maharaj might have misunderstood Mr Hewitt’s response to his calls or that Mr Hewitt expressed himself loosely in what he said to Mr Maharaj; and Mr Guy (although he denies that he was even contacted by Mr Hewitt) might have misunderstood what he was being asked by Mr Hewitt or failed to express himself with sufficient clarity. It is all too easy to be dogmatic after the passage of so many years about precisely what was said in the course of very short and informal conversations, especially when there was no follow-up in writing to confirm what had been said. To this extent I have sympathy with Mr Guy’s surprise that the transfer of the Land could be completed in reliance on such brief and informal and, possibly, imperfect communications. For that reason I think it appropriate to consider the issue of causation a little more fully and examine what happened after 24 June in so far as it throws light on Mr Guy’s knowledge of the transfer and his reaction to that knowledge.

I start with a document headed “Confidential Personal Assets and Liability Statement”. In typed form, it is dated 24 June 2004 (just two days after the transfer of the Land) and was completed in Ms Bartle’s handwriting. It purports to set out Mr Guy’s assets and liabilities. The “assets” column in the statement refers to “residences (if owned)” and “other property”. The latter has been filled in by specifying Plas Brereton (to which a “current value” of £1.5 million is attributed), but there is no mention of the Land. (The “current value” column ignores the amount of any sums secured on the asset referred to in that column.) As Mr Guy contends in these proceedings that the Land (ignoring the amounts secured by it) was worth £14 million or so (I come to this later) it is, to say the least, odd that this major asset which in value dwarfed all of the other assets shown on the statement should have been overlooked if, as he claims, he not only owned it but had no reason to think, much less know, until very much later that it had passed from his ownership. When cross-examined about the statement Mr Guy had no satisfactory explanation for the omission. There are really only two possibilities. Either the Land was omitted because it never was beneficially owned by Mr Guy (and therefore would not have featured in any event as one of his “personal” assets, an issue I come to later) or it was omitted because by 24 June 2004 (whatever the position may have earlier been) the Land had been transferred to TAL and this had happened with Mr Guy’s full knowledge. The statement is also of interest in that apart from a mortgage loan of £400,000, a small sum due by way of tax, two loans referring to monthly payments totalling £1,729 or so, and “other unpaid creditors” totalling £30,000, there is no suggestion of any liabilities of the scale which Mr Guy now claims were due to Pearl and which, as will be seen, feature in his calculation of loss by way of deduction.

But the defendants took the matter further. They submitted that even if Mr Guy was not contemporaneously aware of the transfer when it was completed on 22 June 2004 and there is another – innocent – explanation for the omissions from the statement he was certainly aware of it later that year and in any event well before 14 February 2005. They contended that, so far from complaining of the transfer when he became aware of it, Mr Guy deliberately chose, until it was too late to do so, to take no steps to claim that the transfer had been completed in fraud of him.

The significance of 14 February 2005 is that on that day Barclays Bank lodged with the Land Registry an official search in respect of the Land. This gave to Barclays 30 days within which to lodge for registration a charge by TAL over the Land to secure sums owed to Barclays by Lexi (as by then Pearl had become). The charge in question was dated 8 March 2005 and was lodged for registration on 23 March which was within the 30 day priority period. It secured amounts which exceeded by a very large margin the value of the Land. By agreement with Lexi, Barclays’ charge took priority over the charge which TAL had granted to Pearl (as Lexi then was) on completion of the transfer on 22 June 2004.

Mr Guy subsequently challenged the validity of the Barclays charge. He did so in answer to proceedings brought by Barclays seeking a declaration that it was entitled to sell the Land pursuant to its charge and that any purchaser of the Land from Barclays selling as such chargee would take the Land free from any interest, right or claim that Mr Guy might have in, over or in relation to it. The immediate background to this is that on 5 October 2006 Barclays demanded payment by Lexi of £102 million under a credit facility. Those monies, as I understand it, were secured on the Land pursuant to Barclays’ charge. Lexi failed to satisfy the demand. On the same day, Barclays appointed joint administrators of Lexi and, by an administration order made on 18 October 2006, the same persons were also appointed joint administrators of TAL.

Mr Guy’s challenge to the validity of the Barclays’ charge failed. In the course of the judgment ([2008] EWHC 893 Ch) given on 16 January 2008 dismissing the challenge it was noted, at [26], that Mr Guy had failed to register a unilateral notice against the titles of which the Land was comprised on discovering that the transfer to TAL had taken place. In particular, the judge (Terence Mowschenson QC sitting as a Deputy High Court Judge) noted that:

“The defendant’s [i.e. Mr Guy’s] evidence is that in fact he held off registering such a notice once he discovered that things might not be as they should be. He had received some money in relation to the charge, and he was apparently content to continue to deal with Mr Luqman. Subsequently, he said, he did give instructions to a firm of solicitors to issue a unilateral notice, but they failed to do it. It is noteworthy that when he addressed me this morning he did say that he was prepared to continue to deal with Mr Luqman for a while to see what was happening with the property…”

Attempts by Mr Guy to obtain permission to appeal against the decision failed both before the judge and the single Lord Justice and again, on 9 April 2008, on a renewed application before Carnwath and Lloyd LJJ (see [2008] EWCA Civ 452) and yet again before the Court of Appeal on 8 December 2010 (see [2010] EWCA Civ 1396; [2011] 1WLR 681).

The question which therefore arises is whether, as the judgment of Mr Mowschenson QC from which I have quoted suggests and the defendants have asserted, Mr Guy became aware of the transfer to TAL at a time, i.e. before 14 February 2005, when it was within his power, by the entry on the titles to the Land of a unilateral notice, to take protective measures to safeguard his claims in respect of it. For, if he did become so aware, he knew that he could take protective action but deliberately decided not to do so until it was too late (i.e. until after 14 February 2005) then the contention of the defendants is that, even if Mr Guy could show that he had not approved of the transfer to TAL and that, in addition, he would otherwise have a claim in negligence against the defendants (or some of them) for having facilitated such transfer, then the loss that he suffered as a result of his inability to recover the Land was, to the extent of the Land’s value, caused by his own act and not the negligence of the defendants. It is to the evidence bearing on that contention that I now turn.

In the note of a conference dated 7 April 2005 with Mr Jonathan Small of counsel Mr Guy is recorded as knowing of the transfer in “September/October 2004” and, when asked why he had delayed (in taking up the matter), is recorded as stating that “he started doing a deal with David Bris[len]…” By then, he had instructed Mr Alex Megaw of Pannones. I come later to what Mr Megaw had to say which is relevant to this issue. In an e-mail dated 30 June 2005 from Mr Megaw to a Mr Halloran, a copy of which was sent to Ms Gregory (assisting Mr Guy), Mr Megaw wrote “[Mr Guy] said that he did not know of the transfer of the [Land] until 3 or 4 months later”. The reference to “3 or 4 months later” is to a period after the transfer.

On 8 December 2005 Mr Guy had a consultation with James Guthrie QC. Mr Megaw was present. His assistant took a very detailed note. At page 28 of the note the following appeared:

“TG [i.e. Mr Guy] found out about the transfer and charge of the [L]and in October/November. TG thinks it was in November.”

In context, the year in question is 2004. In a lengthy letter dated October 2006 (the date is no more specific than that) from Mr Guy to Patten J (as he then was) written in connection with other proceedings in which he was embroiled Mr Guy wrote this:

“It was not until late December 2004 that a title search revealed that the site was no longer in Mr Guy’s name but that of Ten Acre Ltd. When Mr Guy questioned Mr Luqman about this he was told it was too late and that [sic] had gone now.”

The letter later stated, in a passage referring to the consultation with Mr Guthrie QC:

“The initial question asked by the barrister was why Mr Guy had waited so long before seeking legal advice. In fact Mr Guy only found out for certain on January 2005 for the first time that the rumours were true and the land had been transferred without his knowledge. He then immediately sought legal advice…”

The letter before the court was a copy which lacked Mr Guy’s signature but he confirmed in the course of his oral evidence that he had sent the letter.

The position appears thus: as time passed, Mr Guy’s recollection of just when he discovered that the Land had been transferred to TAL out of his ownership was gradually pushed back. By the time he came to sign his first witness statement the date had became even later. Although he conceded in paragraph 25 that:

“Towards the end of November 2004 Dave Brislen’s solicitor, John Carpenter, did tell me that the …Land was not mine. I was doing deals with Dave Brislen and speaking to John Carpenter from time to time. I did not believe him at that time because I still could not understand how it could be transferred out of my name without my knowledge or involvement…”

Rather than take the elementary step of searching the titles (and it is to be recalled that Mr Guy was no ingénue in matters of land dealings) he went on to refer vaguely to conversations and meetings with Mr Luqman and others and to an absence of belief on his part that the Land could have passed out of his name, culminating (at paragraph 29) with an assertion that he:

“…finally understood that the registered owner of the … Land was not me but Ten Acre Ltd when I received a copy of a letter from Howard & Howard, who were acting for Ten Acre Ltd, dated 28 February 2005 and addressed to Carpenters. The letter said that their client had good title to the … Land for over a year. That was the first time that I saw anything in writing that made such a suggestion and I wrote to Alex Mr Megaw on the same day asking him to put a caution over the Land.”

In cross-examination before me Mr Guy settled on 28 February 2005 as the date when he first realised that the Land had gone. This, it might be thought, was a convenient date since it post-dated his knowledge to the all-important 14 February 2005. It was clear however, and I so find, that Mr Guy was aware of the transfer long before that date and, at the latest, by October or November 2004. This assumes that I am wrong about his conversations with Mr Hewitt on 22 June 2004 and am reading too much into his statement of assets and liabilities dated 24 June 2004 prepared on his behalf by Ms Bartle, his PA. Moreover, it is just not credible that during the months that followed 22 June 2004 during which he was in frequent contact with Mr Luqman that Mr Guy should not have been fully aware of the transfer of the Land to TAL. Not the least is this so when his frequent contact with Mr Luqman was, partly at least, in connection with the Land. For example, on page 9 of his second statement, Mr Guy stated that in the period July/August 2004 he “was still in Pearl’s offices on sometime[s] daily sometime[s] one to two times a [sic] weekly… During all this time and in the following months we insured and fenced the Ten Acres land, decontaminated the first 5.6 acres and complied with the conditions of the planning permission including putting in a road on the front parcel. This was all done between myself and Dave and Peter Torrible of the Land and Development Practice, keeping SL informed.” (Emphasis added.)

Finally, I draw attention to Mr Megaw’s evidence. He was cross-examined very extensively, mostly so far as I could understand it, in connection with matters which had no relevance to the present claim. At times, as I have already observed, it was as if Mr Megaw’s conduct, rather than that of the three defendant firms, was on trial. This was evident not least in Mr Guy’s closing submissions a significant part of which is devoted to criticising Pannones in general and Mr Megaw in particular. Pannones had been instructed by Mr Guy in early 2004 in connection with his complaint of professional negligence against the solicitors who had acted for him on his acquisition of the Land. There was also another dispute where he sought Mr Megaw’s advice. The dispute with the former solicitors was raised, as I understood it, in connection with the solicitors’ claim for unpaid fees. By December 2004 Mr Megaw had succeeded in enabling Mr Guy to resist the solicitors’ claim. It was as a consequence of that involvement that, by early 2005, the question of the transfer of the Land to TAL came into focus as a matter on which Mr Guy was seeking advice. According to Mr Megaw’s recollection – and as I have stated Mr Megaw had a clear and coherent account of his dealings with Mr Guy - this further involvement arose out of proceedings by Lexi (as by then Pearl had become) to recover loans totalling £465,000 secured on 20 Waterside, Mr Guy’s home. In paragraph 7 of his witness statement in the current proceedings Mr Megaw referred to what he described as “two main points” concerned with Mr Guy’s further instructions, namely:

“(a)

That [Mr Guy] was content with the fact that completion had taken place on the material deal for Ten Acres Lane when he first mentioned the matter to me in early 2005 and that he was only concerned to be paid what he thought he was owed; he did not become agitated until he realised that he was not going to be paid;

(b)

[Mr Guy] was inconsistent and very difficult to pin down on his evidence, notably (but not exclusively) in respect of the price said to have been agreed for Ten Acres Lane.”

Mr Megaw was clear in his recollection that Mr Guy did not finally instruct him to register a “caution” – the expression used although the relevant mechanism was an application to register a unilateral notice – against the titles to the Land until 23 March 2005, that the relevant applications were made the following day and were registered on 29 March but that it was established on 30 March that the Land Registry had received a prior dealing on the titles which took priority. This was later discovered to be the Barclays’ charge so that, given its priority, the registration of the unilateral notices on Mr Guy’s behalf made no difference to his position.

The general effect of the evidence – and I do not need to go into the complicated communications which took place – was clear: for reasons connected with the onward sale of the Land then under discussion between Mr Brislen and Mr Luqman, an event which if it materialised held out the prospect of substantial profit for Mr Guy, Mr Guy was content to hold off taking action to enforce any rights which he thought he may have had in relation to the Land and its transfer to TAL for fear that such action might jeopardise the prospective deal and it was only when any prospect of a deal had finally fallen through, which was in late March, that he instructed Mr Megaw to proceed to register “a caution”. Specifically, Mr Guy had by his own admission instructed Mr Megaw to hold off imposing any restriction between 26 January (when, as I understood it, Mr Megaw was first consulted over the matter) and 28 February 2005 which was the date on which, following receipt of the letter from Howard & Howard, Mr Guy sent Mr Megaw by fax a letter instructing him “to put a caution over [the Land] …”. Mr Megaw said he received that letter in the early evening of 28 February and that he immediately contacted Mr Guy to arrange a meeting to discuss the pros and cons of taking such action involving, not least, obtaining a statement from him to support an application to the Land Registry. Mr Megaw said that there was some delay before Mr Guy came back to him on the matter and that it was only on 4 March that he was able to make contact with him. On that occasion, he said, Mr Guy told him not to take any action until he could attend a meeting with Mr Megaw and Mr Brislen to “discuss strategy”. This hold-off in taking further action continued, he said, until 23 March when, as I have mentioned, Mr Guy instructed Mr Megaw to proceed. By then any hope of a lucrative deal involving Mr Brislen and Mr Luqman for the sale of the Land to a third party developer had apparently fallen through.

Mr Guy strongly contested that recollection. In his closing submissions he invited me to find that he instructed Mr Megaw to register a “caution” on 28 February and that he did not thereafter countermand that instruction.

The significant fact to emerge from all of this was not what action Mr Guy may or may not have instructed Mr Megaw to take on and after 28 February (although Mr Megaw’s evidence was clear, as I have related and accept, that he was indeed told to hold off taking any steps) but that, already by 28 February, it was effectively too late for any action to be taken to protect any claim that Mr Guy might have over or in relation to the Land. This was because of Barclays’ priority search dated 14 February under protection of which Barclays’ charge was later registered.

In his closing submissions, as I understood them, Mr Guy submitted that, so soon as it became known to Mr Megaw (in late January) that the Land had been transferred, Pannones, acting by Mr Megaw, should have advised him to register a unilateral notice to protect his position, even if at the time he was intent on pursuing his negotiations with Mr Brislen and Mr Luqman, but Mr Megaw failed so to advise him. This submission ignores Mr Guy’s clear instruction to Mr Megaw to hold off taking any action until 28 February (by which time it was too late) and assumes that Mr Megaw would have pursued the issue despite that instruction and would have succeeded in persuading Mr Guy to change his mind. But even if Mr Megaw should have ignored Mr Guy’s instruction and was negligent in failing so to do this does not assist Mr Guy: the chain of causation is broken. It does not matter that this resulted (if it did) from a negligent failure by those advising Mr Guy at the time to take the necessary protective action. He is as much bound by what they did or failed to do as he is by his own direct actions and instructions.

In these circumstances I conclude that Mr Guy was aware well before 14 February 2005 that the Land had been transferred out of his ownership to that of TAL and that it was open to him, if he had a case for doing so, to take steps to protect his claim to the Land by the registration of an appropriate protective mechanism (the “caution”) at the Land Registry but that for reasons connected with his dealings with Mr Brislen and Mr Luqman he deliberately (and at a time when he was in receipt of legal advice) held off instructing Pannones to take such action until it was too late to do so if the action was to be of any practical benefit to him.

As a matter of causation therefore the claims, if otherwise well founded, must fail.

I should also note that Mr Patten and Ms Mirchandani had a separate argument based on remoteness. This was that in any event any loss flowing from Mr Hewitt’s failure to retrieve the executed TR1 from Mr Luqman was too remote to be recoverable, the point being that Mr Luqman’s fraudulent use of it was not then reasonably foreseeable. Since Mr Luqman was regarded as an upstanding businessman at the time I see considerable force in the submission. But I do not need to reach any conclusion on it.

In view of my conclusions on liability and causation it is not necessary to consider loss but, having heard evidence and argument on it including detailed written submissions, I shall set out my conclusions as briefly as the relative complexity of the issues involved will allow. What follows assumes that Mr Guy was the beneficial owner of the Land (and not merely a nominee for Pearl or Mr Luqman) and that the loans to him by Pearl were truly liabilities to which he was subject. It also assumes that the true consideration for the Land was a fixed sum, be it £15,000,000 as the documentation stated or £10,000,000 as Mr Guy contended it to be, and not simply the release of Mr Guy from all liabilities which he owed to Pearl. (If it was the latter, then – consistently with his “Confidential Personal Asset and Liability Statement” dated 24 June 2004 - Mr Guy disclosed neither the Land as an asset nor any amount due to Pearl as a liability except a sum of £400,000 secured against Plas Brereton.)

It is Mr Guy’s case that, but for the negligence of the three defendants, the Land would not have passed out of his beneficial ownership. He therefore claims for loss of two kinds: (1) loss of the Land’s value and (2) the costs incurred by him in attempting, fruitlessly, to recover it. In a so-called “updated schedule of loss” dated 25 October 2011 (and served therefore at a time when Mr Guy was still represented by solicitors and counsel - the document bears the names of leading and junior counsel then acting for him) his claim for loss of the Land is valued on alternative bases. The first and primary basis assumes that Mr Guy would have sold the Land “sometime in early 2005 had [it] not been stolen by Shaid Luqman.” He calculated its value as at 31 March 2005. He claimed that at that date its value was £14,080,000 after deduction of so-called remediation costs. I come later to the appropriate date for the valuation and to the important topic of remediation. From that figure he gave credit for various loans made to him by Pearl or, in one case, already charged on a parcel of land (Plas Brereton) which came into his ownership. This was an important and correct concession by Mr Guy. The loans in question were either discharged on completion (because they had been charged on the Land by Mr Guy to Pearl and on completion of the transfer to TAL the security and with it Mr Guy’s liability were replaced by a charge by TAL in favour of Pearl) or were discharged prior to completion (for example a loan from Mr Razak). Taken as a whole, the loans were very considerable in amount: inclusive of interest which would have been incurred up to the assumed date of valuation Mr Guy accepted that £8,772,000 was due. In the circumstances, he claimed that the net value of the Land as at 31 March 2005 was £5,308,000, being £14,080,000 less £8,772,000. His second and fall-back basis assumed that a sale to Mr Luqman at £10,000,000 would have occurred and that the Land would then have been sold on for development for “a price far in excess of £10,000,000” (although no price is supplied) from which further sale, it is said, Mr Guy would have received £250,000 for every £1,000,000 achieved above £13,000,000. Although there was some evidence, none of it very clear, about what it was intended should happen to the Land after its sale to TAL had completed, there was an absence of hard evidence to support this alternative. Moreover, the alternative assumed the very thing – completion of the sale to TAL – which Mr Guy criticises the three defendants for having facilitated. In these circumstances I have not felt able to give further consideration to this alternative in the computation of loss.

The costs which Mr Guy said that he incurred in his unsuccessful attempts at recovering the Land, and which he claimed were part of his loss, totalled £2,704,938.83. They are largely made up of claims for legal and other fees and liabilities for legal costs incurred by Mr Guy in the course of instructing Pannones, Halliwells, Schulmans and Bridgehouse Partners (the solicitors formerly acting for him in this action) and in the course of proceedings brought either against him or by him, and arising largely if not wholly in connection with the Land.

It is impossible to give credence to any of this element of the claim which is simply a series of amounts unsupported by any documentary material. Moreover, by a series of orders (Roth J on 13 July 2011, Peter Smith J on 25 August 2011 and Newey J on 13 December 2011) Mr Guy was ordered to provide disclosure in support of his loss claim. For as a result of his fault or those then advising him he never did so. This part of the claim therefore fails for want of adequate proof. Moreover, it would have been wrong to permit Mr Guy to pursue it in disregard of the court’s various orders and unfair to the defendants to have allowed him to do so. Just as I was completing this judgment Mr Guy sent me some of the bills he had very recently received. I have ignored them as having arrived far too late.

That brings me to the value of the Land. As I have mentioned, the Land which extends to approximately 47.5 acres was previously occupied by brickworks. It had been used as a site for the unregulated dumping of waste material of one kind or another from 1923 to 1978 and had only been licensed for that purpose between 1978 and 1982. It had also been used for fly-tipping. There was clear evidence that there were contaminants at the site and that the site produced methane (an explosive), carbon dioxide (an asphyxiant) and hydrogen sulphide. At the time of its transfer to TAL in June 2004 the Land was and, I think, has since remained, a cleared development site which, in parts at least, had become covered with extensive undergrowth, including an extensive amount of Japanese Knotweed.

The Land’s value lies in its potential for development. But in order to realise that potential the Land has to be “remediated” to eliminate or at least contain the harmful effects of the contaminants and gasses. Other steps have also to be taken to render the Land properly developable. The extent of the remediation to be assumed (and therefore the cost of the remediation to be factored into the calculation of value) depends on the nature of the development proposed for the Land: a significantly greater degree of remediation is required to the extent that the Land is developed for residential purposes than is needed for its use for commercial and/or light industrial purposes. That in turn depends on what development the local planning authority, Manchester City Council, was and is willing to permit.

With a view to addressing these issues and thus to reaching a view on the Land’s value at the material time directions were made earlier in the proceedings for each side (for this purpose treating the three defendants as one) to adduce (1) expert remediation evidence dealing with what, at the material date, was the state of the Land and what needed to be done and at what cost to render it developable for either residential or commercial/light industrial purposes (or a combination of the two) and (2) expert valuation evidence on what value at the material date the Land would have achieved on the open market as between a willing seller and a willing buyer assuming remediation appropriate to its intended use taking account of its actual or likely permitted use or uses for planning purposes. It was agreed by both sides that the material date for the valuation (and thus of the remediation costs) should be taken as the end of January 2005. A particular reason for this date was that, as already discussed, it was at roughly at this time (14 February to be precise) that Barclays lodged its priority search in respect of the Land, thereby (with the subsequent lodging within the priority period of the application to register the Barclays charge) depriving Mr Guy of the ability to profit from any dealing with the Land.

The defendants adduced expert evidence on remediation from Mr Philip Crowcroft, a partner in Environmental Resource Management Ltd. Mr Crowcroft’s credentials were impressive. Apart from holding degrees in civil, structural and geotechnical engineering he had over 30 years of experience in the assessment and remediation of contaminated land and of landfill and brownfield sites. He was or had been a member of various bodies concerned with providing guidance and good practice in the field of land remediation. Although he was not subject to much cross-examination, nonetheless in the short time that he was in the witness box he impressed me with his command of the subject and the thoroughness and, following discussion with Mr Dean (Mr Guy’s expert), fairness of his approach. He produced a very detailed report dated 11 October 2011 which, with its appendices, ran to almost 400 pages.

Mr Guy came to the trial without having taken any steps in accordance with the court’s directions to obtain expert evidence on remediation. Very much at the last minute I allowed him to rely on a report, hurriedly produced, by Terence Dean who with his wife runs a company called Daineswell Ltd which manages the design and construction of land remediation projects. Mr Dean, obviously working under very considerable time pressure, succeeded in producing a short report dated 9 February 2012. Because Mr Gatt, who shouldered the task of dealing with the expert evidence on behalf of the three defendants, was able (at considerable inconvenience to himself) to deal with the sudden appearance of this report and because within three days of receiving it Mr Crowcroft was able to find time to absorb its contents and meet Mr Dean to explore what common ground there was between them and produce a supplemental report reviewing Mr Dean’s position and (with Mr Dean) agree a joint experts’ statement identifying what they agreed and where they differed, I was willing to take the quite exceptional course of permitting Mr Guy to rely on Mr Dean’s evidence notwithstanding its very late appearance. Were it not for the fact that Mr Guy was a litigant in person and had been deluged with many thousands of documents with which he needed to come to terms since he began acting in person, I would not have allowed him this exceptional indulgence.

Mr Dean, whose strength lay in the practical day-to-day aspects of land remediation approaching the matter from the standpoint of the client who was engaging his services, was not familiar with the requirements imposed by the court upon a person called to give expert evidence. It had been very many years since he had last given expert evidence in a court case. As a result his report was deficient in a number of respects and lacked, to my mind, that degree of objectivity which the court looks for in an expert. This was apparent from the course followed by him in his report which was to assess Mr Crowcroft’s approach and then suggest areas where the works to be carried out could be undertaken more cheaply rather than undertake a quite independent appraisal of what was needed. As was pointed out in the defendants’ written closing submissions on the expert evidence, Mr Dean’s focus appeared to be more on the most economic solution than on adopting what, it was submitted and I agree, was the more realistic approach adopted by Mr Crowcroft of identifying (as he put it in his report) “the main elements of a remediation strategy which…reflect good practice at the time, as well as certain aspects of the broad intentions of the contemporaneous documents dealing with this area, and would also likely to be acceptable to the regulators, specifically Manchester City Council…and the Environment Agency.”

I deal first with remediation. The main points of difference between Mr Crowcroft and Mr Dean were twofold: (1) the extent to which, after treatment and removal of un-recyclable material, the top one metre or so of the ground across the area of the site could be re-used (with the remainder of that top metre being sent to landfill) and (2) the method by which gas emanating from the heavily contaminated centre of the site could be controlled.

As to the first of these, I preferred Mr Crowcroft’s opinion that about 50% could be re-used to Mr Dean’s figure of 85% or re-useable material. I do not think that Mr Dean’s opinion had sufficient regard to the sheer quantity of extraneous material in the ground (timber, plastics, and the like), the nature of some of the contaminants and the extent of the regulatory requirements applicable at the time governing re-use of waste.

As to the second, the central area was envisaged as forming an open space for any proposed residential development. As such, it was to be assumed that it would be used by residents, including children, for recreational purposes. It appeared to me that Mr Crowcroft’s altogether more prudent approach for dealing with this area was to be preferred. He favoured a below-surface bentonite cement wall around the area in question with associated granular-filled venting trenches inside the walled area and a cap on the public open space to provide a barrier between the contaminated soil below and the open recreational area above. Mr Dean’s approach, consistent with his wish to find the cheapest practicable solution, was (1) to undertake a detailed ground investigation and (2), depending upon the results of that investigation and what the regulators would accept, to put forward a range of remedial steps from simple trenches to the bespoke capping system favoured by Mr Crowcroft.

Mr Dean’s approach, which recognised the need for something to be done, suffered from his inability to state just what that something was. For the purposes of the valuation I have to come to a view on what, at the valuation date, the assumed remediation would comprise. There seemed to me to be much good sense in Mr Crowcroft’s solution which, as he put it in the joint statement:

“Will provide confidence that the future development of the Land immediately around the encapsulated area will not be affected by gas from deep waste within the slurry wall area. It is certain to assure Regulators and future house purchasers. Any scheme which does not provide an effective cut-off around the deep, former licensed landfill waste, would not provide such confidence, and would be unlikely to achieve planning condition sign-off.”

I have therefore concluded that on this issue, as on the other, the costs to be assumed should be based on the measures that Mr Crowcroft proposed.

I will come later to how this conclusion translates into the cost of remediating the Land for the purposes of the valuation. It is first necessary to consider in what way, at the valuation date, the Land could most profitably be developed. The answer to this question turns on what development at that date the planning authority would accept. That brings me to the evidence of the two valuers.

The defendants jointly relied on the report dated October 2011 of David Law FRICS, a director of Jones Lang LaSalle. Mr Guy relied on a report, also dated October 2011, prepared by Derek Nesbitt MRICS, a director of DTZ Debenham Tie Leung. Both impressed me and there was little to choose between them in terms of expertise. That said, there was a problem with Mr Nesbitt’s evidence. This was that Mr Guy’s side had taken no steps to comply with the court’s direction that the valuation experts on each side should meet to agree a joint statement on what was agreed and what was not, so that it was uncertain at the start of the trial whether Mr Guy would be adducing any valuation evidence at all. It seems that, at very short notice, Mr Nesbitt was asked to attend court to give evidence and, as was plain, was at something of a disadvantage when he came to do so. Although he had completed and signed off his report, there were aspects of it concerned with the planning side of the Land where Mr Nesbitt had had to rely on the views of another expert. This other expert was John Brooks, a colleague from within Mr Nesbitt’s firm. It turned out, however, that Mr Brooks had undertaken, or in the circumstances had only been able to undertake, a less than complete review of the planning file. There were relevant materials in it which he had not considered. Moreover, following or in the course of completing his report, Mr Nesbitt had not had the opportunity (because there had been no client follow-up) to discuss its contents with Mr Guy and those who had sent him his instructions. I allowed Mr Guy to rely on Mr Nesbitt’s report and Mr Nesbitt was duly cross-examined on it. In contrast to Mr Dean’s report, at least Mr Law and the defendants had had plenty of time to read Mr Nesbitt’s report and I therefore felt less difficulty in extending this indulgence to Mr Guy. But Mr Guy continued to labour under the difficulty that his valuer was placing reliance on the expert views of a planning colleague when no permission had been granted to adduce such evidence and when Mr Brooks was not available to be cross-examined on those views.

The central difference between Mr Nesbitt and Mr Law was the likelihood of the Land (or any part of it) obtaining permission for residential development. Mr Nesbitt, in reliance on the opinion of Mr Brooks, took the view that there was an 80% likelihood of planning permission being granted for a mixed development on the Land comprising 23.9 acres of residential use and 18.9 acres of commercial use (some 42.8 acres in all) and that a purely residential development (with appropriate open space) would have a 25% chance of success. Mr Law based his valuation on the assumption that the Land was to be valued for commercial use (for which, in his view, permission would be readily granted) with a percentage uplift from that value to reflect the possibility that residential permission might be forthcoming. He put the prospect of obtaining permission for residential development in the range of 10% to 20% and assumed a roughly mid-point figure of 16% in his final valuation.

It turned out, as I have mentioned, that Mr Brooks had not seen certain documents from the relevant planning file. Those documents made clear that, at the material date (January 2005), Manchester City Council (the planning authority) was strongly opposed to any residential development of the Land and favoured its use as a business park. This realisation led to Mr Nesbitt obtaining a further (and no less inadmissible) opinion from Mr Brooks. In it Mr Brooks reduced his estimate of the prospects of obtaining planning permission for the mixed residential and commercial use of the Land from 80% to 60% and for a full residential development from 25% to 10%.

A narrowing of the valuation range was the net result of this concession and of a further concession by Mr Nesbitt over the need to take into account, when calculating the residential development value, the cost of securing NHBC cover for each residential unit which he had assumed, namely 480 units. Mr Nesbitt helpfully produced a series of calculations. Those calculations made assumptions as to the remediation costs and what the Land would be worth after taking into account those costs. A calculation was then made which depended on whether the approach to be adopted was his own, of assuming a mixed development of residential and commercial use (and remediated accordingly) and discounting that value by between 10 and 50% to reflect the possible planning risks associated with the development, or Mr Law’s which took the value of the Land at its existing (commercial use) value (and remediated accordingly) and uplifted it to reflect the prospect of obtaining permission for residential development, using a range of percentage increases from between 10 and 50%. Finally, he assumed a “blended” remediation cost derived from the mid-point of Mr Crowcroft’s and Mr Dean’s figures and adjusted to take into account his concession on NHBC’s fees to which he then applied his own and Mr Law’s approaches. Those blended costs were set out in section 3 of Mr Nesbitt’s Supplemental Valuation Notes (dated 10 February 2012) contained in the defendants’ Closing Note on Issues of Expert Evidence.

In the light of the planning material, which on its face showed a strong determination on the part of the planners not to permit any residential development on the Land, but taking account of Mr Nesbitt’s view (which Mr Law accepted) that there was nevertheless some prospect of persuading the planning authority at some time to relax that determination and permit some residential development, I have come to the view that Mr Law’s approach is to be preferred. My only qualification to his approach is that, in the light of the evidence, I consider that the prospect of obtaining permission for any residential development was slightly greater than the 10 to 20% which he thought was appropriate. I consider that a 25% uplift to be the appropriate figure. That leaves the appropriate remediation costs which are to be assumed. I have preferred Mr Crowcroft’s figures (adjusted in the light of his discussion with Mr Dean and shown in enclosure 3, headed “Joint Calculations of the Remediation Experts” dated 13 February 2012, to the defendants’ Closing Note on Issues of Expert Evidence), in particular those appearing on the first page of that enclosure.

Taking Mr Crowcroft’s adjusted remediation costs into account, the resulting valuation yields a figure which is below the figure which is reached using the blended remediation costs when adjusted to show a 25% uplift. This is because the adjusted remediation costs are higher than the blended costs. The corresponding uplifted value (applying the same uplift) produced by using the blended remediation costs is £7,251,750. The equivalent uplifted value (again applying the same uplift) produced by using Mr Crowcroft’s unadjusted remediation figures (shown in section 1 of Mr Nesbitt’s Supplemental Valuation Notes) is £7,023,600. Using Mr Crowcroft’s adjusted remediation costs, the uplifted value lies somewhere between those two figures. The differences are not great. Even applying Mr Nesbitt’s approach to the blended remediation costs and assuming in Mr Guy’s favour that the discount is 40% (which was Mr Nesbitt’s amended discount following the appearance of Mr Brooks’ revised planning opinion) the value which this yields is £7,487,912. Again the difference is not great.

More importantly, the resulting values are all significantly less than the sum (£8,772,000) which Mr Guy conceded should be deducted to reflect the amounts which he owed to Pearl and were to be released on completion of his intended sale to TAL, and the liability for which, as I understood matters, was in fact discharged otherwise than at Mr Guy’s expense. According to the defendants’ calculations, the total of the amounts in question, inclusive of interest and other charges, properly to be deducted from the value of the Land as at that date was greater than the figure conceded by Mr Guy. Mr Patten took me through the figures. I shall not take up time discussing them, much less exploring the extent to which it is arguable that they might be greater than they should or that they should or should not reflect offsets (of which Mr Guy suggested several – none of them mentioned in his pleaded case – in the course of his cross-examination), as those items where there might be some doubt as to whether they should be taken into account (either as to the amount loaned or as to interest added) make no difference to the outcome. That is that, assuming liability in the defendants or any one of them is established, Mr Guy fails to demonstrate that he suffered any loss as a result: the value of the Land at the time is exceeded by the amount of the loans which fall to be deducted. I would merely add that the amounts in question were calculated up to 22 June 2004, the date when the Land was transferred to TAL, rather than to the end of January 2005 which, on the agreed valuation basis, is the assumed date when the Land should be taken as being sold and when therefore it might be thought that the amounts of the various loans to be credited against value should be assessed.

There was a question over whether the existence in 2004 and 2005 of Land Remediation Tax Relief (“LRTR”) was relevant to the calculation of the Land’s value. Very broadly stated, LRTR was (and remains) a relief from Corporation Tax. It operates by enabling a company to deduct from its pre-tax profits 150% of the costs incurred by it in cleaning up land in a contaminated state acquired from a third party or, if the company is making a loss, by treating the expenditure in question as a qualifying loss for which a tax credit is available. The land valuations used to calculate Mr Guy’s loss (assuming he establishes liability) are reached after deducting the assumed cost of remediating the Land. In effect the burden of the remediation cost is borne by Mr Guy. The existence of the relief is for this purpose irrelevant to the notional purchaser which has already had the benefit of the cost of remediation in the price that the calculation of value has assumed has been paid for the Land. Is it nevertheless open to Mr Guy to claim the value of the relief so as, in effect, to increase the value of the Land? I think not, and for two reasons. First, it is entirely a matter of speculation whether a purchaser would be eligible to claim the relief. Second, being an individual, Mr Guy was himself ineligible to claim the relief which, as explained above, is only available to a trading company as an offset against taxable profits. In short, the better view, I think, is that LRTR should be ignored. Even if it is taken into account it does not enable Mr Guy to demonstrate that the Land’s value at the material date exceeded the offsets that fall to be made so as to establish a loss. The amount of the relief was said to be 14% of eligible remediation costs. Taking as an example the blended remediation costs of £4,656,600, the relief would have amounted to approximately £652,000. (This ignores the fact that some of those costs would have been ineligible for relief.)

In his closing submissions Mr Guy relied on (1) a so-called “Summation” dated 16 February prepared by Mr Nesbitt and (2) a “Summing-up of Expert Witnesses in Remediation Costs” prepared by Mr Dean. Neither had been the subject of consideration by the defendants. Although dated 16 February Mr Nesbitt’s further paper was evidently drawn up after evidence in the case had concluded and was not available when the defendants’ counsel made their closing submissions on 17 February. Moreover, it appeared to refer to matters which had not been in evidence when Mr Nesbitt was cross-examined and to seek to re-argue matters explored when he gave evidence and which he dealt with in his Supplemental Valuation Notes. I have therefore largely ignored this belated attempt to have a further bite at the cherry. Mr Dean’s Summing-up suffered from the same defect and I have also therefore largely ignored it.

The defendants mounted a powerful case for saying that in truth Mr Guy was never the beneficial owner of the Land but held it as nominee for Pearl or Mr Luqman. They referred to the following matters, among others, for saying so. First, Pearl’s loans to Mr Guy to purchase the Land (they totalled £4.95 million) exceeded the price for the Land, namely £4.7 million. Second, although the loans were not interest-free, in fact interest was neither paid nor claimed. Third, there could be no commercial sense in Pearl or Mr Luqman lending Mr Guy the money needed to purchase the Land only to enable him to sell the Land on to TAL (a Pearl/Luqman-controlled company) at a later date and thereby to profit at Pearl’s or Mr Luqman’s expense, and no good reason why Pearl or Mr Luqman (or any company controlled by them) should not have acquired the Land from the outset. Fourth, Mr Luqman was involved in negotiating a forward sale of the Land to a third party as early as December 2003 which was several months before any kind of agreement had been reached for the sale of the Land by Mr Guy to Mr Luqman (or to any company controlled by him). Fifth, on 19 March 2004 Pearl, acting by Mr Luqman, entered into a written agreement with Mr Brislen concerned with the sale of the Land pursuant to which, among other matters, Mr Brislen was authorised to sell the Land on Pearl’s behalf. Sixth, Pearl paid Mr Guy £100,000 on 19 December 2003 for which Mr Guy was able to provide no coherent explanation. The defendants submitted that all of this was consistent with Mr Guy acting as no more than Mr Luqman’s (or Pearl’s) nominee and that the £100,000 paid to him in December 2003 was in the nature of a fee or commission to him for acting in that capacity.

I do no more than summarise the principal points. It is not necessary to reach a conclusion on this issue, important though it is, since for the reasons set out earlier in this judgment Mr Guy’s claims fail in any event. Suffice it to say that I see merit in the submission. Putting the same point another way, I had no sense as the documents in this case were examined and Mr Guy’s attempts to explain them became increasingly difficult to follow that the dealings between Mr Luqman (and Pearl) on the one hand and Mr Guy on the other were at arm’s length: those dealings struck me as having no evident commercial rationale. Moreover, this is all of a piece with the surprising fact that Pearl continued to advance money to Mr Guy between the date of the meeting at the All Bar One on 19 April 2004 and the date of the transfer to TAL on 22 June 2004. For example, £722,000 was advanced on 6 May 2004 to enable Mr Guy to acquire 20 Waterside (and, I think, a motor car). On 10 May 2004 £200,000 was advanced to enable Mr Guy to discharge what he owed to Mr Razak (and for Mr Razak’s charge over a part of the Land to be released). On 14 May £375,000 was advanced and on 4 June 2004 a further £90,000 was drawn down, both being further advances secured against 20 Waterside but later re-paid by Mr Guy. And on 21 June, the day before the transfer of the Land to TAL, Pearl’s loan of £1.2 million secured on the land at Plas Brereton was discharged. Then there is the undeniable fact that if Mr Guy knew of the transfer of the Land to TAL on 22 June 2004 he never once for several months thereafter complained about what had occurred. These peculiarities of Mr Guy’s relationship with Pearl/Mr Luqman feed into the matter to which I now come.

The signed contract and executed TR1 showed £15 million as the consideration for the Land. In his oral evidence, as I have mentioned, Mr Guy was adamant that £10 million was the agreed price and that he had no idea until long after the event that £15 million was the stated figure in the documentation agreed between the solicitors and therefore the amount which, as a matter of public record, appeared as the price on the relevant registers of title to the Land. At first sight it seemed odd that Mr Guy should be so anxious to distance himself from so large a part of the apparent consideration for the Land.

The evidence suggested that, as between Mr Guy and Mr Luqman, the actual “price” for the Land was rather different. The first point to notice is that if the transaction was truly negotiated at arm’s length it is curious that nothing exists in writing, as between Mr Guy and Mr Luqman, to document just what the deal was that they had struck. On any view the value of the Land - the subject of the deal - was very considerable. The fact that there is no such documentary evidence might be thought to lend credence to the view that this was not in truth an arm’s length sale by the beneficial owner to a third party at all.

The next point to notice is that it is precisely because of the difficulty he was experiencing in understanding what in his evidence he described as “the structure of the consideration” that, after consulting with the head of his department, Mr Bibby decided that he should terminate Mr Guy’s retainer of George Davies to act in the matter. His difficulties, it will be recalled, started with the 19 April letter in which he was told that, apart from £5 million which, the letter stated, Mr Guy had already received “the outstanding amount £10 million will be forwarded to Pearl…on completion of the sale to discharge my outstanding indebtedness to that Company.” By the end of April Mr Bibby was noting on his to-do list that he wanted a letter from Weightmans “explaining the structure of consideration”. In paragraph 45 of his witness statement he explained that he wanted this information:

“Because it [the transaction] had undergone a number of changes since my original instructions and I was no longer clear as to which charges were to be released and how much cash was to be transferred on completion. The structure was gradually becoming more complicated as Trevor and Shaid tried to take account of other loans between them, transforming what had begun as a relatively straightforward transaction into one where I was beginning to have doubts as to whether a suitable structure would be found.”

By the time Mr Bibby decided that he could no longer act for Mr Guy it was not clear to him “that there would be anything left to pay after the various borrowings had been discharged” (see paragraph 54 of his witness statement).

Mr Maharaj had been instructed to act by Mr Luqman on the basis that Mr Guy had already been paid. Mr Hewitt had difficulty in understanding what the consideration was to consist of as appears from paragraph 43 of his witness statement:

“I did not know for certain what redemptions were going to be included as the consideration. This was something upon which Trevor Guy and Shaid Luqman could not agree. I do recall Plas Brereton being indicated as one of the properties that was to have its charge redeemed. I also recall that 20 Waterside was discussed as another possible redemption to be included in the consideration …”

He then went on in that paragraph to speculate about other amounts that might have been included. And when, no longer acting for TAL, Mr Hewitt was rung up by Mr Maharaj at the All Bar One on 22 June, his evidence was that he told Mr Maharaj (although Mr Maharaj had no recollection of this) that “the breakdown of the completion monies” on the transaction was still in issue.

None of this would or should have caused any difficulty if the consideration had simply been a fixed amount, whether £15 million as the documents stated or £10 million as Mr Guy maintained: redemption figures for the sums secured on the Land would have been needed at completion to enable Pearl’s charges over the Land to be released. The balance would have been paid in cash and made available to Mr Guy to discharge other liabilities he had to Pearl. What these liabilities were should not have held up the transaction.

The defendants submitted, however, that the true bargain it now turns out was not as it appeared in the documentation. The true bargain, they submitted, was that there should be “a clean slate” between Mr Guy and Pearl, that is to say, no certain price as such but a drawing of the line by Mr Guy and Pearl under their dealings to date. That this was the true bargain, they submitted, was supported by paragraph 13 of Mr Guy’s first witness statement in which he described the nature of the deal he claimed to have struck with Mr Luqman:

“He offered to purchase the deal from me for £10,000,000 with a completion date on 1 May 2004. I wanted to complete before completion on Waterside so I had the money for that completion. Shaid Luqman agreed that on completion my arrangements with Pearl would be a clean slate. In order for that to happen the money owed to me from Pearl would be taken into account, the loans would be discharged from the proceeds and he agreed that the interest chargeable on those loans would be written off…”

They pointed also to paragraph 44 of a witness statement which he signed on 23 October 2007 in opposition to a summary judgment application in the proceedings brought against him by Barclays Bank in which Mr Guy said this:

“At the [19 April] meeting…I signed a blank Transfer (TR1 form) and a blank contract (no dates or figures inserted) witnessed by my solicitor, Mr Bibby. The solicitors arrived with the documents in this format and explained the details would be inserted later when Mr Luqman had the full information on TAL and when the solicitors had received redemption figures …”

If, they submitted, the agreed price was a fixed sum, whether £10 million or £15 million, it was difficult to understand why there should be any difficulty over what the “details” were that were to be inserted in the contract and TR1 and why, in particular, it was necessary to await any redemption figures. They pointed also to Mr Guy’s “Confidential Personal Asset and Liability Statement” to which I have referred earlier. As already mentioned, this document omits the Land, much less any sum secured against it and mentions only Plas Brereton and Waterside as properties owned by him and, so far as material, to £400,000 as the only large outstanding liability (secured against Plas Brereton).

I do not need to reach any conclusion on this issue. I will only say that the strong impression conveyed by the evidence was that the price of £15 million appearing in the contract and TR1 and which, as I have found, Mr Guy knew to be in those documents when he signed them at the meeting on 19 April did not represent the true arrangement between himself and Mr Luqman. This conveniently brings me to the last matter which I propose to deal with in this judgment.

One of the curiosities of this litigation is why in the face of compelling evidence that the apparent consideration for the transfer of the Land to TAL was £15 million, Mr Guy should have been so anxious to distance himself from any knowledge of that fact, tying himself into all manner of knots in his attempts to do so, and maintain instead that the true price agreed was £10 million. This concern on his part was at its most acute in his unsuccessful attempt to persuade me that he knew nothing of the 19 April letter and had no part in the delivery of it to Mr Bibby at their meeting on that day.

This, said the defendants, was because the inclusion of £15 million as the price of the Land was no more than a piece of dishonest window-dressing inserted for the purpose of representing, falsely, that that was the price at which the Land was being sold when, even on Mr Guy’s case, the price was £10 million (let alone what the defendants submitted was the true arrangement, namely that the Land should be transferred to TAL in return for a cancellation of any liabilities owed by Mr Guy to Pearl). They submitted that the dishonest nature of the documents which, at Mr Luqman’s bidding, Mr Guy procured and signed - namely, the contract and TR1 each containing the falsely inflated price - was such as to bring into play the ex turpi causa principle so as to deny Mr Guy any relief (if otherwise his claim against each defendant were well founded). In particular, they submitted that the form of contract dishonestly included a price inflated by £5 million and that the 19 April letter was prepared and delivered to Mr Bibby with the dishonest purpose of leading Mr Bibby to believe that the £5 million had already been paid. They submitted that Mr Guy was not only aware of but fully complicit in these matters. They submitted that if the true price, assuming it was £10 million and not merely the release of Mr Guy from his liabilities to Pearl, had been pointed out to Mr Bibby and he and Mr Luqman had not dishonestly allowed Mr Bibby and, no less, Mr Hewitt and Mr Maharaj, to believe that the transaction was to be for £15 million, the likelihood is that the sale to TAL would have proceeded no further or, at the very least, would not have proceeded through the agency of the defendants as the solicitors acting in the matter. It would have proceeded no further, it was submitted, because the documents which have come to light indicate that solicitors acting for Bank of Scotland, proposed lenders in this matter to TAL, were pressing Mr Hewitt in April 2004, when he was acting for TAL, for documentation “relating to the additional funding (£5 million plus deal costs) required to complete the acquisition” and, as it was put in a later letter, for “all documentation relating to the now …agreed position that Mr Luqman will be personally making a further equity injection of £5 million plus deal costs into [TAL]”.

The clear inference of this, they submitted, was that Mr Luqman or TAL would be providing £5 million and Bank of Scotland would be providing some or all of the balance needed to complete the transaction and that without the £5 million injection the Bank of Scotland would not have made available whatever the sum was that it was being asked to provide and the transaction would not have proceeded. The submission made was that the contract and TR1 had a stated price of £15 million (and not just £10 million) to create the impression that an extra £5 million was involved and that the 19 April letter was devised, signed and handed to Mr Bibby precisely to enable the transaction to proceed at that apparent price but without £5 million actually passing.

Counsel submitted that for Mr Guy to seek to hold the defendants accountable for any failings which led, if they did, to TAL acquiring the Land in a manner which Mr Guy had not agreed to would be an infringement of the ex turpi causa principle. When addressing me on this point, Mr Simpson submitted that it would be offensive to the policy of the law to allow recovery to be made from persons for their negligence when acting for a client where the client has lied directly and indirectly to those persons and entered into a dishonest conspiracy with someone who was also lying.

In their closing submissions on behalf of Weightmans, Mr Patten and Ms Mirchandani submitted that Mr Hewitt’s statement to Mr Maharaj on 22 June that he acted for Mr Guy was not the only reason that Mr Maharaj was content to proceed to completion. The transaction proceeded to completion in part because Mr Maharaj believed that the purchase price, as shown on the TR1, was indeed £15 million. They drew my attention to the fact that the preceding day, 21 June, Mr Maharaj had telephoned Mr Bibby at 1725pm and recorded Mr Bibby as stating that “he has been told that his client has already received £5m from Pearl and it is that together with the assumption of the Pearl debt that is the consideration for the transfer”. In his witness statement Mr Maharaj confirmed that that note recorded his understanding of the consideration payable under the transaction. Mr Patten and Ms Mirchandani submitted that if Mr Guy had acted honestly but Mr Luqman had maintained his attempt to obtain the Land by underhand means, that attempt would have foundered the moment that Mr Maharaj telephoned Mr Bibby. For, having been told the true position by Mr Guy Mr Bibby would have told Mr Maharaj that there had been no agreement of £15 million, that no monies had been paid and that he had either ceased acting or advised his client to have nothing further to do with Mr Luqman. The transaction, they submitted, would have stopped at that point.

On that basis how does the matter stand having regard to the principle of ex turpi causa?

This is a difficult and developing area of the law. It is one where I am reluctant to reach a final conclusion, not only because it is not necessary that I do so but also because of the absence of a full debate on the matter.

The latest jurisprudence on the topic is to be found in the decision of the House of Lords in Gray v Thames Trains Ltd [2009] 1AC1339; [2009] UKHL 33, in particular in the speech of Lord Hoffmann. He observed (at [30]) that “The maxim ex turpi causa expresses not so much a principle as a policy”. The policy, broadly stated, is that of preventing someone from using the courts to obtain a benefit from his own wrongful conduct. This is reflected in the fuller statement of the maxim, namely “ex turpi causa non oritur actio”. It is the application of the principle, rather than its statement, which gives rise to the difficulty. In the view of Lord Hoffmann there are two forms of the principle, a narrower and a wider form. The narrower form prevents a person from recovering for damage which flows from some punishment lawfully imposed upon him in consequence of his criminal conduct. It is not suggested that this narrower form is applicable in this case. Of the wider form Lord Hoffmann said (at [51] of Gray) that the rule “has to be justified on the ground that it is offensive to public notions of the fair distribution of resources that a claimant should be compensated…for the consequences of his own criminal conduct”. The conduct need not be criminal but has to be of a seriousness to justify the court’s condemnation. That will inevitably turn on the facts and circumstances of the case. Further, the conduct must be sufficiently connected to the claim to justify the court in denying a remedy to the claimant. It is not enough that the conduct did no more than provide the occasion for the occurrence of the damage for the consequences of which the claimant seeks the court’s remedy. Or as Lord Hoffmann put it in Gray at [54]: “Can one say that, although the damage would not have happened but for the tortious conduct of the defendant, it was caused by the criminal act of the claimant?...Or is the position that although the damage would not have happened without act of the claimant, it was caused by the tortious act of the defendant?” In short, if the principle is to apply it must be possible to say that the damage was caused, not merely occasioned, by the claimant’s conduct.

Difficult as I have found this issue I am of the view, necessarily tentative for the reasons explained, that Mr Guy’s claims if otherwise well-founded would not successfully be met by an ex turpi defence. Even if, for the sake argument, a transfer of the Land would not have occurred but for the dishonest statement in the contract and TR1 of the price at £15 million and the supply to Mr Bibby of the 19 April letter with its untrue assertion that £5 million had already been paid over, the loss of the Land was caused not by Mr Guy’s complicity in these matters but by other conduct, namely Mr Luqman’s dishonesty in instructing Mr Maharaj to complete the transfer, having wrongly told him that the consideration for the Land was being satisfied without further payment and by Mr Maharaj’s conduct, encouraged by Mr Hewitt’s assurance that Mr Guy was content for the matter to be completed, in acting on that instruction. All this assumes, contrary to what I have found, that Mr Guy did not assent to the transfer and did not thereafter make restitution of the Land impossible by deliberately delaying the taking of protective steps by the registration of an unilateral notice (followed no doubt by other measures) once he learned of the transfer. Put another way, Mr Guy says that he was robbed of the Land by Mr Luqman who manipulated the solicitors to do his will. This was causatively different from Mr Guy’s willingness to lend himself to a transaction at a dishonestly inflated price. It would not seem right that Mr Guy should find himself deprived by a fraudster of an asset worth millions and denied any remedy in the courts simply because he had been willing to co-operate and to an extent did co-operate with the fraudster in a dishonest scheme, which however never came to fruition, to inflate the apparent price.

The claims fail and the action must be dismissed.