Glenbrook Capital LP v Hamilton (t/a Hamiltons)

The Claimant is an investment fund based in Palo Alta, California. Between 2006 and 2008 it purchased through the Defendant, the sole proprietor of a silver business at the London Silver Vaults (“the Silver Vaults”) in Chancery Lane, a large quantity of silver for investment. The silver remained in the Defendant’s custody. In April 2011, at the height of the bullion market, the Claimant demanded delivery of the silver by 30 April. Some silver was delivered but there is a dispute as to what was delivered to the Claimant. These proceedings were issued claiming an order for delivery up of the silver and damages for conversion. Freezing orders were granted. Some silver was delivered up to Mr Michael Hore, an independent silver expert, on 14 November 2012 for him to assess and keep in safe custody. That silver was finally released to the Claimant on 24 January 2014.

Judgment was entered in default of acknowledgment of service on 9 November 2012, for damages to be assessed. This trial has been the assessment of damages. However it has, in reality, been a full trial because the Court needed to determine what, if any silver, had been converted and what had been delivered to the Claimant after April 2011. It is common ground that 16,699 troy ounces (“ozs”) of sterling silver of .925% purity (“the Glenbrook silver)” were purchased at a cost of about £170,298 (excluding the cost of some candlesticks) which was paid for by the Claimant. The parties' cases as to what happened to the silver are as follows:

The Claimant contends:

670 ozs were delivered to the Claimant’s vault no. 129 at the Silver Vaults and, as is now common ground, a further 10 ozs in the form of about 5 spoons was given to the teenage daughter of a friend of Mr Wickersham. So 680 ozs were not converted.

Between 8,825.7 ozs and 8,845.7 ozs, say 8,835 ozs, were delivered to Mr Hore and subsequently to the Claimant. The difference of 20 ozs is dependent on the weight of silver in some items with non-silver blades or handles.

The balance of 8,166 ozs has never been accounted for.

The Defendant contends that ultimately all the silver was delivered to the Claimant. Some was delivered as silver bars produced from Glenbrook silver that had been melted down.

At a Case Management Conference held on 24 January 2014, Teare J. approved the following list of issues:

I heard the following evidence:

My assessment of the witnesses was as follows. Mr Rudgley and Mr Wickersham were honest witnesses doing their best to assist the Court. Mr Wickersham was inclined to ramble from time to time in his evidence. Miss Gilbert mounted a major attack on Mr Wickersham’s credibility alleging that he had knowingly made an exaggerated claim because he had not included in his statement any reference to the 10 ozs silver spoons given to the teenage daughter of a friend in the presence of Mr Hamilton (so not in any way secretly) or to two of 14 candlesticks manufactured by the Defendant for Glenbrook but for Mr Wickersham’s personal use. These criticisms were not well judged and I reject them. The 10 ozs were on any basis absolutely trivial and had understandably been forgotten by Mr Wickersham (who was not present on the occasion) until he was reminded. As to the two candlesticks, which were ultimately paid for by Mr Wickersham, I am satisfied that they had nothing to do with the Glenbrook silver. They were not manufactured from it, as is evidenced by the costs invoiced by the Defendant which appear to include the bullion price of the silver supplied, and they were rightly not included in Mr Hore’s assessment of the Glenbrook silver.

Mr Inglis and Mr Langford attended to give oral evidence as a result of witness summonses issued by the Claimant when it appeared doubtful whether they would be called by the Defendant. To accommodate their other business commitments, they were called first. They were patently honest witnesses doing the best they could, but as they were the first to admit that their memories had diminished over the years.

I had no reason to disbelieve Mr Conway’s evidence, which was very limited indeed. In evidence, Mr Hamilton expressed surprise that his legal team had not asked Mr Conway about a range of other matters and called him to give oral evidence. I should record however that in 1996 he was convicted of cheating the Public Revenue and sentenced to six years’ imprisonment. In a subsequent trial he was found by Andrew Popplewell QC (as he was), sitting as a deputy High Court judge, to be an untruthful witness. That may explain why it was decided not to call him to give further evidence.

Mr Hore is a distinguished general valuer experienced in silver valuations. He was severely handicapped by the fact that he did not see much of the silver. He was clearly completely honest and independent, and doing the best he could to assist the Court. He did however make some mistakes, one quite surprising for a professional expert: he forgot to make allowance for the reduced pure silver content of .925 sterling silver.

That leaves Mr Hamilton. I regret to say that, for reasons that will become apparent, I found him to be a thoroughly untruthful and evasive witness. He repeatedly said that he would not lie on oath, but I consider that that is exactly what he did on a number of occasions.

Before turning to the individual issues, I shall set out my main findings of fact.

The Claimant is an investment fund. It has invested in a number of different types of investment including wines and cars. In 2006, Mr Wickersham and his colleagues concluded that the price of silver was at rock bottom and that it was likely to rise significantly in the next few years. That was a shrewd calculation. The price of silver bullion rose about five-fold between 2006 and the highpoint of the market achieved in mid-2011.

Mr Wickersham met Mr Hamilton in London and it was agreed that Mr Hamilton would buy silver flatware for the Claimant. Most unfortunately, no record was made of the contractual terms of the arrangement. It is common ground however that (i) that the Claimant would pay in full for the silver when purchased; (ii) that the intention was that decent quality sets of various patterns would be assembled and placed in wooden canteens for shipment out to the United States and retail sale; (iii) that in the meantime the silver would be stored separately from Mr Hamilton’s other stock in a vault in the Silver Vaults; and (iv) that any waste pieces incidentally acquired would be melted and converted into silver bars.

Mr Wickersham’s evidence was that the intention was to buy Georgian silver. That was disputed by Mr Hamilton. Whilst it may have been the original intention that the focus should be on Georgian silver, from the outset Mr Hamilton openly brought Victorian and 20^th century silver without objection from the Claimant. The key point, I consider, was that the aim was to buy silver of sufficient quality that it could be retailed in boxed canteens. Of course some waste would be included in purchases, but that was not the primary object.

There was an issue about the terms of Mr Hamilton’s remuneration. Mr Hamilton contended that it had been agreed with Mr Wickersham that he would have a 50% profit share. He claimed to be in partnership with the Claimant. This was vehemently denied by Mr Wickersham and Mr Lishman, who described the claim as preposterous and uneconomic. There was some support for this proposition in one email Mr Wickersham sent to HSBC instructing the bank to make the first payment of £50,000. He described Mr Hamilton as “our new business partner who is spending the money already on our behalf”. However, I do not regard that description by an American speaker as in any way conclusive that the parties intended there to be a profit share or a partnership proper.

There were strong pointers the other way. First there was no mention between the parties of any partnership or profit sharing arrangement until 2010, when the parties were falling out. Second no partnership records were kept by either party. Third, in Mr Hamilton’s business accounts for the years ending 31 January 2007 and 31 January 2008 prepared by Mr Hamilton’s accountants and approved by him, payments of £124,994 and £63,000 made by the Claimant were described as “capital introduced” into his business. That is wholly inconsistent with a partnership or profit sharing arrangement of the kind alleged by Mr Hamilton. Fourth, as part of the arrangement, Mr Hamilton alleged that he was to bear 50% of the storage costs of the silver. Mr Hamilton has failed to provide invoices or receipts for the rent he claims to have paid. His explanation was that this was an “unofficial”, or in reality a corrupt, cash arrangement with a senior official at the Silver Vaults. However, by comparison with the rents known to have been paid for other vaults at the Silver Vaults, the rents charged to the Claimant were (at least) 100% of what would be expected for a full rent. I am quite satisfied that Mr Hamilton did not bear any storage costs himself. Finally, I consider that a 50% profit share would be remarkably generous where the Claimant was paying for the silver in full and bearing almost all the commercial risk. It is most unlikely that the Claimant would have agreed to it.

It is of course an unsatisfactory state of affairs that there was no written record of the arrangement between the Claimant and Mr Hamilton. Both parties can be criticised for this unbusinesslike conduct. But it is for Mr Hamilton to prove that it was entitled to a 50% profit share and, ultimately, I did not believe him. There can be no basis for implying a right to profit share. In my view it was simply an implied term of the informal contractual arrangement that Mr Hamilton was entitled to reasonable remuneration for the work he did.

The first purchases were made in early 2006. Between 5 April 2006 and 16 December 2008, Mr Hamilton sent 6 emails in all setting out the silver he had purchased for the Claimant and requesting payment, which was duly made. The emails stated the weight of the silver he had purchased in ozs (totalling 16,699 ozs) and the prices paid, but they gave limited and, in some cases virtually no details. The descriptions were often vague, and no dates and few makers’ names were given. So, for instance in the first email sent on 5 April 2006, Mr Hamilton recorded buying inter alia: “33 ozs @ £4 per ounce” and “1032 ozs @ £6.40 including Geo”. Some later emails were a bit more specific but still no dates were given, and in most cases no makers’ names.

As from 15 March 2007 the Claimants started to make requests in writing that Mr Hamilton produce invoices and sale notes for the Glenbrook silver he had purchased. On 19 January 2008, Mr Inglis promised to do so, but they were not provided. Apart from Mr Inglis’ email, Mr Hamilton appears simply to have ignored the many requests made by the Claimant and he did not even bother to respond. His explanation on oath was that, “due to the nature of the silver trade and the way in which business is carried on”, he had no invoices or sale notes for the Glenbrook silver.

That is a ridiculous proposition and it was contradicted by Mr Inglis. Moreover, in an affidavit sworn on 6 February 2014 Mr Hamilton finally provided a list of the dealers from which he said he had purchased Glenbrook silver. They were Do Buy 925 Limited, Gaunts, Sedlers and Stodels. Yet there are examples in the trial bundles of invoices issued by Gaunts, Sedlers and Stodels, as would be expected, in respect of other silver purchased by Mr Hamilton. I can see no reason why these dealers would not have issued invoices in respect of silver purchased by Mr Hamilton for Glenbrook. I think it most unlikely that Mr Hamilton purchased any silverware from Do Buy 925 Limited. In his second witness statement he also said that he had purchased silver from auction houses and in markets. Auction houses certainly issue sale notes and there are several instances in the bundles which give very detailed descriptions. Even in markets, it should be possible to get a receipt, and I would have expected Mr Hamilton to keep a record where that was not possible.

One explanation for the lack of documentation given by Mr Hamilton was that Mr Wickersham told him that it would be more convenient for him if there was less paperwork, particularly if it meant that he was able to obtain better deals at markets. Mr Hamilton surmised that this was to avoid payment of US customs duty. I reject that contention. No US duty is payable on antique silver. I can see no reason why Mr Wickersham would not have wished to have documentary proof of purchase and a full description and (where available) provenance of the silver purchased. Mr Frankel stated that he made it clear to Mr Hamilton on 15 November 2006 that the Claimants needed each and every purchase to be properly inventoried and documented. Moreover, as from 15 March 2007 the Claimant was pressing for production of purchase invoices and other documentation - that is before the fourth set of purchases were made. That is wholly inconsistent with Mr Hamilton’s contention that the Claimant did not wish to receive paperwork, which I think is a rather desperate invention on his part to try and construct an explanation for would otherwise be highly suspicious.

I am quite sure that Mr Hamilton is being untruthful about why he has not produced any documentary evidence proving what was purchased. One explanation, of course, might be that he did not actually purchase all the silver he claims. Another is that he did not, as he claims, charge the Claimant the cost price of the Glenbrook silver, but instead added a secret mark-up for his benefit. The Claimant’s witnesses suspect that this may be the case. However Mr Hamilton denies it and I will proceed on the basis that he purchased the silver he claims to have purchased at the prices he charged the Claimant. The inevitable result of all this is, however, that the Claimant is deprived of evidence that clearly existed, but which has been destroyed or concealed by Mr Hamilton, as to exactly what silver was purchased for Glenbrook.

Other evidence about the silver purchased was given by the witnesses. First, Mr Frankel visited Mr Hamilton at the Silver Vaults on 15 November 2006. Excuses were given as to why he could not be shown all the silver. He was shown 3 sets silver, including one which Mr Hamilton stated was a rare Georgian set containing 48 place settings and worth as much as £50,000. Second Mr Rudgley was told by Mr Inglis in April 2007 that 40 to 50 sets of cutlery were complete or close to completion. This was confirmed in a letter to Mr Hamilton dated 24 April 2007, and not controverted. Third, on a visit Mr Wickersham was shown by Mr Hamilton near complete sets including one by Chawner and a 48 piece Eley & Fearn set. Mr Hamilton told him that about 10-15% of the silver was pre-1800 and that some was pre-revolutionary, i.e. pre-1776.

After many requests, in March 2010, Mr Hamilton finally gave Mr Rudgley access to a vault in which Mr Hamilton claimed the Glenbrook silver was stored. Mr Rudgley is not a silver expert and was in no position to assess the quality of what he was shown. However, over two days, he weighed it using a traditional brass cylindrical scale provided by Mr Hamilton. His measurements would have been reasonably accurate but not as precise as could be achieved with an electronic scale. His estimate was that 1,019 ozs was unaccounted for. Mr Hamilton gave an explanation that 600 ozs were elsewhere, but there was still a shortfall of about 400 ozs. In a letter dated 20 May 2010, Mr Rudgley sought confirmation as to the location 600ozs and an explanation for the 400 ozs. shortfall. Mr Hamilton offered to check the weights if he was paid to do so but gave no substantive response.

From 8 February 2011, the Claimant rented its own vault, no. 129, from the Silver Vaults. There were two sets of keys. Eric Bryan, a reputable dealer who trades as Franks, was provided with one set so that arrangements could be made through him for delivery of the Glenbrook silver to the vault. That set of keys was subsequently transferred at the Claimant’s request to Mr Langford later in 2011.

In March 2011, Mr Inglis remembered delivering to vault 129 first Mr Wickersham’s candlesticks in 2 cardboard boxes and secondly a table, 3 large bow fronted drawers and a large sealed box. He readily accepted that his recollection might be wrong and that two rather than three drawers may have been delivered plus a light oak canteen.

Mr Hamilton suggested that the keys might not have been safely stored by Mr Bryan or Mr Langford and that silver might have been taken from vault 129 without authority. At one point in his evidence he asserted that anyone could have had access to the vault. However the likelihood is that Mr Bryan and Mr Langford would have been very security conscious. They were, after all, used to looking after valuable stocks of silver. In my judgment there is no reason to think that the keys were misused or that silver was stolen from vault 129.

By April 2011, relations between the Claimant and Mr Hamilton had deteriorated to the extent that Mr Wickersham and Mr Rudgley had come to distrust Mr Hamilton. There had been an ill-tempered telephone call between Mr Wickersham and Mr Hamilton. On 28 April 2011, Mr Rudgley met Mr Hamilton at the Silver Vaults and demanded delivery of the remaining Glenbrook silver by the end of the month.

Mr Langford remembered accompanying Mr Hamilton on one occasion when a delivery was made to vault 129. Mr Hamilton deposited some wooden canteen boxes. He did not know what they contained. This was confirmed in a letter “to whom it may concern” dated 22 February 2012. He recorded seeing cardboard boxes containing silverware. The boxes he recorded as seeing were probably the 2 boxes containing the candlesticks. Mr Langford strongly denied having deposited 4,660 ozs of silver bars in the vault - he described this suggestion when put to him as “fiction”.

Otherwise, nothing was delivered to the vault by Mr Hamilton. There were discussions as to whether Mr Hamilton would at least permit Mr Langford to make a professional and independent inventory of the Glenbrook silver, but they came to nothing as a result of Mr Hamilton’s intransigence. On 31 July 2011 Mr Langford refused to participate further as it did not wish to become involved in a protracted dispute.

On 27 June 2011, the Claimant commenced proceedings in California against Mr Hamilton and the London Silver Vaults. They were withdrawn on 12 June 2012. In the meantime, the Claimant reported the matter to the Police.

Mr Hamilton attended Bishopsgate police station voluntarily on 7 February 2012 and was interviewed under caution. In the course of the interview, he made no mention of melting down any silver into bars or of delivering bars to Mr Langford. He said that he could not understand the Claimant’s complaint. They had made a huge profit from the silver which Mr Hamilton put at 100-200% apparently after the alleged profit share had been deducted. He accused them of using bully boy tactics. No charges were brought.

Mr Rudgley attended vault 129 on 4 November 2011 and 2 November 2012. He took photographs on his mobile phone. This came to light in the course of his cross-examination and the photographs were produced in evidence. Overall, they confirm Mr Hore’s assessment of what he received from vault 129, apart from one mahogany canteen with two drawers over two doors which (as he recorded) contained a miscellany of 20^th century silver weighing 27.5 ozs and various knives and fish eaters. This canteen of very indifferent silver does not appear in any photograph produced by Mr Rudgley. It was suggested by Miss Gilbert that this showed that further silver must have been delivered to vault 129, and that this supported Mr Hamilton’s case that more silver was delivered to the vault than the Claimant accepted and that silver was removed after delivery. In my judgment that involves quite a degree of inference from one drawer of very indifferent silver found in the vault and not recorded in photographs taken by Mr Rudgley. It seems to me to be more probable that the canteen was one of those delivered in Mr Langford’s presence and overlooked by Mr Rudgley - in evidence before the existence of the photographs had come to light, he said that Mr Hore had found some silver in a drawer which he had not spotted - or that a photograph was not properly taken or saved by him. Overall I think it very unlikely indeed that this canteen evidences that quantities of silver were delivered by Mr Hamilton to vault 129 and removed by persons unknown prior to delivery to Mr Hore.

These proceedings were issued on 10 September 2012. On 9 November 2012, Cooke J. entered judgment in default of acknowledgement of service. He also ordered that Mr Hamilton deliver up all the silver and silverware (including canteens), bought for the Claimant by Mr Hamilton, to Mr Hore with the exception of the six classes which were essentially the silver and canteens already in the Claimant’s Vault 129. Mr Hamilton was also ordered to deliver up all documents, particularly invoices, recording the purchases of the silver, but none were produced.

On 14 November Mr Hamilton delivered up to Mr Hore a quantity of silver. As Mr Rudgley described it, it was a complete shambles and in Sainsbury’s plastic bags. It was so mixed up that it was impossible to tell whether it was all “rubbish”. Mr Hamilton also delivered some 96 “much distressed” wooden canteen boxes which he had been keeping at another unspecified location in London. The Claimant also separately delivered silver from Vault 129 plus 7 canteens or boxes to Mr Hore. He made an inventory of what was delivered to him. In summary his conclusions were as follows:

There is an issue as to whether all the silver that had been delivered to Vault 129 by Mr Hamilton was delivered to Mr Hore by the Claimant. Mr Hamilton’s case is that much more silver was delivered to the Claimant’s Vault 129 than the Claimant accepts. This, he contends, accounts for all the “missing” silver. According to his evidence, in May and June 2011 some 16 sets of silver were delivered to Vault 129 through Mr Langford who then held a set of keys for Glenbrook. This included a part of Glenbrook’s silver which had been melted down by Mr Conway, producing some 4,660 ozs (or c.120 kgs) of silver bars. These were delivered “probably in the Spring of 2011 ... in a single delivery to Joel Langford at the Claimant’s vault ... [in] I would imagine the Spring/Summer of 2011”.

There is no corroboration for this evidence. On the contrary there is strong evidence against it. First, there is no record of any Glenbrook silver being melted down or of its delivery by Mr Conway to Mr Hamilton. Mr Hamilton’s explanation is that the papers were in the boxes containing the silver bars and there was no other documentation. He also said that Mr Conway would be willing to sign a witness statement confirming that he melted items into bars. Mr Conway’s very short witness statement however makes no mention of this. There is no invoice/record for the costs of melting the silver and pouring the bars into moulds. Second there is no contemporary evidence such as emails, recording the decision to melt down a substantial quantity of Glenbrook silver or of any deliveries of silver bars to Vault 129. These alleged deliveries occurred after the demand for delivery up had been made by Mr Rudgley. If any of this had occurred, I am sure that Mr Hamilton would have been keen to get the Claimant’s approval to melting down about 25% of the Glenbrook silver, a record of what was melted down, and a receipt for delivery of the bars. Third, Mr Hamilton said nothing about this in his police interview. Last but by no means least, Mr Langford denied having received any silver at this time. He described Mr Hamilton’s evidence about delivery of the silver bars as “fiction”.

In my judgment, Mr Hamilton’s evidence about these deliveries to Vault 129 in spring/summer 2011 was a complete fabrication on his part. There were no such deliveries.

There is one other significant piece of evidence pointing to fraud on the part of Mr Hamilton. The accounts of his silver business prepared for the purpose of his tax returns show a struggling business barely breaking even. The only way in which Mr Hamilton was able to make substantial drawings from the business was by treating £167,994 of the payments made by the Claimant as capital introduced to the business. In affidavit evidence he deposed that he had no other source of income.

That may be how it was presented to Mr Hamilton’s accountants, but I am sure that what actually happened was that Mr Hamilton sold the more choice parts of the Glenbrook silver and used the cash proceeds fund his lifestyle which included running a Porsche sports car and later a Bentley car (albeit not new) and educating his daughter privately. This is a very serious finding to make against Mr Hamilton, but it is one which I have reached overall on the evidence and without any doubt.

I can now turn to the specific issues in the case.

The total weight of sterling silver purchased was 16,699 ozs as listed in the six purchase emails. The emails are in many cases very vague about the description of the silver purchased. No hallmark dates were provided and generally no manufacturers’ names. Because no purchase records have been provided to the Claimant and because about half the silver was never delivered to the Claimant, it is impossible to reach any clear opinion as to the quality and condition of the silver purchased. I cannot even be sure that all the silver finally delivered was Glenbrook silver, in the sense that it was originally purchased for Glenbrook.

In those circumstances Mr Emmet Coldrick for the Claimant argued that I should apply the well established presumption in Armory v. Delamirie (1722) 1 Strange 505; 93 E.R. 664. In that famous case, a chimney sweep found a jewel and took it to a jeweller. The jeweller offered a nominal price and the sweep asked for the jewel back. The jeweller refused to return it. In an action for trover, Lord Pratt CJ directed the jury that:

The decision has been followed in many different contexts where a defendant’s actions have made it impossible for a Court to make an informed assessment: see for instance Browning v. Brachers (a firm) [2005] EWCA 753, Phillips v. Whatley [2007] UKPC 28; [2008] 2 Lloyd’s Rep 111 and Keefe v. The Isle of Man Steam Packet Company Ltd [2010] EWCA Civ 683, where Longmore LJ put the point pithily:

This is no doubt a salutary principle, but it should not be punitive. Any adverse conclusion should take account of any evidence that does exist and it should be realistic.

Here the Claimant argued that I should infer that the silver purchased was good quality silver and that in April 2011 it had an average premium above the bullion price of 100%. That seems to me to lean too far in making adverse inferences against Mr Hamilton. The most telling evidence is that in purchasing the Glenbrook silver, he paid on average about 142.3% of the bullion value. I think it right to proceed on the basis that this is the best indication of the average quality of the Glenbrook silver purchased. There is no basis on which I can justly presume that Mr Hamilton did markedly better overall than he charged the Claimant for. In judging however the quality of what was converted and never returned, it is relevant that the silver finally delivered to Glenbrook was of poor quality and worth no more than its bullion value. The Glenbrook silver taken by him must have been of markedly higher quality to account for an average premium at the time of purchase of 142.3% of bullion value. That is confirmed by what he told the Claimant’s representatives.

670 ozs was delivered to the Claimant in vault 129 and a further 10ozs was given to the teenage daughter of Mr Wickersham’s friend. The 680 ozs was of no particular quality and worth no more than its bullion value.

The price of .925 sterling silver on 30 April 2011 was £25.71 per oz for scrap. On this basis, the value of the 16,019 ozs was £411,848.49. Miss Gilbert argued that a discount should be made because the Claimant was not a registered dealer and would not be able to obtain the price of £25.71 which was available only to registered dealers. I disagree. The Claimant would, on this hypothesis, be selling very large quantities of silver for scrap and I am sure that it would have been able to achieve the price available to registered dealers either by negotiation or by using the service of a registered dealer for a modest fee. In any event, Mr Coldrick argued that even in April 2011 the silver would have had a premium value above bullion value. Mr Hore’s evidence was that premium for flatware silver canteens had reduced with the huge rise in the bullion price, but good quality silver still commanded a premium above the bullion price.

It is certainly the case that many other canteens of flatware silver were melted down when the bullion price was so high. There is evidence that some quite good silver canteens were not achieving much, if anything, beyond the bullion value at auction. However, I am not prepared to accept that silver which had an average premium of 142.3% of bullion value when purchased between 2006 and 2008 had no premium in 2011 in circumstances where Mr Hamilton has concealed exactly what was purchased and he had told the Claimant’s representatives that he had purchased quite a lot of high quality silver. I accept that the premium would have been less than 42.3% above bullion value when the price of bullion was so high. Doing the best I can, I find that on 30 April 2011 the Glenbrook silver had an average premium overall above bullion value of 20%. Therefore the value of the 16,019 ozs silver was £411,848.49 x 120% i.e. £494,218.19.

8,166 ozs were delivered as listed by Mr Hore in his report.

The items delivered were mainly late 19th or 20^th century in date and of unremarkable quality. They had no more than their bullion value. I reject Ms Gilbert’s argument that they had a 10% premium above bullion value on 24 January 2014, although it is common ground it had none in 2011. There was no basis for the argument. The value of the 8,166 ozs delivered via Mr Hore was £87,458.86 at the then bullion value of £10.71 per oz scrap sterling silver.

Nothing was delivered.

None.

Nil.

There is an important preliminary issue of law. How should the Court treat that part of the Glenbrook silver which was converted on 30 April 2011 but which was finally delivered to Glenbrook on 24 January 2014? The issue arises because the bullion price for pure silver roughly halved in that period: it fell from £29.26 to £12.19 per oz, and the scrap price for sterling silver fell correspondingly. Ms Gilbert argued that it would be inappropriate to award damages for the loss of value in that period, given that ultimately the silver was delivered to the Claimant. At most the Court should award interest on the capital value to reflect the Claimant’s temporary deprivation. Mr Coldrick argued that there was no reason to depart from the general rule that the measure of damages for conversion “is generally the value of the chattel at the date of the conversion together with any consequential damage flowing from the conversion and not too remote to be recoverable in law” - see General and Finance Facilities Ltd v. Cooks Cars (Romford) Ltd [1963] 1 WLR 644, 649 per Diplock LJ. When goods are returned after the conversion, “the amount by which the damages are reduced must be the value of the goods when returned” - see Solloway v. McLaughlin [1938] AC 247, 258-259 per Lord Atkin.

However, these rules are not inflexible. In a case where the owner had no intention of selling the goods, because they were for instance a family heirloom, it would be inappropriate to award damages based on a difference of value. In Brandeis Goldschmidt & Co Ltd v. Western Transport Ltd [1981] QB 64, Brandon LJ refused to award value based damages where the converted copper was intended for use in a manufacturing process and the plaintiffs were unable to establish special loss. At pp. 872-3, he distinguished between goods acquired “for sale on the market at a profit” and goods acquired for use “as a raw material in their business”. In that case the copper had been acquired as raw material for use in manufacturing and “[i]n these circumstances the detention of the copper did not deprive [the plaintiffs] of the opportunity of selling the copper on the market on the date when the detention first began”. So the plaintiffs recovered nominal damages only.

Here the Glenbrook silver was purchased for investment and resale. By 28 April 2011, the market was very high and Mr Rudgley was making the point in writing to Mr Hamilton that with the price of silver so high, the Claimant wanted to be sellers, at least in part. Time was of the essence as the Claimant believed that silver could easily drop in price - another prescient prediction. In evidence he said that be believed that if the silver had been delivered to the Claimant in April 2011, it would have sold at least part, but he could not say that everything would have been sold - it would have depended on what the silver delivered consisted of. In my judgment, the Claimant was deprived on an opportunity of selling the silver and, had it had that opportunity, it would have used it to realise a large profit by selling at least a substantial part of the silver at a time when it clearly recognised that the market was very high. The Claimant is entitled to recover damages based on the fall in value of the silver eventually delivered in January 2014.

It follows that in my judgment the Claimants are entitled to recover damages of £406,760.33 (£494,218.19 less £87,457.86)

I will hear counsel once this Judgment has been handed down.

None.