Estate agents — Complaint by vendors about conduct of sale — Alleged loss of probable increase of sale price by methods adopted by agents — Complaint of negligence and misrepresentation — Conflict of evidence — Allegations against agents dismissed — Vendors’ claim fails — Agents entitled to commission
husband and wife, decided to sell their house, which they had purchased in 1980
for £150,000, and they put the house in the hands of the defendant agents — A
guide price of £750,000 was mentioned but it was hoped to obtain more — Some
interest was shown in the property when put on the market at the end of August
1988, three inquirers in particular being identified as likely bidders — These
three were told that it was proposed to hold a private auction in about a week,
when they could bid against each other and the winner would enter into a
contract immediately after the result — One of the three withdrew from the
contest for some reason, leaving the other two, the Farrells and the Bartons,
as the protagonists
proposed private auction did not take place because, before the date fixed, the
Farrells had acted with unexpected speed and made a bid of £1m for the
property, which was immediately accepted by the plaintiffs — The circumstances
surrounding this bid gave rise to a serious conflict of evidence, to a shocked
and indignant reaction by the Bartons and to dissatisfaction on the part of the
plaintiffs, leading to the present ligitation
allegations made by the plaintiffs against the defendants were that they acted
contrary to the instructions given to them by the plaintiffs to go back to the
Bartons in order to see whether they were prepared to make an offer of more
than £1m — In more detail, the allegations were that the defendants told the
Bartons that they would need to offer more than £1,500,000 to secure the
property; that they did not give the Bartons the opportunity of making an offer
of more than £1m but less than £1,500,000; that in consequence they lost the
chance of a bid of more than £1m from the Bartons and an increased counter-bid
by the Farrells, resulting in a probable sale for at least £1,300,000; that the
defendants gave false information to the plaintiffs about what had passed
between the defendants and the Bartons; and that in consequence the plaintiffs
had suffered a loss of at least £300,000
who reviewed the evidence in great detail in his judgment, preferred the
evidence given on behalf of the defendants to that for the plaintiffs — He
rejected all the allegations against the defendants, holding that they had at
no time acted contrary to the instructions given by the plaintiffs — They had
gone back to the Bartons as instructed and found that they were not prepared to
bid more than £1m — The defendants had not been guilty of negligence or of
misrepresentation
plaintiffs’ claim accordingly failed — A counterclaim by the defendants for
commission of £26,000 on the sale succeeded
No cases are referred to in this report.
This was an action by Mr and Mrs Watson,
vendors of a property known as Lower Mill, Old Basing, Basingstoke, Hants,
against Lane Fox & Partners Ltd, estate agents, for alleged negligence
and/or breach of instructions in connection with the sale of the said property.
Grahame Aldous (instructed by Jaques
& Lewis) appeared on behalf of the plaintiffs; Richard Lynagh (instructed
by Cameron Markby Hewitt) represented the defendants.
Giving judgment, POTTS J said: In
1988 Mr and Mrs Watson of Lower Mill, Old Basing, decided to sell their home.
They had bought it in 1980 for £150,000. Mr Watson is, and was, a chartered
accountant. He had been a residential property developer. He and his wife
wished to move to Scotland. This they subsequently did.
Mr Watson knew Mr Michael Wiggin [FRICS]
of Lane Fox, estate agents and surveyors, personally but not as a close friend.
Mr Wiggin was and is a director of Lane Fox, the head of their country house
and farm department. In 1988 he had been with that firm for some 21 years,
having been a chartered surveyor from about 1960. In 1970 he became a Fellow of
the Royal Institution of Chartered Surveyors and he had acted as an arbitrator
appointed by the president.
Mr Watson contacted Mr Wiggin over the
proposed sale in June or early July 1988. In July Mr Wiggin visited the
property and his firm was instructed to sell it on Mr and Mrs Watson’s behalf.
A bundle of documents was prepared by the
parties for use in this trial. The internal memorandum of Lane Fox dated July
11 1988 and the letter from Lane Fox to H M Watson of the same date are
relevant. It is to be noted that in the memorandum at item 5 is the following
statement: ‘I did not discuss the question of the guide price with the Watsons
and we can deal with that nearer the time.’
By July 15 1988 a guide price of £750,000 was decided upon. Document 5
refers in the sense that on it is a handwritten note made by Mr Wiggin. That
note reveals that Mr Watson suggested a guide price of £750,000 whereas Mr
Wiggin’s view had been that the appropriate figure was £700,000. I am satisfied
that £750,000 was decided between Mr Wiggin and Mr Watkins.
Mr Wiggin said in evidence that he and
the Watsons hoped that the property would fetch about £800,000. Mr Watson said
in evidence that he and his wife felt that the property would fetch £1m, but
that he may have said they would accept anything over £800,000.
There is a note in these terms: ‘Attached
is the suggested draft letter to Mr Watson. It should be noted that Mrs Watson
will be disappointed if we do not make £800,000.’ That note is Lane Fox’s note; it bears the
date 20.6.88. The draft letter to which it refers I find became the letter of
July 11 1988.
The house went on the market at the end
of August. The particulars of sale included, at p 6, the following statement:
The Mill Building. This four storey
traditional mill, which is constructed of brick under a tile roof, is a
dominant feature of the property and affords exceptional scope for a variety of
uses. The current owner has temporary planning consent for use of The Mill as
offices for his own business and the
further proposals for this building, including office use. This appears to
accord with their policy of encouraging alternative uses for redundant listed
buildings in order to preserve them.
The rest of the particulars set out
details of the substantial country house, Lower Mill, and its grounds.
The mill building referred to can be
identified on a plan and on the photographs annexed to the particulars of sale.
It is to be observed that Mr Watson applied for change of use permission in
respect of the mill building, the change of use being from mill building to
offices, on September 28 1988. This application was refused by the planning
authority on December 5 1988.
In September 1988 there was considerable
interest in the property. Some 48 to 60 people viewed it. In particular, on
September 8, a Mr Farrell viewed the property. On September 10 Mr Farrell
offered £800,000 for the property. On September 17 Mr and Mrs Barton of
Spencers Wood, Reading, viewed the property. On September 18 Mr and Mrs Pushman
viewed the property. On September 22 a Mr Bell offered £900,000 for the
property subject to planning permission for the mill. On September 22 Mr
Farrell, the same Mr Farrell who had previously offered £800,000, offered
£850,000. He did this by letter:
To simplify, I confirm my offer on Lower
Mill as set out, £850,000, exchange in under two weeks, complete seven months.
No interest but 20% deposit to be held by the vendor’s solicitors to the
vendor’s benefit. Sale to include paddocks at rear but not woodland strip on
(something) lane, subject to contract.
By the week of September 26 1988 the
potential purchasers of the property were thought to be Mr and Mrs Farrell, Mr
and Mrs Pushman and Mr and Mrs Barton. Mr and Mrs Pushman visited the property
for a second time on September 25. By September 30 they had offered £950,000.
Mr and Mrs Barton visited the premises again on September 29. Mrs Barton made a
further visit on October 1. By September 29 Mr Barton had indicated that he was
interested in buying the property and a price of £925,000 was mentioned.
On September 30, a Friday, these three
potential purchasers were told that a private auction of the property was
proposed for Friday, October 7 1988. They were invited to attend and bid
against each other and sign contracts immediately thereafter. On October 1 the
Pushmans withdrew, leaving the Bartons and the Farrells as contenders. On
Monday October 3 Mr Farrell bid £1m for the property. This bid was accepted. On
that day Mr Wiggin and Mr Barton spoke on the telephone. On October 4 contracts
were exchanged between the Watsons and the Farrells. On Wednesday, October 5 Mr
Barton spoke to Mr Henry Holland-Hibbert [ARICS], Mr Wiggin’s assistant at Lane
Fox, and to Mr Wiggin on the telephone.
The above outline is not a matter of
controversy. On Saturday, October 8, Mr Wiggin spoke to Mr Watson on the
telephone. Mr and Mrs Watson both gave evidence about this conversation. Mrs
Watson said that there was a conversation about selling curtains and carpets.
Then Mr Wiggin said something to this effect: ‘that Mr Barton was upset and
would I not discuss the sale price with the Bartons’. Mrs Watson said that Mr
Wiggin had told her: ‘Mr Barton was annoyed. It is better not to discuss the
sale price with them’. Mr Wiggin gave no reason for this. Mrs Watson told me:
‘I was curious rather than suspicious regarding this call.’
Mr Watson said:
On Saturday 8 October I was in the
kitchen and the telephone went. My wife answered it. It became apparent she was
talking to Mr Wiggin. I gesticulated that I would like to talk to Mr Wiggin when
she had finished. I took the telephone and congratulated Mr Wiggin on the sale
and said I hoped he would achieve another property in the area where the vendor
was thinking of changing agents. Mr Wiggin changed the conversation. He said
the Bartons were rather upset by events and if Mr Barton were to telephone me,
it might be better if I were not to discuss the price the house had sold at. He
said that Mr Barton was a trouble-maker and upset, and he did not like him, and
it would be better not to discuss the price.
Of this conversation Mr Wiggin gave
evidence as follows:
I reported the Bartons’ disappointment to
the Watsons. I thought it was the proper thing to do. I don’t believe I said
that they, the Watsons, should not disclose the price. Had they said ‘Should we
ring the Bartons?’ I would, I suspect,
have said ‘No.’ I have no recollection
of the conversation as recounted by the Watsons. I have a recollection of
saying that Mr Barton was a trouble-maker. I considered Barton to be a very
difficult man to tie down, as we found out in negotiations. I interpreted him
as being a bad loser. Bad losers are emotional beings and underbidders get
upset.
As to these conversations, I prefer the
account given by Mr and Mrs Watson to the account of Mr Wiggin in so far as
they conflict.
On Monday, October 10 Mr Watson
telephoned Mrs Barton. He had attempted to get in touch earlier. After the
conversation with Mr Wiggin he had decided to make such a telephone call since,
as he put it, he found it strange that Mr Wiggin should have spoken to him in
the terms described after a call which was ‘ostensibly to talk about carpets
and curtains’. When Mr Watson made contact with Mrs Barton he told her the sale
price. He said her reaction was one of great shock and surprise. Mrs Barton, in
evidence, said that her reaction was complete stupefaction. After this
conversation Mr Watson telephoned Mr Barton and told him the sale price. He
then had a discussion with Mr Barton.
In consequence of this discussion, Mr
Watson consulted his solicitors. They wrote a letter to Lane Fox on November 17
1988. There was, apparently, no contact between the Watsons and Mr Wiggin
between October 8 and the date of that letter. The letter was the first
indication to Mr Wiggin and Lane Fox of the Watsons’ dissatisfaction with his
conduct of the sale. It is to be observed that on October 8 Mr Watson had
congratulated Mr Wiggin on the sale. In cross-examination Mr Watson agreed that
£1m was a good price for the property.
I refer to the letter of complaint. It can
be read for its full terms. It is material to refer in this judgment to p 2.
We are further instructed, however, that
the matter did not proceed to an auction as planned, but came to a head on
October 3 1988. On that Monday Mr Wiggin told Mr Watson by telephone that Mr
Pushman had gone to £950,000 but was sticking at that figure. Mr Barton was
also offering £950,000 but that Mr Farrell had offered £1m and was upset
because he alleged Mr Wiggin had previously told him, which would have been
without instructions from our client, that such an offer would be acceptable.
Mr Watson instructed Mr Wiggin that £1m would be acceptable so long as the
others were sticking on their present offers, but that Mr Wiggin should go back
to the others to see if they would increase their offers. Mr Wiggin accepted
these instructions, saying ‘Of course. It is my job to get you the most amount
of money possible.’ Later on the morning
of October 3 Mr Wiggin informed Mrs Watson by telephone that Messrs Pushman and
Barton were not prepared to go above £950,000 and that he had therefore
accepted Mr Farrell’s offer of £1m with a 20% deposit to be paid on exchange of
contracts by October 7 and completion on April 14 1989 on our client’s behalf.
On the basis of what our clients had been told by Mr Wiggin, they proceeded to
exchange contracts with Mr Farrell at the sum of £1m, and contracts were in
fact exchanged on October 4 1988.
We are instructed
— the letter goes on —
that according to information now
obtained by our clients, Mr Wiggin’s representation of the position in the
telephone conversation with Mrs Watson on October 3 1988 was not accurate. In
fact, Mr Barton would have offered more than £1m for the property and Mr
Farrell would have counter-offered more to obtain it. At that time Mr Barton
had already instructed his solicitors and bankers, in view of the impending
private auction on October 7 1988, and both these parties were aware that he
intended to offer over £1m with exchange of contracts at the auction. Mr Barton
had also told Lane Fox on Friday, September 30, when it was intimated to him
that the price might well go to £1m, that he was still very much in the running
and that he was not prepared to disclose the figure he would go to in view of
the proposed private auction the following week.
Far from asking Mr Barton on October 3
1988 whether he was prepared to offer more than £1m, as he was instructed to,
Mr Wiggin told Mr Barton that the other party was ‘bidding like a mad thing’
and he would have to offer £1,500,000 to secure the property, which Mr Barton
declined to do. Contrary to his instructions, Mr Wiggin did not give Mr Barton
the opportunity to make an offer at more than £1m but less than £1,500,000 as
he was expressly instructed, when Mr Wiggin would have secured the sale of our
clients’ property for a sum of at least £1,300,000.
By virtue of the matters we have recited,
our clients will, on April 14 1989, suffer a loss of at least £300,000 as a
result of the negligence and breach of instruction of Mr Wiggin. Our clients
look to you to compensate them for that loss and we await your proposals.
That letter was addressed to Mr M J Lane
Fox FRICS, who appears on Lane Fox’s writing paper as the first-named director.
The letter reached Lane Fox by November
18 1988, for their reply was of that date. The reply contains two paragraphs.
It is signed by Mr Wiggin. The second paragraph is in these terms:
We totally reject the assertions which
have so hurtfully been made and if Mr and Mrs Watson or yourself, or both of
you, would like to come and ask us any questions whatsoever and discuss the
situation in the fullest and frankest way possible, we would be delighted to
clarify any matters which are concerning our clients.
This invitation was rejected, and on
November 21 1988 the solicitors wrote to Mr Wiggin stating, among other things:
We should be most grateful if you would
kindly let us have a detailed reply to our letter, in the absence of which we
can only assume that you decline to reply on the matters which have been set out
in writing.
Thus it would seem that from mid-November
the parties were at arm’s length, the plaintiffs having decided, as they were
fully entitled to, to act through their solicitors. On November 23 1988 a firm
of solicitors wrote on behalf of Lane Fox to the plaintiffs’ solicitors
indicating that they were acting and saying that they were making further
investigations. Various other letters passed, and in December 1988 the
defendants’ present solicitors were instructed. They wrote to the plaintiffs’
solicitors on December 14 indicating that they were acting, repudiating
allegations of negligence and stating that they had instructions to accept
service.
On December 19 1988 the defendants’
solicitors wrote to the plaintiffs’ solicitors. They then purported to deal
with the points raised in the plaintiffs’ solicitors’ letter of November 17
1988. Para 2 is material. It is in these terms:
Mr Barton never indicated to our clients
that he was prepared to purchase the property for a sum in excess of £1m. In
fact, Mr Barton never made a firm offer for the property from the time he first
expressed interest in mid-September. In the circumstances, our clients consider
that they served your clients’ best interests in advising them to accept the
highest available offer, namely the sum of £1m submitted by Mr Farrell. If your
clients had had the courtesy to contact our clients after their conversation
with Mr Barton, the point could have been fully explained.
I have been given no explanation as to
why Mr and Mrs Watson did not contact Mr Wiggin immediately after their
conversation with Mr Barton and before putting themselves in the hands of
solicitors. I have had an explanation as to why thereafter personal contact was
not effected. Mr Aldous, on behalf of Mr and Mrs Watson, criticises the letter
of December 19 1988. He submits that it does not answer the questions posed in
the letter of November 17 1988 or put in any detail the defence now advanced by
Lane Fox. Mr Lynagh, on behalf of Lane Fox, submits that the letter sets out
the essence of the defence. I would comment only that the letter in question,
while setting out essential aspects of the defence, could have been fuller.
In any event, by January 1989 the present
defendants had set out in a legal document their account of this transaction. I
refer to D6, the defence of Lane Fox in the action brought by Mr and Mrs
Barton, 1988 B No 7432, against them seeking damages arising out of their
conduct of this sale. The defence is dated January 31 1989. I will refer to
these proceedings in more detail later in this judgment.
On April 14 1989 the sale of Lower Mill
to Mr and Mrs Farrell was completed. On April 17 1989 these proceedings were
commenced. I refer to the statement of claim. Paras 1, 2, 3 and 4 set out the
background. Paras 5, 6 and 7 set out matters that have been substantially dealt
with in this judgment. They refer, in particular, to the instructions given to
the defendants on October 3 1988. It is necessary to refer to paras 8, 9 and
10.
8. In breach of the said instruction
and/or in breach of the implied terms referred to above, and/or negligently,
the said Michael Wiggin failed to ask the said Mr Barton if he was prepared to
offer more than £950,000. On 3rd October 1988 Michael Wiggin told Mr Barton
that he would have to offer £1.5 million to secure the property which Mr Barton
declined to do. Mr Barton was not given the opportunity to make an offer of
more than £1 million but less than £1.5 million.
9. Further, on 3rd October 1988, after
the conversation referred to above of the same date between the first named
plaintiff and Michael Wiggin, the said Michael Wiggin told the second named
plaintiff that Mr Barton was not prepared to go above the offer of £950,000. In
reliance upon that representation, which was false, and which was made
recklessly, not caring whether it was true or false, or alternatively
negligently, the plaintiffs accepted the said offer of £1 million for the
property from the said Mr Farrell.
10. Had the said Michael Wiggin asked the
said Mr Barton whether he was prepared to increase his offer rather than merely
telling him that he would have to offer £1.5 million to secure the property,
then an increased offer of not less than £1.3 million would have been obtained,
either from the said Mr Barton or from the said Mr Farrell. Further, the said
Michael Wiggin would not have made the false representation referred to above
in reliance upon which the plaintiffs sold the property at the lower price of
£1 million.
The defendants served their defence on
June 19 1989. It is a detailed defence to the allegations made by the
plaintiffs. In addition, the defendants counterclaim for their fees, these fees
having been withheld pending these proceedings.
It is common ground that Mr Farrell
offered £1m for the property. It is common ground that Mr Wiggin was instructed
by Mr Watson to go to Mr Barton and ask Mr Barton if he would bid more than
£1m. It is common ground that Mr Wiggin accepted this instruction. It is common
ground that, later, Mr Wiggin on the telephone to Mrs Watson said that Mr
Barton was not prepared to pay more than £1m, all on October 3.
What is in dispute is what happened on
October 3 when Mr Wiggin spoke to Mr Barton on the telephone. Mr Aldous, for
the plaintiffs, put the plaintiffs’ case to Mr Wiggin thus: ‘You thought that
Mr Barton would not go to contract and decided that the sooner he should be got
rid of the better.’ Mr Aldous went on:
‘You decided, in your professional judgment, to get Mr Barton out and to deal
with Mr Farrell because you thought that this was in the best interests of the
Watsons.’ Mr Aldous submitted that if Mr
Barton’s evidence is correct, Mr Wiggin made false statements. Further, that Mr
Wiggin was negligent, that Mr Wiggin thought he knew best but was not entitled
to think that he knew best because he had express instructions from his clients
as to what to do. Mr Wiggin, it was submitted, convinced himself that Mr Barton
would not go over £1m. He went to Mr Barton and misrepresented his
instructions, and got his answer, and then, having convinced himself that Mr
Barton was not prepared to go above £1m, returned to Mrs Watson and gave her a
false account of what had passed between him and Mr Barton.
Undoubtedly, what passed between Mr
Barton and Mr Wiggin on October 3 is crucial in resolving the issues between
the parties. Although Mr Aldous put negligence at the forefront of his case,
serious allegations are made against Mr Wiggin and his firm, and I find it
impossible to resist the conclusion that if the plaintiffs’ case is correct —
that is to say, the evidence adduced on behalf of the plaintiffs — then Mr
Wiggin deliberately misrepresented the position regarding the sale price to Mr
Barton and deliberately misrepresented Mr Barton’s response to Mrs Watson.
Given the issues involved, I approach the evidence of Mr Barton and Mr Wiggin
in particular with the greatest care. I follow the principle of law set out in
the 16th ed of Clarke & Lindsell on Torts at paras 18-20 where it is
stated, under Standard of Proof:
It was laid down in Hornal v Neuberger
Products Ltd [1957] 1 QB 247, that the question whether the representation
was made or not should be decided on the civil standard of preponderance of
probability for proof of fraud. Although the standard of proof for a criminal
charge is not required, a high degree of probability will be required to
satisfy the civil standard. The more serious the allegation, the higher the
degree of probability that is required.
Counsel helpfully referred me to the
judgments of the Court of Appeal in Hornal v Neuberger Products Ltd.
I have had them in mind and have followed them in considering the issues.
I now go on to consider the evidence in
detail. Mr Barton was called on behalf of the plaintiffs. He is a sales manager
employed by Allied Dunbar. He has been employed by that company for some 14
years and has been a sales manager for some eight years. He has had experience
as a salesman for over 21 years. His expertise is in the sale of insurance and
financial services. In 1988, as today, he lives at Hill House, Spencers Wood,
Reading.
His wife drew his attention to the sale
of Lower Mill. He described how he viewed the property and was impressed. After
visiting the property he spoke to Mr Holland-Hibbert and requested a brochure.
He indicated that he was very definitely interested. A brochure was
subsequently obtained, the supply of a brochure having been complicated by a
postal strike. He said that he believed his wife supplied him with information
concerning the guide price of £750,000. He was of the opinion that the property
would go in excess of £850,000, probably £900,000. He said: ‘I was attracted. I
thought it (the property) had enormous potential.’
On Wednesday or Thursday, September 28 or
29, Mr Barton said he had a conversation with Mr Holland-Hibbert and indicated
that he was prepared to go ahead at £925,000.
I wanted to make a second appointment. We
had some discussion about the price and I think a price of £1m was raised by Mr
Holland-Hibbert. He said £1m would take the house off the market. I countered
by saying I would go ahead at £925,000, subject to a second viewing.
Given that a second viewing took place on
Thursday, September 29, the probabilities are that this conversation took place
on the 28th.
A note on the Lane Fox file was put to Mr
Barton. Under item 4 the figure of £925,000 appears. It would seem that this
note was made by Mr Wiggin. Mr Barton said: ‘The Mill, I thought, lent itself
to sympathetic conversion. I had a discussion with two people in the property
field. Both were interested in joint development or joint
October 4.’
Mr Holland-Hibbert was called on behalf
of the defendants. He gave evidence about his conversations with Mr Barton, and
the conversation described in particular. I have to say that I thought that Mr
Holland-Hibbert was a careful and reliable and honest witness. I am satisfied
that he would not deliberately misrepresent the evidence to save himself or his
superior, Mr Wiggin. Mr Holland-Hibbert was a soldier between 1979 and 1983.
From 1984 to 1987 he studied as a chartered surveyor. He had been with Lane Fox
for about a year at the time of this transaction.
He said that his first contact was with
Mrs Barton very soon after the campaign started. His recollection, he put it,
was: ‘I suspect I said of the guide price ‘Offers in excess of £750,000′.’ He told me that Mr Barton telephoned him
about the house.
I confirmed the guide price. He said he
had a house in Spencers Wood which he would have to sell in order to get this
property and that he would instruct Lane Fox in its sale. He confirmed that he
would be a cash purchaser in response to a question by me. He said he would
want to carry out a survey and bring a surveyor to the property.
Mr Holland-Hibbert referred to his firm’s
list of viewing appointments. Mr Barton’s name appears with a pencilled note
‘Allied Dunbar’, a reference to selling Spencers Wood, ‘Cash purchaser, will
top £800,000.’ (I hope I have read that
correctly because my copy is not very good.)
Mr Holland-Hibbert was asked what he
understood by the expression ‘cash purchaser’. He said: ‘I understood he would
have been able to exchange contracts on funds which he would have readily
available and complete the sale in a sensible length of time. That is, not more
than a few months.’ This understanding
of the term was not challenged.
Mr Holland-Hibbert said:
I spoke to Mr Barton on two occasions in
the following days. He was in our minds as a serious contender and I would
always speak to a serious contender, too many rather than too few times.
Whenever I spoke to Mr Barton I tried to find out where his interest in the property
lay. I remember clearly on more than one occasion Mr Barton saying he was not
prepared to make an offer, although I would very much have liked him to. He
avoided the issue of price, except on two occasions. On the telephone he said,
what would he have to pay to buy the property now? On both occasions I said I was not in a
position to give him such a figure as I had not discussed it with my clients,
but a figure which might tempt them, although I had not discussed it with them,
was a figure of £1m. Twice he said he was not prepared to go to that figure.
Both these conversations were after September 17. One was certainly before the
Bartons’ visit to view on September 29; the other was before that date.
Under cross-examination, Mr
Holland-Hibbert said:
At no time did I raise the issue of £1m
with Mr Barton except on two occasions when he asked me what he would have to
pay for Lower Mill. On both occasions I told him I could not confirm the price
without the approval of my clients, but I think that an offer of one million
would be considered, to which his reply on both occasions was quite clear and
was that he was not prepared to go to a million. I never had any grounds for
giving a figure that would take the house off the market. My job was to get the
most money possible.
Mr Wiggin gave evidence about this aspect
of the case. He said that he spoke to Mr Barton, who told him that he was
interested at £925,000.
I specifically asked him if this was an
offer of £925,000 and was told no, it was not. In spite of this we considered
it some sort of offer. It might have been subject to survey. We wanted to take
him extremely seriously. I was trying to get him to make an offer. I tried
earlier in the week (ie the week of September 26) to get him to make an offer.
He asked me what he might secure the property for and I had told him if he
offered £1m we felt the Watsons would seriously consider such an offer. Mr
Barton made it absolutely clear to me that he would not go to that figure. In
spite of this we considered him seriously interested and hoped he would be able
to go considerably higher than £925,000 and sign a contract.
So far as these conversations between Mr
Barton and Mr Holland-Hibbert and Mr Wiggin are concerned, in so far as there
is a conflict of evidence I prefer the evidence of Mr Holland-Hibbert and Mr
Wiggin.
Mr Barton went on to describe the second
visit to the property. He said:
The purpose was to decide how strongly we
would go for the house and at what level. I was very keen on development of the
mill building. My wife and I went round the house and the mill building and the
annexe. We had a thorough examination of the property. I wanted to make an
offer there and then but my wife counselled against it and suggested that I
make it through the agent. We had a drink with the Watsons and spent
three-quarters of an hour talking. It was a desultory conversation about the
price, who else was interested and at what price, and we both stated that we
were very interested and would proceed through the agents. I specified that I
would be in touch with Lane Fox about the price.
There was a conversation, Mr Barton said,
about an auction. Mr Barton said that he had been caught by Dutch auctions in
the past and he and Mr Watson agreed that a private auction would be desirable
and that this suggestion would be taken up with the agents. Mr Barton said that
the following day, Friday September 30, he spoke to Mr Holland-Hibbert. An
auction was mentioned and Mr Holland-Hibbert said that it was set for Friday,
October 7. ‘I understood,’ said Mr Barton, ‘that the interested parties would
meet at the property to bid, and the winner would exchange contracts there and
then and make a deposit.’
Mr Barton described how thereafter, on
Friday October 3, he spoke to Mr Sturdy of Coutts and made arrangements for a
deposit to be paid in case it was necessary to go over the million mark to
acquire the property. He said that the completion moneys would come from the
sale of his own property, from a mortgage on the mill and from a loan from his
father. He gave details as to how these funds would be put together. I will
deal with this aspect of the case in more detail later.
The conversation with Mr Holland-Hibbert
to which I have referred took place on Friday morning. Later that day Mr Barton
said that he had another conversation with Mr Holland-Hibbert on the telephone.
This conversation was during the afternoon. Mr Barton said that Mr
Holland-Hibbert said to him: ‘Do you realise it’s going for £1m?’ Mr Barton replied:
Not only do I realise it’s going for £1m
but I’m well equipped to deal with that, and do better than that. I wasn’t
prepared to be drawn on the price but I invited Mr Holland-Hibbert to speak to
my bank manager and my solicitor to confirm that arrangements had been put in train.
The next thing that happened, according
to Mr Barton, was a telephone call from Mr Wiggin. Mr Barton said:
He ‘phoned about one hour later. I was
surprised to hear him. The call was on the same lines as the earlier one that
afternoon with Mr Holland-Hibbert. I repeated that I was ready for the auction,
that I had instructed my professionals and that they could check up on them.
This was the first time I had had a conversation of substance with Mr Wiggin. I
was at great pains to tell Mr Holland-Hibbert and Mr Wiggin that I was away on
a management course at Swindon on the following Monday and Tuesday, and I left
my telephone number and my hotel address with them. I also gave them my office
number. I said to Mr Wiggin that I realised the bidding would start at a
million and I had made arrangements to prepare for that eventuality and do
better. I was not prepared to be drawn on the price and I told Mr Wiggin so. I
said that if they, Lane Fox, wanted confirmation that I was a serious contender
they should talk to Coutts and Hamlin Stowe
— his solicitors.
Mr Holland-Hibbert spoke about his
conversations with Mr Barton that Friday. He said that he had two conversations
with Mr Barton.
Early in the morning I’phoned him at
home. This was a follow-up to the view. His wife answered and she passed it
straight over to Mr Barton. The conversation was to make sure that the
appointment had gone to plan. It continued on the footing that there was now a
chance that the sale would be concluded by private auction. We had discussed
this with the Watsons the preceding day. I wanted to be sure that Mr Barton was
willing to attend the private auction because we needed to arrange a venue and
date as soon as possible. Mr Barton said that he was willing to attend. I said
that I needed the name and address of his solicitors so that documents could be
sent to them, and he rang back later with the name and address of his
solicitors. He gave me details about the management course which he was
attending. I said it was important that we have details of his telephone number
over the weekend on the Monday. It was definitely not said by me that the
bidding would start at £1m. I believe that Mr Barton implied by this that we
would disclose the reserve. There had been no offer of £1m so we would set the
reserve (that is the reserve price in the auction) at a level which would
attract potential bidders. Mr Wiggin and I would have consulted about this and
we would have consulted the Watsons, and it would have been a joint decision.
On September 30 I was not in a position
to say what the reserve would be. It had not been finalised. There was no basis
on the 30th for fixing a reserve of £1m. I disagree with Mr Barton’s evidence
as to what he said I said. The only figure he mentioned was £925,000. We thought
that he would increase on this. We thought that he would go to £950,000 but no
mention of £1m was made. If he had said ‘I am prepared to go to £1m’ I would
have been delighted because I would have received an indication that the sale
price was to be higher than I thought and I would have reported this to Mr
Wiggin and the Watsons.
At that point on Monday last, January 28,
the evidence of Mr Holland-Hibbert concluded, since it was late in the
afternoon. Mr
document was found. This was a document that ought to have been disclosed. It
was not disclosed, I am satisfied, because it had got into the wrong file and
it had been overlooked. It is now D7 and is to be found in the bundle of
additional exhibits. It is Mr Holland-Hibbert’s note of conversations he had
with Mr Barton on September 30. It sets out Mr Barton’s movements on October 3
and 4. It gives the telephone number of the training suite where he was
attending a conference. It sets out the address of the hotel where he was to be
found. It contains this note: ‘Friday 7th September not good for Barton to come
to auction’, and then in either pen or ink of a different nature it gives the
name of Mr Barton’s solicitor with his telephone number.
Mr Holland-Hibbert said:
Because there are different inks on the
document I conclude he gave me the information in question in two different
telephone calls. I would need the solicitor’s name to supply to Mr Watson’s
solicitors so that legal matters could be set up before the auction. Had Mr
Barton given me his banker’s name I would have noted it. The banker’s name is
not noted on the document in question. If I had been told that he would go to
£1m I would have noted this. There is no such note on the document.
Under cross-examination concerning the
events of Friday, September 30, Mr Holland-Hibbert said that the proposed
auction was discussed very seriously with Mr Barton in the morning
conversation. He added:
I remember Mr Barton saying in one of the
conversations was it possible for somebody to bid on his behalf at the auction
and I told him it would be better if he came himself. He said he was prepared
to come to the auction but he was not keen on October 7. He then ‘phoned back
with the details of his solicitors. At no time was his bank mentioned at all.
If he had given me the name of his bank it is something that I would have
noted. If he had said he would go over a million I would have made a note of
the bank and would have enquired as to whether what he said was correct. I do
not think I would have enquired as to the contents of the account. If he had
said he was prepared to go to a million I would have made a very important note
to this effect.
I should say that while Mr
Holland-Hibbert was giving this evidence I formed the view that he was
uncertain as to whether he would definitely have telephoned Mr Barton’s bank on
receipt of the information in question. However, I am satisfied that had Mr
Holland-Hibbert been told the name of the bank then he would undoubtedly have
noted it on the document D7 or a similar document.
Mr Wiggin spoke about this Friday. He
said at first: ‘I have no recollection of speaking to Mr Barton on Friday,
September 30. I cannot be absolutely certain but I do not believe I did. At
that time about 20 properties were involved and about four to five were coming
to climax.’ He was asked: ‘On Friday was
Barton prepared to go to a million or more at Lower Mill?’ and he said: ‘No, rather the opposite. Mr
Barton was interested at £925,000. He was willing to come to the auction. He
would come if the reserve was £950,000 but he was not a certain bidder.’ He was then asked how he got this information
and he said:
I got this information from Mr
Holland-Hibbert. I was continually talking to Mr Holland-Hibbert to keep in the
picture. If Mr Barton had said he was prepared or ready to go to a million or
beyond I would have been delighted and reported it to the Watsons. We report
everything to the client. I would have been pleased to encourage him to go to a
million when we were trying to arrange the auction.
Then he added:
The first potential buyer who suggested
he might go to a million was Mr Farrell on October 3. There was never any
question of a £1m reserve. Never at any time did Mr Barton mention his bank to
me at all. If I had a conversation with Mr Barton on the Friday it might have
been about how things were going, but there was no question of reserves or his
bank or things like that. It was never anticipated by me that bidding would
start at £1m. On the Friday none of the participants looked like going to a
million. In addition, if you are going to have an auction you have it at a
level at which you think people will participate. You don’t have it at a level
at which no one will participate. On the Friday there was no possibility at all
that bidding would start at £1m.
In assessing the evidence of Mr Barton,
Mr Wiggin and Mr Holland-Hibbert as to what was said and happened on September
30 and subsequently, I would have been assisted by the evidence of Mr Farrell.
He was not called by either side. I have no evidence as to his present
whereabouts. Thus, I do the best I can on the evidence addjuced by the parties.
I have to say that I prefer the evidence of Mr Holland-Hibbert and Mr Wiggin to
that of Mr Barton as to what passed between them that Friday. It is important
that no potential bidder had then offered £1m. The Pushmans went to £950,000
and withdrew over the weekend October 1-2. Mr Farrell did not, as I find, offer
£1m until the following Monday.
Against this background, had Mr Barton
spoken to Mr Holland-Hibbert and Mr Wiggin on September 30 in the terms which
he alleges, I think that they would not have failed to have noted his interest
and reported what he had said to Mr and Mrs Watson. I think it is highly
probable that Mr Wiggin would have checked on his references to the bank if
aware of them. I can see no reason why, at that time, they should not do any of
these things and none has been advanced. It was in Lane Fox’s interests as well
as their clients’ to sell the property for the best price. A firm indication by
Mr Barton that he would offer more than £1m if necessary would have been a
powerful weapon in their armoury in any negotiations with Mr Farrell. It would
also be relevant in fixing the reserve in any subsequent auction.
I accept Mr Holland-Hibbert’s evidence
that on September 30 there was no basis for fixing the reserve at £1m. I find
that on that day Mr Holland-Hibbert made no mention of the property going for £1m
to Mr Barton. I find that Mr Barton made no mention of his ability to beat that
sum. While Mr Barton gave Lane Fox details of his solicitors, I find that he
gave them no details of his bankers.
Over the weekend Mr Wiggin was in touch
with Mr Farrell. He said:
On Sunday evening I’phoned Mr Farrell. He
was back from abroad. I rang to make sure that he was still on for the auction
at a reserve of about £950,000. I think Mr Farrell had telephoned me on Friday
to find out what was happening and I told him I had recommended to the Watsons
that the interested parties should be invited to a private auction and that the
reserve was likely to be £925,000 to £950,000. I am almost sure that this was
Friday. On Sunday evening, October 2, I telephoned Mr Farrell and asked him if
he was happy to come to this proposed auction at a reserve of £950,000. The
reason I rang was that I detected on Friday that he was getting decidedly fed
up.
Then Mr Wiggin said that his impression
was that Mr Farrell wanted a firm decision.
I could tell he was beginning to reach
the end of his tether. Farrell was a vital man so far as the Watsons were
concerned. He was the only one who had given us confidence that he would sign a
contract quickly and would back up what he said. I was very anxious that he was
contacted before I spoke to the Watsons again on Monday. On Sunday he was not
very keen on the auction. I remember saying to myself ‘Oh dear, his interest is
beginning to wane.’ He told me he would’
phone on Monday morning to confirm whether he would come to the auction.
Mr Wiggin said:
Early on Monday, October 3, there was a
telephone call from Mr Farrell. I took it. He said he was not prepared to come
to the auction. He was fed up with the whole thing. It had gone on all too
long, but he was prepared to offer £1m with a 20% deposit, and exchange of
contracts immediately.
Mr Wiggin noted this conversation. Mr
Wiggin said:
I told Farrell that I was sorry he
wouldn’t come to the auction. I would report his offer to the Watsons.
On Monday, October 3, Mr and Mrs Watson
were returning to London from Norfolk. They had left their Norfolk telephone
number with Lane Fox. Lane Fox attempted to contact them in Norfolk and
discovered that they had left. Thereafter, Mr Wiggin spoke to Mr Watson on Mr
Watson’s car telephone. There were a number of attempts to make contact. The
car telephone was not a successful means of communication. It was decided that
Mr Watson should stop his car and speak to Mr Wiggin from a call box.
Mr Wiggin said:
I informed Mr Watson of the offer. We
discussed Mr Barton’s interest. I was instructed to find if Mr Barton would go
over £1m. If not, then we would go ahead with the Farrells.
Mr Watson said:
I was on the telephone to Mr Wiggin at
about 10 am. Mr Wiggin said that Farrell had offered £1m. It looked as though
the Pushmans and the Bartons had dropped out. The Pushmans had said they would
not go above £950,000. The Bartons had said that they would not go above that
figure either. My response was that I was very happy with the offer of £1m and
I asked Mr Wiggin to go back to the others to ensure that they were not
prepared to increase their offers, to which he replied, irritated I felt, ‘Of
course. It’s my job to get you the maximum amount of money’.
Later in his evidence it emerged that Mr
Watson knew that the Pushmans had gone by October 3 and that the instruction
was to go to Mr Barton. Thus, it is common ground that Mr Wiggin had clear
instructions from Mr Watson to go back to Mr Barton and find whether or not he
would go over the £1m offered by Mr Farrell.
Mr Holland-Hibbert said:
I remember Mr Wiggin coming into the
office on that Monday morning. He said he had spoken to Mr Farrell and Mr
Pushman over the weekend. The Pushmans were not willing to come to the auction.
I remember Mr Wiggin taking a call from Mr Farrell. That call was the call in
which Mr Farrell made an offer of a £1m.
— I interpose to say that there was
evidence, which I accept, that Mr Holland-Hibbert and Mr Wiggin shared the same
office and had adjacent desks —
I could have heard a certain amount of
the call. Mr Wiggin told me that Farrell had made an offer. He told me to
contact Mr Barton. I rang the number on my note, D7, at the training suite at
Swindon. The purpose of the call was to ascertain whether Mr Barton was
prepared to increase on Farrell’s offer of £1m. I was on the ‘phone straight
away to Mr Barton. I spoke to a receptionist who was very vague as to who Mr
Barton was. I explained to her as best I could and she said she would get a
message to him as soon as possible. Mr Barton rang back during the morning. The
call was taken by Mr Wiggin, not myself.
Mr Barton gave evidence of his
conversation with Mr Wiggin that morning. He confirmed that Lane Fox had
telephoned Swindon and left a message. He said Mr Wiggin telephoned. That is
clearly a reference to the call that Mr Holland-Hibbert made.
I returned his call at 10.30 or 11
o’clock, certainly before noon. I remember his words exactly. He said ‘The
other chap is bidding like a mad thing and is well into the million mark.’ In order to take this property off the market
I was told I would have to bid in excess of £1.4m. My reaction was one of
horror and disbelief. I said ‘I can’t believe that a property like this could
go from seven to eight hundred thousand, or eight hundred thousand pounds to £1
1/2m in the space of a weekend.’ Mr
Wiggin was conciliatory. He expressed sympathy. He said the other chap was
determined to have it, there was no stopping him, and one of the phrases I
remember was ‘There can only be one winner in cases like this.’ I said I was not prepared to pay £1 1/2m.
There was no discussion regarding an auction. I telephoned my wife and she was
more disappointed than me, and I asked her to advise my solicitors accordingly.
Had I been asked in that conversation what I was prepared to bid, I would have
said £1.1m.
Mr Wiggin described the call as follows.
He said:
Mr Barton ‘phoned back and the call was
put through to me. I told Mr Barton exactly what the position was. I cannot
recollect the precise words or exactly what I said but I told him that two
other interested parties had declined to come to the auction but one of them
had submitted an offer of £1m and was prepared to sign contracts quickly. I
told him that unless he submitted a bid in excess of £1m the Watsons would be
concluding negotiations with the other party. He declined to bid. He lectured
me that it was too much money and I thought I was understanding and that our
job was to do the best I could for the Watsons.
Mr Wiggin said:
I don’t believe I said anything like ‘The
other chap is bidding like a mad thing and is well into the million mark’. I
didn’t regard Farrell as bidding like a mad thing. Mr Farrell was positive and
clear, the opposite to the Bartons. I do not recollect either £1.4m or £1.5m
being mentioned. The whole gist of the conversation was that he had to bid over
£1m and be prepared to sign the contract quickly.
Mr Wiggin said that over two and a
quarter years or so he has thought of this conversation time and time again.
I cannot recollect ever talking about the
figures that Mr Barton claims I mentioned. If Mr Barton had asked me what
figure would take the property off the market I could possibly have said the
figures he quoted but I think it highly unlikely. I made it absolutely clear
that he knew that he had to bid over £1m and be prepared to sign a contract to
stay in the negotiations. There was no mention of a deposit with the Bartons.
Our conversation never got as far as this.
It is impossible to reconcile the
evidence of Mr Barton and Mr Wiggin as to what was said on October 3. In
judging which account is accurate, it is necessary to set their evidence against
the whole of the evidence in the case and this I have endeavoured to do. In
addition to the evidence recounted, I would refer specifically to the following
matters. It is to be noted that on November 21 1988 solicitors acting for Mr
and Mrs Barton wrote a letter to Lane Fox & Co. On December 19 1988 a writ
and statement of claim were issued by Mr and Mrs Barton against Lane Fox. The
account given in the letter and in the statement of claim of the events leading
up to and including October 3 1988 is in substance the same as that given by Mr
Barton in the witness box. In order to avoid prolonging this judgment to a
wholly unsatisfactory length I refrain from reading the whole of the letter or
the statement of claim. Both documents are exhibited and can be read, if
necessary, by anyone concerned with this case hereafter.
I add, however, that while the account of
events is in substance the same as that given by Mr Barton, the allegations of
loss sustained by him differ. Before me, Mr Barton gave evidence about the
potential development of the property. He said, among other things:
The Mill, I thought, lent itself to
sympathetic conversion. I had discussion with two people in the property field
and both were interested in a joint development or joint purchase,
and I have indicated that arrangements
were made for these people to view the property on October 4. Mr Barton said
later:
The development potential did not enter
into my calculations when it came to assessing the finance I needed to make a
bid at auction.
Later still he described his experience
as a property developer. He said it was limited, that he had developed a
residential property on 2 1/2 acres near his home in 1986. He added that he had
been concerned in advising clients and had a lot of contacts in the property
world.
Of the Lower Mill and the mill house
itself he said:
I thought it would lend itself to
development as a professional’s office, provided parking was restricted. Before
the events, I had very little opportunity to consider planning. I saw
documents. I called at the local authority offices and discussed the position
with the planning officer, and then I arranged for two men experienced in
property to visit on October 4. These were Mr Taylor of Rockhold and Mr Alan
Bussey. They had been involved in my paddock development. Mr Bussey knew the
property at Lower Mill and he was a property developer. If Mr Taylor and Mr
Bussey had expressed interest I envisaged frantic negotiation in which they
would either have entered into a joint purchase of the whole property or we
would have entered into an option arrangement whereby one or other party, or
jointly, would have arranged an option contract with me for subsequent
development of the mill property.
He was asked the question: ‘With money
put up for purchase?’ Answer:
A likely scenario. I thought that there
was a good chance of obtaining permission for a professional office for
lawyers, surveyors or architects with limited vehicle strength. Mr Watson
indicated that he was not interested in a contract for sale subject to
obtaining planning permission.
— This undoubtedly was Mr Watson’s
attitude —
However, I was prepared to bid
unconditionally. While both the house and the mill were listed, either way I
was going to acquire the property if given the opportunity and do the best sort
of development deal I could, then or later.
In the letter of November 21 1988 there
is this passage:
Our clients approached a property
developer who agreed to put up £500,000 towards the purchase price of the
property, retaining for himself the mill building. Our clients would retain the
balance of the property. As a result, our clients were therefore potentially
able to pay at least £1.3m for the property.
In the statement of claim, in the
particulars at para 8, particular (1), it is stated:
The plaintiffs lost the chance of
purchasing the premises which, as the defendants well knew, had a potential for
development. If the plaintiffs had been able to purchase the premises for £1.3m
they would have been able to sell the mill building on the premises for
development for £500,000 to some property developers; (2) with whom, prior to
October 3 1988, the plaintiffs had discussed the purchase of the premises. This
would have left the plaintiffs with the main house, stable building, 10 acres
of land and half a mile of trout fishing on the premises worth at least
£900,000 which the plaintiffs would have acquired at a cost to them of
£800,000. In the premises, the plaintiffs have lost the sum of £100,000.
Alternatively, if the plaintiffs had been able to purchase the premises for
£1.1m, they would have been able to develop the mill building themselves at a
cost of approximately £300,000. The mill building when let would have been
worth at least £1.2m. The remainder of the premises would have been worth at
least £900,000. For a cost of £1.4m the plaintiffs would have acquired premises
worth £2.1m. In the premises the plaintiffs have lost the sum of £700,000.
The latter was described in evidence as a
‘guesstimate’.
The passages to which I have referred,
and in particular the passage contained in the solicitor’s letter of November
21 1988, are far removed, in my judgment, from the evidence given in this court
by Mr Barton. Having regard to what he told me, it is not a matter of surprise
that the action brought by him and his wife against Lane Fox was abandoned in
1990 because, as Mr Barton said, he was advised it would be impossible to
quantify amounts.
Of particular importance to the present
proceedings, however, are the assertions in the correspondence and the
statement of claim as to the loss arising out of the failure to develop. On
October 3 there had been no agreement with a property developer who would put
up £500,000 towards the purchase price of the property, retaining for himself
the mill building. This raises doubts about Mr Barton’s reliability as a
witness on matters relevant to the issues which I have to resolve.
Mr Barton gave evidence about his
financial circumstances in
in 1988 his total income was some £120,000 gross. In cross-examination he said
that his gross income that year was £180,000. Later in his evidence he went
back to a figure of about £120,000, made up of salary, commission and bonus. He
said that his income had been £180,000 in 1987 and that in 1990 it dipped. He
told me that he had available, for the purchase of Lower Mill, a loan of
£200,000 from his father, made up of a straight loan of £50,000 and £150,000
raised by a charge on his father’s house. I have heard no evidence from Mr
Barton senior on this subject, nor have I seen any documents. Second, Mr Barton
would have had available the proceeds of sale of Hill House, Spencer Wood,
valued by him at £750,000.
In the documents there is a letter from
Jeremy S Bowyer, chartered surveyor [FRICS], prepared for the attention of Mr
Sturdy of Coutts, dated October 4 1988. The letter is a valuation of Hill
House, Spencer Wood. At p 2 under ‘Valuation’ Mr Bowyer states: ‘It is my
opinion that the current value of freehold, if offered for sale in the open
market with vacant possession, is £625,000’. When Mr Sturdy gave evidence he
said, when asked about something called a forced-sale value, that this was the
lowest price obtainable if the property had to be sold. He was asked: ‘Was this
something distinct from value on the open market?’ and he said: ‘I would expect it to be made
clear to me’. He was referred to the letter from Mr Bowyer and said: ‘If this
was being put forward as a forced-sale valuation I would expect it to be
stated.’
I take the view that Mr Bowyer’s
valuation is an open-market valuation. I think that Mr Barton was therefore
optimistic in thinking that Hill House was worth £750,000 on the open market. I
prefer the valuation of Mr Bowyer of £625,000. It is to be noted that Hill
House had a mortgage outstanding of £145,000.
Mr Barton added that he would have
obtained a mortgage on Lower Mill for some £300,000. ‘I might’, he said, ‘have
had to raise about £100,000 more by the sale of unit trusts, share options,
life assurance, furniture and clocks.’
Unit trusts were available at £22,000, life assurance had a realisable
value of £30,000, and his furniture and clocks were worth some £120,000 to
£130,000. He emphasised that he was not thinking of developing the mill himself
immediately on his own, but it would be developed at a future date if he had to
operate a loan.
He said: ‘It would have been within my
means to meet repayments of £300,000 on a mortgage of Lower Mill. I could meet
my commitment.’ And he asserted that his
financial position was such as to enable him to make a firm bid of £1m or over.
Mr Sturdy, Mr Barton’s manager at the
Hanover Square branch of Coutts, was called. He gave important evidence to
which I have given the most careful attention. His evidence was strongly relied
on by Mr Aldous. He told me that Mr Barton telephoned him on September 30 and
informed him that he was interested in buying a property which was likely to go
to auction, and Mr Barton said that he would like to arrange finance to make a
deposit on the property. ‘We went through the figures, how much he would
require and how he would repay the bank. Apart from this there was no other
matter concerning Mr Barton’s finance discussed.’ Mr Sturdy said: ‘This sort of transaction was
quite usual, and facilities in the sum of £110,000 were agreed.’ The letter of September 30 1988 to be found
in the documents refers to this conversation. Under ‘amount and purpose’ is
this statement: ‘£110,000 only to assist with the deposit required for the
purchase of Lower Mill, New Ham Lane, Old Basing, Hampshire, and to settle
certain bills.’ Play was made in
cross-examination of the expression ‘certain bills’. I understood the
defendants to be suggesting that the amount available for deposit would be
reduced by the settlement of bills. I can find no basis in the evidence, having
considered what Mr Sturdy and Mr Barton said, for this suggestion. I am
satisfied that £110,000 was made available by Coutts and was available on
September 30 and thereafter as a deposit on Lower Mill. Mr Sturdy said: ‘I was
very much asked to lend 10% deposit of £1.1m. Mr Barton told me that the
property was going to auction and that he might have to bid up to £1m or
£1,100,000 for the mill.’
Mr Aldous described Mr Sturdy as an
impeccable witness with no axe to grind. I entirely agree. Mr Aldous goes on to
submit that it is beyond question, therefore, that Mr Barton had moneys
available on October 3 to enable him to make a deposit on an offer of £1.1m. He
submitted that if Mr Wiggin had said to him, Mr Barton, on that day: ‘Would you
bid more than £1m?’ it is inconceivable
that Mr Barton would not have said ‘Yes’. Mr Barton had made all the
arrangements by Monday. Later in the week he might have been prepared to pay
more.
In my judgment, the essential question is
whether, on September 30 and October 3, Mr Barton had sufficient funds readily
available so as to exchange contracts and complete the sale in a reasonable
length of time. I accept Mr Holland-Hibbert’s evidence that Lane Fox were
looking for a cash purchaser and that this was brought to Mr Barton’s
attention. As I have indicated, I have no evidence from Mr Barton’s father and
no documentary evidence that the loan that was envisaged from him and which would
have been a vital component in any offer was available readily. I observe that
£150,000 was to be obtained subject to a charge. I have heard no evidence as to
the general state of Mr Barton’s account at Coutts. I note that in 1988 Mr
Barton had a drop in income. Moreover, any sale of Hill House would, in the
nature of the transaction envisaged, have had to be effected under pressure of
time. Such a sale at Mr Barton’s anticipated figure of £750,000 is not
supported by Mr Bowyer’s estimate to Coutts.
I conclude that in the absence of firm
commitments from developers, and there were none on October 3, it could not be
said with any confidence that Mr Barton had sufficient funds readily available
on that day to enable him to bid £1m or more. In my view, the significance of
the facility of £110,000 given by Coutts is that it would have enabled Mr
Barton to make a deposit immediately after the auction fixed for October 7.
Indeed, this was the reason given to Mr Sturdy when the facility was sought. I
cannot therefore accept Mr Aldous’ submission that by October 3 Mr Barton had
made all arrangements to put himself in funds to pay more than £1m.
The fact that the arrangement with the
developers was that they would view on October 4 is significant. While Mr
Barton said that funds from potential developers played no part in his
calculations, this was not what was being said through his legal advisers in
November 1988.
I go on to consider a further aspect of
the case which I have had in mind in assessing what was said in the crucial
conversations on October 3. On October 5 Mr Barton was telephoned by Mr
Holland-Hibbert. Mr Barton said that he was told that contracts had been
exchanged and he thanked Mr Holland-Hibbert for telling him this. He asked what
price the property had fetched. ‘Mr Holland-Hibbert said it was not the firm’s
practice to exchange such details with unsuccessful purchasers and I then
explained’, said Mr Barton, ‘what I had done. I said I was heavily involved and
asked for the price. There was no rhyme or reason why I shouldn’t have it. Mr
Holland-Hibbert said: ‘I can’t discuss that’ and I said that the whole matter
had been handled poorly.’ He indicated
his displeasure and asked for this to be conveyed to Mr Wiggin.
‘An hour later’, said Mr Barton, ‘Mr
Wiggin was on the telephone. He was trying to be conciliatory. I asked him
about the price and Mr Wiggin said it was not the practice to disclose
successful prices. I said this was difficult to understand. Mr Wiggin said he
was acting under strict instructions from Mr Watson not to disclose the sale
price.’ Mr Barton became testy and said
he would telephone Mr Watson. He, he said, would deal honestly with him and let
him know what the property had gone for. At this point Mr Wiggin said he dealt
with some of Mr Barton’s company directors. Mr Barton said: ‘I inferred this to
be a veiled threat to contact my directors and complain.’
Mr Wiggin when he gave evidence agreed
that reference had been made to directors. He said that he regretted making
this statement as soon as it was made. It was not intended to be a threat. Mr
Holland-Hibbert said that on October 5 he telephoned Mr Barton. The purpose was
to inform him that contracts had been exchanged.
I told him that contracts had been
exchanged. He asked me what the sale price had been. I said unfortunately I
could not disclose the exact price unless I had the client’s authority to do
so, which I didn’t have. I remember he was a little upset that I couldn’t give
him the information. I know that Mr Wiggin spoke to Mr Barton later that day,
although I can’t remember who ‘phoned who.
Mr Wiggin said this:
It may be that on the Wednesday, the 5th,
when Mr Holland-Hibbert telephoned Mr Barton to tell him that the contracts had
been exchanged, Mr Barton asked to speak to me. I know that when I picked the
telephone up Mr Barton was on the line. I personally did not ‘phone. It is my
firm’s policy not to tell anybody, not even under-bidders, the sale price of
property without permission of the vendor. I explained this to Mr Barton. I did
not tell Mr Barton we specifically were instructed by the Watsons not to tell
him.
Then Mr Wiggin said: ‘I gave him a good
guide to the sale price, an indication. He said: ‘Oh dear’ or words to that
effect, and gave me the impression he regretted not having bid.’ Later, he said: ‘I could easily have told Mr
Barton what the price was’, but later still when he was re-examined he said: ‘I
have not got a clear recollection of telling Mr Barton the price.’
The passage in Mr Wiggin’s evidence ‘I
gave him a good guide to the sale price, an indication’, and the expression ‘I
could easily have told Barton what the price was’, was against the whole tenor
of the case before that. The case, as I understood it, had proceeded on the
basis that Mr Wiggin had adhered to what he called the firm’s policy not to
tell anybody, not even an under-bidder, of the sale price of the property
without permission of the vendor, which had not been given.
I find that Mr Wiggin did not tell Mr
Barton the sale price during these conversations. I have given careful
consideration to Mr Aldous’ criticism of Mr Wiggin’s evidence in this regard. I
have considered the submissions that Mr Aldous has made regarding the
implications to be drawn from this evidence. I have considered those
submissions against the whole of the evidence in the case.
I have come to the conclusion that Mr
Wiggin’s evidence in this regard has no sinister basis. I am satisfied that in
saying what he did in court he was not lying or intending deliberately to mislead.
The issue in this case is a factual one. I have in mind what counsel have
submitted about the character of the principal witnesses. They are all persons
of the highest probity, a fact which does not make my task any easier.
In the end I have to stand back and look
at the whole of the evidence given in the trial and ask myself whether, given
the burden and standard of proof, the plaintiffs have made out their case
against these defendants. This in turn requires me to scrutinise with the
greatest care the evidence given by Mr Barton and Mr Wiggin as to what was said
by them in the crucial telephone call of October 3. I have done this and I have
attempted to fit that evidence into the framework of the acceptable evidence as
a whole.
I have reached the conclusion that I am
unable to accept Mr Barton’s version of what was said. On October 3 there was,
as Mr Lynagh put it and as I find, a change of pace. The offer and the attitude
of Mr Farrell rendered an auction impossible or inappropriate. I have reached
the conclusion that Mr Barton was unable to adapt to the fresh circumstances
which were placed before him while at Swindon that day. His sights were set and
his arrangements were made for four days ahead, October 7. I am unable to
accept his assertions that he was told by Mr Wiggin that he would have to bid
in excess of £1.4m to take the property off the market. I think that the
account of Mr Wiggin, buttressed in important respects as it is by the evidence
of Mr Holland-Hibbert, is inherently more likely than that of Mr Barton.
I find that on October 3 Mr Wiggin asked
Mr Barton to submit a bid in excess of £1m in accordance with his instructions
and that Mr Barton thereafter declined to bid. In my judgment, Mr Wiggin and
Lane Fox at no time acted contrary to instructions as alleged. That being so I
acquit the defendants of negligence, recklessness and deceit. The plaintiffs’
claim must fail. I heard no argument on the counterclaim, I presume because
counsel took the view that if the plaintiffs’ claim failed, then the
counterclaim would be bound to succeed, but I will hear submissions about that
if necessary. Failing such submissions there will be judgment for the
defendants on the counterclaim.
I should say finally that counsel
addressed me as to quantum of damages. Should this matter go further, I think
it only necessary to say that had judgment been given for the plaintiffs then I
would have assessed the plaintiffs’ loss at £100,000.
The plaintiffs’ claim was dismissed.
Judgment was given on the defendants’ counterclaim for £26,000.
