PROVING THINGS 3: THE COMPLETE ABSENCE OF EVIDENCE MEANS THE COURT WILL NOT SPECULATE

Another example of a failure to prove damages can be found in the decision of His Honour Judge Stephen Davies (sitting as a High Court judge) in Fairhurst Developments Limited -v- Collins [2016] EWHC 199 (TCC).

KEY POINTS

This is another case (the third today) where parties have got to trial and claimed damages but put forward no evidence at all to support the claim.

THE CASE

There was a claim and counterclaim relation to the construction of a residential development site.

EVIDENCE OF THE DEFENDANT’S IMPECUNIOSITY

One issue in the case was whether the defendant had acted unreasonably in failing to carry out repairs to the property

(4) I am not satisfied that Mr Collins has not had the financial ability to undertake the necessary repairs. Although in giving evidence he protested as to his financial difficulties caused by Fairhurst, in particular the cost of funding this litigation, and his losses on renting out Poplar Cottage, he has produced no documentary evidence in terms of his and his company accounts or bank statements for the duration of the litigation to support his case that he has simply been unable to afford to undertake these works either at all or for these reasons. This evidence is inconsistent with the evidence of his financial success given in the opening sections of his WS1. In cross-examination Mr Collins was adamant that he could not have refinanced Aldford View, given its lack of completion. He did appear to accept that he could have taken out a bridging loan which could have been converted into a refinanced mortgage loan once the remedial works were completed and the necessary certificates and approvals obtained. He was not, therefore, having to take on the risk of bridging finance until the property had sold which, I accept, would potentially have been an open-ended and hence risky commitment. Whilst his position was that he would not have been prepared to take on the risk of doing this, it did not seem to me that this aversion was based on solid grounds, given the relatively limited extent and cost of the works which I have determined are reasonably necessary. Alternatively, as in the end it seemed to me he had to accept, he could have obtained finance by remortgaging one or other of his other properties. He has not produced any evidence to contradict his own evidence in his WS1 that there is substantial equity in those properties. Although he has made reference to his personal credit rating having been damaged due to the non-payment of the mortgage over Aldford View, it must be borne in mind that there is no direct evidence of this and in any event that it was his primary obligation to pay the mortgage, so that his decision to take the risk that his credit rating would suffer if Fairhurst did not pay its share on time seems foolish in the extreme.

It is also to be noted that in a letter written on 18 September 2014 [A/1850] Mr Collins made an open offer to pay a further £67,000 to compromise the case, on the basis – amongst other things – that the rectification costs were “at least £50,000”. If that was a genuine offer then Mr Collins clearly believed he had access to funds to enable him to pay that sum if the offer was accepted.
  1. In the circumstances it is my conclusion that Mr Collins has failed without reasonable excuse to take reasonable steps to undertake the necessary remedial works since May 2011 and is in breach of his obligations under the development agreement and the trust as a result insofar as the consequence of that is that Aldford View is unsellable.

LOSSES CLAIMED FOR WHICH THERE WAS NO EVIDENCE

14.7 Other pleaded losses
  1. Mr Collins has also pleaded a claim for the costs incurred in instructing a “planning barrister and planning consultants” to deal with planning and environmental matters. This claim fails because:
(a) I am satisfied that it was not Fairhurst’s responsibility to deal with planning matters.

(b) I am satisfied that it was Mr Collins who chose to involve the Environment Agency in order to promote his case in this litigation and, hence, that he cannot recover the cost of dealing with them as damages.

(c) No details of such losses are given.

  1. Finally, Mr Collins has pleaded a claim for his loss of earnings whilst attending site and not at work. This claim, which Mr Collins accepted in cross-examination that he was not pursuing, would have failed anyway for a number of reasons:
(a) There is no evidence, by way of diary or otherwise, as to the dates and times when it is said that Mr Collins was on site, and specifically when he was on site dealing with Fairhurst’s breaches as opposed to when he would have been on site anyway as a joint venturer. In the complete absence of such evidence is it not possible for the court to speculate.
(b) Since Mr Collins operates through a limited company, it would not be possible for the limited company to recover losses it may claim to have suffered due to his absence. Even if that was wrong no details of such losses are given.
(c) There is no indication that he receives a salary but took unpaid leave and hence suffered a loss of earnings in his personal capacity. Again, no details are given in any event.

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