PROVING THINGS 40: NO EVIDENCE – NO LOSS: LITIGATION IS NOT A WALK IN THE PARK

A constant motif in this series has been the ability of litigants to arrive at trial and not be able to prove central parts of their case – including damages.  This is exemplified in the judgment of Mr Justice Baker in Francis -v- Knapper [2016] EWHC 3093 (QB). After a six day trial the claimants had, the judge found, no evidence at all to prove their claim in damages.

“… in my judgment Mr and Mrs Francis indeed had ample opportunity to prove, or at the very least coherently identify, a case on loss, but failed to do so”

THE CASE

The claimants were suing for damages following their purchase of a a holiday park. It was alleged that misrepresentations had been made by the solicitors and vendor about the condition of the park.  The claimants lost for several reasons. However it is instructive to read the judgment on evidence and damages.

THE JUDGMENT ON DAMAGES

“Loss
  1. The loss alleged is a difference between the purchase price of £1,350,000 that Mr and Mrs Francis paid for the Park and the market value of the Park, as acquired. The evidence as to whether there is any such loss, and if so its amount, is very unsatisfactory. That was in truth conceded by Mr Seitler QC for Mr and Mrs Francis, whose primary submission in the circumstances was that if the Park Representations claim succeeded, I should give judgment for damages to be assessed and directions for a separate assessment of damages. By contrast, Mr Bacon submitted for Mr Knapper and Fursdon Knapper that: Mr and Mrs Francis had had ample opportunity to prove, if they could, that they had suffered a loss, in other words to provide, if they could, satisfactory evidence that the value of the Park as purchased was not the £1,350,000 they paid for it (and if so by how much); the admitted unsatisfactory nature of the evidence at trial meant they simply had not done so; the proper conclusion was therefore that they had failed to prove loss and the claim should be dismissed on that ground whatever the findings might be on other issues.
  2. The principal evidence on quantum was an expert report of Christopher Tucker, a chartered surveyor and registered RICS valuer with over 30 years of experience in the valuation and sale of caravan parks / holiday parks. He was appointed jointly under the case management orders for this trial, and neither party asked any supplementary questions after he provided his report or applied for him to be called at trial to be asked any questions. His evidence is thus agreed. It values the Park in April 2008 at £1,450,000, with no major defects, and expresses the opinion that even if there were major defects they would not affect that valuation if their cost of cure was re-chargeable to chalet owners under the service charge provisions of the lease.
  3. Mr Seitler QC submitted that the latter opinion was not expert evidence, so that I can ignore it. He said the expert was there trespassing on matters of law, in particular he was addressing the question of law whether a subsequent recovery from the chalet owners of the costs of work actually undertaken (if any) would be res inter alios acta so as not to affect the damages assessment in this case even where the need to carry out those works suppressed any valuation of the Park in April 2008 otherwise used in that assessment. I disagree. In my judgment, Mr Tucker was providing an expert opinion on a commercial property market question upon which the court does not have specialist knowledge and requires the assistance of such evidence, namely whether and if so how the re-chargeability of the cost of necessary works under extant leases affects the price willing buyers pay and willing sellers expect to be paid for commercial property of this type.
  4. Given that conclusion, and the expert’s starting valuation of £1,450,000, some £100,000 more than Mr and Mrs Francis paid for the Park, they can only prove loss if they can prove (a) that there were matters at the Park as acquired in April 2008 requiring costly works that have not been taken into account in that valuation, (b) the cost for such works that a willing seller and willing buyer would probably allow to the buyer, by a reduction in price, as of April 2008, if they would not be works re-chargeable under the service charge provisions of the chalet leases, and (c) the extent to which, if at all, those works were indeed not so re-chargeable.
  5. In truth, Mr and Mrs Francis have made no attempt to discharge that burden. They are not assisted by Mr Tucker’s report because he cannot give evidence as to (a) or (c), and can only give evidence as to (b) by reference to primary factual or expert evidence not of his own as to the probable actual cost, assessed as at April 2008, of any works identified under (a). A ‘Scott Schedule’ procedure was ordered for the purpose at least of identifying Mr and Mrs Francis’ detailed pleaded case as to (a), and the probable actual cost of works as I have just mentioned. The Scott Schedule they served under that procedure, which represents the best particulars for any such case they were able to provide in the light of all the disclosure and factual witness evidence in the case, was considered by Mr Tucker in his report to see if he could not at least provide hypothetical valuation opinions, but he concluded that he was not able to do so as the Scott Schedule did not enable him to identify any meaningful assumptions that might be made.
  6. In the circumstances, in my judgment Mr and Mrs Francis indeed had ample opportunity to prove, or at the very least coherently identify, a case on loss, but failed to do so. In a supplementary note for opening, provided at my direction after I had seen his skeleton argument for trial, Mr Seitler QC made a manful attempt to construct a case from the general factual material available. But in my judgment the attempt failed to provide any satisfactory basis upon which I could reach any quantified conclusion as to whether the Park as purchased was worth less than Mr Tucker’s starting point valuation of £1,450,000, let alone less than the £1,350,000 paid for it by Mr and Mrs Francis.
  7. In the circumstances, my finding as to loss is that Mr and Mrs Francis have not shown that, had the inaccurate CPSE answers induced their purchase, loss was caused thereby.”

    THE PROVING THINGS SERIES

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