England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
(Mr Justice Etherton)

		Royal Courts of Justice Strand London WC2 Friday 22nd June, 2001

1. LORD JUSTICE JONATHAN PARKER: This is an application by Mr Michael Judah Collins for permission to appeal against an order made by Etherton J on 23 March 2001 dismissing Mr Collins' counterclaim in a possession action brought against him by Chancery Securities Plc ("Chancery").
2. In the action Chancery claimed possession of residential property at 18 Cheyne Walk, London NW4, formerly Mr Collins' home, together with sums due under outstanding facilities relating to the acquisition by him of a number of other properties. On 18 November 1990, Chancery had appointed Mr JM Villiers, of John Villiers Associates, as Law of Property Act receiver in respect of one of those properties, namely 42 Neeld Crescent, London NW4. Mr Villiers was joined as an additional defendant to Mr Collins' counterclaim.
3. On 14 October 1992 a possession order was made in respect of 18 Cheyne Walk. Mr Collins appealed against that possession order but the appeal was dismissed on 25 June 1993 and a further application for permission to appeal to this court was dismissed on 3 August 1993. On 13 November 1995 Mr Collins was made bankrupt on the petition of Barclays Bank. It appears that at the date of the bankruptcy the debt owed to Chancery by Mr Collins stood at some £2.5 million.
4. On 11 July 1997, pursuant to an order of the court, Mr Collins' trustee in bankruptcy assigned to him the causes of action upon which the counterclaim is based.
5. The trial of the counterclaim took place before Etherton J over some 10 court days. Mr Collins appeared in person; Chancery and Mr Villiers were represented by separate counsel.
6. In his counterclaim, Mr Collins made a large number of allegations of negligence, breach of duty, and misconduct against both Chancery and Mr Villiers. In a reserved judgment extending to some 87 pages of typescript, Etherton J found that none of Mr Collins' allegations against Chancery and/or Mr Villiers had been made out, and he dismissed his counterclaim. He expressed his overall conclusion in the following terms:

"I am left in no doubt that there is no substance whatever, on analysis, as a matter of fact or law, in any of the numerous complaints pleaded in Mr Collins's counterclaim."

7. Mr Collins has appeared in person on this application. I should record that Mr Collins sought an adjournment of the application, on the ground that the allotted time of 30 minutes would not enable him sufficiently to develop the various arguments which he wishes to put in support of the application. I was however constrained to refuse that request, since the efficient working of the listing process in the Court of Appeal requires that litigants seeking permission to appeal should only have a limited time in which to make their application. In that respect, Mr Collins is in no different position from any other litigant, including any other litigant in person. In the event, however, it has been possible to allow Mr Collins sufficient time to make the submissions which he wished to make.
8. Turning to the substance of his application, he seeks permission to appeal on essentially two main grounds. His first main ground, in support of which he puts forward a number of detailed arguments, is that the judgment was not, as he puts it (I quote from his skeleton argument), "justified on the evidence before the judge". His second main ground (a ground which appears in the written skeleton argument but which has not formed the subject of his oral submissions this morning) is that he believes that the judge's previous contact or connection with Mr Villiers may have clouded his judgment. In this respect it is to be recorded that at the outset of the hearing below the judge very properly disclosed that he had come across Mr Villiers previously in a professional capacity and he enquired whether any of the parties objected to his continuing with the trial. Mr Collins accepts that he made no objection at the time, but he states that he now believes that the judge's connection, such as it may have been, with Mr Villiers may have clouded his judgment.
9. I turn, therefore, to the first proposed ground of appeal, to the effect that the judge's conclusions were against the weight of the evidence before him. In support of this proposed ground of appeal, Mr Collins submits that the judge was in error in accepting the expert evidence of Mr Shapiro, Chancery's expert valuer. Mr Collins suggests that Mr Shapiro's qualifications and experience were not sufficient, and that he made statements contrary to the facts, which were contradicted by other witnesses. Mr Collins also submits that Mr Shapiro's opinions as to methods of valuation were clearly shown to be wrong. The short answer to this proposed ground of appeal is that it was entirely a matter for the judge to assess the reliability of the witnesses before him, including the expert witnesses, and to decide which evidence to reject and which to accept. In relation to Mr Shapiro, the judge stated in his judgment that he found him to be:

"a particularly impressive witness".

10. The judge went on to say that Mr Shapiro had given his evidence thoughtfully and carefully, and, despite some provocation by Mr Collins, with restraint and circumspection. The judge further referred to Mr Shapiro's personal knowledge of the area and to the fact that he had by chance personally carried out a valuation of one of the relevant properties, namely 45 Netherhall Gardens.
11. In my judgment, therefore, there is no substance whatever in the first proposed ground of appeal, relating to Mr Shapiro.
12. At this point, it is perhaps convenient to record that the judge formed a similarly favourable view of Mr Villiers, describing him as being a very precise and meticulous professional and a patently honest witness. The judge recorded his view that Mr Villiers had demonstrated a meticulous attention to detail and a methodical approach.
13. Mr Collins then goes on to challenge particular parts of Mr Shapiro's evidence. In the first place, he submits that Mr Shapiro was plainly wrong in rejecting a square footage approach to the valuation of residential property, where there are different sized flats in the same building. (This relates to a property known as Berkeley Court which featured prominently in the trial.) He states that he showed the judge what he described as positive proof that residential property is valued by the square foot, and he complains that this evidence was ignored in the judge's judgment. In this respect I need only refer to a passage in the judgment (at page 47A of the transcript) where the judge describes Mr Collins' reliance on a square footage approach to the valuation of residential property as "substantially flawed". The judge continues:

"Mr Shapiro explained that the residential market in England, as distinct from the international market, does not value residential property, or market it, by reference to a price per square foot."

14. This, again, was a matter entirely for the judge and his conclusions in this respect are not susceptible of challenge in the Court of Appeal.
15. Next, Mr Collins submits that Mr Shapiro was plainly wrong in his opinion that the rental value of residential property is not a reliable basis for arriving at the market value of the property as a whole. Mr Collins submits that in any business a return on an investment has a relation to the value of that investment. The judge referred to Mr Collins' contentions in this respect at page 52 of the judgment. He concluded (at the foot of that page) that none of the analytical methods used by Mr Collins for testing the adequacy of the purchase prices for the flats in Berkeley Court in 1992 or 1993 were either sound or helpful. The judge went on to conclude that Mr Collins' proposed methods could not, as he put it, undermine the contemporaneous valuations which had been placed before the court, and he stated that he had no doubt that Chancery had taken reasonable steps to obtain proper prices for the flats at Berkeley Court.
16. Next, Mr Collins refers in his written skeleton argument to what he describes as the "guessed opinions" of Mr Shapiro. He complains that the judge took these opinions as fact, notwithstanding that they were contradicted by other witnesses. Once again, however, this was essentially and pre-eminently a matter for the judge, and in my judgment it does not raise an issue which is susceptible of challenge on appeal.
17. Mr Collins' next proposed ground of appeal relates to a property known as Beatrice Court, upon which he relied as a comparable. He submitted that it was at least on a par with Berkeley Court. However, the judge regarded Beatrice Court as an unreliable comparable. Thus, at the foot of page 48 of the judgment, the judge said this:

"I also find that the analysis by Mr Collins is substantially flawed by devaluing the Beatrice Court flats by reference to asking prices rather than actual prices achieved. Mr Collins argued that at least one of the Beatrice Court flats was known to have achieved its original asking price, or something approaching the original asking price. He also submitted, as a general observation, and in the questions he put to many of the witnesses, that no agent would quote an asking price that is wholly unrealistic, since that would squander the cost of advertising. Again, it seems to me that in legal proceedings of the present kind, in which it is sought to fix a party with legal liability, speculative inferences of this kind carry little weight."

18. I can, for my part, see no basis upon which those findings could be challenged on appeal.
19. Mr Collins next relies on evidence relating to 45 Netherhall Gardens. He seeks to challenge Mr Shapiro's method of valuing that property. He further suggests that had the property been properly advertised in the trade press, with a very much larger square footage, it would have fetched a very much higher price. However, the judge found (at page 66E of the judgment) that the property was adequately exposed to the market and was sold by Chancery for a proper price. Once again, I can see no basis for challenging that conclusion on appeal.
20. Next, Mr Collins relies in his written submissions on an offer which he made for the purchase of Berkeley Court and Netherhall Gardens and the discharge of all his indebtedness to Chancery, in consideration of an immediate payment of £1.2 million. However, as the judge rightly concluded, there was no legal duty on Chancery to accept any offer by Mr Collins to compromise his entire outstanding indebtedness, including interest, by acceptance of an offer of a lesser sum. Once again, I can see for my part no mileage whatever in Mr Collins' attempted reliance on the fact that he made such an offer.
21. Mr Collins summarises this part of his case by saying (and again I quote from his helpful skeleton argument):

"In all, the judge did not comply with the solid evidence provided, but with unsubstantiated opinions of valuers all of whom had no credibility as they categorically stated that the site in Hampstead was not worth developing as it would show a loss of between £191,000 and £90,000, whereas facts show the developer [made] £815,000 profit."

22. In relation to that submission, I can only repeat the observation which I have already made, to the effect that it was a matter for the judge to decide what evidence to accept and what to reject, and to reach his conclusions on the basis of the expert evidence before him. I can, for my part, see no way in which the judge's performance of that function could be challenged on appeal.
23. Turning to Mr Collins' allegations in respect of Mr Villiers, Mr Collins submits that he lacked the necessary experience to undertake the duties of receiver. In this respect, Mr Collins relies on a letter from Mr Villiers to Mr Morris (whom I assume to be a lawyer) in which he said this:

"Whilst I am familiar with the job entailed [a reference to the receivership] as it is my everyday field of work, I have never carried out the job before as receiver."

24. Mr Collins has also drawn my attention to documents in which Chancery itself at one stage complained of the way in which Mr Villiers was carrying out his duties. Mr Collins has also referred to a reference on the final page of the judgment to a particular situation in which the judge concluded that Mr Villiers had not acted with the skill or care which he should have done. It is right to say, however, that in relation to that conclusion the judge went on to say:

"I am quite clear, however, that this lapse did not cause any delay to the sale of the flats at Berkeley Court, and that the problem was in reality caused by Mr Collins's failure to pass [and then there is a reference to a plan] to Mr Villiers ..."

25. As I indicated earlier, the judge formed a very favourable view of Mr Villiers, and as to the manner in which he carried out his duties as receiver, and I can, for my part, see nothing in Mr Collins' complaint in this respect. In any event, it seems to me that Mr Collins is seeking to take Mr Villiers' statement that he had not previously acted as receiver out of context and to attribute to it a meaning which it plainly does not bear, when one looks at the remainder of that letter.
26. Next, Mr Collins complains that Mr Villiers unnecessarily commissioned new drawings of Berkeley Court (which Mr Collins alleges were of an inferior quality) and reapplied for planning permission. However, at page 72 of the judgment, the judge concluded that Mr Villiers' actions in this respect were perfectly reasonable.
27. Finally, so far as Mr Villiers is concerned, Mr Collins complains that he at one stage created a management company to manage Berkeley Court with a view to the freehold of the property being transferred to that company. As to that, the judge said this:

"The management company structure was and is frequently used in relation to blocks of flats. Mr Villiers held a bona fide, and in my judgment thoroughly reasonable view that it would assist sales to set up such a management structure since the arrangements would make the block and the flats more attractive to purchasers. It would give them more control over the costs of maintenance and the condition of the block. It is impossible to criticise Mr Villiers for having that view."

28. Once again, that conclusion of the judge seems to me to be unchallengeable on appeal.
29. Mr Collins has raised a number of other points which I might (I hope not unfairly) describe as ancillary to the main thrust of his arguments, to which I have already referred. But in the circumstances I do not consider it necessary to deal with those points individually. In relation to them, I simply make the general observation, which I have made a number of times in the course of this judgment, that the conclusions of the judge in respect of all the matters complained of by Mr Collins seem to me to be unchallengeable on appeal.
30. I turn then briefly to Mr Collins' second main ground of challenge to the judgment, one on which he did not expressly rely in his oral submissions, but one which is made in the written argument which he submitted, which relates to the judge's previous connection with Mr Villiers. As I indicated earlier, the judge made full disclosure of what in any event appears to have been a relatively tenuous and indirect connection with Mr Villiers, and enquired whether any party had any objection to his hearing the case. None of the parties objected. Furthermore, had the judge perceived any possible risk that such connection as he may have had with Mr Villiers might in any way affect his judgment, he would not have continued to hear the case, whether or not any party had raised a specific objection. Nor is there anything whatever in the terms of the judgment to suggest or indicate that the judge might in any way have been influenced by such connection as he might have had with Mr Villiers. Mr Collins could have objected to the judge hearing the case, but he chose not to do so. In all the circumstances, I can see no substance whatever in this second main challenge to the judge's judgment.
31. For the reasons that I have given, therefore, I conclude that there is no substance in Mr Collins' proposed appeal, and I accordingly refuse permission to appeal.
ORDER: Application for permission to appeal refused. (Order not part of approved judgment)