ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
(HIS HONOUR JUDGE CHARLES HARRIS QC)
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE MUNBY
SIR HENRY BROOKE
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Mr Tim Marland ( instructed by Waltons and Morse ) appeared on behalf of the Respondent.
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Lord Justice Longmore:
"I have seen and heard Mr Jabir who is, and was accepted as being, a long established and highly experienced pearl dealer, one of only 15 or so people who exist in the world who trade at the highest levels in this commodity. He is internationally recognised as one of the leading experts in pearls and he has traded many important pearls, including some of historical significance and value. He explained to me, entirely credibly, that his was a business in which privacy and discretion, not to say secrecy, were of great importance, and that deals were commonly done face-to-face with other dealers and sealed with a handshake, often without documentation. The ultimate customers of dealers like himself are people of great wealth who will be anxious to preserve their anonymity. He also explained how it was quite possible in practice to pass between countries in the EU carrying a pearl or pearls without any Customs declaration or other formality. I found him a convincing witness."
"11. Considering the evidence as a whole, not all of which I have rehearsed, it seems clear that pearls of the highest quality are dealt with by a very small number of astute and experienced men, most of whom will be known to each other and who will have traded or whose families will have traded with each other over many years. They rely upon their considerable personal skill and judgment and they negotiate and deal with each other face-to-face in the light of their hands on evaluation of the goods in question. As used once to be the case in the City of London, they reach agreement with each other by word of mouth and a handshake. Trust in each other is utterly essential, and I think it unlikely that a man would survive, let alone thrive in this field if he did not justly have the confidence of those he deals with.
12. Mr Jabir is clearly a very successful practitioner in his field and I do not accept the defendants' implicit contention that what he was doing here was in effect to conspire with Mr Sathak, and indeed Mr Ruff, to assert to the defendants and then pretend to the court that he had a pearl which he had bought for $500,000 and agreed to sell for $650,000 when he had not. Nor do I find that Mr Sathak, who came to England from Dubai to give evidence, attended court to lie. He gave the court the names of a number of the families whom he buys for and deals with. He said he expected to be able to sell on the pearl for a profit of 'a little over 20 per cent', which would indicate a price of about $780,000. He was going to sell, he said, to a 'royal family in the Gulf'. It was suggested to him that he was being 'paid to give evidence'. In the event, I am satisfied that Mr Jabir only, and not unreasonably, agreed to meet his travel and hotel expenses.
13. Accordingly, and without much hesitation, I find that the pearl which the defendants have mislaid was one which the claimant had purchased at a price of $500,000 and which he had an agreement to sell on to Mr Sathak for $650,000."
"And also I think people who had seen the missing pearl, again it had not been tested, so they would not be able to say positively, but their view was that it looked like a natural freshwater pearl so I was influenced in that way too"
(1) Saltwater or freshwater?
(2) The genuineness of Mr Jabir's agreements to buy and sell the pearl
(3) The valuation exercise conducted by the judge
"When asked during final submissions how an open market price was to be found, Miss Day submitted that it was 'a price which would be agreed between a willing buyer and a willing seller who are both reasonably informed by the subject-matter of the bargain and not the price achieved by sale to a private client in the retail trade for two or three times its purchase price.'"
"It is to be observed that the claimant is explicitly claiming the price agreed between willing and informed buyers and sellers. The short answer in the instant case is that the claimant has demonstrated not just one but two sales between well informed and willing buyers and sellers, a sale between Mr Ruff and Mr Jabir and the sale agreed between Mr Jabir and Mr Sathak. Thus three expert dealers have demonstrated at what price they could sell. Mr Ruff got $500,000 from the astute and careful professional buyer, Mr Jabir, and Mr Jabir was able swiftly to resell to Mr Sathak, a successful Middle East pearl expert, at a 30 per cent mark up."
"Here the very article in question had in effect been twice professionally valued at $500,000 and once at $650,000. Mr Sathak indeed envisaged an ultimate sale of a further 20 per cent profit to a final purchaser, but no reliance is put upon that."
"The position might be different if I was satisfied that Mr Jabir had been duped or deceived and had bought an ordinary cheap pearl under the misapprehension that it was valuable. Perhaps a counterfeit Rolex or a bogus gold coin would be other examples of this. If that were the case then he would never had had the genuine article and so would not have lost its value when it vanished. But what he had was a clearly remarkable pearl, and accepted as such by three dealers. It cannot therefore, in my view, be just to award him only a fraction of the value attributed to it by the three expert dealers on the basis that two retained expert witnesses, who have never seen the pearl in question, could present evidence of much lower prices for other pearls."
Lord Justice Munby:
Sir Henry Brooke:
Order: Appeal dismissed