Approved Judgment - clients.squareeye.com

THE HONOURABLE MR JUSTICE EADY
Approved Judgment
Butler-Creagh v Hersham
dated 20 November and 4 December 2008. On this date, for example, Mr Butler-
Creagh stated that the purchase was to be by Cherrilow “ … in which I own all the
shares together with the person who is assisting with the funding … I can confirm that
I propose to develop the property as a high class hotel”. There is also a letter dated 2
December, signed by their agent Mr Martin Conway. He there put on record his false
understanding that Mr Butler-Creagh would be “providing an element of the funding”.
Mr Butler-Creagh further stated to the Marian Fathers that he no longer wished to be a
guarantor because of tax advice he had received to that effect, although there was no
documentary evidence to confirm that this was so. It seems likely that these
statements were indeed all false, but they are not such as to induce Cherrilow to
acquire the property.
82. I can see that Cherrilow might have been induced in part to acquire Fawley Court by a
reliance (unwise no doubt) on Mr Butler-Creagh‟s estimate of its value. On the other
hand, I have to be satisfied on a balance of probabilities inter alia that he did not
genuinely believe this valuation at the time: see e.g. Connolly Ltd v Bellway Homes
Ltd [2007] EWHC 895. This is by no means self-evident, given his lack of
credentials as an experienced property valuer and his natural inclination to espouse
optimistic fantasies. Yet, applying the civil standard of proof, I can be satisfied on
these facts that he had no genuine belief:
i) It was all part of an elaborately planned deception;
ii) There were no grounds to believe at that time that any willing purchaser (let
alone a “queue”) would be available at more than £22.5m, especially given the
rapid downturn in the economy – and no such grounds have emerged in the
course of the litigation;
iii) He had deliberately pitched his own bid high, so as to win the tender process,
while having every intention of thereafter beating the price down.
83. It may seem implausible in the cold light of hindsight that Mr Sewell or Cherrilow
would really place reliance on any statements made by Mr Butler-Creagh. The
question arises as to why Cherrilow failed to obtain its own valuation or survey report
in order to make its own judgment. The explanation proffered is that he exerted
pressure upon Ms Hersham, falsely claiming that others were interested as potential
purchasers in the background and that he might transfer his supposed right to
purchase to one of them (albeit having no locus standi to do so). This pressure was
conveyed via Ms Hersham to Cherrilow, although with the benefit of hindsight she
now sees the claim that other investors were lining up as “nothing more than a ruse”.
It was clearly critical to Mr Sewell‟s decision to go ahead with the exchange of
contracts on 10 December. He was determined that this unique opportunity should
not be lost.
84. It is necessary for me to take account of the contemporaneous record made by Mr
Sewell at the meeting of 2 December in which he refers both to the supposed urgency
and to Mr Butler-Creagh‟s claim that Fawley Court was indeed still worth £22m.
That record is consistent with the present claim of reliance, as is an email from Mr
Sewell dated 4 December: