Approved Judgment - clients.squareeye.com

THE HONOURABLE MR JUSTICE EADY
Approved Judgment
Butler-Creagh v Hersham
to negotiate with the Marian Fathers directly, rather than withdrawing altogether. The
calculation by Cherrilow arrives at the same final figure because it is assumed that a
deal would have been done at Mr Greene‟s valuation of £10m. Whether the Marian
Fathers would have come down that far I rather doubt. Since, however, my finding is
that Cherrilow would have withdrawn altogether as a prospective purchaser, it is
perhaps unnecessary for me to address this hypothesis further.
110. So far the outcome would appear reasonably straightforward, but there is also a claim
for additional damages in respect of the consequential losses incurred. The
calculation of these stood until the close of trial at £21,707,708. That was based on a
total expenditure of £31,707,708 minus the value of the property at £10m. (It will be
noted that the expenditure incurred appears to correspond almost exactly to the
supposed profit which Mr Butler-Creagh was dangling in front of prospective
purchasers back in 2008.) Somewhat surprisingly, perhaps, no challenge was offered
in cross-examination to Ms Hersham‟s evidence on these figures. Obviously, credit
would have to be given for any gain accruing to Cherrilow: see e.g. Spence v
Crawford [1939] 3 All ER 271, 288-9. Yet Mr Auld submits that there has been no
gain to show for the expenditure. He described Fawley Court as “a white elephant”.
111. The underlying policy is that damages are intended to put the relevant claimant in the
position he would have occupied if he had not sustained the wrong for which he is
being compensated: see e.g. the observations of Lord Browne-Wilkinson in Smith
New Court Securities Ltd v Citibank NA [1997] AC 254, 262. Such a claim may be
made in respect of consequential losses even if they were not reasonably foreseeable:
Doyle v Olby (Ironmongers) Ltd [1969] 2 QB 158. But they must be consequential.
112. Unfortunately, perhaps through constraints of time, the position on quantification was
left at the end of the trial in a rather unsatisfactory state. In particular, the issue of
causation was not explored. On the last day of the hearing, a newly formulated
summary of Cherrilow‟s alleged losses was presented without amplification or an
opportunity for Mr Butler-Creagh to test or challenge it.
113. One cannot simply spend money in a situation of this kind and express it as a loss
flowing from the actionable misrepresentations. It is said that the money has been
spent with nothing to show for it. It needs, however, to be demonstrated that it was
necessary or reasonable to spend the money to mitigate loss or to preserve the relevant
asset. It is surely appropriate to demonstrate that the claimant in question has had to
spend the money, not merely as a matter of choice, but as a result of being placed
wrongfully in a particular predicament as a result of the misrepresentation(s)
comprising the cause of action.
114. One possibility, once the nature and extent of the misrepresentations became
apparent, would have been to market the property and, if sold, to make an assessment
of loss at that stage. Yet, having chosen in spite of everything to “make a go of it”,
Cherrilow needs to show that the cost of doing so is somehow greater in consequence
of the wrongdoing than would otherwise have been the case. It is necessary to focus
on this marginal impact of the misrepresentations.
115. The written summary of losses submitted on the final day was significantly reduced
from the pleaded figure of £21.7m. The thinking was explained in supplemental
written submissions, which I received in the middle of August (and to which Mr