"I question whether the respect given to our findings of fact based on the demeanour of the witnesses is always deserved. I doubt my own ability, and sometimes that of other judges, to discern from a witness's demeanour, or the tone of his voice, whether he is telling the truth. He speaks hesitantly. Is that the mark of a cautious man, whose statements are for that reason to be respected, or is he taking time to fabricate? Is the emphatic witness putting on an act to deceive me, or is he speaking from the fullness of his heart, knowing that he is right? Is he likely to be more truthful if he looks me straight in the face than if he casts his eyes on the ground perhaps from shyness or a natural timidity? For my part I rely on these considerations as little as I can help." "
"Psychologists and other students of human communication have investigated many aspects of deceptive behavior and its detection. As part of this investigation, they have attempted to determine experimentally whether ordinary people can effectively use nonverbal indicia to determine whether another person is lying. In effect, social scientists have tested the legal premise concerning demeanor as a scientific hypothesis. With impressive consistency, the experimental results indicate that this legal premise is erroneous. According to the empirical evidence, ordinary people cannot make effective use of demeanor in deciding whether to believe a witness. On the contrary, there is some evidence that the observation of demeanor diminishes rather than enhances the accuracy of credibility judgments."
“[27]. Having considered the matter closely, my own view is that it is not possible to say as a generality whether it is easier to tell whether a witness is telling the truth in court rather than remotely. It is clear from Re A that the Court of Appeal is not saying that all fact finding cases should be adjourned because fact finding is an exercise which it is not appropriate to undertake remotely. I agree with Leggatt LJ that demeanour will often not be a good guide to truthfulness. Some people are much better at lying than others and that will be no different whether they do so remotely or in court. Certainly, in court the demeanour of a witness, or anyone else in court, will often be more obvious to the judge, but that does not mean it will be more illuminating. [28]. I was concerned that a witness might be more likely to tell the truth if they are in the witness box and feel the pressure of the courtroom, but having heard Mr Goodwin and Mr Verdan I do now accept that this could work the other way round. Some witnesses may feel less defensive and be more inclined to tell the truth in a remote hearing than when feeling somewhat intimidated in the court room setting. In the absence of empirical evidence, which would in any event be very difficult to verify, I can reach no conclusion on what forum is most likely to elicit the most truthful and/or revealing evidence.”
“Pursuant tosection 85A (1)(a) of the Courts Act 2003 (as amended by theCoronavirus Act 2020 ) the Trial shall be broadcast by Sparq by means of a passive live stream to a bespoke web page created by Sparq. The webpage shall be accessible to the public without password or other restriction and the webpage address shall be published in the daily cause list and be available on request from the court office”
“Even for those sites where interest is still shown the bids made can vary significantly, sometimes by 100% probably being indicative of the fact that developers have widely differing views as to where the market will go over the next twelve months”
“The current residual site value of the proposed building, assuming an agreement in place with Jumeirah is estimated at£2.78 million , or vacant and available for sale to an owner occupier together with reconfigured residential units in the range of£43.15 to£48.50 million . Subject to further checks, it would appear likely that a redesigned scheme could generate similar values”
“Assuming a straight disposal of the property on an unconditional basis could be undertaken within a relatively short time frame, we consider that a sales price in the region of£40 million could be achieved. This is drawn from valuations in the range of£43.15 million to£48.5 million and envisages an element of top up on performance following sale. Whilst this is not supported by our appraisals of the current residual value of the consented scheme, it is supported by other comparable land sales that have occurred in London this year….”
“It will be a soft administration (meaning the Bank will be able to guide it).”
“Shay – you should get a call from RBS on a case involving a property (whole [sic] in the ground) in Blackfriars. Give us a call once you hear from them”
“However, administrators are becoming more used to deploying “light touch” administrations where day to day management is not needed or can be delegated.”
“We understand that the indicative value that has been placed on the Property by CBRE in their valuation is significantly below the value that was given by Savills in the valuation that they provided to the Lenders, and upon which the Lenders relied…”
“It is a flat piece of ground with planning permission for hotel and mixed use. RBS [are] owed 30 m in syndicate with AIB – Paul Whitehead, and Santander [are] owed 15 m each. RBS then have a 5 m mezz strip. CBRE are advising. We are told it is light touch admin. Herbert Smith have petitioned in respect of unpaid fees and winder is due to be heard next Wed, hence urgency.”
“In electing to appoint an administrator, the asset will not be immediately sold. Planning will be pursued in a different manner. The administrators will do whatever is appropriate in the circumstances to discharge his functions but he will always be available to hear proposals and suggestions from the stakeholders… “There are a number of solutions that could be put forward and Shay will consider them, For example, an investor could put in funds to pay off the bank debts, although I have no instructions. Alternatively, Mirax could buy the bank debt or Mirax could buy the property from the administrators.”
“Our instructions are to seek your best unconditional offer… Our client is seeking to conclude an unconditional sale, however, if any conditions are proposed these should be clearly stated”
“Seen that. Role of administrator is to achieve the best price which is why we had the full and transparent marketing. We are happy that we explored the market…”
“Administration: the new regime [40] The new regime for administrations was introduced by theEnterprise Act 2002 . The main purpose, and the most significant effect, of the changes was, in effect, to replace administrative receiverships with administrations. The Cork Report had seen great benefits in receivership as an alternative to liquidation and as a means of rescuing companies, and the original administration regime in Part II of the 1986 was based on the proposition that administration should be available where either there was no debenture holder with the power to appoint a receiver over the business and assets of the company or the debenture holder declined to do so. In the White Paper published in July 2001 (Insolvency – A Second Chance, Cm 5234), the Government’s position was that administrative receivership should generally cease to be a major insolvency procedure and should be replaced by administration, which was described as: “Collective insolvency proceedings – proceedings in which all creditors participate, under which a duty is owed to all creditors and in which all creditors may look to an office holder for an account of his dealings with a company’s
“A person may be appointed as administrator of a company— (a) by administration order of the court under paragraph 10, (b) by the holder of a floating charge under paragraph 14, or (c) by the company or its directors under paragraph 22.”
“The structure of this provision makes it clear that an administrator who is pursuing the objective under paragraph 3(1)(c) (“Objective 3”) is focussing on achieving a return to the secured creditor (albeit whilst not unnecessarily harming the interests of the creditors as a whole); an administrator who is pursuing the objective under paragraph 3(1)(b) (“Objective 2”) is focussing on achieving a better return to unsecured creditors as well as repaying the secured creditor; and an administrator pursuing the objective under paragraph 3(1)(a) (“Objective 1”) is focussing on achieving a result in which all creditors are paid in full and the company is restored to financial health for the benefit of its shareholders.”
“Understood in this way, there is a significant difference between the role of the officeholder in an administration on the one hand and in a receivership or administrative receivership on the other. A receiver or administrative receiver owes his primary duties to his appointor and is generally free to determine when and how to realise assets to repay the secured debt without consideration for the interests of the unsecured creditors or the company itself. In contrast, in deciding how to run the administration, an administrator is required to have regard to the interests of all of the company’s creditors, and he can only limit his ambition to seeking to realise assets to repay the secured creditor if he thinks that it is not reasonably practicable to achieve anything else. Even then, he must not unnecessarily harm the interests of the creditors as a whole”
“[33] It can therefore perhaps be said that the primary objective of an administration appointment is the rescuing of the company as a going concern, an objective which has in mind the saving of the company’s undertaking, or a substantial part of it, and in due course the return of the company to its management. This might in some cases require the use of a company voluntary arrangement or a scheme of arrangement. Accepting the existence of such objective, it must also be recognised that in practice a high proportion of appointments of administrators have been and will be made in cases in which it is apparent both before and after the appointment that a rescue of the company in this sense is not reasonably practicable and that the alternative objective that is foreseen as being achievable is the paragraph 3(1)(b) objective. The achievement of that objective will usually involve the sale of the company’s business and undertaking, either in whole or in parts. Moreover, this objective must be pursued even if a rescue of the company is perceived as practicable but the administrator nevertheless thinks that the paragraph 3(1)(b) objective would achieve a better result for the company’s creditors as a whole. Despite this hierarchical scheme, the distinction between the old regime and the new one is that appointments of an administrator (whether made in or out of court) do not specify the particular objective to be pursued and achieved. What objective the administrator sets out to achieve is a matter for his own judgment.” [34] Accepting this last point as well, it is also the case that the particular way in which an administrator will or may set about achieving the purpose of administration is in practice not something that remains an unknown until after the administration appointment has been made. On the contrary, as paragraph 11 prescribes, the court may only make such an appointment if it is satisfied that the administration ‘is reasonably likely to achieve the purpose of administration’; and in order to make an assessment as to that, the court requires evidence as to how the purpose is foreseen as likely to be achieved. That evidence must include an opinion from the proposed administrators that it is reasonably likely that the purpose will be achieved (rule 2.3(5) of theInsolvency Rules 1986 ). [97] … I regard it as in principle anyway wrong to identify the purpose of an appointment of administrators by reference to pre-appointment considerations as to the particular objective or objectives that it is foreseen that an appointment is reasonably likely to achieve. The present case shows that an appointment that is made with the intention, hope or expectation of – or, perhaps, ‘with a view to’ - the achieving of a particular objective may not in fact achieve it. The fallacy of the ‘fact based’ approach is that it proceeds on the erroneous basis that the factual considerations that induce the making of a particular administration appointment are considerations that conclusively identify the objective ‘with a view’ to which the appointment is made. That involves a misinterpretation of the scheme of Schedule B1. [98]. Paragraph 11 of Schedule B1 provides that a court may make an administration order in relation to a company only if it is satisfied (a) that the company is, or likely to become, unable to pay its debts, and (b) ‘that the administration order is reasonably likely to achieve the purpose of administration’. Paragraph 3 explains what that purpose is and sets out the hierarchy of objectives that I have explained. An application to the court for the making of an administration order will of course require evidence as to how it is said the purpose is likely to be achieved and such evidence will commonly be directed at the achieving of a particular objective in the hierarchical scheme. If the court is thereby satisfied that an administration order is ‘reasonably likely’ to achieve such objective, the paragraph 11(b) condition of the making of an administration order will be satisfied. But it is fallacious to proceed from that to the conclusion that the purpose of the administration order that is then made is to enable the achieving of that particular objective and that alone. It is not. The order is made for the purpose of administration explained in paragraph 3, which keeps all the administrator’s options open; and the present case provides a good working example of how an administrator who assumes his office with the thought that he might be able to achieve the purpose of administration in one particular way may quickly find that circumstances compel him to change tack and seek to achieve it in another way”
“It is to be observed that it is not an absolute duty to obtain the best price that circumstances permit but only to take reasonable care to do so; and that in my judgment means the best price that circumstances as he reasonably perceives them to be permit”
“The approach adopted by Cross LJ [in Cuckmere Brick Co. Ltd. V MutualFinance Ltd. [1971] 949 at p. 973 creates a form of strict liability on the mortgagee. His duty of care to sell at the best price reasonably obtainable is not delegable in the sense that he can avoid or perform his duty merely by appointing a reputable agent to conduct the sale, but extends to ensuring that reasonable care is taken by any agent or professional adviser employed by him in the sale. The extension of his duty may be an accident of history, but it promotes justice for the mortgagor who is thereby saved from the invidious, and often difficult, task of apportioning blame between the mortgagee and his agents and can also claim credit for any loss when settling accounts with the mortgagee. Moreover, the mortgagee can be assumed to be better placed to know the facts relating to a claim against the agent and is frequently in a better financial position to pursue the claim and ultimately it must be remembered that it was the mortgagee who chose the agent who was later negligent. Once the special rule applicable to mortgagees is accepted, there is no sufficient reason to distinguish the position of the mortgagee and that of the receiver, and it would therefore appear that a receiver is subject to a like strict liability in respect of disposals”
“[449] In reaching that conclusion I.e. that the same strict non-delegable duty applied to both mortgagees and receivers. , the Court of Appeal referred to and relied on an obiter dictum to that effect of Cross LJ in Cuckmere Brick Co Ltd v MutualFinance Ltd[1971] Ch 949 at p. 973. Cross LJ had indicated that the underlying rationale for the view that a mortgagee should be liable to the mortgagor for the negligence of the mortgagee’s agent was that the mortgagor would not necessarily have any direct cause of action against the mortgagee’s agent himself. Earlier in the same passage, Cross LJ explained the distinction between such a case and the law applicable to a trustee, “[Counsel for the mortgagee] further submitted that even if we should be of opinion that a mortgagee was liable to account to the mortgagor for loss occasioned by his own negligence in the exercise of his power of sale, it was not right that he should be liable for the negligence of an agent reasonably employed by him. … counsel pointed out that a trustee is not liable for the default of an agent whom it is reasonable for him to employ. But the position of a mortgagee is quite different from that of a trustee. A trustee has not, qua trustee, any interest in the trust property, and if an agent employed by him is negligent his right of action against the agent is an asset of the trust. A mortgagee, on the other hand, is not a trustee and if he sues the agent for negligence any damages which he can recover belong to him….” [450]. Applying that rationale, since an administrator does not, qua administrator, have any interest in the property in question; and since the agent will invariably be engaged by an administrator on behalf of the company so that any cause of action would be an asset of the company, the correct analogy for this purpose is indeed between an administrator and a trustee rather than between an administrator and a mortgagee or receiver. [451]. Accordingly, I would accept the proposition that the Administrators cannot be liable in negligence to AHDL if they reasonably relied upon advice from APAM that appeared to be competent.” “[Counsel for the mortgagee] further submitted that even if we should be of opinion that a mortgagee was liable to account to the mortgagor for loss occasioned by his own negligence in the exercise of his power of sale, it was not right that he should be liable for the negligence of an agent reasonably employed by him. … counsel pointed out that a trustee is not liable for the default of an agent whom it is reasonable for him to employ. But the position of a mortgagee is quite different from that of a trustee. A trustee has not, qua trustee, any interest in the trust property, and if an agent employed by him is negligent his right of action against the agent is an asset of the trust. A mortgagee, on the other hand, is not a trustee and if he sues the agent for negligence any damages which he can recover belong to him….”
“55. I do not believe the matter is as clear as the respondent contends. I accept that a court appointed receiver has no interest in the property and is, in this sense, similar to a trustee. However, in general he is under the same fiduciary duties and owes the same duties of care as a receiver appointed out of court. Moreover, the receiver may well be in the best position to ascertain the merits of any potential claim against any agent he has appointed. In all the circumstances I have reached the conclusion that this is an issue which would benefit from further argument and since it is not necessary for me to express a final conclusion upon it, I prefer not to do so.”
“the Administrators cannot be liable in negligence … if theyreasonably relied upon advice from APAM that appeared to be competent”
“The distinguishing obligation of a fiduciary is the obligation of loyalty. The principal is entitled to the single-minded loyalty of his fiduciary”
“We saw in para 12-025 above that theInsolvency Act 1986 directs the administrator as a general rule, to perform his functions in the interests of the company’s creditors as a whole. Thus, in exercising his powers as agent, the administrator must act with “single minded loyalty” so as to promote the interests of creditors collectively (they being the ones who hold the economic interest in the company) over his own interests.” “This gives way where the administrator chooses to perform his functions with the objective of realising property in order to make a distribution to one or more secured or preferential creditors (the third objective). In these circumstances, the secured or preferential creditors (as appropriate) in effect become the principal, subject to the duty to avoid unnecessary harm to the interests of the company’s creditors as a whole: 1986 Act Sch B1 para 3(2), (4)”
“Given the range of interests to be addressed under paragraph 3 of Schedule B1, the use of the expression that the administrator “thinks” rather than, for example, “reasonably believes” is a clear indication that Parliament intended a degree of latitude to be given to an administrator in deciding upon the objective to be pursued, and that he is not lightly to be second-guessed by the court with the benefit of hindsight. In Lightman & Moss, The Law of Administrators and Receivers of Companies (6th ed.) at paragraph 12-022 it is suggested, by reference to case-law and the legislative debate upon this provision, that the appropriate standard of review by the court should be one of good faith and rationality. This would mean, for example, that an administrator’s decision not to pursue the first objective will only be open to challenge if it was made in bad faith or was clearly perverse in the sense that no reasonable administrator could have thought that it was not reasonably practicable to rescue the company as a going concern. I agree with that approach. Though obviously important for creditors and shareholders, the assessment of the practicality of following one or other objective (e.g. whether a company which is insolvent or on the brink of insolvency can be rescued) will most likely require the exercise of a substantial amount of commercial judgment, often under significant time pressures. I see no good reason to adopt any more interventionist standard of review of an administrator’s opinion in this regard than is applied more generally by the courts to the question of whether to interfere with specific business decisions taken by administrators: see e.g. Re Edennote Ltd[1996] BCC 718 .”
“Paragraph 3(4) is not altogether happily drafted. The words “only if” and the word “and” linking the requirements in sub-paras 3(4)(a) and (b) suggest that the administrator may only select the third objective if the selection itself does not (objectively viewed) inflict “unnecessary harm”
“The rules clearly give him a measure of judgment about what to place before the creditors or, as we have now learned to call it, a margin of appreciation. I do not think, therefore, that the question I should ask myself is whether I would have come to the same conclusion as Mr Pepper. It seems to me that the court should only interfere if a judgment made by the administrator about the material to be placed before the creditors was a judgment to which no reasonable insolvency practitioner could come. That judgment should I think be made on the basis of the material available to the administrator at the time and not with the benefit of hindsight”
“He was obliged to keep a record of his actions and dealings and of the information which he had obtained but that did not, in my judgement, require him to record the reasoning which had led him to take each action. Mr. Macpherson’s argument was in effect that the First Defendant should have made a file note setting out the process of reasoning leading to each step he took in carrying out his duties as trustee in bankruptcy. Such a requirement would be unrealistic and is not required by the obligation to keep proper records. In that regard the First Defendant was correct to say that his obligation was to keep records which were such that his actions could be justified by reference to them but that he was not required to set out the chain of reasoning which caused him to take a particular action.”
“Without making any independent inquiry, the FAs improperly agreed with the Syndicate pre-appointment to conduct a “light touch” administration, which the FAs understood to mean that they would work with CBRE and BLP … to effect the strategy of an LPA receivership under the guise of an administration”
“The FAs’ acquiescence in this strategy necessarily involved the FAs impermissibly determining their statutory objective prior to appointment.”
“The banks have lost confidence in the borrower [OBL] and the sponsor [meaning Mirax]. We have gone through two processes for credit approval of restructurings in the last 12 months. The most recent restructuring went into payment default almost immediately. Two winding up petitions have been presented against the borrower. The banks are seeking either a substantial pay down of their facilities or to control the planning process through the appointment of an administrator.”
“CBRE was instructed to act in a property advisory role to ‘ensure the [Site] is sold at best value given the current market conditions’.”
“Q…CBRE were conflicted and they were conflicted because they had been advising the banks and the banks had a discrete position, which did not mesh or overlap, or might not, with the whole body of the creditors. A.That is the [JL]’s position yes as I understand it. Q.OK. And your answer to that is? A.I disagree. When we engaged CBRE, they were acting for the administrators with a duty of care to us”
“In my opinion, CBRE had a conflict of interests as a result of acting for both the Syndicate and the joint administrators, whose interests were not entirely coincident. The agent’s conflict of interest gave rise to a clear conflict of interests for the joint administrators themselves. A reasonably skilled insolvency practitioner would introduce safeguards to reduce the threats to objectivity created by such a conflict. Such safeguards would in the circumstances of the Company include different agents.”
“It’s all about whether the interests of the bank align with the interests of the creditors as a whole”
“Q. Well, if the property is to be sold, you agree that it is in the common interest of all creditors that the best price should be obtained? A. Yes Q. And you would, therefore, expect the interests of all creditors to be aligned: yes?
“Everybody recognised that we were in a very unstable market condition in our view and that the market would determine the value of the site, which could well be within the security of the banks or maybe within the security of the Beethams, but the advice that we had from the conversations we had with CBRE, it was not at the level of Savills.”
“Q. What do you mean that a reasonably skilled insolvency practitioner would not adopt a strategy of allowing the market to determine the price? What should he do instead? A. He should identify the value on the basis of professional advice and independent valuation. Q. Right. Let’s just take that one stage further, before we break. Assume that the administrators in this case had obtained a valuation of - whether it’s 115 million, 120 million or 125 million, it matters not for these purposes, and assuming that, because they concluded that a funded rescue was not possible, they determined that the site should be sold; yes? A. Yes. Q. And they marketed it fully and openly and it reached highest offers of£80 million . What do you suggest that the reasonably competent administrator should do in those circumstances? A. Review the marketing process to ensure that they had achieved the best price that was reasonably obtainable. Q. And if, on reviewing the marketing process, they concluded they had achieved the best price reasonably obtainable, should they sell or should they not?
“A. Well, they had a decent valuation from CBRE and they had an indication of value from Savills. So they had - they knew there was real value in the site and they also knew that if they went out to get another valuation, a formal valuation, it wasn’t really going to add anything to the argument because it would entirely depend on the - the inputs. And the strategy here was that the property should be sold, so taking it to the market and making sure that it was properly marketed, as widely as appropriate, was the way to go forward. Q. And that would determine whether it was worth£2 million or£240 million ? A. Well, it would do, wouldn’t it? Q. And you think that is a sensible way forward? A. That seems to me to be a reasonable way forward for the administration, yes, in the context of the administration.”
“The insolvency experts agree that in the circumstances of the Company it would not be reasonably practicable to achieve objective 1 unless (without selling the Site) the Site could be refinanced, the unsecured creditors paid or otherwise satisfied and the administration costs paid (and subject to provision for future costs and liabilities as required in order to be a going concern).”
“…It would be a matter of refinancing, but that’s what the going concern would be all about, obtaining that refinancing. Q. So by going concern, you would also recognise the need for there to be a probable source of 200 or 300 million of funding?
“The point I’m making is that the powers here are the powers of the administrator, which he is granted, he or she is granted, and they are powers to manage the company. Raising finance is a different task, which is not to do with the day-to-day management of the company, and from where I sit you can’t actually restructure and refloat and refinance a business as administrator on your own, and that’s where I think Mr Laughton and I both agreed, that it’s not for the administrators to go out and just raise large sums of money to refinance a company.”
“As discussed previously, we want to handle any crossover between the S96A and longer-term scheme amendments very carefully. Adrian Dennis can be difficult, and if he senses that something more significant is coming forward he may seek to delay or frustrate the S96A process. Technically they should be seen separately, but that won't necessarily stop him! The risk is that by putting the two together you will unravel the implementation and potentially see the extant consent expire, along with its value”. (9) DP9’s advice about the importance of completing the s96A process before opening discussions about any potential scheme amendments was passed on by CBRE to the FAs on4 March 2011 . CBRE also informed the FAs that the marketing brochure was now in its fifth draft. (10) After the s96A application had been granted and the Permitted Scheme implemented in June 2011, a “scheme reconfiguration pre-application meeting” with the Council’s planners was held on24 June 2011 (12 days after the deadline for bids). It was attended by DP9 and CBRE. The notes of the meeting record two major reservations on the part of the council about any reconfiguration: “The [Site] is an employment site and the Council has always viewed it as such. Members did not envisage the area being residential, and officers were also keen to avoid losing further employment sites to residential.” “Members did have aspirations for a prestigious hotel on the site….” and the officer “was not convinced about the justification for 150 rather than 261 rooms, and queried why no other 5-star operator could service 261 rooms if Jumeirah could have done.” (11) On7 July 2011 , Mr Kerr informed CBRE in a telephone call that he believed strongly that the successful bidder would secure the Council’s consent to lower the star rating of the hotel and reduce the residential room size. However, Mr Kerr advised that he did not think that the planners would put this into writing. most of the potential purchasers seem to want”
“My point is that from conversations with officers at Southwark, it appears likely that we can revise the planning consent by reducing the size and number of hotel rooms to a level that we are told most of the bidders would prefer, and in addition that we can change the layout of the existing flats to produce a greater number of smaller units. There also appears to be a very good chance that a new affordable housing deal can be agreed as an off-site payment, particularly when you consider the recent agreements on NEO Bankside and King’s Reach. Obviously, none of this can be guaranteed and there is somerisk, but I am not sure I understand why we do not get the consent for thesechanges and then secure a sale. I know that it would take longer but we could have been doing this over the last four or five months of the sale process. I want to make it clear that this is not me trying to get fees for DP9 – as you can imagine they are relatively insignificant in terms of our overall business - I just want to make sure that this has been considered properly before anydecision has been made. It is entirely possible that I may have missedsomething and if so I apologise but I thought I should make my views clear”
“I will revert to DP9 on timing and likely costs. In value terms, it is difficult to say, but I would agree with your assessment that some of the benefit of re-configuration would have already been factored into the bids received. I would expect there to be an enhanced value of the site above, say£80 m , as this would be reward for the investment in a new planning permission and the risks attached.”
“I agree with you that they have most likely already priced this risk in – none of the bidders throughout the process queried our initial advice that you could alter the planning ….”
“If you are looking for overage, then in the absence of overage, you may get some hope value on top of the basic market price. If you are going for a conditional sale there is less certainty because it’s conditional on something outside your control. The ultimate realisation may, however, be higher, and those are the parts of the things you have to take into account and compare when looking at the different options.”
“It is widely recognised across the industry that developers (purchasers) tend to avoid overages where possible, preferring to pay more upfront in order that the overage falls away”
“STPP transactions are more complicated to document legally; the market tends to prefer unconditional sales with clawbacks/overages; agents tend not to push STPP transactions as their fees are deferred until permission is gained; many vendors lack the patience for STPP transactions; in a strong market, the pricing differential between conditional and unconditional pricing tends to compress meaning that vendors are more inclined to go with the certainty.”
“This is a matter for expert evidence”
“Sufficient particulars as to the steps which should have been taken for the marketing of the Site have already been pleadedin that marketing was not undertaken outside the UK and targeted marketing was limited to 60 recipients being sent marketing brochures”
“CBRE were (and still are) the largest global property advisory business. Their capacity to achieve market reach in the context of disposing of One Blackfriars would have been in line with market practice at the time”
“Following [CBRE’s] confirmed appointment by the Administrators in January this year, a marketing strategy was put in place to achieve the following objectives: • Market the property to as wide an audience as possible • Provide potential purchasers with sufficient due diligence to enable them to be on an unconditional basis • Sell at the highest possible price”
“The insolvency experts agree that a reasonably skilled insolvency practitioner would instruct professional real estate agents with appropriate experience, resources and expertise to market and sell the Site, if that were an appropriate strategy The insolvency experts agree that CBRE was such a firm The insolvency experts agree that any strategy for marketing and sale of the site would focus on an administrator’s responsibility to take reasonable steps to obtain the best price that the circumstances, as the administrator reasonably perceives them to be, permit in the interests of the creditors of the Company as a whole”
“Shay Bannon made it clear that this would have to be a fully global advertising…”. (2) CBRE had given consideration to a potential strategy from pre-appointment as described in the CBRE Strategy Report and discussed at the FAs’ meeting with CBRE on27 September 2010 . (3) I accept Mr Gillington’s evidence that “the CBRE estimates and associated strategic review documents were sufficient to inform the marketing strategy”. (4) Within a week of the marketing website going live, 107 parties had logged in and downloaded marketing. Before the first bid deadline over 1,400 documents were downloaded from the data room. (5) Potential planning uplift was considered, as is demonstrated by various steps which were specifically directed at capturing the planning potential, such as: (a) implementing the Permitted Scheme; (b) engaging the architects to provide their proposed reconfigurations; (c) engaging with the Council (d) allowing bidders (who had their own professional advice and were also engaging with the Council) access to DP9; and (e) including DP9’s letter of18 July 2011 in the data room. (6) Mr Baggley accurately recorded on12 November 2010 that “given the international reach of the site, a comprehensive marketing strategy is being formulated to ensure global markets (the Middle East, Asia etc) are fully explored”. (7) CBRE ensured that the marketing of the Site was suitable for a campaign with global reach. In the brief to brochure designers it was noted: “The brochure will have a global readership, as we anticipate getting interest in the opportunity from Far East, Mid East and Russia.”
“Did the Fas fail to ensure an appropriate bidding process?”
“There is a substantially smaller range than was initially the case after the first round of bids … This smaller range showed that the outlying bids had been excluded following a successful selection process of interviews and due diligence and that there were still three seemingly credible remaining bidders who represented both equity only and debt backed purchasers.” “Therefore, the fact that the Site had been widely exposed to the market … the three remaining bids following this process were all within a range of£12.5 m and that they were from a range of seemingly credible bidders, showed that this was the level the market was willing to pay for the Site and that there was sufficient interest from appropriate purchasers.”
“There is a value arc to every site and the property market loves numbers. Even where there is no guide price agents in my experience tend to adopt language along the lines of “There is no guide price on this one but…”
“I should add that … neither SMR nor I took any steps that encouraged Sellar or any other bidder, to reduce the level of their bids for the Site. We had no reason whatsoever to take such a step. We, and CBRE, had every reason to do the exact opposite, and maximise bids.”
“Several major players had put in bids for the Site of around£50m or£60m . Only two had been told that, if they wanted to get into the next bidding round, they had to increase their bid to in excess of£70m ”