Regal BA Limited v Jun Zhang [2026] EWHC 1446 (Ch)

[2026] EWHC 1446 (Ch)Case No PT-2024-000939IN THE HIGH COURT OF JUSTICEBUSINESS AND PROPERTY COURTS OF ENGLAND AND WALESPROPERTY TRUSTS AND PROBATE LIST (ChD)Venue Royal Courts of Justice, Rolls Building, Fetter Lane, London, EC4A 1NLDate 23 June 2026
Before
HIS HONOUR JUDGE HACON
Between
REGAL BA LIMITEDClaimantJUN ZHANGDefendant
Richard Clarke and Poppy Kemp (instructed by Winckworth Sherwood LLP) for ClaimantMartin Dray (instructed by Acuity Law Limited) for DefendantHearing Hearing dates: 20-24 April 2026
Approved JudgmentThis judgment was handed down remotely at 10.40am on 23 June 2026 by circulation to the parties or their representatives by e-mail and by release to the National Archives..............................HIS HONOUR JUDGE HACON
[1]Bishops Avenue is a thoroughfare in North London known for high-end residential properties located along its route and in roads off the avenue. One such road is White Lodge Close. In 2015 the Claimant (‘Regal’), a developer of residential and commercial property, bought the house at 16 White Lodge Close and replaced it with a more luxurious 7-bedroom residence (‘the Property’) having the name ‘High Trees’. Between 2018 and 2021 Harry Kane and his family lived there, renting the Property from Regal.[2]On 23 March 2022 Regal entered into a contract of sale with the Defendant (‘Ms Zhang’) whereby Ms Zhang agreed to purchase the Property for £16.85 million plus £50,000 for the contents. On the same day Ms Zhang entered into a tenancy agreement with Regal pending completion of the sale. Ms Zhang moved into the Property with her partner, Stuart Onslow, and their two children.[3]On 13 February 2023 the contract of sale was varied. The date for completion was moved to 27 September 2023 and as before the contract of sale included a deposit of £1.685 million to be forfeited by Ms Zhang if she failed to complete. Ms Zhang entered into a second tenancy agreement.[4]Ms Zhang failed to complete by the new deadline. On 19 December 2023 the contract of sale was terminated and Ms Zhang forfeited the £1.685 million deposit.[5]On the same day Regal and Ms Zhang entered into a new agreement (‘the Sale Agreement’) with the sale price maintained at £16.9 million including contents, a new deposit of £2,527,500 and a date of completion on 22 April 2024. A third tenancy agreement was concluded, to expire on 22 April 2024.[6]Ms Zhang failed to complete by 22 April 2024. A notice to complete was served on Ms Zhang the next day. Condition 6.8.2 of the Sale Agreement required Ms Zhang to complete within 10 working days of service of the notice, a period which expired on 8 May 2024. She did not complete. The Sale Agreement was terminated and Ms Zhang forfeited the second deposit.[7]On 12 September 2024 Regal sold the Property to 16 Bishop Limited (‘16 BL’) for £10,157,168.94.[8]On 28 October 2024 Regal issued the claim form in these proceedings. Regal claims damages under various heads from Ms Zhang for breach of the Sale Agreement. The main claim is for the difference between the contract sale price of £16.9 million and the sum obtained for the Property, less the £2,527,500 forfeited deposit.[9]Ms Zhang admits that Regal is entitled to damages in principle but argues that the amount due is much less than the sum claimed. She says that Regal sold the Property to 16 BL for a sum well below its true market value.[10]Richard Clarke and Poppy Kemp appeared for Regal, Martin Dray for Ms Zhang.

The law

[11]There was no dispute as to the relevant law. The well-established general principle is that damages are compensatory; the innocent party is to be placed, so far as money can do so, in the same position as if the contract had been performed, see Johnson v Agnew [1980] AC 367, per Lord Wilberforce at 400.[12]Where a defendant fails to purchase land in breach of contract, the normal measure of damages due was identified by Warrington LJ (with whom Sir Ernest Pollock MR and Sargant LJ agreed) in York Glass Co, Ltd v Jubb [1925] All ER Rep 285 at 294, citing Williams on Vendors and Purchasers (3rd ed.):
‘If the purchaser break the contract as, amongst other things, by failure to pay the price before the vendor has parted with his estate in the land, the vendor cannot recover the whole price as damages, but is limited to the loss which he has actually sustained, that is to say, the difference, if any, between the price agreed to be paid and the value of the land as remaining on his hands at the date of the breach.’
[13]Warrington LJ made this further point:
‘I can only add to that what is clearly the law, that he would be entitled to recover any further incidental expenses to which he had been put by being compelled to retain the land in his own possession instead of conveying it to the purchaser.’
[14]The principle that the value of the land left in the ownership of the vendor is to be assessed as of the date of the breach of contract has become more nuanced since York Glass. In Hooper v Oates [2013] EWCA Civ 91, Lloyd LJ (with whom Leveson and Toulson LJJ agreed) cited with approval (at [29]) the observation by Goulding J in Techno Land Improvements Ltd v British Leyland (UK) Ltd [1979] 2 EGLR:
‘The general rule does not require the court to close its eyes to matters occurring after the breach of the contract or after the commencement of the action or even after a judgment has declared the defendant’s liability without quantifying it, if they would enable the court to fix the plaintiff’s actual loss more accurately.’
[15]Lloyd LJ continued:
‘[34] I agree that the availability of a market is a most relevant factor in relation to the date for assessment of damages for breach of a contract for the sale of land where the buyer fails or refuses to complete the purchase. It is hardly ever the case that there is a readily and immediately available market for the sale or purchase of land, in the sense that the seller can go out into the market on the date of breach, or the next day, and find a purchaser who can and will proceed to contract at once. … The definition of market value itself, to which I have referred above, involves an assumption that the property has been exposed to the market for a reasonable time, which is likely to be for more than a month and may well be several months or longer. If the comparison sought to be made is between the contract price and the market value as at the breach date, then the assessment of that market value, by an expert valuer on established principles, would have to assume a prior period of marketing, which, by definition, will not and could not have happened. … [38] It seems to me that the breach date is the right date for assessment of damages only where there is an immediately available market for the sale of the relevant asset or, in the converse case, for the purchase of an equivalent asset. This is most unlikely to be the case where the asset in question is land. If the defaulting party is the buyer, much will depend on what the seller does in response to the breach, as is suggested in Chitty on Contracts, 31st ed, para 26-014, cited above. If he resells, the buyer may be able to show that, in so doing, the seller failed to take reasonable steps to mitigate his loss, for example by taking too long, or failing to follow proper professional advice, or in some other way. Absent any feature of that kind, the eventual resale price is likely to be the figure to be set against the contract price for assessment of the damages, not because it represents the market value at the date of the breach, but because it shows what loss the seller has suffered, uncomplicated by issues of remoteness or failure to mitigate. If the property market has declined during that time, it is of no avail for the defaulting buyer to say that this should not be laid at his door. If he had completed the contract, he would have suffered that decline in value, so this is part of the loss for which the seller needs to be compensated.’
[16]Thus, the loss suffered by the claimant is the difference between the contract price and the price which the claimant is able to secure for the property from a third party after the defendant has defaulted, subject to the defendant being able to show that the claimant has failed to take reasonable steps such as taking too long to sell or failing to follow sound professional advice regarding the sale.[17]There was extensive expert evidence in the present case from professional valuers regarding the market value of the Property, mainly by reference to comparables. This evidence, though potentially of some relevance, must be kept firmly in its place. Of primary importance is the price obtained by Regal for the Property in the sale to 16 BL. That price will govern the loss suffered by Regal subject only to Ms Zhang, on whom the burden lies, being able to prove that the Property was not freely and competently sold by Regal at arm’s length on an open market and that in consequence the best available price was not obtained.[18]In Banque Bruxelles Lambert SA v Eagle Star Insurance Co Ltd [1995] 2 All ER 769, Phillips J addressed expert evidence from valuers at p.790:
‘The significance of the price obtained in the open market as potentially the best evidence of open market value does not need to be demonstrated by expert evidence. It is obvious as a matter of common sense. Where a valuer is instructed to advise a bank as to the value of a property the sale of which has just been agreed, the marketing history of the property provides, potentially, evidence of the view that the market actually took of the value of the property. Plainly, the valuer should explore as carefully as he is able the marketing history of the property. The valuer will be aware of the limitations of the exercise of considering comparables as a guide to the price a property will actually achieve in the market. If the marketing history of the property is such as to leave the valuer confident that the property was properly marketed his consideration of the comparables will, essentially, be a cross-check of the validity of the sale price as evidence of value.’
[19]Use of the sale prices of comparable properties as a cross-check does not mean that if prices achieved by comparables are at variance with the sale price of the property in issue, it necessarily follows that the vendor acted unreasonably – in the sense that by reason of the vendor’s conduct the property was not freely and competently sold on the open market. In Thai Airways International Public Company Ltd v KI Holdings Co Ltd [2015] EWHC 1250 (Comm) Leggatt J said:
‘[38] The standard of “reasonableness” is, however, applied with some tenderness towards the claimant having regard to the fact that the claimant's predicament has been caused by the defendant's wrongdoing: see Banco de Portugal v Waterlow & Sons Ltd [1932] AC 452, 506; Britvic Soft Drinks Ltd v Messer UK Ltd [2002] 1 Ll Rep 20, para 114 (affirmed [2002] 2 Ll Rep 368, CA). Thus, the claimant is not expected to take steps which would involve unreasonable expense, risk or inconvenience: see Chitty on Contracts (31st edn, 2012), vol I, para 26-080. In addition, the burden of proof is on the defendant to show that there was a course of action which it was reasonable to expect the claimant to adopt that would have avoided all or an identifiable part of the claimant's loss: see e.g. Roper v Johnson (1873) LR 8 CP 167; Standard Chartered Bank v Pakistan National Shipping Corp [2001] CLC 825 at para 38. Furthermore, there is often a range of responses available to the claimant which will be regarded as reasonable. As stated by Potter LJ in Wilding v British Telecommunications plc [2002] EWCA Civ 349; [2002] ICR 1079 at para 55: “If there is more than one reasonable response open to the wronged party, the wrongdoer has no right to determine his choice. It is where, and only where, the wrongdoer can show affirmatively that the other party has acted unreasonably in relation to his duty to mitigate that the defence will succeed.”’
[20]The circumstances of the vendor may affect whether their conduct is reasonable. The authors of McGregor on Damages (22nd ed.) make this observation at 28-040, with which I agree:
‘It should be unusual for a finding of a failure to mitigate to apply to a vendor who accepts the best available offer shortly after a purchaser’s failure to complete particularly where the vendor is carrying substantial bridging finance and is anxious to sell.’
[21]Finally, the logic of the foregoing authorities is that it is irrelevant if the vendor is simply unlucky in being unable to find a buyer save at a price which is lower than might have been expected despite adequate marketing of the property in issue. It may be that at the upper end of the property market, with fewer purchasers who can afford the prices, luck plays a greater role. Failing to take this into account would amount to assessing the loss suffered by the vendor by reference to a reasonable market value of the property, an approach rejected in those authorities.

The background in more detail

[22]In December 2018, shortly after the construction of the Property, Regal took a loan from Deutsche Bank (‘the DB Loan’) secured against the Property. The loan agreement was varied several times and the repayment date extended. Regal continued to service the loan until September 2024.[23]In early 2022 Ms Zhang entered into negotiations with Coutts & Co about a loan, apparently to be secured against the Property if she were to buy it. Coutts obtained a valuation report from the estate agents Strutt & Parker. The report, dated 2 March 2022, runs to 122 pages and values the Property at £14.5m. It was disclosed to Ms Zhang. At around the same time Regal informed Ms Zhang that the Property had been valued at £16m by a valuer not identified in the evidence.[24]The first contract of sale between the parties and the first tenancy agreement were concluded on 23 March 2022, then varied on 13 February 2023. Ms Zhang defaulted and forfeited her £1.685 million deposit. The contracts were replaced by the Sale Agreement and a new tenancy agreement which were entered into on 19 December 2023. The agreed completion date was 22 April 2024.[25]In late 2023 Ms Zhang and her partner, Mr Onslow, decided that they wanted to live elsewhere in London. They and their two children subsequently moved to Notting Hill. Meanwhile Ms Zhang instructed two estate agents specialising in high-end properties, London House and GA Residential, to market the Property on her behalf. This they separately did between January and April 2024 with an asking price of £16.5m. No buyers were found.[26]There was no formal evidence from either London House or GA Residential as to what they did and the responses they received. However Regal obtained an email dated 3 January 2025 from Richard Douglas of London House. He said:
‘Following our conversation I can confirm that we were approached to find a buyer for High Trees around October/November 2023 and that turned in to a formal instruction January 8th 2024 (see attached the signed terms). We did have soft interest around the £10m mark but our client wasn’t interested at those levels as she had bought the house at the height of the market significantly higher. We understand the price was around £16,000,000. We were informed by our client that they did not wish to complete on the purchase of High Trees as they had decided to buy a house in Notting Hill instead, near her son’s school. We understand that she ended up purchasing a house on Hereford Road.’
[27]In January or February 2024 Ms Zhang met Mr Eden of Regal and sought a £1m reduction in the purchase price. Mr Eden refused.[28]Ms Zhang failed to meet the completion date of 22 April 2024 and forfeited her £2,527,500 deposit. Her tenancy of the Property ended on the same date.[29]From 22 April 2024 Regal took steps to market the Property. In around May 2024 Sotheby’s International were instructed to advertise the Property for sale to international clients. On 11 June 2024 Regal instructed DDRE Global, an agency specialising in prime real estate, to market the Property in the UK. Regal also used its international offices to advertise the Property. According to Regal DDRE began the marketing in April before the contract of instruction was signed although there is no documentary evidence of this. Both agents offered the Property at the price of £16.5 million. Neither found a buyer.[30]There was no evidence from either agent, but Regal obtained an email dated 3 January 2025 from Lee Greenfield of Sotheby’s. He said: ‘Regarding High Trees, as you are aware, we were instructed by you back in April 2024 to sell the house internationally to our overseas buyers. We did a campaign on the house that reached an abundance of offices worldwide as well as thousands of international buyers registered on our database. As you know, the market last year was extremely challenging, not just from a domestic point of view, but also from an overseas point of view with the uncertainty surrounding the non-domicile taxation and H/UHNW taxation implementations. There was some positive response from the campaign but upon us vetting the prospective buyers, it was quite challenging due to market conditions. In terms of viewings, we showed the house a handful of times, please see below the feedback from those viewings; Mr Khallili - Really liked the house but felt the house was not as private as he would like and also wanted a bigger garden. They went on to purchase a house on Winnington Road. Mrs Loupos - Liked the house but on reflection wanted a house with an elevator Mr Gabr - Felt the price was high and the house was quite exposed to the road and would have been around circa £9-£10m to be of interest to him. We also had a Chinese family that had seen the house previously when it was on the market. Their interest resurfaced but they were not going to get close to the levels you would have wanted as they felt the market had dropped since last time.[31]On 22 July 2024 16 BL was incorporated. The company was set up by a Gabriel Gherscovic for the sole purpose of buying the Property. It can be inferred that from some time before this date Mr Eden of Regal and Mr Gherscovic had entered into serious discussions about a possible purchase. In cross-examination Mr Eden said that to the best of his recollection there was a first offer from Mr Gherscovic of £9m at the end of May or early June 2024 followed by negotiations in which Mr Eden pushed up the asking price.[32]By a contract dated 12 September 2024 title to the Property was transferred from Regal to 16 BL. The purchase price was £10,157,168.94. That oddly precise figure is explained by a completion statement dated 9 September 2024 created by the solicitors acting for Regal in the sale, Teacher Stern. The basic sale price was £10m. To this was added sundry sums including the cost of alarm monitoring and insurance. The completion statement indicates that payment of £150,000 of the total price was deferred to some later date.[33]Also on 12 September 2024 Regal Avenue Road Limited (‘Regal Avenue’), a member of the Regal group of companies which also has Mr Eden as a director, entered into a loan agreement with One Hundred Camden Limited (‘100 Camden’), a company controlled by Mr Gherscovic, under which 100 Camden was to lend to Regal Avenue the sum of £3 million (the ‘100 Camden Loan Agreement’). Mr Gherscovic gave Regal Avenue a personal guarantee that 100 Camden would make the loan available.[34]On 14 November 2024 16 BL charged the Property to GB Bank Limited for about £11.2 million. On 20 November 2024 16 BL charged the Property to 3R Investments Limited for about £500,000.[35]100 Camden failed to advance the loan of £3m to Regal Avenue. On 20 November 2024 Regal Avenue issued a claim form against Mr Gherscovic for breach of his personal guarantee in relation to the 100 Camden Loan Agreement, seeking £3m in damages. On 10 February 2025 Master Pester gave judgment in favour of Regal Avenue, ordering the payment of £3m plus interest and costs. What then happened was not made clear, but in a letter dated 9 April 2026 from the solicitors acting for Regal in this action they state that Mr Gherscovic is now bankrupt following a successful petition by GB Bank Limited.

The witnesses of fact

[36]The witnesses of fact for Regal were Paul Eden, founder and director of Regal, Warren Swimer who is Regal’s finance director, and Daniel Walters, Head of Asset Management at Regal. Mr Walters’ evidence related to an issue which settled shortly before the trial and he was not cross-examined. My impression was that both Mr Eden and Mr Swimer were doing their best in cross-examination to give their evidence accurately according to the facts as they saw them to have been.[37]Ms Zhang gave evidence as the only witness of fact on her side of the case save for a short witness statement from Mr Onslow identifying some documents. Ms Zhang attended by video link from Hong Kong. It became clear during cross-examination that Ms Zhang was little able to help the court. It turned out that much of the information in her witness statement came from Mr Onslow who had taken the lead in most of the relevant dealings concerning the Property. In fact when pressed on almost any part of her evidence Ms Zhang was unable even to recall exactly what Mr Onslow had told her and she gave the impression that she had not understood much of what Mr Onslow had said. I remarked on this during closing argument and was told that a gentleman who had been in court throughout the trial was Mr Onslow.[38]The lack of substantive evidence from Mr Onslow, though he was clearly available to attend the trial, did not assist Ms Zhang. I cannot be certain that the account of events given in Ms Zhang’s witness statement was a full and accurate picture of the relevant facts since it is at least possible that, no doubt unintentionally, Mr Onslow was selective in what he told Ms Zhang. His own views and recollections could not be tested in cross-examination. The arguments on Regal’s marketing of the Property Ms Zhang’s case

The arguments on Regal’s marketing of the Property

[39]Ms Zhang contends that the market value of the Property in September 2024 was £14.75m, the figure proposed by her expert witness. I will return to the rival contentions of the expert valuers.[40]Ms Zhang’s counsel criticised the lack of disclosure from Regal regarding the conduct and progress of marketing by Sotheby’s and DDRE. That may be right, but the same criticism was levelled by Regal against Ms Zhang in relation to the marketing on her behalf by London House and GA Residential.[41]As to the marketing on behalf of Ms Zhang, she submits that it provides no guide to anything. Her main point is that London House and GA Residential were instructed on 8 January 2024 and marketing ended in April 2024, a period of three months which was insufficient time in which to sell a piece of super prime property.[42]Secondly, buyers who may have been interested in purchasing at a price of £14.5m possibly preferred to wait until Ms Zhang’s right to complete had expired so that they could then deal directly with Regal.[43]Thirdly, in early 2024 Ms Zhang put the Property onto Rightmove, Zoopla and OnTheMarket, websites widely used for marketing property. She relies on Mr Eden’s criticism of this strategy as ‘flawed’ because prime property in his view should only be presented by agents using a ‘bespoke’ approach, that is to say personally contacting individuals known to have a potential interest in the property in question.[44]Turning to Regal’s marketing strategy, Ms Zhang makes no criticism of the expertise or efforts of either Sotheby’s or DDRE on behalf of Regal. Her case is again that their marketing was too brief: it did not start in earnest until mid or late June 2024 and ended in September 2024.[45]Ms Zhang contends that it was around the time marketing on behalf of Regal began that Mr Eden met Mr Gherscovic and began discussions about the possible sale of the Property to Mr Gherscovic. Ms Zhang points to the 100 Camden Loan Agreement which, she says, was negotiated between Mr Eden and Mr Gherscovic at the same time. Ms Zhang infers that a sale to Mr Gherscovic through his company 16 BL was always the preferred route so far as Mr Eden was concerned because of his side deal with Mr Gherscovic. That was why the Property was sold to 16 BL and moreover the sale was agreed at a price below the Property’s market value.[46]Leaving aside the valuations by the expert witnesses, it was submitted on behalf of Ms Zhang that this inference of selling below the true value is supported by two matters. The first is the high price of £16.5m at which Sotheby’s and DDRE were instructed to market the Property. On Regal’s own case that grossly overvalued the Property which means that neither agent had any prospect of making a sale. The second is that in November 2024 16 BL was able to obtain loans from GB Bank and 3R Investments exceeding £12m secured against the Property, from which it is reasonable to conclude that the two lenders were satisfied that the Property was worth well in excess of £12m.

Regal’s case

[47]Regal submits that the marketing done by and on behalf of Ms Zhang provides support for what later happened when Regal put the Property on the market. A record of WhatsApp messages between Stuart Onslow and Grant Alexson of GA Residential indicates that the agency had numerous discussions with potential buyers. Ms Zhang in her evidence said that there were at least 5-7 viewings by London House. Richard Douglas of London House told Stuart Onslow that London House only received ‘soft verbal interest’ at around £10m.[48]An email from Grant Alexson of GA Residential to Mr Onslow sent on 19 February 2024 attached reports from Zoopla and OnTheMarket showing over 17,000 hits for the Property on Zoopla and about 5,000 on OnTheMarket.[49]An open day was arranged by GA Residential for 28 March 2024, to which 50-60 people were invited. It was postponed through lack of interest and never took place.[50]With regard to Regal’s marketing through Sotheby’s, DDRE and its own overseas offices, these resulted in 10-12 viewings. The feedback from Mr Greenfield of Sotheby’s (see above) indicates that the market was challenging at the time and that two of the four parties to whom Sotheby’s gave a viewing indicated that the price was too high, one of them stating that a price of £9-10m would be required to generate interest from him.[51]Mr Eden said in cross-examination that although DDRE was not instructed until 11 June 2024, he had worked with the agent’s founder, Daniel Daggers, before and because of that connection DDRE had started marketing ahead of the signing of formal instructions. There was an email in evidence indicating that the first viewing arranged by DDRE took place on 29 April 2024. Mr Daggers is apparently known among estate agents as ‘Mr Super Prime’ based on his expertise in selling properties at that end of the market.[52]Mr Eden’s evidence was that Mr Gherscovic initially expressed interest in the Property at a price of about £9m and that Mr Eden had to negotiate the price up to the agreed £10.1m or so.[53]Mr Eden stated that the 100 Camden Loan Agreement was entirely separate from the sale of the Property. Regal Avenue wanted the loan in order to develop a different property in Swiss Cottage. Had the loan gone ahead, Regal Avenue would have paid 5% compound interest on the loan and would have provided 100 Camden with a share of the profits made from the development.

The adequacy of Regal’s marketing of the Property

[54]The adequacy of Regal’s marketing was argued by reference to several matters which were said to point in one direction or another.

Whether the Property was marketed for a sufficient period of time

[55]A significant part of Ms Zhang’s case is that the Property was not on the market long enough to find a purchaser of such a home willing to pay the full market value.[56]In his email of 3 January 2025 Richard Douglas said that London House was formally instructed by Ms Zhang on 8 January 2024 with discussions about selling the Property dating from October or November 2023. It seems that GA Residential was instructed at about the same time. London House did not make a marketing video until March 2024 but I think it is reasonable to assume that both it and GA Residential were contacting prospective buyers from not long after 8 January 2024 using the bespoke approach referred to by Mr Eden. There is no reason to believe that marketing stopped at any time before Ms Zhang defaulted on 22 April 2024. That amounts to a period of about three and a half months.[57]Almost immediately thereafter Regal began its marketing campaign. As indicated above, DDRE arranged the first viewing on 29 April 2024 and there was documentary evidence of a final viewing on 10 September 2024, a period of a little under four and a half months.[58]The Property was thus presented on the market by two sets of specialist estate agents for a cumulative period of between 7 and 8 months. Mr Kay thought that an average period on the market for this type of property in London is 169 days – between 5 and 6 months. This is broadly consistent with the time spent on the market by the comparable properties referred to by the experts, although the variation is wide.[59]In cross-examination Regal’s expert, Mr Nimba, said that in September 2024 the market for this type of high-end property was falling like a stone. I think that Mr Nimba was capable of exaggerating but the notion of a falling market is consistent with Lee Greenfield’s email of 3 January 2025 where he refers to challenging conditions at this end of the market due to expected changes in tax for non-domiciled persons and high and ultra-high net worth individuals. Ms Zhang’s expert, Mr Kay, did not say anything to the contrary. This does not directly address the market value of the Property in September 2024 but I find that if Regal had delayed the sale, the price obtained was more likely to have gone down rather than up.

Whether a sale was inhibited by the price sought

[60]I do not see much force in Ms Zhang’s argument that a sale was unlikely at the asking price of £16.5m. Potential buyers were free to offer a lower amount or to state the sort of price that might have tempted them. This is particularly true given that it is Ms Zhang’s case that the market value was £1.75m under the asking price, making offers at the lower level all the more likely if buyers were tempted.[61]There was an indication in Mr Greenfield’s email of 3 January 2025 that Mr Gabr stated that it would take a price level of £9-10m for him to be interested. In cross-examination it was put to Mr Eden that if he had been truly interested in selling to a party other than Mr Gherscovic at a price of around £10m, he would have pursued Mr Gabr’s offer. Mr Eden said that he was never told by Greenfield about an offer from Mr Gabr. While it would be surprising to learn that Sotheby’s had failed to pass on a formal offer from a potential purchaser, Mr Greenfield did not say that there had been an offer. It is not clear when Mr Gabr made his comment and seems to me possible that Mr Greenfield did not think that Mr Eden would have been interested in the comment at the time.

Advertising the Property on websites

[62]I am not persuaded that Ms Zhang’s decision – probably Mr Onslow’s idea – to advertise on three widely used property websites made any significant difference. There was no evidence that any prospective purchaser at this end of the market either noticed the Property being listed on these websites or, if they did, that anyone found it off-putting.

The timing of discussions with Mr Gherscovic

[63]Mr Eden’s evidence that he was discussing the sale of the Property with Mr Gherscovic since late May or early June does not in my view mean that he only ever intended to sell to Mr Gherscovic. Progress in pushing up the sum Mr Gherscovic was willing to offer from his starting point of £9m was apparently fraught and slow. If either Sotheby’s or DDRE had secured a buyer willing to offer significantly more than £10m there is no good reason to suppose that Mr Eden would have declined the higher offer, subject only to the possibility that the prospect of the 100 Camden Loan Agreement added value to an extent that made a global deal with Mr Gherscovic worth more still. Pending an agreement with Mr Gherscovic, there was sound reason to leave Sotheby’s and DDRE looking for buyers.

The influence of a prospective loan from 100 Camden

[64]The agreement by 100 Camden to make a loan of £3m to Regal Avenue was concluded on the same day as the sale of the Property to 16 BL. Mr Eden was insistent in cross-examination that there was no connection between the two. In his closing argument counsel for Regal pointed out that Ms Zhang’s counsel did not put it to Mr Eden that he was not telling the truth about this and therefore his evidence must be accepted. It seems to me that Mr Eden was probably telling the truth if what he meant was that there was no formal connection between the two in the sense that there was no stated understanding that the deals stood or fell together. That could have been what he meant.[65]On the other hand, I think that Mr Eden must have had both deals in his mind on 12 September 2024. The issue is whether Mr Eden’s wish to obtain a loan from 100 Camden significantly influenced his negotiating stance on the price of the Property.[66]Mr Eden agreed in cross-examination that the loan of £3m was important to him and was essential for cash flow. But he also said that had Mr Gherscovic not offered the loan he would have found another investor for the new project, not easily, but a replacement would have been found. As explained by Mr Eden, when Regal intended to develop a site, it uses high net worth individuals to invest money and take a proportion of the profit on the development. His discussions with Mr Gherscovic had also included the possibility of a set-off between repayment of the £3m and recovering part of the benefit derived from the project. Though described in evidence as a loan, the proposed arrangement was part loan and part investment by Mr Gherscovic through his company. Unsurprisingly, Mr Eden said that he regretted the 100 Camden Loan Agreement after 100 Camden failed to honour the deal.[67]Although Mr Eden stated that he could have found another investor, his chosen way forward, when 100 Camden did not provide the £3m, was to sue Mr Gherscovic for breach of his personal guarantee that the money would be advanced. It was submitted on behalf of Ms Zhang that this cast doubt on Regal’s ability to find an alternative lender. I am not sure that this necessarily follows. It depends on whether it was simpler to sue Mr Gherscovic or to find another investor.[68]100 Camden failed to pay the first tranche of the loan, which fell due on 16 September 2024. A letter before claim referring to Mr Gherscovic’s personal guarantee in writing was sent to him by email on 3 October 2024 and again by email and post on 17 October 2024, seeking payment by 18 November 2024. The claim form was issued on 20 November 2024. As appears from the order of Master Pester dated 10 February 2025, the order was made without any opposition from Mr Gherscovic. The way it is worded, Mr Gherscovic was obliged to pay Regal Avenue £3m plus interest outright, which seems odd, but that is by the way.[69]It seems to me from the foregoing that it is possible that an expectation of obtaining £3m from Mr Gherscovic without much or any resistance seemed at the time to be easier than finding another lender. As against that, the evidence indicated that by 2026 Mr Gherscovic had been declared bankrupt and there is no indication that Mr Gherscovic ever complied with Master Pester’s order, but I do not know when either the possibility, or the fact, of Mr Gherscovic’s bankruptcy became known to Mr Eden.[70]I can reach no clear conclusion as to how difficult it would have been for Mr Eden to find an alternative investor in his Swiss Cottage project. In the end I was given no good reason to doubt Mr Eden’s evidence that he could have found another lender and so, by inference, was not tied to Mr Gherscovic’s offer of a loan.[71]I find it likely that Mr Eden thought it opportune and convenient to obtain the loan from Mr Gherscovic through 100 Camden and at the same time to sell the Property to 16 BL. But the value to Regal Avenue of obtaining the loan was not such as to significantly affect the price of the Property at which, on behalf of Regal, Mr Eden was willing to sell.

Valuations made by inference on behalf of GB Bank and 3R

[72]I agree with the submission made on behalf of Ms Zhang that in all probability GB Bank and 3R Investments would not cumulatively have lent over £12m to 16 BL in November 2024, secured against the Property, without each having obtained a valuation of the Property and that they would have required the valuation to be well in excess of £12m.[73]In cross-examination Mr Nimba referred to a Strutt & Parker report which he said was dated October or November 2024 and which he recollected as having valued the Property at £16.5m. The report was not in the evidence and I cannot be sure who provided the valuations or the detail of the means used.[74]As became apparent from the divergent opinions of the experts in this case, valuing a property such as High Trees is a subjective and inexact art. Neither expert agreed with a figure of £16.5m. I would assume that the likelihood of guessing wrongly increases in a falling (or rising) market. To the extent that it is relevant for me to rely on any expert valuations of the Property, it makes no sense to be guided by the unidentified individuals who reported back to GB Bank and 3R Investments. The experts in these proceedings gave extensive written evidence and were cross-examined over about two days at the trial. If expert valuations carry weight in the present case, a matter to which I will return, it is the valuations given by the experts who appeared in court which matter.

The DB Loan

[75]Finally there is the effect, if any, of the DB Loan: whether it led to pressure on Regal to redeem the loan such as to influence Mr Eden’s wish to push forward with a sale of the Property. I have found that a delay in the sale was likely to lead to lower, not higher, offers, so the effect of the DB Loan on Mr Eden’s thinking about the timing of the sale is of little relevance. However, I will deal with it.[76]The DB Loan was taken by Regal in December 2018. The maximum sum of £12.95m available was drawn down. The loan agreement was extended twice and expired in March 2023. By December 2021 the loan had been paid down by Regal to £11.1m. Despite the expiry Regal did not seek a further extension. DB was informed of Ms Zhang’s failure to complete in April 2024 and that in consequence Regal had not received £16.9m from her. Mr Eden said that DB was kept up to date about steps taken to sell the Property and was content for the time being to take no action to recover the loan, instead to continue to collect the interest. When Mr Eden was pressed on why the DB Loan put Regal under pressure to sell the Property, as he had stated in his witness statement, Mr Eden said that DB had told him that it wanted the loan off its back because it was negotiating other loans, although DB was relaxed about the outstanding debt.[77]The two deposits forfeited by Ms Zhang in December 2023 and May 2024 were used in part to pay down some of the loan. The debt was cleared in full by Regal Avenue in December 2024 with a payment of £9,367,500 plus interest.[78]My impression is that the DB Loan was a factor in his mind when considering the urgency or otherwise of selling the Property since Regal had to pay interest on the loan. But at no time up to the date of sale of the Property did DB apply pressure on Regal such as to push Regal towards a faster sale.[79]That is not to say that there was no financial pressure at all on Regal because of Ms Zhang’s failure to complete. Mr Eden said that the board of Regal was unhappy about the effect it had on cash flow.

Conclusion on the adequacy of the marketing of the Property

[80]I have found that the Property was marketed for an appropriate period of time by two successive estate agents, both expert in the relevant sector of the market. I have not accepted that any of the matters raised by Ms Zhang lead to an inference that the price paid by 16 BL was below that which would have been paid by a purchaser had the marketing been adequate. I therefore conclude that the marketing was adequate. The Property was freely and competently sold to 16 BL at arm’s length on an open market. There may or may not have been an element of bad luck in Regal’s inability to find a buyer willing to offer more than £10.1m but that is irrelevant. It is likely that Ms Zhang agreed a price in the Sale Agreement which was above the market value of the Property at the time.[81]It follows that for the reasons discussed above the opinions of the experts as to the value of the Property in September 2024 are of little help in reaching a conclusion as to the level of damages due to Regal. Nonetheless, they may be used as a cross-check. The expert evidence, both written and oral, was quite extensive. Without implying any disrespect to the experts, I see no need to deal with it in corresponding detail.

The expert witnesses

[82]Regal’s expert was Mohindra Nimba. Mr Nimba has been qualified as a chartered surveyor since 1995 and is a member of the Royal Institution of Chartered Surveyors (RICS). He is a director of two firms of surveyors in London. Over the last 20 years Mr Nimba has conducted valuations of residential and commercial properties in London in the course of which he had previously toured some of the houses which were treated as comparable to it by one or both the experts.[83]Ms Zhang’s expert was Richard Kay. He has been qualified as a chartered surveyor since 1996 and like Mr Nimba is a member of RICS. Mr Kay is the senior partner in a firm of surveyors in London which specialises in landlord and tenant matters. The firm deals mainly with high value London property with particular emphasis on valuations in the context of the discharge or modifications of restrictive covenants pursuant to s.84 of the Law of Property Act 1925. Mr Kay had not visited the Property or any of the comparables before but looked at them from the exterior before writing his report.[84]Mr Nimba was criticised in closing argument on a number of counts. I will mention two of them. He came to realise that details regarding one of the properties which he and Mr Kay had agreed was comparable to the Property had been wrongly stated by them both. He failed to inform Mr Kay of this even though Mr Kay had earlier provided Mr Nimba with revised details of other comparables. Secondly, it emerged that Mr Nimba’s son had visited the Property to Mr Nimba’s knowledge. This and whatever details were passed to Mr Nimba by his son were not disclosed to Mr Kay. I find these matters consistent with my impression of the way in which Mr Nimba gave his evidence in cross-examination. While I believe that on the whole he was doing his best to assist the court with his honestly held views, he probably did so with Regal’s case well in mind and sometimes felt the need to state his views accordingly.[85]Mr Kay appeared to be more able and willing to make appropriate concessions in cross-examination than was Mr Nimba. I am sure that he too was doing his best to state his honest opinions. However, among them was his very fair point that he had only a medium level of confidence in the valuation of the Property stated in his report.

A better approach to expert evidence

[86]As part of the preparation for drafting his report, each expert was provided with many of the documents in the proceedings including the pleadings. From the start both knew that Regal’s argument was that in September 2024 the Property was worth the £10,157,168.94 paid by 16 BL. Both knew that Ms Zhang’s pleaded contention was that the difference between that figure and the £16.9m price under the Sale Agreement had been due to Regal’s failure to mitigate its loss and that by implication that the Property was worth £16.9m in September 2024.[87]I find this unsatisfactory. The credibility of both experts would have been much improved if neither had been told the value of the Property which each side wished to establish at the trial before finalising and serving their respective reports. That way the experts would have used their expertise to arrive at a valuation of the Property in September 2024 without being influenced by the figure for which their instructing party contended. After service of the reports it would then have been helpful to inform them of the price achieved in the sale to 16 BL in September 2024 and to have asked them to comment on it in a supplementary report, stating whether the actual sale price affected any view expressed in the main report and if so, why. I doubt that it was either necessary or desirable to inform the experts of the price set out in the Sale Agreement or the parties’ pleaded contentions on price before the experts’ evidence had been concluded and served.[88]During the trial I asked counsel about this, and both agreed with me that the foregoing sequential approach to the preparation of the expert evidence would have been of greater assistance to the court.[89]Mr Nimba stated that in his opinion the market value of the Property in September 2024 was £10.25m. In Mr Kay’s opinion it was £14.75m. As I have said, the latter was the value supported by Ms Zhang at the trial rather than her pleaded case that the Property was worth £16.9m.[90]I think it is likely that both estimates were influenced by the respective expert’s knowledge of each party’s pleaded case. I do not at all say that either expert set out to mislead the court, but in any contentious proceedings loyalty on the part of an expert to their instructing party is almost inevitable. Such loyalty is liable to build up over the course of the preparation for trial by the litigation team. There may also be an understandable wish on the part of an expert to justify their fee.[91]In these proceedings the expert evidence was never going to play a large role in the outcome for reasons I have discussed, but all the more so because of the way in which it was prepared. The value of the expert evidence, even as a cross-check, was compromised.

The cross-check

[92]There were 14 properties considered by one or other of the experts to be comparable to the Property. The experts set these out in a chart containing all relevant details which was much referred to and was very helpful.[93]The experts agreed on 6 as being comparable. Each expert was cross-examined on how he could justify the properties only he took to be comparable and on why he rejected comparables favoured only by the other expert. What emerged from this, unsurprisingly, was that identifying comparables is a highly subjective process and that reasonable experts can disagree.[94]The 6 agreed comparables were sold between September 2023 and August 2024 at prices between £6.5m and £14.75m. The price achieved per square foot was in every case higher than the equivalent for the Property. The experts differed as to why that was. Broadly, Mr Kay said it was because the higher figures reflect the true market value in the Bishops Avenue area, whereas Mr Nimba identified features of each property that purchasers would prefer, such as having a lesser part of the square footage below ground, not being too close to the Avenue and so offering less privacy and security, having a garage (the Property does not) and so on.[95]Mr Nimba’s reasons were plausible, but in the end only underlined the obvious point that potential purchasers have different priorities when it comes to buying a house. If the house ticks all the right boxes in the mind of a purchaser, they are more likely to be willing to buy close to the asking price. Should such a purchaser be in the market for that kind of property at the right time, so much the better for the vendor. Of course the converse applies.[96]I find no real assistance from the cross-check other than that the experts’ evidence was not sufficiently at odds with the price paid by 16 BL to cast doubt on the adequacy of the marketing of the Property by Regal in all the circumstances.

Special condition 7 of the Sale Agreement

[97]Special condition 7 of the Sale Agreement reads as follows:
‘7 Stamp Duty Land Tax Strictly on condition that the Buyer completes the contract on or before 22 April 2024 the Seller will pay to the Buyer the sum of One Million Pounds (£1,000,000) towards the Buyer’s Stamp Duty Land Tax Liability for the Property within 5 days of completion taking place pursuant to this contract. For the avoidance of all doubt, the Seller will not be obliged to make any payment of any amount pursuant to this special condition 7, whether by contribution of any sum towards the Buyer’s Stamp Duty Land Tax Liability for the Property or otherwise, if completion does not take place on or before 22 April 2024.’
[98]As noted above, the governing principle of compensatory damages is that the innocent party is to be placed in the same position as if the contract had been performed, see Johnson v Agnew [1980] AC 367, per Lord Wilberforce at 400. That means performance of all relevant obligations under the contract including, in this instance, completing the contract on or before 22 April 2024. Had that been done, Regal would have paid Ms Zhang £1m or, in practical terms, that sum would have been deducted from the sale price.[99]The words of special condition 7 from ‘For the avoidance of doubt …’ to the end of the clause do not alter this. Special condition 7 would have had effect if Ms Zhang had completed but did so after 22 April 2024 on a date when there had been no termination of the Sale Agreement. No question of damages would then have arisen, but Ms Zhang would not have benefitted from a £1m deduction in the sale price. As it is, the relevant hypothesis is that completion took place on 22 April 2024 and that the £1m deduction was due.

Special condition 10 of the contract of sale to 16 BL

[100]In the contract of sale between Regal and 16 BL, the purchase price of £10,157,168.94 was expressly stated to be subject to special condition 10. Under that special condition 16 BL was required to pay to Regal a further £3,420 per day for every day that completion was delayed beyond 9 September 2024. The total sum payable by 16 BL, including £10,260 due to completion having occurred 3 days after 9 September 2024, came to £10,167,428.94.[101]It was argued on behalf of Ms Zhang that if Regal were to succeed in its claim the relevant purchase price was £10,167,428.94. I disagree. The extra £10,260 paid by 16 BL was unconnected with the value of the Property as agreed between Regal and 16 BL.

Conclusion on Regal’s principal claim

[102]For the foregoing reasons, I conclude that Regal is entitled to damages in the sum equivalent to the difference between the agreed price of £16.9m to be paid under the Sale Agreement and the £10,157,168.94 purchase price paid by 16 BL, i.e. not including the further sum provided by 16 BL for delayed payment.[103]This is subject to two reductions: the £1m paid in respect of special condition 7 of the Sale Agreement and, as agreed, £2,527,500 being the second forfeited deposit.

Interest paid on the DB Loan

[104]Regal claims damages equivalent to the interest paid on the DB Loan for the period between the last date on which Ms Zhang could have completed under the terms of the Sale Agreement (8 May 2024) and completion of the sale to 16 BL on 12 September 2024.[105]Mr Swimer, Finance Director of Regal, said in his witness statement that Regal had borrowed against the Property and that the borrowings from DB were secured by a charge on the Property. The loan facility expired in March 2023 and although it was not formally extended, DB did not press for repayment when Ms Zhang failed to buy the Property in April 2024.[106]Mr Swimer produced a schedule of interest payments to DB for the period 7 May to 12 September 2024. I am not sure why it was not from 8 May 2024 but the discrepancy of one day was not resolved and I will ignore it. The amount outstanding on the DB Loan throughout that period was stated to be £9,367,500, on which the interest paid to DB for the same period was identified as being in total £259,870.57.[107]A deed of release of the DB Loan dated 12 September 2024 was in evidence which shows that all obligations owed by Regal to DB under the DB Loan were discharged on that date. There was also a letter dated 11 September 2024 from Farrer & Co, acting for DB, to Regal’s solicitors. It states that the total redemption figure was £9,367,500. It was argued on behalf of Ms Zhang that this must have been the totality of what was owed to DB, including interest. Therefore Mr Swimer’s schedule was misleading in that the figure on which interest was paid must have been less than £9,367,500.[108]This was raised with Mr Swimer in cross-examination. He said that interest was paid separately, which payments are not set out in his schedule. No documentary proof of payment was in evidence. Mr Swimer’s evidence was consistent with his schedule since the amount due to DB throughout the relevant period is shown to have remained constant at £9,367,500. It therefore seems to have been the principal sum owed, not including any interest. It was not satisfactory that Regal failed to produce documentary evidence of the interest paid but Ms Zhang did not suggest that the amount was unrealistic given the interest rates prevailing at the time.[109]It was also argued on behalf of Ms Zhang that Regal had failed to mitigate by using the deposits forfeited by Ms Zhang to pay down the loan (together they came to £4,212,500). Mr Swimer said that some of those deposits had been used to pay down the loan but he was unable to say how much. By the time that the deposits were forfeited the sum loaned by DB had been reduced to £11.1m. This had gone down to £9,367,500 by May 2024, indicating a further reduction in the loan by £1,732,500. Mr Eden agreed in cross-examination that it would have been reasonable to use both deposits to reduce the loan by the full £4,212,500.[110]On the evidence Regal could and should have reduced the loan by £4,212,500 using both forfeited deposits. Regal is entitled to the interest due on £11.1m less that amount (£4,212,500) for the period 8 May to 12 September 2024.

Professional fees

[111]Regal claims recovery of the professional fees of their solicitors charged for handling the sale of the Property to 16 BL in the amount of £13,092.10. An invoice from the solicitors was exhibited. It was argued for Ms Zhang that this was insufficiently detailed so that the reasonableness of the sum could not be challenged. No conveyancing file was produced.[112]It seems to me that the sum claimed is probably in accordance with what Regal had to pay their solicitors for handling the sale to 16 BL. Regal is entitled to that sum.

Interest

[113]Interest is claimed by Regal on the sums due, pleaded at a rate of 4%. Regal is entitled to interest at that rate. In the case of the DB Loan and the fees for handling the sale to 16 BL, interest should run from the date of payment to DB and their solicitors respectively. The parties agreed that in both instances the relevant date is 12 September 2024.