“i) The forward sale transactions entailed Standard funding the difference between the Market Value (as defined) of the relevant Designated Assets at inception of the Transaction and the Downpayment (or Additional Downpayments) during the period up to the Forward Settlement Date. Thus, in the circumstances set out in paragraph 5 of this Judgment, Socimer was effectively able to borrow the difference for its own commercial purposes and Standard received remuneration for that in the shape of the Forward Value, payable by Socimer on the Forward Settlement Date which took account of the costs of funding. ”
“The value of any Designated Assets liquidated or retained and any losses, expenses or costs arising as a result of the termination or the sale of the Designated Assets shall be determined on the date of termination by seller.”
“The broad principle that a defendant in an action for breach of contract is not liable for doing that which he is not bound to do will not be applicable willy-nilly in a case where the employer is contractually obliged to exercise his discretion rationally and in good faith in awarding or withholding a benefit provided for under the contract of employment. Where the employer fails to do so, the employee is entitled to be compensated in respect of such failure”
“to assess the amount of the bonus likely to have been paid, bearing in mind the flexibility afforded by the contractual language. Thus the exercise would not permit the judge simply to substitute his own view of what would have been a reasonable payment for the employer to make, but required him to put himself in the shoes of those making the decision, and consider what decision, acting rationally, and not arbitrarily or perversely, they would have reached as to the amount to be paid. … The judge was correct to embark upon his examination taking account of the criteria which Mr Amaitis [President and CEO of Cantor Fitzgerald International] stated would have been adopted by the defendants and which were listed by the judge at paragraph 91 of his judgment … With no contractual signposts in relation to the formula for calculating the bonus payable, and no clear indications from the treatment of the claimant in previous years in relation to the payment of discretionary bonus, the task of the court is more difficult. No doubt in tackling that issue, the court will have in mind a range of possible outcomes. But in principle its task remains the same, that is to put itself in the shoes of the President, and decide what figure he would in the end have arrived at.”
“The PRS had to be ‘calculated in good faith’ and therefore had to be a bona fide estimate made without regard to whether it would have produced a higher or lower price. There is accordingly no basis for calculating the damages on the assumption that the vendor was contractually entitled to choose the highest figure. All that can be said is that there would have been a range of possible figures. But there is no legal basis for assuming that the hypothetical figure would have been at the upper rather than the lower end of the range. … In those circumstances, the only rational course open to a court is to choose the figure which it considers that a forecast made with reasonable care was most likely to have produced.”
“[If] it appeared from the evidence that even if reasonable care had been taken, the estimate would still have been to a greater or lesser extent higher than the actual outcome, it follows that to that extent the purchaser's loss has not been caused by the breach of warranty. So far as the price was referable to that part of the overestimate, the vendor is not liable. It should not however be sufficient for the vendor to say that merely because of the uncertainties in forecasting, the estimate could have been higher than the actual outcome. It could just as well have been lower. In such a case the purchaser is entitled to have damages assessed on the basis of the most probable outcome, which in the absence of contrary evidence, is that if the vendor had taken proper care, he would have got it right.”
“14. A mortgagee ‘is not a trustee of the power of sale for the mortgagor’. This time-honoured expression can be traced back at least as far as Sir George Jessel MR in Nash v. Eads (1880) 25 SJ. 95. In default of provision to the contrary in the mortgage, the power is conferred upon the mortgagee by way of bargain by the mortgagor for his own benefit and he has an unfettered discretion to sell when he likes to achieve repayment of the debt which he is owed: see Cuckmere Brick Co Ltd v. Mutual Finance Ltd[1971] Ch 949 at 969G. A mortgagee is at all times free to consult his own interests alone whether and when to exercise his power of sale. The most recent authoritative restatement of this principle is to be found in Raja v. Austin Gray[2003] 1 EGLR 91 , 96 paragraph 59 per Peter Gibson LJ. The mortgagee's decision is not constrained by reason of the fact that the exercise or non-exercise of the power will occasion loss or damage to the mortgagor: see China and South Sea Bank Limited v. Tan Soon Gin alias George Tan[1990] 1 AC 536 . It does not matter that the time may be unpropitious and that by waiting a higher price could be obtained: he is not bound to postpone in the hope of obtaining a better price: see Tse Kwong Lam v. Wong Chit Sen[1983] 1 WLR 1349 at 1355B. 15. The Claimants contend that a mortgagee is not entitled to ignore the fact that a short delay might result in a higher price. For this purpose they rely on certain obiter dicta of Lord Denning MR in Standard Chartered Bank v. Walker[1982] 1 WLR 1410 1415G-H and 1416A. The mortgagee in that case, having obtained insufficient on the sale at auction of the property charged to recover the sum secured, applied for summary judgment against the mortgagor for that sum. The mortgagor resisted the application alleging that the mortgagee had sold at an undervalue on a variety of grounds one of which was that the sale took place at the wrong time of year. The Court of Appeal gave the mortgagor leave to defend on the ground that there was an arguable case that the sale had been negligently handled. It was common ground in that case that a mortgagee can choose his own time for sale: see Fox LJ at p.1418 F-G. Lord Denning accepted that there were dicta to this effect, but added that he did not think that this meant that the mortgagee could sell at the worst possible moment and that it was at least arguable that in choosing the time he must exercise a reasonable degree of care. The view expressed by Lord Denning cannot stand with the later authorities to which we have referred and which state quite categorically that the mortgagee is under no such duty of care to the mortgagor in respect of the timing of a sale and can act in his own interests in deciding whether and when he should exercise his power of sale. 16. The mortgagee is entitled to sell the mortgaged property as it is. He is under no obligation to improve it or increase its value. There is no obligation to take any such pre-marketing steps to increase the value of the property as is suggested by the Claimants. The Claimants submitted that this principle could not stand with the decision of the Privy Council in McHugh v. Union Bank of Canada[1913] AC 299 . Lord Moulton in that case at p.312 held that, if a mortgagee does proceed with a sale of property which is unsaleable as it stands, a duty of care may be imposed on him when taking the necessary steps to render the mortgaged property saleable. The mortgage in that case was of horses, which the mortgagee needed to drive to market if he was to sell them. The mortgagee was held to owe to the mortgagor a duty to take proper care of them whilst driving them to market. The duty imposed on the mortgagee was to take care to preserve, not increase, the value of the security. The decision accordingly affords no support for the Claimants' case 17. The mortgagee is free (in his own interest as well as that of the mortgagor) to investigate whether and how he can ‘unlock’ the potential for an increase in value of the property mortgaged (e.g. by an application for planning permission or the grant of a lease) and indeed (going further) he can proceed with such an application or grant. But he is likewise free at any time to halt his efforts and proceed instead immediately with a sale. By commencing on this path the mortgagee does not in any way preclude himself from calling a halt at will: he does not assume any such obligation of care to the mortgagor in respect of its continuance as the Claimants contend. If however the mortgagee is to seek to charge to the mortgagor the costs of the exercise which he has undertaken of obtaining planning permission or a lessee, subject to any applicable terms of the mortgage, the mortgagee may only be entitled to do so if he acted reasonably in incurring those costs and fairly balanced the costs of the exercise against the potential benefits taking fully into account the possibility that he might at any moment ‘pull the plug’ on these efforts and the consequences for the mortgagor if he did so. 18. If the mortgagor requires protection in any of these respects, whether by imposing further duties on the mortgagee or limitations on his rights and powers, he must insist upon them when the bargain is made and upon the inclusion of protective provisions in the mortgage. In the absence of such protective provisions, the mortgagee is entitled to rest on the terms of the mortgage and (save where statute otherwise requires) the court must give effect to them. The one method available to the mortgagor to prevent the mortgagee exercising the rights conferred upon him by the mortgagee is to redeem the mortgage. If he redeems, there can be no need or justification for recourse by the mortgagee to the power of sale to achieve repayment of the debt due to him secured by the mortgage. 19. When and if the mortgagee does exercise the power of sale, he comes under a duty in equity (and not tort) to the mortgagor (and all others interested in the equity of redemption) to take reasonable precautions to obtain ‘the fair’ or ‘the true market’ value of or the ‘proper price’ for the mortgaged property at the date of the sale, and not (as the Claimants submitted) the date of the decision to sell. If the period of time between the dates of the decision to sell and of the sale is short, there may be no difference in value between the two dates and indeed in many (if not most cases) this may be readily assumed. But where there is a period of delay, the difference in date could prove significant. The mortgagee is not entitled to act in a way which unfairly prejudices the mortgagor by selling hastily at a knock-down price sufficient to pay off his debt: Palk –v- Mortgage Services Funding Plc[1993] Ch 330 at 337-8 per Nicholls V-C. He must take proper care whether by fairly and properly exposing the property to the market or otherwise to obtain the best price reasonably obtainable at the date of sale. The remedy for breach of this equitable duty is not common law damages, but an order that the mortgagee account to the mortgagor and all others interested in the equity of redemption, not just for what he actually received, but for what he should have received: see Standard Chartered Bank Limited –v- Walkers[1982] 1 WLR 1410 at 1416B.”