Jeremy Mark Gordeno v Irwin Mitchell LLP

Richard Farnhill (sitting as a Deputy High Court Judge of the Chancery Division):

1. Mr Gordeno owned a property, called Redlands, near Basingstoke in Hampshire (the Property ). The Property can be divided into three elements: the House was a large, eight bedroom Edwardian house in substantial gardens that Mr Gordeno extensively modernised when it was first acquired in the name of his wife as a family home; the Garden is a further area of gardens to the north of the House; the Pasture is an area of open grazing land to the south of the House.

2. On 22 September 2016 Mr Gordeno sold the Property to Glo Homes Ltd ( Glo ), a special purpose vehicle being used to develop housing. The purchase price was comprised of an initial sum of £2 million; an overage on the Garden (the Garden Overage ) of around £1.5 million payable if planning permission was granted to build housing there; and an overage of around £11.5 million on the Pasture (the Pasture Overage ) if planning permission for housing were granted over the whole area. I say “around” because in the case of each overage the precise amount was to depend on the number of units for which planning permission was ultimately granted. He was advised on the sale by Mr Acheson of Irwin Mitchell LLP.

3. Mr Acheson advised Mr Gordeno that the Garden Overage would potentially be unenforceable in the event that Glo became insolvent, an event that came to pass on 4 June 2018 when Glo was placed into administration. However, he was further advised that the Pasture Overage would survive such an insolvency. That advice was wrong and Irwin Mitchell admit that they breached their duty of care and skill in giving it. They deny that the breach has caused Mr Gordeno any loss, alternatively they deny that it has caused him the loss he now seeks to recover. Issues for determination

4. The statements of case had gone through multiple iterations, as sometimes happens in fact heavy disputes, but shortly before trial the parties very helpfully agreed a list of issues for determination. In one respect, which I will come to address, it seemed to me that the pleaded position was slightly wider than the agreed issue might suggest. In the circumstances, I have relied on the statements of case in addressing that issue.

5. The agreed issues were based on the six questions posed by the Supreme Court in Manchester BS v Grant Thornton UK LLP [2021] UKSC 20 at [6]. However, three of those questions are not in issue on the facts of this case. It is accepted that the harm is actionable; Irwin Mitchell concedes that it breached its duty; and there is no issue of remoteness.

6. That leaves the following matters to be resolved: Factual causation i) Would Mr Gordeno have proceeded with the sale to Glo if the Defendant had not misadvised him about the security of the Pasture Overage as admitted? Scope of duty and measure of loss ii) What losses fall within the scope of, and have a sufficient nexus to, the duty that the Defendant breached? iii) How should that loss be quantified? iv) What was the value of the property at the date of its sale? Mitigation v) Was Mr Gordeno under any duty to mitigate his loss by attempting to enforce the payment obligations of the assignee and guarantors under an assignment of the Garden Overage and Pasture Overage made on 14 June 2019 (the Assignment )? Consequential losses vi) Did Mr Gordeno incur costs liabilities to Vardags (his lawyers) and Hope (Glo’s lenders who were seeking possession of the Property) in defending proceedings for declaratory relief as to the enforceability of the Pasture Overage in a reasonable attempt to mitigate the loss allegedly caused by the Defendant? vii) If so, what is the extent of Mr Gordeno’s liability in this regard? Quantum viii) At the time of the sale, what was the market value of the Property as between a willing buyer and a willing seller, without any provisions for the payment of overage, such value being the sum of the values of each of the House, the Garden and the Pasture? ix) Is Irwin Mitchell entitled to rely on the £3 million limitation of liability? Handing down

7. As is typical, a draft of this judgment was sent to the parties to allow them to suggest any corrections that they thought needed to be made and to prepare to address any consequential matters. Both parties suggested corrections, many of which I accepted. One of those proposed corrections prompted further emails from both parties. For whatever reason, I did not receive those emails in finalising my judgment and so did not understand the proposed correction to be controversial.

8. My judgment was handed down remotely and upon handing down the parties appreciated that I had not seen the further exchange and alerted me to it. I arranged for the judgment to be recalled so as to permit the parties to address the issue that they had raised in correspondence. By that stage, however, the National Archive had automatically released the judgment and so, I understand, third parties had become aware of it.

9. As a consequence of those events it is important to be clear on two points at the outset. First, this is my judgment in this matter. Any earlier version has been superseded by this judgment, and to the extent that the two differ this is the version to be relied on.

10. Secondly, the error did not come about through the fault of either party. Both the parties and their legal teams observed the terms of the embargo. I am grateful to them for the way in which they handled matters. The witnesses

11. Mr Gordeno worked in the nightclub business, principally as an owner, operator or consultant to clubs in Soho. As a result of the losses he has suffered over recent years he has returned to that business but at the time of the events in question he had not been working, in that or any other capacity, for some time.

12. It is relevant to note, for the purposes of this judgment, that Mr Gordeno’s father was and his brother is successful in the entertainment industry; his father was an actor, singer and choreographer, his brother is a musician. His mother has run her own businesses. On a number of occasions Mr Gordeno’s family have been willing to provide him with money, either to pay off other debts or to set him up with capital assets. The acquisition of the Property was such an instance; it was part funded by Mr Gordeno’s mother.

13. It would, I think, be fair to describe Mr Gordeno very much as a big picture person. In giving evidence he had a strong tendency to speak in general terms: precise dates and the sequence of events were less important to him than the broad thrust or gist of what he now recalls. That can be an issue for any witness in giving live evidence, but in Mr Gordeno’s case it went significantly further than that. His first witness statement had to be materially corrected, indeed in significant aspects it had to be rewritten, in a second witness statement. His evidence in these proceedings cannot be reconciled with evidence, including affidavit evidence, given in other proceedings.

14. Mr Carpenter KC put it repeatedly to Mr Gordeno that some version of his evidence was a lie. I reject that without hesitation. I believe that Mr Gordeno was genuinely seeking to assist the court and genuinely giving his best recollection of events. The difficulty is that I still did not believe it. As I have just observed, time and again it was impossible to reconcile what he was saying before me with either his earlier evidence in these or other proceedings or the contemporaneous documents. Even while giving his evidence his version of events would shift back and forth.

15. The Gestmin v Credit Suisse line of cases is now so well-rehearsed it does not, I think, need to be set out in great detail, but those factors that go to influence memory were present here in the clearest terms. Mr Gordeno was poorly advised by Mr Acheson and Irwin Mitchell. The transaction that he entered into following that advice has cost him a very great deal, both financially and emotionally. Their error concerned precisely the event that came to pass. As he says in his witness statement, these proceedings represent a way, probably the only way, for him to recover some element of what he has lost.

16. One adds to that the fact that the test for causation in a case such as this is, principally, a subjective one. The issue with such a test was best summarised by Kirby J in the High Court of Australia in Chappel v Hart [1998] HCA 55 at paragraph 93(7): The subjective criterion involves the danger of the "malleability of the recollection" even of an upright witness. Once a disaster has occurred, it would be rare, at least where litigation has commenced, that a patient would not be persuaded, in his or her own mind, that a failure to warn had significant consequences for undertaking the medical procedure at all (where it was elective) or for postponing it and getting a more experienced surgeon (as in this case).

17. That decision is one of medical rather than professional negligence, but the parties agree that the test here is equally a subjective one, and the risks are the same. This transaction has been a disaster for Mr Gordeno – it ultimately led to his bankruptcy. That hindsight in my view heavily, but I accept subconsciously, affected his evidence.

18. One adds to that the fact that many of the events are now 10 years in the past and when they were happening he was not, in my view, at all focussed on the detail. He relied on others for that. While I again accept that this was subconscious, much of his evidence, including on critical points, was reconstruction rather than recollection.

19. Finally, in assessing but for causation the exercise that the witness must undertake can verge on the metaphysical. He (in this case) is asked to speculate on the one thing that would have happened in an alternate reality. Even leaving aside the psychological factors identified by Leggatt J and Kirby J, that is a potentially challenging exercise. There are myriad alternate realities, and the witness is called upon, effectively, to rank them in terms of probability and declare the one that comes second (that is, after the actual reality). It was obvious, from his evidence, that at times the exercise made little sense to Mr Gordeno.

20. The result is, through not fault of his, that Mr Gordeno’s evidence was weak. He does not have a clear recollection of the sequence of events or of what he knew or thought at particular points in time. His recollection has in many places been submerged, subconsciously and honestly, by his case. The case he must answer was clearly put by Mr Carpenter, but at times it clearly made no sense to Mr Gordeno.

21. That is not to say that his evidence was wholly unreliable. Mr Gordeno is an astute businessman and has a good appreciation of risk in that context. In assessing the different options open to him for the sale of the Property I think he was alive to the upsides and downsides associated with each, and his evidence in terms of those risk factors was stronger. When he came to view them through the prism of his case – when the consequences of his evidence were made clear to him – he backed away from that evidence, but it seemed to me that what he said on risk was a much truer reflection of what he thought at the time.

22. Mr Acheson was the partner at Irwin Mitchell who gave the negligent advice to the effect that the Pasture Overage rights could not be over-reached on an insolvency of Glo. He accepts that his advice was negligent and expressed his regret both about the advice and what has followed. I considered him, in this, to be wholly sincere. He was not in any way defensive and, specifically, did not in any way seek to shield himself from the consequences of his advice.

23. I found Mr Acheson to be a wholly truthful witness. He was honest, at times almost painfully so, in accepting where he had fallen short. He was equally honest in accepting where he had no or no clear recollection of events. Where he did have a recollection he was open in giving it; as I have noted, that was equally the case where it was not in Irwin Mitchell’s interests. I had no hesitation in accepting the entirety of his evidence.

24. Mr Shapiro was the claimant’s expert. He is a chartered surveyor and has had decades of experience in the residential and commercial property market. His experience is both practical and theoretical; he has lectured, spoken and written extensively in this field and has served as an independent expert appointed by the President of the Royal Institute Of Chartered Surveyors dealing with rent review, management, valuation and service charge disputes and as the Independent Expert to determine the price payable for freehold interests under section 33 of the Landlord and Tenant Act 1987 .

25. Mr Shapiro seemed to me to be of the art rather than science school of valuation: he is familiar with the rules, but uses them as a starting point rather than an end point. A good example of this was the issue of odour. The Pasture, in particular, is close to the Basingstoke Sewage and Waste Treatment Plant (the SWTP ), and that has presented issues for obtaining planning permission for residential development on it. Mr Shapiro repeatedly returned to the point that he would look critically at any conclusion against planning permission because on the map the Property is a logical infill between two other parcels of development land (Redlands and East of Basingstoke, which I will address below). In reaching that conclusion he rather brushed aside, I felt, the fact that the scientific evidence goes to show that those parcels of land are not affected by the smell of the SWTP, and to the extent that they are residential development is not permitted on them. Everything turned on the map: it just “made sense”.

26. He also approached things from the perspective of a risk-tolerant investor. He asked himself what someone with an appetite for risk who was looking for a potentially high return might do. There are reasons for approaching the valuation exercise in that way, and the RICS rules on such valuations (known as the Red Book ) do provide for how a property might be valued for a special purchaser. That was not the task here, however. The issue was market value, and the market would not value the Pasture as a speculative investment.

27. The effect of these two factors was that I was concerned that Mr Shapiro’s evidence was unduly affected by hindsight bias. He repeatedly made the point that, “ Hindsight has proved me right. ” Strictly, that is not correct: he made no valuation at the time that was vindicated by subsequent events that were unknown when the valuation was prepared. Rather, he has viewed the question of value through a lens that includes subsequent events. In assessing whether a valuation prepared at the time was reasonable, it seems to me that such a lens would typically only be appropriate if the later events were reasonably foreseeable at the time.

28. I was also concerned that Mr Shapiro was not consistent in his use of evidence. A striking example was the July 2017 Basingstoke and Deane Supplementary Planning Document (the Supplementary Document ). This was referred to by Mr Shapiro in his report in support of his conclusions. He recognised that the Supplementary Document did not exist at the time of the valuation in September 2016, but considered that its contents would “ most likely ” have been revealed to anyone who inquired of the local authority. When aspects of this were put to him that contradicted his conclusions he noted that it came later in time than the valuation and he had no way of knowing whether its contents were available at the time or not. The only apparent driver for his change of position was the realisation that elements of the Supplementary Document were unhelpful.

29. The result was that Mr Shapiro’s evidence was mixed. In some places he was strong, and I found his evidence of assistance. In others I felt he had allowed extraneous factors to distract him and found myself unable to accept what he was saying.

30. Ms Seal was the Defendant’s expert. She, too, has extensive experience in the field of residential and commercial property valuation. While it is not as extensive as that of Mr Shapiro, in all material respects – that is, how the Property would have been valued at the time – she was equally well qualified.

31. The key difference between the experts was that if Mr Shapiro saw valuation as more art than science, Ms Seal was much more focussed on the science and was cautious about relying too heavily on the art. She took a data driven approach, particularly in her use of a residual value model for the Garden. I appreciate, of course, that there is a risk of such models projecting a false air of objectivity. As with any economic model, the output turns on the inputs selected and the assumptions made. Provided there is transparency, they remain valuable. The macroeconomist John Kay made the point about models more broadly (“The Map is Not the Territory: Models, Scientists, and the State of Modern Macroeconomics” (2012) 24 Critical Review 87 at page 92): It is easy – too easy – to criticize this approach simply on the grounds of lack of realism. All science uses unrealistic simplifying assumptions. Physicists describe motion on frictionless plains, gravity in a world without air resistance – not because anyone believes that the world is frictionless and airless, but because it is too difficult to study everything at once. A simplifying model eliminates confounding factors and focuses on a particular issue of interest. To put such models to practical use, one must be willing to bring back the excluded factors.

32. That, in essence, is what I consider Ms Seal did. She tested the assumptions she used in her models and also tested the outputs by reference to her extensive experience.

33. Ms Seal’s evidence before me was very strong. She accepted that any hypothetical approach to determining value lacks some of the rigour of the market and I recognise that is inevitably so. However, her methodology was robust and reflected practices endorsed by the RICS. At the risk of over-quoting, the statistician George Box famously observed that all models are wrong but some are useful; Ms Seal’s were useful models. She was clear and concise in giving her answers; at no stage did she venture beyond her expertise or her remit in these proceedings. I found her evidence, both in terms of her approach and the way she explained it, to be highly persuasive.

34. Finally, in respect of the experts, I recognise that they both made mathematical or transpositional errors in their calculations. In each case the relevant expert accepted the error and the correction when it was pointed out. Obviously, it would have been preferable to avoid such errors in the first place. So far as I could establish they were ultimately not material, however. The Factual Position

35. The Property was acquired in the name of Mr Gordeno’s then wife in 2008. It was transferred to him in 2012 as part of their divorce settlement. At that time Mr Gordeno looked into opportunities to develop the Property. There was some interest in the Garden from Cooper Estates Strategic Land Ltd ( Coopers ), the developer who owned the land to the north of the Property, but Mr Gordeno was seeking to sell the whole Property. At around the same time he sought planning permission to convert some of the outbuildings into houses but that was not granted.

36. By late 2014 the local planning authority, Basingstoke & Deane Council, had proposed its new local plan (the Draft Local Plan ), setting out its planning strategy until 2029. In the case of maps, a picture is frequently worth significantly more than a thousand words. Given its importance to Mr Shapiro, it will also assist in illustrating the point that he was making.

37. The Garden is the roughly square box of land apparently carved out of the Redlands designated development area; the house is the square below the garden marked “Redlands” (but not the triangle of land to the west); the Pasture is the large block of land to the south and east of the House (but, again, not the triangle to the west).

38. In his witness statement Mr Gordeno said that he reviewed the Draft Local Plan at the time and concluded that the Garden was part of the development area. That recollection was plainly wrong. Looking at the map of the Redlands development area to the north of the Property it clearly excluded the Garden (along with the remainder of the Property). It is also inconsistent with what later happened, when Mr Gordeno sought the inclusion of the whole Property, including the Garden, in the Redlands development area.

39. I also note that the East of Basingstoke development area to the west of the Property was subject to the following condition: k) Creation of a substantial green buffer from the outset of the development, creating a strong and defensible boundary between the site and the open countryside;

40. Again, looking at the map of that area the open countryside appears to include at least the Pasture.

41. Finally, in connection with the local plan, both the Redlands and East of Basingstoke development areas had a condition relating to the SWTP to the south of the Property. It suffices to quote the language of the Redlands condition; the two are substantially identical: In light of the nearby incinerator and sewage treatment works ensure acceptable noise and odour standards can be met within homes and amenity areas, through the avoidance of noise sensitive areas and the preparation of comprehensive noise and odour studies (in consultation with the utility provider) which inform layout decisions on this and the adjoining East of Basingstoke site;

42. The SWTP can clearly be seen on the plan above. As the condition notes, there are in fact two facilities on the same site. The incinerator is the large building at the western edge of the SWTP. It was principally a concern due to noise. The remainder of the site is the sewage treatment area; the issue there was odour. Given its closer proximity to the sewage treatment area of the SWTP that would, obviously, be an even greater concern for the Property and especially for the Pasture.

43. In November 2014 Mr Gordeno submitted a new application to redevelop the outbuildings; that was withdrawn soon after, however, in January 2015. Mr Gordeno’s evidence here was very unclear, but the documentary evidence shows that it was, at least in part, due to the costs associated with pursuing such an application at that time.

44. There is also a suggestion in Mr Gordeno’s evidence that in 2014 he received an offer from a Mr Raj of £2.15 million for the Property. Again, his evidence on this was vague. His recollection was that he received the offer in June or some time after June, and he recognised that it must have been before he submitted his planning application in respect of the outbuildings in November 2014. There is no documentary evidence going directly to this. Carsons, the estate agent through whom the offer is said to have been made, is no longer in business, and Mr Gordeno has (quite understandably) retained almost no emails.

45. I accept that Mr Raj expressed an interest in the Property and, on balance, I also accept that he made an offer to purchase it. Mr Gordeno was clear in giving his evidence, and had a particularly clear recollection of Mr Raj.

46. I do not accept that it was at or even close to £2.15 million. In August 2014 Mr Gordeno had the Property listed with Hamptons at £1.6 million. There is no credible reason why he would do that if he had received an offer at over £2 million. That could be explained by the offer coming after the Hamptons listing, but then one would expect Hamptons to be told of this and there is no evidence that they were. In re-examination Mr Gordeno suggested that the discrepancy might be explained by a change in his personal position that meant he was looking to sell quickly. In giving that evidence he was very obviously confusing events with the position in 2015, when he received a further offer that I will go on to address. More to the point, it was equally obviously not right. The alleged Raj offer was almost contemporaneous with the Hamptons listing. Nothing had changed. It seems to me that any offer would have been in the region of the marketing figure from Hamptons, viz. £1.6 million.

47. Mr Gordeno accepted that he did not take the offer seriously or in any way pursue it. Instead, he looked at developing some of the outbuildings near the House. The position soon shifted. The change in circumstances that I have referred to above involved difficulties with access to his children. Mr Gordeno was asked about this in re-examination, and it seemed from that that those difficulties were happening around the time of a later offer in May 2015.

48. Mr Gordeno’s evidence around the May 2015 offer again served to highlight the weakness in his recollection of details. His original position in his first witness statement was that he was simply testing the market at that stage and had no real interest in selling and that the only thing he was marketing was the House, not the Garden or the Pasture. He asserted that the asking price was £1,800,000 and he received an offer of £2,150,000. All of that was wrong. The whole Property was marketed with an asking price of £1,600,000. The driver was access to his children, not a desire to test the market, and his testing the market hypothesis was further undermined by the fact that in May 2015 Mr Gordeno accepted an offer of £1,525,000. These were fundamental errors in Mr Gordeno’s version of events. To his credit, he accepted and corrected all of them, but they illustrate the concerns I had with his recollection.

49. The buyer needed to sell their own property and proved unable to do so, meaning the sale stalled and ultimately collapsed. That was not necessarily a bad thing for Mr Gordeno, at least financially. To understand why one must step outside the strict chronology.

50. In September 2015 Mr Gordeno applied to have the Property designated for development under the Draft Local Plan. In January 2016 the local authority did so designate the Garden. It rejected the House and the Pasture due to their proximity to the SWTP. The documentary evidence on this is surprisingly thin, but a later memo considering a planning application in respect of the House made in 2018 referenced a planning inspection carried out in 2016 in connection with the Draft Local Plan. The memo recorded the inspector’s conclusion: The majority of the southern site [the House and the Pasture], however, extends to within the odour exposure levels that are likely to occur around the [SWTP] as defined in the Odour Assessment Report for the East Basingstoke site. I therefore have concerns whether acceptable odour standards for future residents could be achieved on the majority of the southern site. Until such time as improvements to the [SWTP] significantly reduce the extent of these contours, the southern site should not be included in the Plan for housing purposes.

51. The memo also recorded that a later report prepared by GF Environmental Ltd in December 2016 (the GFE Report ) stated that odour levels were acceptable for residential use. It is important to be clear on what that document was; it had been prepared for Glo as part of its attempts to obtain planning permission for the Property. While I am cautious about focussing on events much after the sale of the Property to Glo, for reasons I will come to address, I think it is fair to note that the GFE Report did not seem to persuade Basingstoke & Deane Council. Specifically, in its 2023 review it seemed to endorse the inspector’s original findings: “ in relation to this site his concern appears to be fundamental and suggests that the principle of development for housing is not acceptable. ” There is nothing to suggest that its position had ever changed in the interim.

52. One of the issues I must determine is what Mr Gordeno would have done had he received the correct advice, and that, in part, turns on his perception of and appetite for risk. The designation of the Garden as development land seems to me to have been relevant to his risk perception.

53. As in many aspects of life, there were multiple risks relevant to Mr Gordeno’s situation and it is important to be clear both what the risks here were and how they inter-relate. In respect of the Garden Overage and the Pasture Overage there was both development risk (that planning permission would not be granted) and credit risk (that Glo would not pay the relevant overage). The breach of duty alleged in this claim, and admitted by Irwin Mitchell, goes to advice that bears directly on the credit risk. I will come to the scope of that duty, which is contested, but Mr Gordeno does not contend that Irwin Mitchell was obliged to advise on the development risk.

54. Development risk is still relevant to the analysis, however because it goes to value. If the likelihood of development was small, the value of the relevant overage would be less; if it is high, it is increased. While I am sure Mr Gordeno did not explain his analysis of risk in such formulaic terms, it was clear from his evidence that development risk was central to his thinking: Q. But it is a lot harder to get planning, isn’t it, on unallocated land? A. I’m not a developer but I think it makes – when the land next door was allocated and they came to me in 2012 they said it is absolutely going to happen, these were Coopers, next door, and sure enough it did. So once it is allocated it is a sure bet. But I mean, before it is allocated, yes of course it is part – Q. All right. But once it is allocated it is a sure bet? A. I would say so, yes.

55. Soon after he was referred to an email from Mr Acheson to him on 9 August 2016 regarding the likely timeframe for planning permission being granted for a development on the Garden. Mr Acheson explained to Mr Gordeno in that email that Mr Coppen had told him that planning should be granted by the end of that year. Q. And so there was a question of timing and Mr Coppen is likely to have told you, as he told Mr Acheson, that planning was going to be got on the Garden quickly, I would suggest. A. Well, I mean, I think on the Garden – I think, yes, it was allocated (inaudible), the plans were being done, I suppose it was a foregone conclusion.

56. Mr Gordeno went on in his evidence before me to explain that he was at the time heavily focussed on his overage rights to the Pasture and the fact that they were protected in the event of Glo’s insolvency. Put another way, his evidence was that he was focussed on credit risk and how the Pasture Overage could be protected against it. That, of course, is his case. I do not believe that was his thinking at the time, however. There is no real documentary evidence from that period but in July 2017 there was an exchange between Mr Gordeno and Mr Acheson regarding a proposed change to the structure of the deal. Glo was seeking a longer period in which to pay the Garden Overage following the grant of planning permission. Mr Gordeno was resistant: “ Once planning is granted founders will be in abundance after all. ” The reference to founders should obviously be to funders. Equally obviously, by 2017 Mr Gordeno considered that the grant of planning permission, which he regarded in 2016 as a “ foregone conclusion ”, would mean that refinancing would be straightforward for Glo and there was no reason why he should have to wait to be paid. It was put to Mr Gordeno that he would have had the same view of the funding landscape in 2016: Q. Well, I’m just suggesting that you would have had the same belief a year or so earlier? A. I don’t know how to answer that. Q. Right. Well, it would be a logical thought to have, wouldn’t it; would you accept that? A. Yes, in hindsight. Q. Well, not with hindsight. If asking yourself what are the risks here and one of them is that GLO needs to repay the loan or refinance it after nine months, you would have thought: well, as long as they get planning, everything is going to be fine. Because once they have got planning, the value goes up, everyone will want to lend to them, it will all be fine? A. I thought everything would be fine anyway, based on the overage agreement, but I was commenting here on that. So yes, I suppose you are right, obviously I would want them to get planning as soon as possible.

57. In my view what Mr Gordeno said in 2017 equally reflected his thinking in 2016: he thought that everything would be fine. Put another way, had he turned his mind to the issue of the possible insolvency of a purchaser of the Property he would have considered the risk to be very low. He believed the designation of the Garden as development land was a critical step. It made planning permission a “ foregone conclusion ”, “ a sure bet ”. He had his reasons for such confidence, based on his perception of what had happened for Coopers on the neighbouring land. Nor was it a long-term proposition: the timescale was months, not years. Once permission was granted, funding the development or refinancing the loans would be straightforward – funders would be “ in abundance ”. That perception informed his assessment of risk of the various options that became open to him, and would equally have informed his risk perception had he been given the correct advice.

58. Returning to the chronological sequence of events, at some point after the sale that had been agreed in mid-2015 collapsed Mr Gordeno had engaged a property developer friend, Mr Coppen, to see if he could interest developers in the Property. He orally agreed to pay Mr Coppen a commission if he was successful.

59. Mr Gordeno also received at least tentative interest direct from developers. Of these, Reside Ltd ( Reside ) proceeded to the stage of heads of terms. Their proposal was for the grant, by Mr Gordeno, of an option to purchase part of the Property. The Heads of Terms themselves are not clear which parts of the Property were the subject of the option, and it seems that the plan annexed to them that would have resolved the matter has been lost. Mr Gordeno’s recollection was that he was entitled to retain the House and its immediate grounds, meaning the option was over the Garden and the Pasture. He was not challenged on that and it makes sense.

60. In return for the option, Mr Gordeno was to receive upfront payments of £10,000 on exchange, £10,000 once a specified part of the land (which again is not clear from the heads of terms document that is in evidence) was approved for development and £150,000 once the whole site was approved for development. The option price payable was 85% of market value of the relevant part of the Property at the time and the option period was an initial five years with the right to extend for a further five years. This deal was therefore very different from the Glo deal. Mr Gordeno would have given up less, in that he could have kept the House and if Reside did not obtain planning he could keep the Garden and the Pasture, but also would have received less by way of payment, and very significantly less upfront.

61. At around this time Reside lobbied, unsuccessfully, for the House and the Pasture to be designated for development in the local plan.

62. Mr Gordeno did not pursue the Reside proposal. Mr Coppen had by this time introduced Mr Gordeno to Glo and from March 2016 that seems to have been his focus. At around this time Coopers, who owned the Redlands development area that bordered the Garden, was applying for planning permission for 150 new homes on that land. From April 2016 Mr Gordeno and Glo were in discussions with the local authority about a development of 16 houses on the Garden.

63. Negotiations over sale terms with Glo continued throughout this period. Initially Mr Gordeno instructed a local firm, Horizon Law ( Horizon ) to act for him. By early July he had decided that the complexity of the transaction necessitated a more specialist firm and instructed Irwin Mitchell, who had previously acted for him on a dispute. Mr Acheson was the partner at Irwin Mitchell with carriage of the transaction.

64. Irwin Mitchell’s retainer letter dated 11 July 2016 described the work it was to undertake as including “ Reviewing and amending the existing standard documents. ” and “ Dealing with completion and with receipt of future payments due under the contract. ” There was a limitation of liability in respect of the transaction of £3 million in the aggregate.

65. Glo was, as I have noted, a special purpose vehicle with no significant assets. Its purchase of the Property was to be funded by a short-term bridging loan from Lendy Ltd ( Lendy ). As part of that process Lendy obtained a valuation of the Property from Matthews & Goodman (the M&G Report ) on 5 August 2016. M&G gave two valuations for the Property: i) The market value for the Property was £3.875 million, comprised of £1.625 million for the Garden and £2.25 million for the House and Pasture combined. ii) On a reduced marketing period for the Property of 90 days, the market value was £3.15 million for the Property, comprised of £1.35 million for the Garden and £1.8 million for the balance.

66. M&G commented that the reduced marketing period of 90 days was “ an unrealistic period to market a property of this nature ”. It anticipated that a marketing period of six to 12 months would be required in the then market conditions.

67. It is worth highlighting this point. It was a frequent part of Mr Schmitz’s submissions that Mr Gordeno could simply have sold at £3.875 million with no risk. That goes beyond the evidence. What the M&G Report says is that Mr Gordeno’s best case, on a marketing period of 90 days or less, was £3.15 million, 10% below the amount being offered by Glo in respect of the advance payment and the Garden Overage. It was stressed that such a marketing period was, however, “ unrealistic ”. To the extent that Mr Gordeno’s case is premised on there having been alternative buyers of the Property for £3.875 million in September 2016, that premise is unsupported by any evidence and I reject it.

68. The M&G Report recorded that M&G had been told, by Glo, of the pre-application discussions for up to 16 units on the Garden. M&G was also obviously aware of the Coopers application to build 150 units on their part of the Redlands development area, since the M&G report recorded that it could be assumed that planning permission would be granted on the Garden “ at least in line with the density of the adjoining land ”.

69. The M&G Report further noted as a strength the “ Potential for inclusion of remaining land [that is, the House and the Pasture] within the Basingstoke strategic housing land allocation. ” However, it expressly stated that M&G attributed no “hope” value (reflecting the potential for future development) to the Pasture.

70. By early August 2016 the key commercial terms of the sale had been agreed. These differed in significant ways from what had originally been discussed. It is easiest to see the key terms side by side. Original proposal Revised proposal Upfront payment of £2.5 million Upfront payment of £2 million Garden Overage of £1 million +/- £100,000 for each unit above/below 18 Garden Overage of £1.5 million +/- £75,000 for each unit above/below 18 Pasture Overage of £11.5 million +/- £100,000 for each unit above/below 115 Pasture Overage of £11.5 million +/- £75,000 for each unit above/below 115

71. Certain points are worth highlighting. First, this reflects the point that I have made about the contrast with the Reside deal – under that deal Mr Gordeno would receive thousands of pounds on execution; under even the revised Glo deal he was to receive millions. For reasons I will address shortly regarding Mr Gordeno’s lifestyle, that was significant.

72. Secondly, the revised proposal meant that Mr Gordeno was exposed to £500,000 of additional risk if the Garden Overage for any reason could not be delivered. Both types of risk that I have noted above were relevant to that increased exposure: if planning permission were refused or if Glo could not pay then Mr Gordeno would be £500,000 worse off under the revised terms. He was subsequently advised on credit risk by Irwin Mitchell, who told him that the Garden Overage would not survive a Glo insolvency; that risk, in itself, did not deter him from accepting the revised deal.

73. Again this goes to the question of the counterfactual: what would Mr Gordeno have done if he had been given the right advice? Mr Gordeno’s evidence was that he was not concerned about the loss of £1 million or £1.5 million on the Garden Overage but would never have risked the Pasture Overage. Throughout the course of his evidence he referred to the latter as his “pension”.

74. That evidence, it seems to me, wholly ignores what Mr Gordeno must have known about development risk at the time and is implausible. If Mr Gordeno had been properly advised he would have known that by entering the Glo deal he was putting at risk the Garden Overage and the Pasture Overage: if Glo entered insolvency and the Property was sold, he would lose the value of those rights. But he must have appreciated that the value of those rights was at risk anyway, because if planning permission were refused he would also lose the right to overage payments.

75. In the case of the Garden Overage, the development risk, at least in Mr Gordeno’s mind, was very slight. Mr Gordeno’s evidence was, as I have noted, that once the Garden was designated for development he regarded the grant of planning permission as a “ foregone conclusion ”, a “ sure bet ”. He was not asked what that meant in numerical terms, but a fair understanding of his evidence was that it was close to 100%. Moreover, the evidence suggests he was entirely reasonable in holding that view. M&G had valued the Garden on the basis that it had potential development value and so, too, did both experts. While M&G had recorded reservations about the precise proposal put forward, that was about the detail of the scheme; M&G were plainly operating with the understanding that planning for a development of around 16 units was likely to be forthcoming.

76. It is accepted by Mr Gordeno that he knew of the credit risk point in respect of the Garden Overage. That meant that he viewed the insolvency of Glo as representing effectively a loss of £1.5 million and he was prepared to take that risk.

77. By contrast, while the potential value of the Pasture Overage was high – potentially £11.5 million or more if the whole area could be developed – the prospects of such development in 2015 were poor, indeed very poor, and Mr Gordeno knew that. The land had been expressly rejected for residential development in a plan that ran through to 2029. The reason was odour from the nearby SWTP. At the risk of stating the obvious, the infrastructure for such a plant (most notably the plant itself and the sewers connecting it to the area it serves) was fixed, such that the SWTP was not going anywhere and Mr Gordeno could not conceivably have thought otherwise.

78. Nor is this simply an objective analysis or one conducted with the benefit of hindsight. The permanence of the SWTP is, as I have said, obvious. Mr Gordeno’s evidence in his witness statement was that he “ kept a close eye on planning and developments in the area ”. He must therefore have appreciated that the odour issue was a problem for development on the Pasture. While he did not recall it when I asked him, he must also have appreciated that there was a stated desire in the Local Plan to maintain a “ strong and defensible boundary ” between the East of Basingstoke development area and the open countryside, which can only have meant the land to the east of the development area. That included the Pasture.

79. As Mr Gordeno noted, he was aware that the local council wanted more houses built in the area. He took that to mean that the prospects for development of the Pasture were good. With respect, I strongly doubt that anyone ever told him anything to encourage such a belief. I entirely accept that there was a desire to build more houses in the area, but that does not mean they were to be built on the Pasture. Again, it is helpful to refer to one of the plans that was in evidence.

80. This plan was taken from the Supplementary Document, which as I have noted postdates events. As I have also noted it is reasonable to conclude, and I do conclude, that it represented thinking at the time that these matters were being discussed with Mr Gordeno.

81. What is significant for current purposes is the purple dashed line showing the 1.5 OUE/m 3 odour exposure. That is the level above which odour sensitive uses were considered not to be viable. One sees that even in the East of Basingstoke development area: housing and odour sensitive uses such as schools were not permitted in that part of the site closest to the SWTP. That land was to be kept in its then current state, that is open fields. One sees that the same line runs through the Pasture such that well over half of it is prima facie not suitable for odour sensitive uses, most importantly (for current purposes) housing.

82. As I have noted, all of this would have been known at the time Mr Gordeno was having his discussions with the various planning officers and departments. I consider that these issues would have been communicated to him, at least in general terms. In the circumstances, his evidence that he thought the Pasture Overage would result in him receiving payment in five to eight years, based solely on the time it would take Coopers to develop their land, was simply not credible.

83. On the contrary, Mr Gordeno was well capable of understanding, and in my view did understand, that there was significant risk that the Pasture would never be granted permission for development. His evidence was that the overage was a long-term arrangement, running for 30 years. Obviously, that mitigated the risk somewhat, but it was still the case that the Pasture overage was speculative at best. When most people talk about a pension they are thinking of a low risk or risk-free investment, with risk often being mitigated through diversification of assets; Mr Gordeno was not. This was a single asset that carried with it very significant potential rewards. The experts agreed that the value of the Pasture as agricultural land was £140,000; the Pasture Overage could have been worth as much as £11.5 million. That is not a like for like comparison, of course, because the Pasture Overage would only be paid in the future, possibly quite some time into the future, and so the headline figure would need to be discounted to reflect the delayed receipt. Even so, it was a significant pay-off. But the risks were also higher, and I believe that Mr Gordeno knew that and was prepared to take the development risk, anyway.

84. This necessarily means that I reject Mr Gordeno’s evidence that he regarded planning permission on the Pasture to be just as likely as planning permission on the Garden. I have no hesitation in doing so. That evidence was, it seemed to me, heavily influenced by subsequent events, notably the acquisition of the whole Property by Bellway, site clearance works that Bellway is said by Mr Gordeno to have undertaken on the Pasture and its application for planning permission. Very obviously, that represents an impermissible use of hindsight in considering what Mr Gordeno would have thought at the time.

85. Even if I were wrong on that, if one is to use hindsight one should do so with open eyes: the trigger for the overage was planning permission, and Bellway’s application for permission has not been determined. It is not my role to determine it, and nothing I say should be taken as expressing a view on it either way, but it is important to note that the application is opposed by Basingstoke and Deane Council and the Environment Agency and Thames Water (both of which are statutory consultees). Thames Water opposes residential development in part because it considers it inconsistent with its own application to expand the SWTP. As I have noted, the use of hindsight is impermissible in any event, but in the case of Mr Gordeno’s evidence it is selective hindsight, ignoring all of these factors, which is obviously wrong.

86. Keeping all that in mind, Mr Gordeno’s evidence on his perception of risk at the time was simply not credible. He repeatedly said that he would not accept any risk when it came to the Pasture Overage but that is obviously wrong: risk was baked into its very structure. This was an inherently speculative investment, regardless of credit risk, and its value to Mr Gordeno and his willingness to gamble on it reflected its speculative quality.

87. What I have said thus far relates principally to development risk. Credit risk and development risk are different in nature, as I have addressed. They would also have potentially different outcomes for Mr Gordeno. If Mr Gordeno had taken the Reside option agreement, for example, he would still have faced development risk but in the event of a Reside insolvency would have retained the Property. I will deal with credit risk when I consider the counter-factual of what I believe Mr Gordeno would have done if correctly advised. What I draw from this is simply that his overall risk appetite at the time must have been greater than he now believes to have been the case.

88. Finally, on risk, it is important to address an argument advanced by Mr Schmitz. He cautioned me against viewing the Garden Overage as being the reward for the taking of a risk. Mr Gordeno was not securing something of value in return for a gamble on the Pasture Overage. Rather, Mr Schmitz submitted, the Garden Overage was a risk in itself. The M&G valuation suggested that the Property was worth £3.875 million, suggesting that Mr Gordeno could have received more for an open market sale without taking any risk on the Garden.

89. While I see that the Garden Overage was a taking of risk in and of itself (indeed, two risks as I have addressed) there was an upside to Mr Gordeno in taking that risk. As I have noted, M&G considered that a sale at £3.875 million could take up to a year to secure, and Mr Gordeno wanted money sooner than that; only Glo were offering quicker payment. He could have sought a quick sale on the open market but the M&G Report made clear that he would likely achieve a significantly lower price, in the region of £3.15 million, 10% less than Glo was offering.

90. In any event, I do accept that the Pasture Overage was not the price Mr Gordeno had to pay to secure some valuable right in the form of the Garden Overage. That does not change the analysis. The point is that the Pasture Overage was by its nature quite high risk but if successful carried a potentially high reward; Mr Gordeno was aware of both those things and was prepared to take that risk.

91. Returning, again, to the chronology, the financing was progressing in parallel. On 26 August 2016 Mr Acheson sent an email to Mr Gordeno setting out Lendy’s requirements: i) Lendy required both a first legal charge as security for its loan and that Mr Gordeno enter into a deed of priorities, subordinating his rights in relation to the Property to those of Lendy. ii) Lendy would not lend on terms requiring any future purchaser of the Property to accept the Garden Overage rights. Mr Acheson recorded that: “ If [Lendy] exercise their security because Glo Homes default on the loan, they are not prepared to require the buyer to take the first 1.5m overage liability on the grant of planning (they have no problem with doing so on the 11.5m liability). ” Lendy’s concern was the LTV: if a buyer were obliged to pay £1.5 million it would reduce its offer price accordingly and that would affect the LTV. iii) Mr Gordeno could secure the Garden Overage by way of a second ranking charge, but that would be vulnerable in two ways if Lendy were to enforce its security. If Lendy sold the Property after planning permission was granted, the buyer would take free of Mr Gordeno’s right to the Garden Overage and he would be entitled only to the balance of the sale proceeds after Glo’s liabilities to Lendy had been discharged. If such a sale happened before planning permission the position was worse; nothing would be payable to Mr Gordeno and he would lose the right to the Garden Overage.

92. Mr Acheson raised the issue of valuation: Is the property really worth 3.5m without planning? If so, why are you selling for 2m? If not, how much money will be left in the pot when the bank’s debt has been paid off. The only way I can see around this is for you to have reliance on the valuation report.

93. Mr Gordeno’s answer to that question in his witness statement was that: I was happy to take less upfront because of the prospect of a big pay day when planning for [the Pasture] eventually came through, which as it survived and was advised to be secure for 30 years, would not be affected by such events [an insolvency of Glo]. [Mr Acheson] knew this and advised me accordingly, even after Glo went into administration and right up until [the Property] went to auction.

94. It is not clear, from that passage, how Mr Acheson is said to have known the trade-off Mr Gordeno now says he was willing to make between a reduced payment upfront and the prospect of “ a big pay day ” in the future. Mr Gordeno did not identify any communication or discussion.

95. The point was put to Mr Gordeno in cross-examination: Q. You didn’t tell him that either the phone either; that is what I’m suggesting to you? A. I imagine I would, because he is asking the question or he is making a quite valid point there and I would have explained it to him.

96. What Mr Gordeno now imagines he would have done is not the same as a recollection of what he did do. It is a reconstruction of events.

97. Mr Acheson was clear that he did not recall any such discussion. He openly accepted that he could not positively deny that such a discussion happened; if there had been such a discussion, however, he did not recall it.

98. I believe that Mr Acheson did not recall such a conversation because it did not happen. As I have noted, he was a very reliable, very open witness and I had considerable confidence in his evidence. While it is notoriously difficult to recall something not happening, in my view any such conversation, had it happened, would have made a significant impression on Mr Acheson because it would considerably have expanded the scope of what Mr Gordeno was asking Irwin Mitchell to advise on compared to the retainer letter sent only six weeks earlier.

99. By contrast Mr Gordeno’s evidence, at its highest, represents an assumption of what Mr Acheson knew, not evidence of how he is said to have known it. If the Pasture Overage were the critical feature of this transaction, as Mr Gordeno now says, one would expect him to recall when and how he communicated that to Mr Acheson.

100. The surrounding circumstances that I have addressed above also suggest that there was no such communication. Mr Gordeno knew the Pasture Overage was speculative. He was accepting the Glo deal because he regarded the risk of non-payment of the Garden Overage as being very low: planning permission was a “ foregone conclusion ” and once that was secured, refinancing or further funding would be straightforward. The Garden Overage represented, in his mind, something very similar to a sale at £3.5 million. As the M&G valuation made clear, in the short term (meaning within six to 12 months) a sale at that level was the best deal he was likely to get. In such circumstances he would not have communicated to Mr Acheson that he would take less upfront in return for a larger payout, on the Pasture Overage, in due course because he did not view the transaction that way. Indeed, the opposite was true. He viewed the Garden Overage as a “ foregone conclusion ” and the Pasture Overage as having significant development risk.

101. The key advice was given by Mr Acheson in a letter dated 6 September 2016: On completion of the sale by the funder, the obligation to pay the [Garden Overage] of c£1.5 million will fall away and will not bind the new owner. However, the funder must ensure that the new owner covenants to comply with the obligation to pay the [Pasture Overage] payments (see below).

102. Irwin Mitchell admits that the advice was wrong and breached the duty of care and skill owed to Mr Gordeno. Under section 104(1) of the Law of Property Act 1925 a lender in possession can sell the security “ freed from all estates, interest, and rights to which the mortgage has priority ”. Lendy was not a party to any agreement requiring it to secure Mr Gordeno’s overage rights. On the contrary, there was a deed of priority to which Mr Gordeno and Lendy were parties granting Lendy’s interests priority over those of Mr Gordeno.

103. While I describe this letter as the key advice, because as a matter of law it was, this was another area of significant weakness in Mr Gordeno’s evidence. In his statement he explained: “ I did not know the exact amount GLO was borrowing until much later, although I was aware it was at least £2,000,000 to cover the Initial Price. ” Yet the 6 September letter states: “ The buyer is obtaining a loan of £2,334,500 and interest will accrue on this sum. ” Mr Gordeno had obviously revisited the letter in preparing his evidence, and he was right to do so on such a fundamental communication, but apparently had not paid attention to aspects of what it said that were relevant to his evidence.

104. Mr Gordeno further explained in his statement that: I did not fully understand Ben’s advice… The [Pasture] Overage would remain intact [if Lendy sold the Property] as it was transferable – meaning any new buyer would be required to covenant to comply with the overage agreement.

105. Mr Gordeno’s evidence was therefore that he did not follow some of the letter, but did understand the advice on the Pasture Overage. But if this was a key piece of advice, and was so central to his decision-making, it is in my view odd that he did not follow up on the aspects that were not clear, since they might have affected his decision.

106. As part of the sale Mr Gordeno was granted a three-year assured shorthold tenancy of the Property at an annual rent of £250 payable only if demanded. It could be determined early if Lendy exercised its power of sale, Mr Gordeno received the Garden Overage or Glo sold the Property following a refusal of planning permission. Completion of the sale took place on 22 September 2016.

107. On completion Glo paid £2 million to Irwin Mitchell for Mr Gordeno’s account. That is not what Mr Gordeno received. After various deductions he was paid £1,257,319.18. The difference was made up of: i) Payment of £417,924.20 to Real Estates Associates. This was a bridging loan that Mr Gordeno had taken out to consolidate a variety of debts, some quite pressing. There were two facilities, one at an interest rate of 16.8% and the other at 18% (with both attracting higher interest in the case of default and the 18% facility having a 1% arrangement fee). In an email to his brother in late 2015 Mr Gordeno had acknowledged: “ If I had a choice I wouldn’t even take the loan but they [his other debts] need paying now or I wouldn’t be paying such stupid interest for such a short period .” ii) Taray fees of £180,000. This was Mr Coppen’s commission for arranging the sale to Glo. iii) Kent Capital debt of £83,450. This was a loan originally of £75,000 taken out in April 2016 to allow Mr Gordeno to settle legal claims against him. It had a 2% arrangement fee and attracted interest at £50 per day, amounting to around 24% p.a.. iv) Jonathan Sachs’ fees of £31,237.62. These were Irwin Mitchell’s fees in connection with a dispute in which they acted for Mr Gordeno. v) Irwin Mitchell’s fees on the sale of the Property to Glo of £30,000. vi) Disbursements of £69.

108. Mr Gordeno had other debts, notably fees of over £7,000 due to Kingsley Napley LLP, who obtained a charging order against the Property. There were also sums due to South East Water, although as Mr Gordeno noted in his cross-examination those were significantly less than the amount initially demanded.

109. A central theme of Irwin Mitchell’s case on causation is that the wolves were at Mr Gordeno’s door: he had significant debts and no means, other than a sale to Glo, of paying them. Mr Gordeno’s tax returns and declarations to the Child Maintenance Service showed that he had not worked since at least 2015. His bank statements for 2016 showed he had an expensive lifestyle running at somewhere around £20-25,000 per month and had been living off increasingly expensive loans or the sale of capital assets, notably a property in Spain.

110. Mr Gordeno dismissed this argument. He said he was confident he could have borrowed more given that the Property had substantial equity in it. He also believed his mother would have lent him money had he asked.

111. I recognise that there was no evidence that Mr Gordeno ever sought funding from a third-party lender. Nor was there any evidence that his mother would have helped him. She certainly did assist him in the purchase of a property some years later, and as I have noted she had offered such assistance before, but there was also evidence to suggest that she did not have disposable assets available to her at this time. It seems to me that these evidential concerns miss the point, however.

112. The test for causation is subjective – what would Mr Gordeno have done had he been properly advised. It was Mr Gordeno’s perception of reality that would have influenced his thinking, rather than reality itself. Had he believed he had myriad financial options he would be more likely to walk away from the Glo deal. Pointing out that reality might well have caught up with him at some point thereafter is beside the point in the causation counterfactual, because it would not have done so at the time he made his decision and once that hypothetical decision is ascertained the counterfactual stops.

113. In my view Mr Gordeno did believe he could have raised the money from other sources. As I noted in the early part of this judgment, his family is wealthy and has supported him before. I think he would have concluded that they would do so again. He obviously had not investigated alternative funding options, but I think he did believe that the amount of equity in the Property would allow him to borrow even without a source of income. While he may have disliked the rates of interest he was paying, he was still prepared to accept them if he had to.

114. Thus far I am with Mr Gordeno. The analysis does not stop there, however. The question is not what Mr Gordeno thought he could have done, it is what he would have done.

115. Here, I found his evidence as to whether he would have borrowed from a third-party or borrowed from his mother to be significant. In his witness statement he explained: “… I could have raised the necessary funds to pay [Real Estates Associates] off by either taking out a mortgage – especially since [the Property] was valued at least £3,875,000 in August 2016, or as the last resort, borrowing funds from my mother, a high-net worth individual who has lent me money in the past. ” By contrast, in re-examination he explained: “ If I didn’t do the deal with Glo, then, yes, it was to be – I would – it would certainly have given me enough time to do that, but as I say I probably would have gone to my mother, because that is the easiest and quickest route and takes any pressure off, that’s for sure. ”

116. Obviously, those two answers are irreconcilable: Mr Gordeno’s mother was either the first port of call or the last resort, but not both. What seems to have been critical, in deciding which it was, was how easy he perceived the different alternatives to be.

117. One sees something similar in the Kent Capital loan. This was to allow Mr Gordeno to settle legal proceedings. He asserted, in his witness statement: “ The reason why I asked [Mr Coppen] to organise such a loan was for convenience, more than anything else. ” Mr Gordeno further asserted that he could have paid the settlement sum from his own funds. It became apparent on cross-examination that the position was significantly less clear cut than that; at the very least Mr Gordeno needed to borrow part of the settlement sum. What is notable, though, is not so much whether he needed to borrow, but why he did so from Kent Capital. It was easy – “ for convenience more than anything else ”. And he was prepared to pay an interest rate of 24% p.a. for that convenience.

118. Mr Gordeno made the point that the loan was short term and so the total interest payable was low. That was only the case, however, if he sold the Property, since that was the only way to repay Kent Capital. Glo’s offer was the only one on the table at that time. As I have noted, Mr Schmitz repeatedly highlighted that the M&G Report suggested the Property could be sold for £3.875 million, but that was on the basis of a marketing period of up to a year. A quicker sale was expected by M&G to realise 10% less than the Glo offer – £3.15 million. Nor does it detract from the point that Mr Gordeno was prepared to pay well above market rates of interest “ for convenience ”.

119. I equally believe that Mr Gordeno would have taken some degree of credit risk on the Pasture Overage “ for convenience ”. As I have noted already, the Pasture Overage was inherently risky, in terms of development risk. For the reasons I have given it is my view that Mr Gordeno believed that both development risk and credit risk for the Garden Overage were low: planning permission on the Garden was, in his mind, a near certainty, and once that was obtained it was, again in his view, also highly likely that refinancing the Lendy loan would be straightforward. In those circumstances, credit risk on the Pasture Overage was also low, because once Glo had planning permission on the Garden it had an asset of real substance and could refinance.

120. By contrast, other sources of finance were not easy. There is no evidence to suggest that he approached Real Estate Partners, or any other bridging lender, but as I have observed he considered the interest rates he was paying to be “ stupid ”, and in the case of Kent Capital only made sense to him in the short term. Locking himself into such rates for the medium-long term while he sold the Property would have been unattractive. Moreover, he was struggling to make repayments; the Real Estate Partners loan was in default and others might follow. There was no evidence to show how likely refinancing was, but it would inevitably have involved complications in such circumstances.

121. Mr Schmitz submitted that the wolves could easily have been driven from Mr Gordeno’s door by section 36 of the Administration of Justice Act 1970 , such that he would have had a reasonable time in which to repay any debts. There was some limited debate about how realistic this was as a route for Mr Gordeno, but the practicality of it seems to me not to be the issue. As I have noted, the question is subjective – what would Mr Gordeno have done? It is accepted by Mr Schmitz that Mr Gordeno was not advised about the 1970 Act . To be clear, no claim is made against Irwin Mitchell for not having so advised and I am not seeking to suggest they should have done so. The point is that he was not told about his right, if any, and I have no reason to think he knew about it from any other source. It could not, therefore, have affected his decision either way.

122. The evidence also suggests that borrowing from his family was, at this time, likely to be at best a fraught process. Both Mr Gordeno’s brother and his mother had complained in strong terms about his spending and his reliance on his mother. He recognised in his evidence that he and his brother were going through a “ turbulent time ” in their relationship at this point, and that his mother was looking to cash in investments at the time which was taking longer than she anticipated, such that she had to borrow from Mr Gordeno’s brother. All of this would inevitably have made it harder to borrow from either of them.

123. In the circumstances the Glo deal was not simply an easy option; it was the only easy option. That, in my view, would have given it considerable appeal to Mr Gordeno.

124. I pause here to note that from this point in the narrative events quickly cease to have any bearing on the issue of causation. As I have explained, both experts agreed that later planning documents could show what would have been revealed from discussions with the planning authority before the document itself was issued. I accept that will be the case; such documents do not suddenly emerge, fully formed, from the ether. Obviously, later documents are less likely to show the thinking at the time than are earlier ones. Certain of the events also go to other issues such as mitigation, but the narrative can proceed more quickly.

125. Following completion of the sale Glo made multiple planning applications to develop the House and the Garden, all of which failed. Possibly as a consequence, Glo failed to comply with its obligations to Lendy. It was, however, able to remortgage the Property with another lender, Hope Capital ( Hope ). Mr Gordeno granted a deed of priority to Hope on 24 July 2017 in terms materially identical to those granted to Lendy. Irwin Mitchell continued to act for Mr Gordeno but did not correct their earlier advice.

126. Glo also failed to comply with its obligations to Hope and on 4 June 2018 was placed into administration. At the time it owed Hope around £3.1 million. The administrators sought possession of the Property with a view to its sale. However, Mr Gordeno insisted both that he was entitled to remain there, pursuant to his tenancy, and was entitled to the preservation of his Pasture Overage rights.

127. This resulted in possession proceedings being brought in the County Court and an action for a declaration being brought in the High Court. Mr Gordeno contested both sets of proceedings.

128. As late as 29 January 2019 Irwin Mitchell was advising Mr Gordeno that any buyer from a mortgagee had to pay overage on the Pasture. However, on 11 February 2019 it apparently realised that the previous advice was wrong, or at least doubtful and informed Mr Gordeno: “ The effect of the structuring of the agreement, and the placing into administration of Glo Homes, means that it seems possible that the Administrators can overreach the second charge on sale. ”

129. Also in that letter Irwin Mitchell therefore advised Mr Gordeno that he needed to obtain independent legal advice. Mr Gordeno instructed Vardags. Irwin Mitchell’s initial position in these proceedings was that in light of this advice it was unreasonable for Mr Gordeno to incur any meaningful costs in continuing his defence of the administrators’ claims. In my view the clarity of the advice is relevant to that question. The advice given was qualified. Saying “ it seems possible that ” the administrators were right was certainly a significant concession of weakness from Irwin Mitchell, but it still fell somewhat short of a clear acceptance of the administrators’ position.

130. In the midst of those proceedings, on 14 June 2019, Mr Gordeno executed the Assignment, transferring his rights under the overage agreements to Taray Homes Ltd ( Taray Homes ). This was one of Mr Coppen’s corporate vehicles. Taray Homes was to pay £3 million by no later than 14 June 2020. The longstop date for payment was 12 months later. Taray Homes’ obligations were guaranteed by Taray Investments plc ( Taray Investments ) and Mr Coppen. For ease of reference I will refer to Taray Homes, Taray Investments and Mr Coppen collectively as “the Debtors ”, since although their capacities are different in principle, in practice they all became debtors in respect of the Assignment. On the same day, Mr Gordeno responded to the declaratory relief claim by filing a witness statement setting out the Assignment and averring that the court should dismiss the claim for declaratory relief.

131. On 5 July 2019 there was a hearing on the declaratory relief claim at which Mr Gordeno, despite having divested himself of his interests, was represented by leading counsel. HHJ Hodge ordered that Taray Homes be joined as a party and the claim was adjourned. On 12 July 2019 the declaration sought by Hope was made without contest by either Mr Gordeno or Taray Homes.

132. None of the Debtors made any payment under the Assignment by the payment date or, indeed, at all. Nor did Mr Gordeno seek payment. He explained during his cross-examination that he considered any request pointless because he was in regular communication with Mr Coppen at the time and knew that Mr Coppen and his companies were all on the verge of insolvency. That is not what the records say. Mr Coppen was not made bankrupt until 8 April 2022; Taray Homes had administrators appointed on 10 June 2022; and Taray Investments was wound up on 15 June 2022.

133. There was some debate about the true financial health of Mr Coppen’s companies, and I accept that a formal insolvency is the end of a process not the beginning. But I equally accept Irwin Mitchell’s case that Mr Gordeno had a window within which he could have sought and pursued payment. I will address whether his decision not to do so was reasonable when I deal with mitigation.

134. Mr Gordeno was unable to pay his legal costs and was declared bankrupt by the Kingston-upon-Thames County Court on 15 September 2020. Mr Gordeno noted in his witness statement that he was seeking treatment at the time for ill health he has suffered as a result of the stress that these matters have caused him and was unaware of the bankruptcy proceedings until served with the order. He was automatically discharged from bankruptcy on 15 September 2021 and obtained from the trustee an assignment of the present cause of action against Irwin Mitchell on 20 September 2022.

135. The Property was sold to Bellway Homes ( Bellway ) on 29 July 2022 for £4,775,000. That amount was insufficient to discharge the debts owed by Glo and so Mr Gordeno did not receive any part of the proceeds. The Issues Factual causation Would Mr Gordeno have proceeded with the sale to Glo if the Defendant had not misadvised him about the security of the Pasture Overage as admitted?

136. Mr Carpenter submitted that this was a separate and free-standing question, rather than being part of the scope of duty question, and I agree that is the case. It is the fourth of the six questions in the Manchester Building Society decision: “ Is the loss for which the claimant seeks damages the consequence of the defendant’s act or omission? ”

137. As the cases indicate, factual causation is linked to scope of duty, and there is often virtue in addressing scope of duty first. It is, I suspect for that reason, the second of the Manchester Building Society questions. The parties here framed factual causation as the first issue, however, and on the way that Mr Gordeno’s case is put I can see why. He raises it as a threshold issue – any advice raising doubts about the security of the Pasture Overage would have led him to back out of the Glo deal.

138. To answer the causation question constructs a counter-factual – what would Mr Gordeno have done if he had been given the correct advice. As I have noted, this issue has a certain metaphysical quality to it, and it can be highly complex in some cases. This, it seems to me, is not one of them. Had Mr Gordeno been told by Irwin Mitchell that his Pasture Overage rights could have been over-reached on an insolvency of Glo, I believe that he would have gone ahead nonetheless. I say that for four connected reasons: i) Mr Gordeno was prepared to take multiple risks on this deal. Even without looking to the counterfactual he took both development risk and credit risk on the Garden Overage and development risk on the Pasture Overage. In my view he would have taken credit risk on the Pasture Overage provided he thought it was sufficiently low. ii) His risk appetite on the Pasture Overage can in part be seen with the development risk he was prepared to take in relation to it. He knew that the issue was odour from the SWTP, knew that had served as a block on the Pasture being designated for development, knew that without such designation the prospects of planning permission were poor, knew that the issue was not going away even allowing for the 30-year duration of the overage. His evidence about it being his “pension” must be viewed in that light. It was a speculative investment, with high rewards but no guarantees, or anything approaching guarantees. iii) By contrast, he regarded the credit risk with Glo to be low. He thought that the grant of planning permission for the Garden was a near certainty, “ a foregone conclusion ”, at which point Glo would have an asset of substantial value and if refinancing were necessary, it would be straightforward – “ funders would be in abundance ”. As I have already noted, it is of course true that credit risk and development risk do not overlap – either could pull the Pasture Overage down. But in circumstances where he was prepared to take a quite high development risk with his “pension” it seems to me wholly implausible that he would have been put off by a much lower perceived credit risk. iv) Mr Gordeno needed to pay his debts. For the reasons I have given I had the strong sense of Mr Gordeno as someone who preferred the easy option, even at some considerable cost in terms of interest rates. A deal on the lines of the Reside deal offered too little upfront and would not work for him. I have also explained why neither his family nor third-party loans necessarily were easy options. There was no other sale in the offing, and the M&G Report indicated that any such sale would likely take six months or more to arrange; again, it was not easy or quick. From Mr Gordeno’s perspective the Glo deal was both those things – it was upfront money that would meet his needs. I believe that just as Mr Gordeno had previously accepted “ stupid ” rates of interest for convenience he would also have accepted what he thought was a low credit risk.

139. I recognise that Mr Gordeno firmly believes the opposite, that he would not have touched the Glo deal had he known there was credit risk with the Pasture Overage. In my view that belief is heavily influenced by hindsight. He has lived through the consequences of the Glo insolvency and they have been deeply unpleasant for him. At the time, however, he had confidence in Glo, confidence in securing planning permission for the Garden in short order and confidence that once that was achieved, further funding would not be an issue. He firmly believed, perhaps not unreasonably, that the credit risk with Glo was very low. Had he been advised that such credit risk was a live issue with the Pasture Overage, already a speculative investment, I believe he would have taken it.

140. That addresses the issue as it was framed. There are, however, two further points that it is important to address.

141. The first relates to the scope of Irwin Mitchell’s duty. For reasons I go on to address, I do not accept that the scope of that duty was as broad as Mr Schmitz submitted. However, again as I address below, even had I been with him on that point and found that the advice should have been in the form for which Mr Schmitz contended, I still do not believe it would have deterred Mr Gordeno from proceeding. That finding is, in itself, fatal to Mr Gordeno’s claim so far as it relates to entering into the Glo transaction.

142. The second was a point raised by Mr Schmitz that relates to the Vardags costs. I address those in more detail below, but the point to note here is that factual causation in respect of the claim for the Vardags costs is assessed at a different time and in different circumstances. What I say here does not apply to those costs, therefore. Scope of duty and measure of loss What losses fall within the scope of, and have a sufficient nexus to, the duty that Irwin Mitchell breached?

143. The parties disagreed as to the scope of Irwin Mitchell’s duty. Mr Schmitz started by referring me to Manchester Building Society at [17]-[19]:

17. …in our view, in the case of negligent advice given by a professional adviser one looks to see what risk the duty was supposed to guard against and then looks to see whether the loss suffered represented the fruition of that risk. This is the point of the mountaineer’s knee example given by Lord Hoffmann in SAAMCO .

18. …the whole range of cases constitutes a spectrum … between the extremes, every case is likely to depend on the range of matters for which the defendant assumed responsibility and no more exact rule can be stated.

19. …the focus should be on identifying the purpose to be served by the duty of care assumed by the defendant…

144. He submitted that I should infer that Mr Gordeno changed from Horizon to Irwin Mitchell because he needed careful guidance in a complicated transaction involving his principal asset. Mr Gordeno had not needed to enter into this transaction; a straight sale at market value would have been a far simpler and safer alternative. He was taking a bet to achieve an end, the lucrative Pasture Overage right. Had that right been worth less or been less secure than he thought, he would not have taken the bet. This was obvious to Mr Gordeno, but also known to Irwin Mitchell: when Mr Acheson asked on 26 August 2016 about why Mr Gordeno was accepting an upfront payment plus overage when he could simply sell at the same price, Mr Gordeno had explained to him the bet he was taking and the importance of the Pasture Overage in his calculus.

145. Mr Carpenter did not dispute the relevance of what was said at paragraphs [17]-[19] of Manchester Building Society , but in answering the questions there posed placed reliance on what was said in Hughes-Holland v BPE Solicitors [2017] UKSC 21 at [49]-[52]. He particularly relied on the observation by Lord Sumption at [50] that in the earlier cases to which his Lordship referred: “ The solicitors had not assumed responsibility for identifying all the matters relevant to the lender’s decision or for advising them to proceed. ” The same was true here, he submitted. Irwin Mitchell’s role was set out in their retainer: to advise on the drafting of the legal documents and arrange the transfer of funds, nothing more than that.

146. Mr Carpenter further referred to the point made by Lord Sumption at [52]. There, he was critical of the Court of Appeal’s reasoning in Portman Building Society v Bevan Ashford [2000] PNLR 344 : That involves the same error as affected Chadwick J’s analysis in Steggles Palmer , namely that the mere fact that the breach of duty caused the lender to proceed when he would otherwise have withdrawn was enough to make the solicitors legally responsible for the lender’s decision and all its financial consequences. All “no transaction” cases have this characteristic, whether or not the fact withheld or misrepresented goes to the viability of the transaction or the honesty of the counterparty, because in all of them the fact withheld or misrepresented is ex hypothesi sufficiently fundamental to have caused the lender to walk away had he known the truth. It is right to add that in at least one of the cases before the House of Lords in SAAMCO (the York Montague case) the information withheld went to the viability of the transaction, and that in Banque Keyser Ullmann SA v Skandia (UK) Insurance Co Ltd [1991] 2 AC 249 , which was regarded in SAAMCO as an application of the same principle, the information withheld not only went to the viability of the transaction but would also have revealed the dishonesty of the counterparty. Yet it was not suggested in either case that these were relevant considerations.

147. The error in the earlier cases was, Mr Carpenter submitted, that they focussed on factual causation – whether the lender would have proceeded had it known the truth – without considering scope of duty. For the correct approach he referred me to Jackson & Powell on Professional Negligence and the decision of Rimer J as he then was in Cottingham v Attey Bower & Jones [2000] PNLR 557 at [47]-[48]. There Rimer J referred to the following passage from the then current edition of Jackson & Powell as setting out the law: It is submitted that solicitors advising in commercial transactions, like other professional advisers, are generally under a duty to provide specific information or advice and not to advise on the wisdom of the transactions in general, and thus the loss for which they are responsible will be limited to the consequences of the specific information or advice being accurate. Of course the facts of any particular case may show that the solicitor is under a wider duty to advise on the wisdom of the transaction as a whole.

148. The current edition of Jackson & Powell in turn confirms, at 11-260, that Cottingham remains good law following Hughes-Holland and Manchester Building Society .

149. In my view, Mr Carpenter was plainly right.

150. The starting point is to recognise that scope of duty and causation are different questions. That is how they are framed in the list of issues, and reflects how they are addressed in the cases. The Supreme Court stressed in Meadows v Khan at [64]: “ that conclusion as to factual causation does not provide any answer to the question as to the scope of the defendant’s duty. ” Meadows was a medical negligence case, but the same distinction is made in Manchester Building Society at (in particular) [6] and [12], and as I have noted addressed the two issues separately in the list of questions.

151. Mr Gordeno’s case, with respect to him, at times seemed not to make that separation. By way of example, Mr Schmitz submitted in his written closing that his case was a simple one: “ Because he was negligently advised, he entered into a different transaction from the one he was led to believe he was entering into, and he should be restored to his position, to get back the amount of the undervalue for which he sold the Property. ” The difficulty there is that it risks giving rise to the same error identified in Hughes-Holland at paragraph [52]: to paraphrase what is said there, Mr Gordeno’s case is that “the mere fact that the breach of duty caused him to proceed when he would otherwise have withdrawn was enough to make Irwin Mitchell legally responsible for his decision and all its financial consequences”. Not only did Lord Sumption make clear that such reasoning was erroneous at paragraph [52], he had already unambiguously rejected that approach at paragraph [42]: What is clear is that the fact that the material contributed by the defendant is known to be critical to the claimant’s decision whether to enter into the transaction does not itself turn it into an “advice” case. Otherwise all “no transaction” cases would give rise to liability for the entire foreseeable loss flowing from the transaction, which is the very proposition rejected in SAAMCO .

152. The correct starting point is to establish the scope of the duty. As the Supreme Court explained in Manchester Building Society at [13], this is to be approached in a “ straightforward way ”. The test was set out at [17] and is quoted above.

153. Applying that approach, it seems to me that one must start with Irwin Mitchell’s retainer letter. As I have noted, that specified that their role was “ Reviewing and amending the existing standard documents ” and “ Dealing with completion and with receipt of future payments due under the contract ”. That, it seems to me, was entirely normal for a solicitor involved in a transaction: they were to advise on the legal structuring and the legal risks and handle the practical logistics of (but not otherwise advise on) fund flows. In the language of Manchester Building Society , those were the risks that Irwin Mitchell was to guard against (paragraph [17]); that was the purpose of their advice (paragraph [19]).

154. For the reasons I have set out above, I do not accept that the scope of the retainer was ever extended. Specifically, I reject the suggestion that following Mr Acheson’s question on 26 August 2016 as to the apparent discrepancy between the valuation of the Property in the M&G Report and a payment of £2 million upfront, Mr Gordeno revealed to him that his rationale was to take an upfront gamble in return for a large payout under the Pasture Overage down the line. I do not believe that any such discussion ever happened, not least because I do not believe that at the time Mr Gordeno saw the Pasture Overage as the secure investment he now considers it to have been.

155. The scope of the retainer is critical for the reasons Lord Sumption set out in Hughes-Holland at paragraph [51]: The duty of the solicitors depended on their retainer, which was agreed before any breach of duty occurred and appears to have been in substantially similar terms in both cases. In both cases [ Steggles Palmer and Colin Bishop ], it extended to the care with which the solicitor answered the questions in the lender’s standard reporting instructions, but not to the decision whether to proceed with the transaction. It followed that the loss flowing from the decision to lend could not as such be within the scope of their duty. Chadwick J’s approach was to make the measure of damages depend not on the scope of the duty but on the gravity of the particular breach and on his assessment of the objective quality of the reasons why the lender would have responded by refusing to proceed. In effect, he reverted in Steggles Palmer to the distinction between “no transaction” and “successful transaction” cases which had been rejected in SAAMCO . His observation that the lender had been deprived of the opportunity to make the decision that he would have made is only another way of saying that this was a “no transaction” case.

156. That highlights, it seems to me, a further error in Mr Gordeno’s case: it focusses on the gravity of the breach, not the scope of the duty. This case was, in my view, a situation common in residential and commercial conveyancing. Like those cases analysed by Lord Sumption in Hughes-Holland at [50], “ The solicitors had not assumed responsibility for identifying all the matters relevant to the lender’s decision or for advising them to proceed. ” Or as the point was put in Cottingham , Irwin Mitchell had not assumed some “ wider duty to advise on the wisdom of the transaction as a whole ”.

157. Finally, even were I to accept Mr Gordeno’s case I do not believe that it moves the position along the continuum. In response to my questions during closing Mr Schmitz confirmed that there was no obligation on Irwin Mitchell to advise on the prospects of obtaining planning permission or the creditworthiness of Glo (put another way, the scale of the credit risk associated with Glo). Rather, he submitted, Mr Acheson should have brought out the nature of the risk being undertaken: I submit he should have said, “Well, you realise that if Glo fails, you will have no recourse for the [Pasture Overage]. It will be gone, just as the [Garden Overage] is gone. Bearing in mind that you have a valuation here … which shows that you are taking upfront only £2 million on a property worth 3.5 million and bearing in mind that … there is some risk to the [Garden Overage] and … if at any time, before it comes through, Glo fails, do you want to … put £1.5 million worth of value at risk?” … My suggestion here is that [Mr Acheson] simply should have said, “You had better – this is the way this deal works. This is the gamble you’re taking. Do you want to take it, knowing what I have just told you?”

158. The difficulty is apparent once one strips away what was admitted to be the breach and what was in fact done to see what is left. Irwin Mitchell admit they should have advised that there was a legal risk to the Pasture Overage on a Glo insolvency; they did advise on the credit risk to the Garden Overage; Mr Acheson in his 26 August email did flag the fact that a property valued at over £3.5 million was being sold for an upfront payment of £2 million; Mr Gordeno was advised (and accepts that he knew) that there was some credit risk to the Garden Overage.

159. It seems that the only thing remaining is therefore Mr Schmitz’s final question – this is the gamble, do you want to take it? In my view the explicit posing of the question does not add anything to the elements set out above. On Mr Gordeno’s own case he appreciated the risk to the Garden Overage; his complaint is that he did not appreciate the risk to the Pasture Overage. Put another way, his complaint is not Mr Acheson’s failed to pose a question on the weighing of risks; it is that Mr Acheson did not furnish him with the means needed to carry out the balancing exercise. It was for Mr Gordeno to do the balancing; Mr Acheson’s role was to tell him that the credit risk on the Pasture Overage should go into the scales. That is very much a complaint about a failure to provide information, or something at that end of the Manchester Building Society continuum. It is wholly consistent with what is said in Hughes-Holland and Cottingham . But it necessarily follows, in my view, that the relevant scope of Irwin Mitchell’s duty was limited to those losses related to, and only to, the Pasture Overage. How should that loss be quantified?

160. There is a risk that this issue as formulated merges into the mechanics of valuation. In fact, what the parties were focussed on was the question of what elements of the valuation qualified as recoverable loss, given the scope of the duty.

161. Mr Schmitz’s position was essentially a no transaction approach: Irwin Mitchell was to protect Mr Gordeno from entering into a transaction without knowledge of the risks, and having breached that duty it was to put Mr Gordeno in the position he would have been had he not entered the transaction. Since in that scenario he would have kept the Property but not received £2 million from Glo, the damages would be the market value of the Property at the time of completion less £2 million.

162. Mr Carpenter submitted that could not be right: Irwin Mitchell’s negligence had deprived Mr Gordeno of, if anything, only the ability to extract the hope value of the Pasture, that is the amount a buyer would have paid above its value as agricultural land to reflect the possibility of future development value.

163. For the reasons I have given above, I accept Mr Carpenter’s position that the duty was not so broad as Mr Schmitz suggested. It was not a general duty to advise; it was (so far as is relevant) a duty to tell Mr Gordeno what would happen in the event of Glo’s insolvency. Moreover, while the duty in principle applied to both the Garden and the Pasture Overage, it was not breached in the case of the Garden Overage. Mr Gordeno knew what would happen to that on a Glo insolvency.

164. The question then is what would have happened if I had accepted Mr Gordeno’s case, that he would not have done the Glo deal had he been properly advised on the Pasture Overage.

165. I do not accept the no transaction approach. That was precisely the error identified by Lord Sumption in Hughes Holland at [52]: if one proceeds on a no transaction basis, the scope of duty question becomes meaningless. One sees that here; Mr Gordeno would recover in respect of the Garden Overage, even though he was correctly advised in respect of it. It seems to me that his losses must be the losses associated with and only with the breach, which related to the Pasture Overage only. For reasons I go on to address, I accept the evidence of Ms Seal on this, and indeed all other, issues. That means I accept her hope value of £70,000.

166. That leaves the agricultural value of the Pasture, which the experts agreed was £140,000. Mr Gordeno did not advance any alternative case that this was recoverable as being wrapped up in the Pasture Overage, or in any other way attempt to apportion the purchase price in the Glo deal. It seems to me, therefore, that no distinct claim is made in respect of the £140,000. What was the value of the Property at the date of its sale?

167. There was some measure of agreement between the experts as to aspects of the methodology. Both agreed that the different elements of the Property had to be valued in different ways. For the Garden it was appropriate to use a residual value calculation of some sort, working out what a development of 16 homes could be sold for, calculating what it would cost to build them (and their associated infrastructure, such as roads and sewerage) and deducting the latter from the former. They disagreed fundamentally about how that calculation was to be prepared. For the House a comparables approach was used, looking at sufficiently similar properties sold in the area at around the same time. They did not agree on the approach for the Pasture.

168. The experts further agreed that in valuing the Property as at September 2016 it was appropriate to consider only material that would have been available to a developer at the time. As I have noted, that could include reports that were issued soon after as showing the thinking that led up to and resulted in their preparation. It would not include more recent events. I have made this point before but it merits repeating, because on multiple occasions developments much later in time were put to Ms Seal as evidence that her valuation was wrong. Ms Seal addressed each of those points and, as I will come to address, I accept her evidence. The developments that were put to her are irrelevant, however, because they go to the wrong time period. That is, of course, no criticism of Ms Seal, who was simply addressing the questions asked. I did feel that Mr Shapiro placed some weight on such points, however, notably a planning application for Bellway, which now owns the Pasture. I considered him wrong to do so.

169. Starting with the Garden, the experts in their Joint Statement agreed that a valuer at the time would use a residual value approach. Moreover, it seemed to me to be agreed that in adopting such an approach a valuer would take a conservative approach, adopting a realistic worst case.

170. Ms Seal adopted a ground-up approach: she identified the input values and assumptions in her model and worked through to a conclusion. There were errors, but Ms Seal accepted them and prepared a revised model. Otherwise, that approach was in my view a robust one. It complied with the relevant RICS guidance and was in my view the approach most likely to produce an accurate approximation of market value.

171. She was challenged on a number of her assumptions, but I consider that she addressed those challenges: i) Access: Ms Seal assumed that access would be via the land being developed to the north and would take in the region of eight years. Mr Shapiro assumed it could be via the driveway to the House and could be achieved in a year or less. The difference is significant in a residual value calculation in determining finance costs. It seems to me that any prudent valuer would not rely on use of the driveway. As it is currently constructed it is wholly inadequate as an access road: it is too narrow, and there is no evidence as to the standard to which it was made up. Expanding it was not straightforward because Hampshire County Council owned the end of the drive connecting to the A33. The owner of the Property had an easement to pass over it, but not to dig it up and replace it with a wholly different structure. Documentary evidence from March 2017 shows that Hampshire County Council, in its capacity as highways authority, opposed access to the Garden via the driveway on safety grounds, so there is no reason to think it would be prepared to allow changes to its part of the drive. It is notable that when the Garden was included in the Redlands development area in January 2016, the plan that is at paragraph [ 36] was updated but still showed no access point via the driveway. As a fallback, Mr Shapiro suggested that the developer of the Garden could have encouraged the developer of the Coopers land to build an access road by way of making a contribution to Coopers or any subsequent owner to prioritise the building of that road. That was a half-formulated suggestion, however, and was not in any way costed. The Claimant objected to the build cost for an access road put forward by Ms Seal (although she was not challenged on it in cross-examination) but advanced no figure of their own. In the circumstances it seemed to me that there was no evidence as to the financial viability of such an approach or its impact on the residual valuation calculation. I therefore accept Ms Seal’s evidence on all aspects of the access issue. ii) Affordable housing: Ms Seal was cross-examined at some length about her assumption that the planning permission would require 40% of units to be affordable housing. However, not only do I accept her evidence, that was also the evidence of Mr Shapiro. The only real difference seemed to be how one should calculate the gross development value of social housing. Ms Seal capitalised rental yields. That is the approach recommended in the relevant RICS guidance and I accept that she was right to adopt it. iii) Build costs: Ms Seal used the costs published by the building cost information service (BCIS). Mr Shapiro’s objection seemed to me principally to be that developer costs would be lower because they would carry out the work themselves rather than putting it out to tender. I have a number of difficulties with that. First, each developer’s costs are presumably different, and at the time of valuation it could not be known who would develop the Garden. Secondly, even if one knew, developers do not publish their costs, so again the “correct” figure is unknowable. Thirdly, the use of BCIS (along with other sources) is recommended by RICS in its valuation guidance on affordable housing without raising the concern raised by Mr Shapiro. Again, I accept that Ms Seal’s method was an appropriate one for her to adopt.

172. Mr Shapiro, by contrast, started with the M&G Report on the basis that it would be difficult critically to test the components of that valuation “ nine years after the valuation date without being influenced by hindsight data. ” I do not accept any aspect of that approach. First, and very obviously, the whole reason for using a data driven approach is to assist in stripping out hindsight bias. That is not to say that data driven approaches are perfect; the selection of data is critical, and there may be cases where data is no longer available (although to be clear, this was not such a case). Of course, if a valuer produces a result that is at odds with what they know was the price ultimately achieved in a subsequent sale they may revisit their assumptions or their inputs to see why that might be. There is nothing wrong with that provided they are transparent, and such transparency is encouraged by the use of data in the first place.

173. Secondly, Mr Shapiro’s argument was circular. Essentially he was saying that the best starting point was the M&G Report because he had no means of critically challenging that valuation nine years later. That only works if one assumes the M&G Report was right. If one assumes that it was wrong, the conclusion is that it is a terrible starting point that cannot be shown to be correct.

174. Thirdly, Mr Shapiro did in fact criticise elements of the M&G Report. Specifically, M&G applied a 25% discount to the overall land value to reflect a number of risks. The first was delay. The longer a development takes, the greater the financing costs, typically because interest is payable on the debt for a longer period. The second was the type of development permitted, since profit margins are different depending on the type of housing. The third is the percentage of affordable housing required, since again profitability is lower on affordable units. Mr Shapiro rejected that and adopted a different approach, increasing financing costs in the model to reflect the delay in being able to complete units (since once units are sold, the financing can be repaid).

175. I found this unsatisfactory on two levels. In the course of Mr Shapiro’s cross-examination it became apparent that he had not appreciated that the M&G discount related to three risks, delay, the nature of the development permitted and the need to provide affordable housing, and his revised approach addressed only one of them, delay. More to the point, for current purposes, Mr Shapiro’s position was that he was continuing to use the M&G Report even knowing that elements of it were inaccurate because he could not say that the balance of it was inaccurate. But nor could he say that it was accurate. Without critically checking, he simply did not know. In my view, one way to resolve that was to build a model of his own and compare the output with the M&G figures. Mr Shapiro did not do that, and nor did he suggest any other way of critically analysing the M&G figures. His evidence, in my view, suffered as a consequence.

176. Fourthly, Mr Shapiro recognised in his cross-examination that retrospective valuations were possible, and indeed common. Indeed, it is hard to see how a claim for valuers’ negligence could be brought otherwise. But if the task can be done in accordance with an expert’s duties for those purposes, it can equally be done for the valuation exercise that needed to be carried out here.

177. Fifthly, Mr Shapiro did feel able to undertake a critical review of a valuation in this case, that of Ms Seal. Since Ms Seal was carrying out the exercise on the basis of the position in 2016, just as M&G were, it is hard to see why the individual elements of Ms Seal’s approach were properly the subject of scrutiny but the M&G Report was, in large part, not to be touched.

178. Mr Shapiro’s approach of adopting the M&G figure largely without testing it by reference to a model of his own was, in my view, a significant weakness in his evidence. Moreover, the way in which he replaced the 25% discount to land value with an increase in financing costs seemed, to me, to fail to allow for the other factors that went to M&G’s decision to make the 25% discount in the first place. Taken together, these factors meant I had significantly less confidence in Mr Shapiro’s approach and, in turn, his valuation figure.

179. For these reasons I preferred the evidence of Ms Seal. I therefore accept her revised calculation of £685,000 as representing the market value of the Garden in 2016.

180. The approach to the House was different. M&G had adopted a comparables approach, looking at the sale price of similar properties in roughly the same area achieved at roughly the same time. One need only set out the comparables approach to see that there is a significant element of subjectivity in it, since so much turns on what is considered sufficiently similar, a factor that both experts noted in preparing their valuations.

181. Both experts also accepted that the best evidence of market value was not comparables but any sales data on the Property itself. Here, as I have noted, there was a history of Mr Gordeno having marketed the Property and he received an offer on it for around £1.5 million in 2015. That offer did not proceed to a sale, and in any event was for the Property as a whole, not just the House. That is relevant on two levels. First, the Garden and the Pasture obviously have value, and that must be deducted from the offer price to reflect that fact that here we are considering only the value of the House. Secondly, in the case of the Garden in particular it is plainly relevant that if it were sold for housing the House would have, to the north, a new development rather than gardens and open fields. The experts disagreed on how that would impact value, but both accepted it needed to be considered.

182. There were three key differences in approach between the experts. i) Ms Seal considered that having a building site in the Garden followed by a development of 16 houses quite different in size, age and character from the House would detract from the House’s value. Mr Shapiro disagreed, saying that it could enhance the value of the House to have near neighbours as this would increase the sense of security the owner might feel. It seems to me that Ms Seal is plainly right on this point. I accept her evidence that typically owners of large houses in the country are opposed to developments near their property. Moreover, if one looks at the various marketing particulars for the Property exhibited to Ms Seal’s report, all of them use external photographs showing open countryside; none show the proximity of the House to nearby residential developments. The negative impact of nearby housing on the value of the House was also the view expressed by M&G. While there may be some purchasers who would share Mr Shapiro’s preference for near neighbours, it seems to me they would be a minority in the case of the House. The issue here is the market value; reducing the pool of potential purchasers would, in my view, limit that value. ii) While both experts accepted that marketing and sales history were relevant, Mr Shapiro’s valuation came out almost 20% higher than any offer received, despite the fact that the offer in question related to the Property as a whole and he was valuing just the House. Ms Seal treated the previous marketing history as, effectively, a cap, and in circumstances where no sale had been achieved at that price I think she was right to do so. If no willing buyers had come forward at a price of £1.5 million, it is hard to say that the market price, which involves estimating what a willing buyer would pay, is higher than that. iii) In assessing comparables Mr Shapiro appears to have increased their value to reflect the fact that the Property had a larger acreage. That is plainly wrong when one is valuing only the House. Mr Shapiro, I think, accepted that in his cross-examination.

183. For these reasons I had more confidence in Ms Seal’s valuation of the House, and accept that its market value in 2016 was £1.2 million.

184. Finally, one comes to the Pasture. The approaches adopted here by the two experts were radically different. Mr Shapiro summarised his basis for his figure of £1 million in the course of his cross-examination: That is what speculators do. I mean, the answer is it looks as if it should be developable. We can see only one problem and that is the odour line. If that changes and the opposition goes away, I’m making a killing and the question is not how much am I going to make, but can I afford to make the loss, and £1 million loss to a comparatively wealthy man is not significant in the context of the overall wealth. I’m not talking about someone who has a few hundred thousand capital and his own house, I’m talking about what people – Bellway [the developer that now owns the Pasture], for example, or me – could afford to lose. In fact, I put this to the test, I had a conversation with three people, all in the property business and said: what would you do? They all said: yes, I would take a quarter of that. And if you say I will divide it by four, take a risk of a quarter of a million quid, minus the capital loss value, it is not consequential, it is not important. The gain is important, the potential gain is very high. It is no worse than a man who puts a chip on a roulette wheel. Why is he putting a chip on a roulette wheel for £1 when the odds are 32 to 1 against if I’m right? …Because he knows there is hope. Here, the hope is much, much higher if I’m right.

185. The hope value, in Mr Shapiro’s model, was focussed on the scale of the gain, which justified taking a position with long odds. Because the difference in the value of the Pasture between agricultural land and building land could be as high as £10 million, a speculator would pay £1 million for it to be able to place that bet. The agricultural value of the Pasture was £140,000; that meant the hope value was £1 million less £140,000 which was how Mr Shapiro derived his £860,000. I reject that approach, and in turn his figure.

186. First, Mr Shapiro did not point to any guidance, from RICS or anyone else, endorsing this method. It would be striking were such guidance to exist, since it would amount to RICS endorsing land speculation.

187. Secondly, the task for the experts was to identify the market value. That, necessarily, involves there being a market. But Mr Shapiro was unable to identify the existence of such a market for his method of valuation, simply asserting, “ I know it to be so but I cannot give you an example. ” Moreover, he recognised that no bank would lend on his valuation, meaning that it limited its application to cash purchasers. That was not what he was asked to do.

188. Thirdly, it was impossible to follow Mr Shapiro’s calculation because he did not give either his estimate of the odds of development being permitted or a time frame. Mr Shapiro referenced roulette odds of 32:1 against. In fact the odds for a single number bet in roulette are either 36:1 or 37:1, depending on whether one is playing on a European or an American table. The house pays, in either case, as if the odds were 35:1, one of the reasons casinos are profitable over the longer term. Be that as it may, the chance of success on a single number bet is around 2.5-3%. He later went on to compare his approach to buying a Premium Bond. The odds on Premium Bonds are significantly longer (although as Mr Shapiro noted, the stake is not risked): at least 22,000:1. In any event neither analogy is really apt, it seems to me, because both roulette and the Premium Bonds are games of pure chance; the planning system, it is to be hoped, is more principled. Yet what the principles are that would drive the odds of a successful application or its timing (subject to what I say below on odour) were not explained by Mr Shapiro. The reason for his £1 million number was wholly unclear.

189. Fourthly, any calculation of the prospect of development, and hence the odds and in turn the hope value, turned on the issue of odour from the SWTP. Mr Shapiro seemed to accept that. He concluded that because it was a problem action would be taken to stop it, while recognising that “ I may be thinking outside my expertise ”. He did not offer any suggestion as to how the issue might be stopped, and nor, it seemed to me, did he have any because, as he rightly thought, he was operating outside his expertise; indeed he was well outside it.

190. Fifthly, Mr Shapiro’s conclusion as to the odour issue seemed to be based on a belief that development had been permitted on the East of Basingstoke land, which was closer to the SWTP and so would be more affected by odour. He was wrong in that. As the plan at paragraph [ 79] shows, odour sensitive uses are not permitted on that land in areas affected by odour. He also seemed to be basing his conclusion on the December 2016 GFE Report. That was not material that would have been available to a valuer in September 2016, such that Mr Shapiro’s reliance on it was an illegitimate use of hindsight. In any event, Mr Shapiro seemed to me to have misunderstood that report. He had, for instance, concluded that the various sensors used for odour measurement were in the Pasture. In fact, they were all in the Garden or around the House, which as the plan at paragraph [79] shows is outside the area affected by odour. He thought the report gave the Pasture, as Mr Shapiro put it, “ a clear bill of health ”. It did not.

191. Sixthly, odour was not the only issue. As I have noted, there was a desire in the Local Plan to create a strong, defensible barrier between the housing and the open countryside to the east. Mr Shapiro had not considered that condition, and so presumably whatever probability calculus he had performed did not reflect it. Similarly, Mr Shapiro accepted the conclusion in the M&G Report that the only reason the Pasture was not designated for development was that Mr Gordeno had not put it forward. That was not correct; it was put forward and rejected, as I have addressed above.

192. Seventhly, to the extent that Mr Shapiro was including in his calculus developers, and his reference to Bellway suggests that he was, it would mean they land-banked, buying land speculatively. The evidence of Ms Seal was that they did not and I accept her evidence. It reflects the facts of this case, where Reside offered an option agreement. It also reflects economic reality. As Ms Seal noted, land-banking on, essentially, bets would tie up significant capital, which comes at a cost for developers. Finally, if Mr Shapiro were right, large swathes of the Home Counties would seem ripe for such speculation, being sufficiently close to growing towns to be potentially developed in the future. Many of those sites would not have the issue of a neighbouring SWTP. Yet one does not see the land values of those sites inflated by hope value of the type described by Mr Shapiro. Ms Seal observed in her cross-examination: “ I think that the number of sites in the south-east of England that are highly unlikely to get planning permission in the foreseeable future outnumbers those parties looking to spend £1 million on sites that are highly unlikely to get planning permission in the near future. ” I agree.

193. Ms Seal started with the agricultural value of the Pasture and increased it by 50% to reflect the hope value that development might be permitted. There did not seem to me to be any clear basis for that figure, and indeed in the course of her cross-examination Ms Seal observed that if every house builder spent an additional 50% on land outside the curtilage, they would be significantly less profitable. She further noted that the model was one she did not recognise. That was primarily directed at Mr Shapiro’s “ worth a punt ” approach, but the comment, it seemed to me, applied equally to the 50%.

194. I agree that even a 50% uplift seems difficult to justify. Both experts agreed that developers and industry participants use economic models to drive their decisions; those models have inputs; both the 50% and the £1 million are outputs. Neither expert provided much by way of support for those outputs, meaning I had no way in which to test the figure by reference to how it was derived.

195. That is no criticism of Ms Seal. She, I think, equally lacked the data to analyse the question, quite possibly because few if any purchasers would pay any uplift for so speculative an investment. The burden of proving hope value is, of course, on Mr Gordeno. However, given that Irwin Mitchell apparently concede there would be some hope value, and Ms Seal’s evidence in support of their case was that it might reach £70,000, I accept that figure as the outer limit of what might have been paid. Mitigation Was Mr Gordeno under any duty to mitigate his loss by attempting to enforce the payment obligations of the assignee and guarantors under the Assignment?

196. Two lines of authority were raised in connection with the Assignment, and it is important to keep them distinct, since only one is really a question of mitigation.

197. Mr Schmitz referred me, I am obliged to say rather in passing, to Haugesund Kommune v Depfa ACS Bank [2010] EWHC 227 (Comm) . This was part of the extensive swaps litigation. The defendant bank had advanced money to the claimant Norwegian municipalities under what was described as a swap contract. The claimants denied their liability to the bank on the ground that they lacked the capacity to enter into such contracts, which they said were essentially loans. Before entering into the swaps the bank had sought advice from Norwegian lawyers, Wikborg, Rein & Co, on precisely this point and Wikborg had advised in clear terms that the swaps were not loans under Norwegian law and the claimants had the power to enter into and perform them. The claimants sought a declaration of non-liability; the bank counterclaimed for restitution in the event the swaps were found to be unenforceable. The bank also joined Wikborg as a third party and brought a claim against it for damages for breach of contract and negligence. While the bank gave credit for sums it had received from the municipalities, it contended that it had no obligation to pursue them for any further sums.

198. As I understand Mr Schmitz’s point, he relies on the conclusion of Tomlinson J, as he then was, at paragraph [37] that the bank was entitled to bring a claim against Wikborg and had no obligation to give credit for sums it might have recovered by way of restitution from the municipalities. If that is his point, I disagree with it.

199. In their comprehensive and helpful written closing submissions, Mr Carpenter and Mr Steer addressed this point in some detail. In Haugesund Tomlinson J relied on the decision of the Court of Appeal in The Liverpool (No 2) [1963] P 64 . Two ships, the Ousel and the Liverpool, collided in the port of Liverpool. The owners of the Liverpool admitted liability for the collision. The Mersey Docks and Harbour Board, under statutory powers, cleared the wreck of the Ousel, for which it could recover its costs from the owners of the Ousel (by statute) or the owners of the Liverpool (in tort). The owners of the Ousel tendered the amount recoverable from them but the Mersey Docks and Harbour Board declined the tender and pursued the owners of the Liverpool for the full loss. The Court of Appeal found that it was entitled to do so. Harman LJ at pages 82-83 emphasised: …this case, in our judgment, has nothing to do with the duty to mitigate damages. It concerns the board’s legal rights, and no duty rests on it at the demand of a tortfeasor to satisfy part of the damages by resorting to another tortfeasor;

200. As Harman LJ observed, if the law were otherwise it would render the rules on contribution unnecessary, since the defendant tortfeasor could simply insist that the victim sue all tortfeasors. A similar point was made by Rix LJ in the appeal in Haugesund [2011] EWCA Civ 33 at [40]: In my judgment, the principle in The Liverpool is not in doubt. If it were otherwise, no claimant with remedies against more than one defendant could ever get judgment against either, for each defendant could play off the claim against him by referring to the claim against the other. And where the claimant has sued only one out of a number of possible defendants, the litigation before the court would become embroiled in satellite litigation involving the alleged position relating to other parties. It is rather for the defendants involved to bring contribution or other similar proceedings against each other, or for the sole defendant to implead other parties if it is thought prudent to do so.

201. Mr Carpenter and Mr Steer observed that it follows that the principle in The Liverpool (No 2) applies where the two potential defendants are liable for the same loss. They referred me to McGregor on Damages paragraph 10-096. This, they submitted, was not a case involving the same loss. Mr Gordeno asserted that he had suffered loss arising from Irwin Mitchell’s admitted breach of duty; and he had a separate claim against Mr Coppen and his corporate vehicles for non-payment under the Assignment, which he could bring regardless of whether there was a claim against Irwin Mitchell.

202. They recognised, as I think they had to, that Tomlinson J had sought to apply The Liverpool (No 2) in a wider context, not involving a single loss. They submitted that could not be right for two reasons. First, Tomlinson J’s decision was reversed by the Court of Appeal, strictly on other grounds but in terms that showed that the single loss principle applied. Secondly, if Tomlinson J were right, and the principle in The Liverpool (No 2) did apply to cases involving different losses, then it should rarely if ever be necessary for a claimant to claim against third parties to reduce their loss before claiming against the defendant. But that is not the law – as multiple cases on mitigation illustrate, claims against other parties can be necessary.

203. It seems to me that this case does not fall within the principle laid down in The Liverpool (No 2) . The claims here arose out of different transactions or events; while they related to the same asset they were otherwise unconnected. There is no prospect of Irwin Mitchell bringing a claim for contribution or anything similar (to paraphrase Rix LJ). They have no claim arising out of or in respect of the Assignment and could not implead the Debtors. I also accept that if this case gives rise to the principle in The Liverpool (No 2) , so too would a great many other cases where it has previously been thought that there was a duty to mitigate by bringing a claim against third parties.

204. That leaves the duty to mitigate which, as I have noted, is a wholly separate duty. Here, the law was not in dispute. A claimant must take reasonable steps to mitigate its loss. That could include claims against third parties, although what is reasonable in that context depends on the facts of the particular case. As Chitty summarises at 30-101: “ The question as to what it was reasonable for a person to do in mitigation of damage is not a question of law but one of fact in the circumstances of each particular case. ”

205. Mr Schmitz submitted that on the facts of this case, neither the assignee nor the guarantors were worth pursuing; they simply lacked the means to pay. That was reflected by the fact that all of them went through some form of insolvency process soon after. Mr Carpenter recognised that the various debtors ultimately were all insolvent, but submitted that there was a window between the payment date under the Assignment and the various insolvencies when payment could have been pursued. Yet Mr Gordeno made no formal demand.

206. Mr Carpenter further referred me to the decision in Sainsbury’s Supermarkets Ltd v Mastercard Inc [2020] UKSC 24 at [216]: The legal burden lies on the operators of the scheme to establish that the merchants had recovered the costs incurred in the MSC. But once the defendants have raised the issue of mitigation, in the form of pass-on, there is a heavy evidential burden on the merchants to provide evidence as to how they have dealt with the recovery of their costs in their business. Most of the relevant information about what a merchant actually has done to cover its costs, including the cost of the MSC, will be exclusively in the hands of the merchant itself.

207. He recognised that the decision concerned actual mitigation, rather than the duty to mitigate, but submitted that the same principle should apply here. Irwin Mitchell had raised the issue; it was for Mr Gordeno to show the court what he had done and that it was reasonable.

208. It seems to me that there are two difficulties with that submission. First, at least on the facts of this case much of the relevant information about what Mr Gordeno could have recovered was in the hands of Mr Coppen and his vehicles or, subsequently, in the hands of those administering the various insolvencies. In the case of the two companies there is also information that is publicly available, such as their respective reports and accounts. Mr Gordeno is no better placed than Irwin Mitchell to obtain any of that, and so the justification for the heavy evidential burden referred to in Sainsbury’s does not arise.

209. Secondly, the question of whether what Mr Gordeno did was reasonable is not a question of evidence at all. It is a point for submission. Again, that does not in my view shift the evidential burden onto Mr Gordeno.

210. In my view, on the question of the evidential burden Mr Gordeno was required to do what he in fact has done: explain in evidence what steps were and were not taken. His case is that he spoke to Mr Coppen and concluded, from what Mr Coppen said, that none of the entities were worth pursuing, even to the point of making a demand. To the extent there is publicly available evidence going to that, it is before me.

211. The question is then one of reasonableness.

212. In my view, it was not reasonable for Mr Gordeno simply to take at face value what Mr Coppen said about the Debtors’ ability to pay. Plainly the Debtors on the one hand and Mr Gordeno on the other did not have any commonality of interest; the sum owed was significant, such that even a partial recovery had value; basic checks such as obtaining the latest report and accounts of the Taray companies were quick, easy and cheap.

213. Likewise, in my view he should have made a demand both of the debtor and the guarantors. Again, it was a simple, quick, cheap step and would have applied pressure on the various debtors to honour a debt that Mr Gordeno thought was due.

214. In terms of what might have been recovered, the evidence was thin. As I have already found, the onus was not on Mr Gordeno to adduce such evidence, given that it was not in his control. It is apparent from the accounts of Taray Homes, however, that it had net assets of a little under £460,000.

215. Mr Schmitz, by way of submission, suggested that caution should be exercised in reading that as available assets, noting that there was a £650,000 revaluation reserve, and such reserves cannot be used to justify the payment of dividends. There was no accounting evidence in this case and I am cautious about drawing conclusions in its absence. I am familiar, in broad terms, with what a revaluation reserve is: it attempts to reflect the current value of the company’s assets. If the value of those assets has increased there will be a positive reserve, but until they are sold such a gain is a paper gain only; it has not been realised.

216. If that is right then it follows that Mr Gordeno could have enforced against those assets by compelling their sale. The fact that they could not be used as a basis to pay dividends does not alter that. That would be consistent with the net assets being stated to be a little under £460,000.

217. In such a case it seems to me that Mr Gordeno could have pursued Taray Homes for up to £460,000. Given what I have found above about the scope of his recoverable loss in entering into the Glo deal, it follows that he could and should have mitigated the whole of that loss by pursuing Taray Homes. Consequential losses Did Mr Gordeno incur costs liabilities to Vardags and Hope in a reasonable attempt to mitigate the loss allegedly caused by the Defendant? If so, what is the extent of Mr Gordeno’s liability in this regard?

218. Three points make this issue complicated. The statements of case have gone through multiple iterations and working out what was said and when is a forensic process. That is not to criticise Mr Schmitz; judges have the benefit of analysing statements of case with hindsight, which always helps to show where matters could have been put more clearly, and as I have noted already Mr Gordeno’s factual case has evolved over time. Maybe more critically, ambiguity is injected by the fact that the amendments for each iteration are in different colours and the dates on which the amendments were made do not follow that colour coding, although for reasons I address that ambiguity seems to me surmountable. The difficulty was perhaps highlighted by the second point, that the agreed issue in the list of issues is not a precise reflection of the statements of case. I understand entirely why the parties focussed this issue in the way that they did, but in such circumstances where I have concluded that the statements of case are somewhat wider it is the statements of case that must prevail. Finally, the causation analysis is complicated by the fact that the counterfactual that applies in respect of other elements of Mr Gordeno’s claim cannot apply here. The first counterfactual was the focus of the evidence, meaning there is less clarity on the second counterfactual.

219. The first point to address is what the pleaded claim is. Mr Carpenter submitted that if no claim was pleaded it could not properly be advanced before me in the absence of amendment, and no application to amend had been brought. He further submitted that Mr Gordeno’s pleaded claim was only for costs incurred in mitigating the losses said to have been caused by Irwin Mitchell’s breach of duty, that is the losses associated with entering into the Glo deal. If he could not recover for those losses, he equally could not recover for costs incurred to mitigate them because there was nothing to mitigate. He gave the example of a road traffic accident, where the victim claimed for both physical injury and economic losses consequent upon that injury in the form of lost earnings. If the physical injury claim failed, the loss of earnings claim also had to fail. Mr Carpenter argued that no claim was advanced for the Vardags costs as primary losses, that is as a free-standing claim.

220. Mr Schmitz submitted that the pleaded case was wide enough to support a claim for the Vardags costs as a free-standing claim. He recognised that the point could have been put more clearly, but submitted that what was needed was to plead the relevant facts and that had been done through a combination of the Particulars of Claim and the Reply.

221. I accept Mr Carpenter’s point that Mr Gordeno is limited to his pleaded claim. To the extent authority is needed it comes from Al-Medenni v Mars UK Limited [2005] EWCA Civ 1041 at [21]. Mr Schmitz pointed out that Al-Medenni involved a factually quite different situation to the one I face, and I accept that it did, but the points made by Dyson LJ, as he then was, about the adversarial nature of the system and the need for the judge to determine the issues identified by the statements of case applies equally here.

222. The focus then turns to what was pleaded. That starts with paragraphs 10-11 of the original Particulars. These set out the advice that was given on 6 September 2016, which I have addressed above, and the further advice given by Mr Acheson on 29 January 2019, essentially repeating the September 2016 advice. Paragraph 12 asserted that “ the advice given by the Defendant ” was wrong and paragraph 13 set out the particulars of negligence. Neither paragraph specified whether it was in respect of the September 2016 advice alone or both iterations of the advice, but since the advice was materially identical those paragraphs logically must have related to both instances of the advice being given.

223. Paragraph 14 went to causation. It asserted that the advice caused Mr Gordeno to sell the Property to Glo. That could only relate to the advice in September 2016. Paragraph 15 set out the particulars of loss in respect of the Glo sale.

224. Paragraph 15A of the Amended Particulars asserted: Further, in or about February 2019 the Claimant, in an attempt to mitigate his loss, instructed Vardags Ltd Solicitors (“Vardags”) to write on his behalf to the auctioneers, Messrs. Allsops, in connection with a forthcoming auction of the Property which Hope Capital Limited, the then mortgagees, above-mentioned, had instructed Allsops to carry out. The purpose of this communication was to require that the Property not be sold, save with notice of the Claimant’s overage rights. Thereafter, Hope brought proceedings against the Claimant and GLO in the High Court … in which it sought a declaration that Hope’s charge entitled it, as mortgagee, to exercise its power of sale by deed, so as to pass title to a purchaser, free from the Claimant’s interests under the Overage Agreement and free from the Charge that purportedly secured the same. In a further attempt to mitigate his loss, the Claimant instructed Vardags to defend the action on his behalf.

225. The prayer for relief sought the total amount of the Vardags costs plus interest.

226. This paragraph is unquestionably problematic. It does not address the February communications between Mr Gordeno and Irwin Mitchell that are said to have prompted the appointment of Vardags and does not address why Mr Gordeno was seeking Vardags’ advice. It treats the defence of the Hope proceedings as being roughly contemporaneous with the auction, when a critical period of weeks passed before proceedings were commenced.

227. On its face I recognise that it strongly suggests the context of all this is the rules around mitigation of loss. That makes no sense in the context of paragraph 15A, however. While the background to the Vardags instruction is not pleaded, as both parties were at all times aware Vardags were instructed in light of the email from Irwin Mitchell of 11 February 2019 telling Mr Gordeno that there was a potential problem with Irwin Mitchell’s earlier advice and that Mr Gordeno needed to obtain independent advice on his legal rights. As I have noted, in the 11 February email Irwin Mitchell did not go so far as to say that their earlier advice was wrong. What that means is that when Vardags were first instructed it could not simply have been with a view to mitigating loss because Mr Gordeno would not know he had a loss; he had no idea what his legal position was because the firm on whom he had been relying for so long had told him he needed to get his advice from someone else. None of that is even hinted at in the Amended Particulars, less still is it spelt out.

228. One then turns to the Defence. Paragraphs 10-12 of the Particulars were admitted. Causation so far as it related to the Glo sale was contested, and I have already set out my findings on that issue above. Paragraph 43A.1 of the Amended Defence dealt with paragraph 15A of the Amended Particulars: … in circumstances where Hope was entitled to sell the Property free from the second charge and the Claimant’s overage rights, it is denied that there was any sustainable basis for [sic] Claimant to challenge the sale (whether via auctioneers or otherwise). Therefore, it is denied that the Claimant’s instruction of solicitors to engage with the Property’s auctioneers in the manner pleaded was a step taken in reasonable mitigation of his alleged losses.

229. Paragraph 43A.2.2 dealt with the Hope proceedings in similar terms: Whilst it is admitted that the Claimant instructed Vardags to defend the proceedings brought by Hope, it is denied that he did so in reasonable mitigation of his alleged losses. As pleaded above, there was no sustainable basis upon which the Claimant could challenge Hope’s attempts to sell the Property and/or defend the proceedings that Hope had brought. As such, it was not reasonable for the Claimant to contest those proceedings.

230. The Amended Reply stated at paragraph 40A: With regard to paragraph 43A of the [Defence], it is admitted that there was in fact no sustainable basis for the Claimant to challenge Hope’s sale of the Property free from the second Charge and the Claimant’s overage rights, but it is averred that the Claimant acted in the belief that there was such a basis and it is further averred that such a belief was reasonable and that in defending Hope’s claim, the Claimant acted reasonably in mitigation of his loss. The Claimant’s belief was reasonable because of advice which the Defendant had given as to the meaning and effect of the contract as set out in paragraph 10 of the [Particulars of Claim] and because of the advice given by the Defendant as late as 29 th January 2019 as set out in paragraph 11 of the same.

231. All of the statements of case went through further iterations but these paragraphs did not change. Significantly, in my view, what that means is that by the time the Re-Re-Re-Amended Particulars were signed, paragraph 40A of the Amended Reply had for some time been Mr Gordeno’s pleaded case.

232. None of this is an advert for the pleader’s art, as I have observed. But I accept that it was not necessary, in serving the Re-Re-Re-Amended Particulars, for Mr Gordeno to repeat everything that was said in the Amended Reply. That was already part of his pleaded case. What that means in practice is that I accept that paragraph 15A of the Re-Re-Re-Amended Particulars must be read alongside, and be informed by, paragraph 40A of the Re-Re-Re-Amended Reply.

233. That brings me to Mr Carpenter’s submission. I believe he accepts that Mr Gordeno has pleaded the advice that was given, breach and loss. He considers that Mr Gordeno has only alleged a consequential loss claim for the Vardags costs. He does not accept that MrGordeno has pleaded causation properly (or at all). There is force in his broader criticism about the way the case is pleaded, but ultimately I do not accept his point.

234. Mr Gordeno plainly pleaded the advice given on both 6 September 2016 and subsequently, notably 29 January 2019, in paragraphs 10 and 11 of the Particulars. As I have noted, those paragraphs are admitted.

235. Mr Gordeno pleaded breach in paragraph 12 of the Particulars, and for the reasons I have given I consider that covers both the advice of September 2016 and the later advice. Paragraph 12 is also admitted.

236. I accept Mr Carpenter’s point on causation so far as it relates to the original Particulars. The only plea there relates to the September 2016 advice and Mr Gordeno entering into the Glo deal. The position developed in the Amended Reply, however. There Mr Gordeno asserted that: he challenged Hope’s sale of the Property in the belief that his Pasture Overage rights survived the Glo insolvency; his belief was a reasonable one given the advice he had received both in September 2016 and in January 2019; and, separately, he was acting in reasonable mitigation of his losses.

237. The assertion was not simply that he relied on the advice in some abstract way; it is that the advice caused him to believe he should challenge Hope’s position and that he acted in furtherance of that belief. The specific action is not identified, but in the context it must include the instruction of Vardags.

238. Nor do I read the pleaded case as being limited to mitigation; the Amended Reply, at the very least, makes a broader point that Mr Gordeno’s belief that he had an enforceable right in the form of the Pasture Overage was reasonable. Mr Gordeno was seeking both to assert his rights (that is, to achieve a no-loss outcome) and, if that failed, to mitigate (a reduced loss outcome).

239. I do not accept Mr Carpenter’s analogy to consequential losses in a road traffic case. This, it seems to me, is somewhat different. First, in a road traffic accident there is a single event at a single point in time and all losses flow from that one event. Here, there was a continuing breach of the duty of care and skill, in that the September 2016 advice was not corrected until February 2019 and so could go on to cause further loss. Moreover, there were further breaches, in that the advice was repeated. For both reasons the causation analysis here cannot be limited to a single event, as it can be in Mr Carpenter’s road traffic accident example.

240. The second issue I have with the example is that the reason economic losses cannot be recovered on the facts of Mr Carpenter’s example is the rule in common law negligence preventing recovery for pure economic loss. It is an issue of substantive law, not of pleading; even were a free-standing claim for pure economic loss pleaded on those facts it would fail. There is, in my view, no such issue of public policy here where the claim arises in both contract and tort. The question is therefore one of pleading only, and for the reasons I have given I consider that the point was put in issue on the statements of case.

241. Mr Carpenter rightly noted that the Vardags costs were not addressed as a free-standing claim in the list of issues, but the list of issues does not amend the statements of case. I further accept that Mr Schmitz did not address it separately in his submissions before me, but the same is true of a number of points that were touched on only lightly or not at all. The trial timetable had to be stretched to accommodate both parties, and in such circumstances I accept that all counsel had to adapt their submissions to fit the time that they had.

242. I therefore accept that the point was pleaded. The question then is whether it was established, which principally turns on the question of factual causation. I am particularly grateful to Mr Schmitz for the way in which he brought out the nuance of this point.

243. In his witness statement Mr Gordeno addressed the fallout from the Irwin Mitchell email of 11 February 2019 in the following terms:

138. I was devastated by all of this, especially considering that the auction [of the Property] was only three days away. As advised, I urgently contacted another firm and instructed Vardags on the same day.

139. Vardags contacted the Defendant on the same day and requested copies of all relevant documents. As the Defendants would not elaborate on exactly what was wrong with the sale documents, I had to take advice to determine my correct legal position. My aim was to try and salvage something from the situation.

244. The starting point is therefore that Mr Gordeno’s evidence shows that he instructed Vardgs because, and only because, Irwin Mitchell had told him their advice on the Pasture Overage may have been wrong; he did so because Irwin Mitchell (rightly) would not advise further and Mr Gordeno needed urgently to understand his legal position; and his motive in all this was to try to salvage his position as best he could.

245. In assessing causation above I did so by reference to a counterfactual: what would have happened had Mr Gordeno been properly advised in September 2016 of the credit risk to the Pasture Overage? As I explained there, I believe he would still have proceeded with the Glo deal. It was not put to Mr Gordeno that if he had received the correct advice in September 2016 or at some point thereafter before February 2019 he would still have incurred costs with Vardags (or some other firm). As such, there is no evidence as to any counterfactual in February 2019 with which to challenge Mr Gordeno’s version of events. Such a counterfactual is, in any event, inherently implausible. If Mr Gordeno had been given the right advice sooner, and in particular if he had been given it from the outset, it is hard to see why he would have incurred additional legal expense checking it when Hope made the same arguments. Such evidence as there is suggests that the opposite is true. Mr Gordeno observed in his cross-examination: “ … I mean, do you think I would realistically, I would like to say as a half intelligent businessman, would I spend hundreds of thousands of pounds with Vardags and Wallace … on a wing and a prayer. ” For reasons I come to address I think he did cling to the hope that Irwin Mitchell’s original advice was correct long after the time when it was reasonable for him to do so. But that is quite different to saying that if the advice given had reflected the risks Mr Gordeno faced he would still have sought to instruct another firm precisely when that advice was shown to be correct.

246. It also seems to me that the counterfactual is at odds with the evidence in another respect. Mr Gordeno’s unchallenged evidence was that he instructed another firm because he was advised to do so on 11 February by Irwin Mitchell. Mr Acheson’s evidence, which reflects the documents, was that Irwin Mitchell advised Mr Gordeno to instruct another firm because it faced a potential conflict. Had Irwin Mitchell’s initial advice been correct, it would not have faced a potential conflict. They could have continued to act, and there is nothing to suggest that Mr Gordeno would have instructed another firm. Since Irwin Mitchell were already familiar with the file and the exchanges with Hope, no reading into the matter would have been necessary for them to continue to advise. By contrast, Vardags’ initial work must have involved coming up to speed with the previous advice and considering whether it was correct. Those costs would not have been necessary, and the evidence strongly suggests they would not have been incurred, had Irwin Mitchell’s advice been correct, i.e. had there been no breach of the duty of care and skill.

247. Accordingly, it seems to me that this aspect of Mr Gordeno’s claim does not face an issue with factual causation. Mr Gordeno’s evidence was that he only instructed Vardags because he was advised to do so by Irwin Mitchell, and I accept that. Mr Acheson’s evidence was that Irwin Mitchell so advised Mr Gordeno because they had a conflict, and that, too, I accept. It was not accepted at the time, but is admitted now, that Irwin Mitchell breached the duty of care, and that breach is what gave rise to the conflict and so, in turn, the need for Mr Gordeno to instruct Vardags. I do not consider that he would have incurred at least the initial Vardags costs in any event; Vardags were not advising on a new point, they were revisiting earlier advice which should have been correct in the first place.

248. Finally, one comes to the reasonableness of the costs. In the context of mitigation it is now accepted by Irwin Mitchell that Mr Gordeno acted reasonably in incurring some costs liability with Vardags in order to verify the position. Even there they limit this, however, to Vardags’ first invoice covering the period 12-18 February 2019. Mr Carpenter submitted that by this stage the point had been clearly set out by Hope’s lawyers and Irwin Mitchell had accepted their error. It was only a question of confirming the position.

249. Mr Schmitz submitted that Mr Gordeno simply did what Irwin Mitchell had suggested – he took independent advice and he continued to advance the arguments that Irwin Mitchell had themselves put forward over a prolonged period. When it became apparent that the defence was hopeless, Vardags simply acted so as to reduce costs. Mr Gordeno has asserted privilege over the Vardags file, as is his right, so I have no evidence either way as to when he was advised that the defence was hopeless. I am essentially asked to infer that it was shortly before the dismissal of his defence, such that all the costs were reasonably incurred.

250. I do not accept Irwin Mitchell’s case that this was a simple matter – that Vardags could quickly come up to speed, and with limited input from leading counsel could (and should) within a few days have advised Mr Gordeno to fold. Any new legal team would need time to read into the matter and consider the detail. Abandoning the defence was an irrevocable step; it was not to be taken lightly.

251. Nor do I accept that Irwin Mitchell had paved the way to such a conclusion in the manner they now suggest. The advice in fact given by Irwin Mitchell on 11 February 2019 was that “ it seems possible that the Administrators can overreach the second charge on sale ”. As I have noted, that is well short of being definitive. I entirely accept that having realised their conflict Irwin Mitchell could not advise further; but what that meant was that Vardags needed time to form their own view.

252. By contrast, it seems to me that Mr Gordeno did delay well beyond the point when it would have been reasonable to conclude that his position was hopeless. Ultimately, the point on which his defence to the declaratory action failed is a short one and is a point of law. There were only so many ways it could be tested. The first two Vardags invoices cover the period from 12 February to 26 March 2019. That, it seems to me, was adequate time for lawyers to consider the position and advise. There is nothing to suggest that the advice changed. The remaining costs were most likely to be refining the strategy and preparing for trial. Those steps were futile, and obviously futile given what Mr Gordeno must by that stage have known. Costs after the second invoice therefore were not reasonably incurred.

253. The same logic applies equally to Hope’s costs. As I understand it, those costs only became due well after the point when I have concluded that Mr Gordeno should have accepted the inevitable. In my view he was not acting reasonably in allowing matters to reach that point, such that those costs are not recoverable from Irwin Mitchell.

254. Finally, and for the avoidance of doubt, Mr Gordeno’s claim for the first two Vardags invoices is not subject to any reduction by virtue of the Assignment. Again, this flows from the analysis on factual causation. Had I been with Mr Gordeno on his primary case regarding the Glo deal, I would have accepted that Irwin Mitchell’s advice caused him to enter into a transaction under which he received a right, the Pasture Overage. That right was less valuable than he thought it to be, but had it not been for the advice he would not have had any such right at all. When he sold that right, which was the effect of the Assignment, that plainly would have affected any loss he suffered.

255. By contrast, here I have accepted that as a result of Irwin Mitchell changing their advice in February 2019 Mr Gordeno incurred legal costs that he should not have needed to incur. There was no corresponding upside – he ought to have been able to keep the Pasture Overage (or sell it and recover the full proceeds) and still not pay those costs. Accordingly, it seems to me that claiming under the Assignment would not have been an act of mitigation in respect of these losses. Quantum At the time of the sale, what was the market value of the Property as between a willing buyer and a willing seller, without any provisions for the payment of overage, such value being the sum of the values of each of the House, the Garden and the Pasture?

256. For the reasons given above, I accept the valuation of Ms Seal. The market value of the Property was £2,095,000, comprised of £685,000 for the Garden, £1.2 million for the House and £210,000 for the Pasture (of which £70,000 represented its hope value). Is Irwin Mitchell entitled to rely on the £3 million limitation of liability?

257. Mr Gordeno’s case is that Irwin Mitchell’s limitation of liability of £3 million was unenforceable by virtue of the Consumer Rights Act 2015 .

258. Irwin Mitchell accept that Mr Gordeno was dealing as a consumer under section 61 of the 2015 Act and accept that if the limitation of liability caused an imbalance in the parties’ rights and obligations to his detriment then it is unenforceable against him under sections 62(4) and (1). Their point is a factual one – Mr Gordeno read the limitation, which was in clear terms, and did not in any way object to it despite the retainer letter inviting him to raise any concerns. While Mr Gordeno was dealing as a consumer, his background was that of an experienced businessman who would have understood the limitation of liability’s operation and effect.

259. In assessing unfairness section 62(5) requires me to consider the nature of the subject matter of the contract and all the circumstances existing when the term was agreed. Such terms are common in solicitors’ retainers, but there is no suggestion that it in any way contravened any requirements or guidance of the SRA. It is clear and contained in the body of the retainer letter, not simply an appendix. The limitation is for a figure that is 100 times Irwin Mitchell’s fees. The M&G Report valued the Property at £3.875 million with a reasonable marketing period but only £3.15 million on a reduced marketing period, so the limitation was only slightly less than the value of the Property. When one considers that Glo was to pay (and did pay) £2 million upfront, the value of the Property at risk was significantly below the limitation of liability.

260. Given my other findings this point is academic, but I accept that the limitation caused no imbalance to the parties’ relationship. Conclusion

261. Lord Sumption emphasised the critical role of causation in negligence in his judgment in Hughes-Holland at [20]: “ It is generally a necessary condition for the recovery of a loss that it would not have been suffered but for a breach of duty. ” Put that way the proposition is uncontroversial. But where breach of duty is established or admitted, a temptation exists to assume that it must have been the cause. That temptation must be resisted, for as Professor Morgan has observed (“Great Debates in Tort Law” (Hart 2022) page 74): There is no sensible reason to believe that a ‘guilty’ possible cause is more likely to be causal than an innocent possible cause, simply because of its ‘guilt’. … Fault does not increase the ‘causal potency’ of the defendant’s possible contribution.

262. Professor Morgan was addressing personal injury cases, particularly those where the claimant is exposed to a harmful agent from multiple sources, but what he says is of general application. Part of the message of the line of cases culminating in the six Manchester Building Society questions is to maintain a focus on which possible contributions do have causal potency and which do not.

263. Mr Gordeno has a moral right to feel aggrieved. He paid a significant amount for legal advice and that advice was wrong. A moral right to feel aggrieved is not the same as a legal right to damages, however. In my view, even had Mr Gordeno been properly advised of the risk to the Pasture Overage on a Glo insolvency he would have seen that risk as being a minor one. Of course, nobody sensibly likes to be told they will be exposed to greater risk for the same reward. But he had strong financial reasons to favour the Glo deal and his other options for raising funds would have been more difficult. Had Irwin Mitchell advised him that he was exposed to a credit risk on Glo I believe he would still have taken the easier option, confident that it would have come good. Put in straightforward legal terms, even on his broader version of the scope of duty, which I also reject, he has not established causation in respect of this part of his claim.

264. His moral and legal rights are more closely aligned in the case of the Vardags costs. Here, there is no question of what Mr Gordeno would have done had Irwin Mitchell’s advice been different, because that aspect of his case turns on Irwin Mitchell’s advice changing in February 2019 in precisely the way that it did. The breach of duty here does have causal potency. Given the uncertainty that Irwin Mitchell’s breach had created and the urgency of his situation, I consider that Mr Gordeno acted reasonably in instructing Vardags and leading counsel. I also consider that Mr Gordeno’s position by that stage (through no fault of his) was legally tangled and that Vardags would properly need some time to advise. By 26 March 2019 that process should have been complete, however, and in pressing on past that point Mr Gordeno acted unreasonably. Accordingly, he is entitled to recover the sums he paid under the first two Vardags invoices but not any amounts thereafter.