Titan v Colliers – the price of everything and value of nothing

The Court of Appeal recently overturned the High Court's judgment in the case of Titan v Colliers.

Originally, the High Court found that the defendant's valuation of a German commercial property had been negligent.

The Claim

Having relied on a €135 million valuation made by Colliers in 2005, Credit Suisse made a loan of €110 million to the landlord, who transferred the majority of the loan to Titan. Following the landlord's default in 2009, the property was then resold for only €22.5 million.

Titan sought damages, alleging that the value of the property in 2005 had been €76.6 million.

With the true value of the property assessed as being €103 million ie over the 15% bracket of reasonable valuations/over the set margin of error in surveyors and valuers negligence claims, the High Court Judge found Colliers liable.

The Appeal Decision

The main ground on appeal was that the true value of the property had actually been higher than €103 million and indeed the Court of Appeal assessed that the true value of the property was €118.3 million, meaning that the valuation fell within the 15% margin of error and therefore that Colliers had not been negligent.

Assisting this decision were the following points:

• only six months prior to the fateful valuation, the property had been sold for €127.1 million and the High Court Judge had incorrectly proceeded without regard to evidence of an actual sale;
• on three different occasions between 2003 and 2005 the property had been valued by other firms at between €114.7 million and €134.5 million; and
• the High Court Judge has not taken into account the rising market in 2005.

Comment

It is welcome that the Appeal Judge adopted a more accurate approach to valuing the property, rather than settling on a figure between the valuations made by opposing experts in court.

It must also be positive that the Court of Appeal recognised that the pre-crash rising market was a relevant factor to be taken into account.

Following the Court of Appeal judgment, Titan's solicitors said that they are considering an application for permission to appeal to the Supreme Court.