Louis Glatt v Nigel Heath Sinclair (2011)
A substantial price difference between the sale price of a property and that of its immediate subsequent sale was sufficient evidence to justify permission for a breach of duty action against a receiver.
The appellant homeowner (G) appealed against an order refusing permission to continue an action for breach of duty against a receiver (S) appointed by the court. Under the court's authority, S had arranged the sale of a number of G's properties. With respect to one property S had obtained a valuation of £330,000 and shortly afterwards it had been sold for that price by an estate agent (M). In response to G's concern, S had obtained an additional valuation which had also been at £330,000. However, the property had been remarketed on the day of completion for £455,000 and a sale rapidly agreed at that price. No satisfactory explanation had ever been given for the 38 per cent uplift. G alleged that S had failed in his duty by allowing the purchase at an undervalue to a buyer connected to M. G contended that the judge had erred and his claim had a realistic chance of success.
S had been entitled to rely on the two valuations from reputable national firms and to instruct selling agents (see para.33 of judgment). However, given the size of the uplift and the fact that neither the asking price, nor any sales particulars or advertising had ever been disclosed, there remained a triable issue over whether the property had been adequately advertised and marketed by S (para.41). The allegations of sale to a person connected to M were very serious allegations of fraud and the judge had been correct to hold that the evidential basis for them was too flimsy (para.50).