Ludsin Overseas Ltd v Douglas John Maggs (2014)
The best indication of the value of an asset at any particular time was what someone would pay for it after reasonable attempts had been made to sell it. Evidence to the effect that nobody had been prepared to offer even £2 million for a property after six months' marketing by a well-known and reputable agent was more persuasive than expert evidence, obtained before the marketing process had begun, valuing the property at £3.35 million.
The appellant (L) appealed against a deputy registrar's decision to set aside a statutory demand made in respect of a debt owed by the respondent (M).
L had served the statutory demand for the unsatisfied part of a money judgment entered against M, and had obtained a charging order over M's interest in a property known as "Bellmans". The charge ranked behind a mortgage and a charge in favour of another judgment creditor (D). It was common ground that in order to fully secure the debt to L, Bellmans had to be worth at least £2.9 million. The deputy registrar set aside the statutory demand on the ground that the debt was fully secured. In doing so he relied on expert evidence indicating that Bellmans had an open market value of £3.35 million. It subsequently transpired that Bellmans was to be sold pursuant to an order for sale in favour of D. L appealed against the setting aside, seeking to adduce fresh evidence to the effect that Bellmans had been put on the market for £2.5 million; that only one offer, of £1.615 million, had been made; and that after six months the "floor price", below which D would have to seek permission before effecting a sale, had been reduced to £1.7 million. L asked that the matter be dealt with by way of rehearing rather than review.
L would be permitted to adduce the fresh evidence, and the matter would proceed by way of rehearing. After six months' marketing at asking prices ranging from £2.5 million to £1.7 million, nobody had offered to buy Bellmans at a price which provided security for L's debt. The interests of justice demanded that the matter be approached with the most up-to-date and reliable facts available, so long as those facts were probative of the matter in issue. The best indication of the value of an asset at any particular time was what someone would pay for it after reasonable attempts had been made to sell it. There was direct evidence of that in the instant case. The fact that no-one had been prepared to offer even £2 million for Bellmans after six months' marketing by a well-known and reputable agent was highly persuasive, if not conclusive, evidence that it was not currently worth enough to secure L's debt. That was far more persuasive than the expert valuation evidence given to the deputy registrar. The statutory demand should not have been set aside (see paras 18-24).