Cases - Nyckeln Finance Co Ltd v Stumpbrook Continuation Ltd

Record details

Name

Nyckeln Finance Co Ltd v Stumpbrook Continuation Ltd

Date

[1994]

Citation

2 EGLR 143

Keywords

Negligence in valuations and surveys

Summary

In 1989 the claimants, relying on a valuation from the defendants, lent £21m to fund the purchase of a large office block. Within a few months the borrowers defaulted in repayment; at this time the market was falling rapidly but the claimants delayed for almost a year in taking steps to repossess the property, despite the fact that in August 1990 they received an offer of £17m for it. In 1992, when the property was finally repossessed and resold, it realised only £3.1m. It was held that the claimants ought reasonably to have accepted the offer of £17m in August 1990, and were accordingly not entitled to be compensated for any loss that would have been avoided if they had done so.

In a difficult residual valuation, the parties' expert witnesses agreed that a bracket of only 10% was appropriate.