Expert Witness Journal Issue 66 April 2026 - Flipbook - Page 73
Hope Capital Ltd v Alexander
Reece Thompson LLP
by Expert Evidence.
In 2018 a historic Grade 2 listed National Trust
property known as Cedar House was put on the
market. It dated back to the 15th century and had
many original features including a huge medieval
main hall, and had had many well-known guests over
the years including, at one time, Lord Nelson. It was
situated in Cobham Surrey and in more recent times
had been a high-end hotel and restaurant.
valuation of Cedar House at that time. A 180-day
valuation is what is commonly used in bridging
昀椀nance and many 昀椀nance companies will only lend
against this particular valuation. It is the value of
a property assuming there were only 180 days to
advertise and sell the property i.e. often some 5%15% lower than the open market value, depending
on the type of property. Judge Nicol, taking into
account the “uncommon” nature of the property
agreed that a valuation of 15% above or below the
true value was acceptable and would not have been
considered negligent. He thought the true valuation
should have been £2,475,000 which was well below
the 15% tolerance value, and that ART’s valuation
was therefore incompetent. There were a couple of
external factors leading to the eventual drop in sale
value of Cedar House – the unprecedented collapse
in the property market due to the global pandemic
and Cedar House’s reputation as a ‘problem
property’ due to di昀케culties with the National
Trust. The Judge also found that Hope’s conduct
contributed to making Cedar House incapable of a
quick sale and on that basis they had not su昀昀ered
loss of capital.
The defendant (‘ART’) was a 昀椀rm of chartered
surveyors and property consultants and had valued
Cedar House at £4,000,000 in its report dated 14
February 2018. Cedar House was intended to be the
security for a bridging loan. This bridging loan was
for £2,215,440 excluding interest and fees and was
provided to St Anselm Heritage Properties by Hope.
St Anselm reneged on the loan and Cedar House
fell into the hands of receivers in November 2018.
Cedar House was 昀椀nally sold in October 2020 for the
greatly reduced price of £1,400,001.
Hope Capital brought proceedings against ART
alleging that the loss in value of the property was
due to ART’s negligence in initially overvaluing the
property for collateral for the bridging loan. They
argued that the true value was only £2,150,000, and
that by funding the bridging loan they’d lost a total
amount of £2,527,749. This was a cumulative 昀椀gure
made up of di昀昀erent losses: – loss of pro昀椀t on the
deal, loss of capital and loss of interest on the loan.
“
The key issue at the heart of the case was whether
the duty of care owed by the valuer was greater than
normal (i.e. simply providing a valuation opinion
on which the lender was entitled to rely), in e昀昀ect
protecting the lender against all risks associated
with the transaction. Given that the principles of
this case were similar to numerous other property
transactions, the Judge noted that there would
have had to be a direct communication between the
parties extending the duty of care to a higher level.
The fact that this particular valuation was the only
“green light” in the whole process was not su昀케cient
to extend that duty of care to a higher level.
When I was young, I thought money was the most
important thing in life; now that I’m old I know it is.”
Oscar Wilde
ART admitted that it had breached its duty of care
towards Hope and that it had been negligent. The
Court had to decide whether Hope had su昀昀ered
any loss as a result of that negligence, how much
the loss was and also whether Hope had been guilty
of contributory negligence. The loss would be
limited to the di昀昀erence in the original valuation
of £4,000,000 and £1,950,000 which is what Hope
claimed should have been the correct 180-day
EXPERT WITNESS JOURNAL
“
The lack of money is the root of all evil.”
Mark Twain
The Judge concluded that even though ART had
been negligent in giving the original valuation,
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APRIL 2026
