Zabihi v Janzemini & Ors

Where conversion has caused substantial loss, difficulty in proving the precise value of the goods does not restrict recovery to nominal damages. The court must make the best rational assessment permitted by logically relevant evidence. Expert valuation evidence may be preferable, but it is not the only admissible evidence of value.

The prima facie measure of damages for conversion is the market value of the chattel at the time of conversion. A presumption that missing goods possessed the highest possible value requires rational parameters and cannot resolve a case in which both parties have dishonestly withheld the truth.

The claimant delivered four sets of diamond and gold jewellery to the first defendant for sale. The defendant later said that the jewellery had been stolen, but subsequently offered different jewellery for return. Both parties advanced dishonest accounts of the identity and value of the original jewellery.

Blackburne J found that the jewellery offered for return was not the original jewellery. Although its precise characteristics could not be established, he assessed its open-market value at £125,000 and awarded that sum as damages for conversion.

The defendant appealed, seeking a reduction to nominal damages. The claimant cross-appealed for an increase to £500,000. The central questions were whether the judge could assess value on the available evidence, whether expert evidence was essential, whether the presumption concerning unproduced goods applied, and whether private-sale or market value was the proper measure.

1. By a majority, both the appeal and the cross-appeal were dismissed. The Chancellor, with whom Sullivan LJ agreed, held that Blackburne J had sufficient evidence to value the converted jewellery at £125,000. Moore-Bick LJ dissented on the defendant’s appeal and would have reduced the award to £30,000, but agreed that the cross-appeal should be dismissed.

2. The valuation issue was within the pleaded case. The defendant had expressly required strict proof of the jewellery’s value, and both parties had an opportunity to adduce evidence and cross-examine on that question. The trial judge also raised the possibility that the original jewellery differed from both parties’ descriptions and received submissions upon it. The procedural principle discussed in Senate Electrical Wholesalers Ltd v Acatel Submarine Networks Ltd [1999] 2 Ll.L.R 423 did not require the claim to be dismissed.

3. Where substantial loss is established but precise assessment is difficult, the court must do its best using evidence it can properly accept. The evidence must be logically relevant, but it need not consist exclusively of expert opinion. The agreed £30,000 value of the replacement jewellery provided a rational minimum because the defendant would not reasonably have substituted more valuable goods without saying so.

4. The majority held that the parties’ contemporaneous references to possible private-sale prices of £340,000 to £500,000 were sufficiently relevant to value. The trial judge was entitled to discount those figures by the expert evidence concerning retail mark-ups, derive an open-market range of £100,000 to £150,000, and select its midpoint.

5. The presumption in Armory v Delamirie (1721) 1 Strange 505 could not apply without limitation. Both parties had given dishonest evidence, so a presumption against one was met by an equal presumption against the other. The absence of characteristics beyond diamonds and gold also left no rational parameters for assuming the highest value. The trial judge had used the tempered principle only as a check upon his valuation.

6. The claimant’s cross-appeal failed because the prima facie measure of damages for conversion is the chattel’s market value at the time of conversion. An anticipated private sale at a higher price did not alter that measure.

• Court of Appeal (Civil Division): By a majority, dismissed the defendant’s appeal against the £125,000 damages award and unanimously dismissed the claimant’s cross-appeal for an increased award: [2009] EWCA Civ 851.
• High Court, Chancery Division: Blackburne J found that the defendant had converted four sets of jewellery and assessed their open-market value at £125,000. No citation for that decision is stated in the judgment.