Jabir v HA Jordan & Co

In valuing lost property, the price of a genuine transaction involving the specific item may provide better evidence of market value than sales of other items that are not strictly comparable. This applies where the transaction was made between informed and willing parties, even if it was a private sale rather than an open-market transaction. Oral evidence may establish commercial agreements where the trade commonly relies on personal dealings and handshakes. An appellate court should not interfere with a trial judge’s findings based on credible witness evidence merely because additional documentation or expert evidence might have been available.

The respondent admitted liability after losing a distinctive pearl delivered for jewellery work. The remaining issue was quantum. The High Court accepted the appellant’s evidence that he had bought the pearl for $500,000 and agreed to sell it for $650,000. It awarded damages of $650,000.

The respondent appealed, arguing that the judge had not found that the pearl was saltwater, had wrongly accepted undocumented purchase and resale agreements, and should have valued the pearl by reference to expert evidence concerning comparable freshwater pearls. The central issue was the proper evidence of the pearl’s value.

1. Appeal dismissed. The judge’s award of $650,000 was upheld.
2. The judge made no express finding that the pearl was saltwater, but the award could only have proceeded on that basis. The finding was implicit in the judgment. The judge was entitled to determine the issue although the experts had assumed that the pearl was freshwater. The issue had been raised at trial and the appellant had been cross-examined on it.
3. The judge was entitled to find that the purchase and resale agreements were genuine. The absence of further documentation was not fatal. The evidence explained that high-value pearl dealing commonly involved private face-to-face transactions concluded orally or by handshake. The respondent had not sought specific disclosure of documents concerning the eventual payment. The judge’s conclusion rested on his assessment of witnesses whom he had seen and heard, and the Court of Appeal could not properly reverse it merely because more documents might have been produced.
4. The experts’ comparable transactions were materially weaker evidence because they concerned other pearls and proceeded on the assumption that the missing pearl was freshwater. Genuine transactions involving the very pearl, between experienced and informed dealers, were better evidence of its market value. The reasoning was supported by Biggin v Permanite [1951] 1 KB 422 and Zabihi v Janzemini & Ors [2009] EWCA Civ 851. A 30 per cent resale mark-up was accepted as normal in genuine transactions. The judge was therefore entitled to award the agreed resale price rather than the purchase price or the lower expert valuations.

• Court of Appeal (Civil Division): Appeal dismissed. Lord Justice Longmore gave the judgment; Lord Justice Munby and Sir Henry Brooke agreed.
• High Court, Queen’s Bench Division: HHJ Charles Harris QC accepted the appellant’s evidence concerning the pearl’s purchase and agreed resale and awarded $650,000.