Tour des Finances NV GVBF v CBRE Loan Services Limited

In a secured-lending contract requiring a professional valuation by an appointed valuer, a report is not invalid merely because the work is imperfect, the parties disagree about value, or a cross-check is cursory. The decisive questions are whether the report satisfies the contractual definition and whether actual bias, dishonesty, bad faith, improper instruction or pressure has been proved. Lenders or an agent may raise questions and comments on a draft for the valuer’s consideration, but may not dictate the result or compromise professional independence. In this context, apparent bias without actual bias does not disqualify the valuation. A valuation may therefore remain contractually effective despite shortcomings where it is still a professional valuation prepared to the required standards.

The claimant, Tour des Finances NV GVBF, financed the acquisition of a major Belgian office property under an Amended Facilities Agreement. The defendant, CBRE Loan Services Limited, acted as agent and security agent for the lenders. The agreement provided for a Cash Trap Event if the loan-to-value ratio exceeded a defined threshold. A valuation by Jones Lang LaSalle exceeded that threshold.

The claimant sought a declaration that the valuation had been obtained in breach of the agreement and an order releasing rental income withheld under the cash trap. The central issues were whether the defendant or lenders had improperly influenced Jones Lang LaSalle, whether the valuer lacked independence or was biased, and whether apparent bias, shortcomings in the valuation work, or failure to perform a discounted cash-flow cross-check meant that the report was not a contractual Valuation.

Disposition. The claim failed. The Cash Trap Event had occurred, and Jones Lang LaSalle’s report was a Valuation within the agreement despite criticism of its quality.

1. Contractual construction. The court applied the approach described in Wood v Capita Insurance Services Ltd [2017] UKSC 24; [2017] AC 1173. Textualism and contextualism are tools for ascertaining the objective meaning of contractual language, through an iterative process that tests proposed interpretations against the agreement and its commercial consequences. The AFA required a professional valuation by a professional valuer to appropriate professional standards. Its reference to the RICS valuation standards was not confined to the meaning of market value.
2. Independence and communications. The valuation had to be carried out by the appointed valuer, not by the agent or lenders. Questions and comments on a draft could be raised for the valuer’s consideration, but the evidence did not establish improper instruction or pressure, loss of independence, or bias.
3. Bias and quality. In this context, actual bias, rather than its mere appearance, was relevant to disqualification. The report’s cursory discounted cash-flow cross-check, omissions and other weaknesses did not prevent it being a Valuation. There was no dishonesty, bad faith or impropriety, and the cross-check was not shown to have altered the result.
4. Adverse inference. The court refused to infer from the failure to call two further witnesses that Jones Lang LaSalle had acted improperly. The proposed inference went beyond what could safely be concluded from the evidence.

The judge observed that a single valuer engaged by one party, unequal access to the valuer and serious consequences may undermine confidence in the agreed process. Those observations did not alter the contractual conclusion. The requested declaration and release of rental income were not granted.

not stated in the judgment.