Neutral Citation Number: [2008] EWHC 51 (Comm)
Case No: 2007 FOLIO NO. 717
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT

Royal Courts of Justice
Strand, London, WC2A 2LL

Date: 18/01/2008

Before :

MR JUSTICE DAVID STEEL
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Between :

	Case No: 2007 Folio 717		
	THE CHESHIRE BUILDING SOCIETY	Claimant	
	- and -		
	(1) DUNLOP HAYWARDS (DHL) LTD
(T/A DUNLOP HEYWOOD LORENZ)
(2) COBBETTS 	Defendants	
			
	And Between		
			
	Case No: 2007 Folio 1451		
	DUNLOP HAYWARDS (DHL) LTD	Claimant	
	- and -		
	IAN MCGARRY	Defendant	

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Case No: 2007 Folio 717
Sue Carr Q.C. & Ben Elkington (instructed by Addleshaw Goddard) for the Claimant
Roger Stewart Q.C. & Ben Patten (instructed by Berrymans Lace Mawer) for the First Defendant

Case No: 2007 Folio 1451
Roger Stewart Q.C. & Ben Patten (instructed by Berrymans Lace Mawer) for the Claimant
The Defendant did not appear and was not represented.

Hearing dates: 11th & 12th December 2007
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Judgment

Mr Justice David Steel: 

Introduction
1.	The Claimant (“CBS”) seeks summary judgment against the First Defendant (“DHL”) together with an order for interim payment in action 2007 Folio No. 717. In turn, DHL seeks the same relief by way of an indemnity in Action 2007 Folio No. 1451 against the Defendant in that action, Ian McGarry (“McGarry”). The two applications are heard together pursuant to an Order dated 30 November 2007 which abridged the relevant period of notice.
2.	The claim is in deceit and arises from loans made by CBS in 2005 to a company called Goldgrade Properties Ltd (“Goldgrade”). CBS made claims against the valuer and the solicitors who acted on its behalf in respect of both an initial advance and a further advance both secured against commercial property in Birmingham. The Court is not, in the present application, concerned with the claim against the solicitors. 
3.	The background can be summarised briefly. In February 2005, CBS was asked to make a loan of £10.5million to Goldgrade to fund the purchase of a property in Priory Road, Aston, Birmingham (“the property”) at a price of £14.5million. It was the understanding that, following purchase, the property was to be occupied by three business tenants taking new leases at favourable rental rates.
4.	CBS gave instructions to DHL to value the property. McGarry, a director of DHL, duly produced a valuation which purported to accord a value of £16million to the property with the benefit of the new leases and £10.5million with vacant possession. In reliance, CBS advanced the sum of £10.5million to Goldgrade in April 2005.
5.	In September 2005 CBS was asked to advance a further £1million to Goldgrade against the security of the property. CBS accordingly asked DHL to confirm whether or not its valuation figure still applied and DHL, again through McGarry, confirmed that it did. The further advance was duly made.
6.	In due course CBS discovered that it had been the victim of a mortgage fraud. The proposed new leases were bogus and the true vacant possession of the property was only about £1.5million. CBS suffered a substantial loss as a result when Goldgrade defaulted on the loan.
Procedural history
7.	Before developing the factual background I need to grapple with the procedural history. CBS issued proceedings on 16 May 2007 claiming damages in deceit, or in the alternative, negligence and/or breach of contract. On 15 June 2007 DHL served its Defence. DHL admitted negligence and breach of contract but alleged that CBS had been contributorily negligent. As regards the deceit claim, DHL “did not admit” that McGarry had acted fraudulently.
8.	Notably DHL chose not to issue any Part 20 claim against McGarry at this stage. This tactic was apparently based on the expectation, or at least hope, that McGarry would cooperate with DHL in presenting its defence.
9.	On 14 September 2007, CBS issued the present application accompanied by various witness statements and an expert’s report. It was only thereafter on 15 October 2007 that DHL issued its separate proceedings against McGarry. This asserted (“without prejudice to the non-admissions in its Defence”) that McGarry has acted fraudulently in the respects alleged by CBS. No defence has been served.
10.	DHL issued its own application for summary judgment on 14 November 2007 (although it was not served until about 3 December 2007). DHL then applied for that application to be heard concurrently with CBS’s application which had been fixed for 11 and 12 December 2007.
11.	This application for a concurrent hearing came before me on 30 November 2007. McGarry did not appear at that hearing. It was submitted by DHL that it was desirable that the two applications were heard together although DHL remained concerned that they had been unable to get any assistance from McGarry (save on unacceptable terms - to wit an undertaking not to proceed against him).
12.	I took the view that it was most improbable that any further short period of additional notice to McGarry would result in any assistance (or even comment) being forthcoming. Accordingly I granted the application “without prejudice to any application for an adjournment”. 
13.	In the event McGarry did not appear in person on the first day of the hearing of these applications. (It should be noted that he presently has no legal representation save in respect of potential criminal proceedings in respect of which a Restraint Order under section 41 of the Proceeds of Crime Act 2002 was made in March 2006).
14.	However on the second day of the hearing, McGarry made an appearance and sought an adjournment. The primary grounds of the application appeared to be as follows:
i)	DHL had given him insufficient time to prepare for the hearing.
ii)	He was arrested in March 2006, in relation to the matter and thus needed to take legal advice.
iii)	There was no need for any haste as he was subject to a restraint order.
iv)	The matter should thus be determined after the final resolution of the criminal proceedings.
15.	This proposal appeared to involve substantial, indeed open ended, delay. Further it was the submission of DHL that, if it was appropriate to grant a short adjournment, that should involve the postponement of both applications. This struck me as wholly unrealistic given the delay in joining McGarry and, more importantly, the extensive investigations conducted by DHL into McGarry’s conduct carried out by consultants retained by DHL.
16.	One of the major difficulties with McGarry’s position is that, when asked to give an oral indication of what his defence would be, he responded as follows:
“My defence will revolve around the argument that I was not the head of valuations or the head of the office at the time that this valuation was undertaken and I was instructed by my superiors to over-value a previous property on behalf of the same borrowers that this case relates.”
	  This hardly afforded much assistance to DHL or indeed himself.
17.	Despite all this I indicated that I would have regard to any matters that he might bring to the court’s attention by the following Monday since on any view there would be a delay before a judgment was handed down. McGarry refused to comply with this timetable and left the court. In the result I continued hearing both applications.
The chronology
18.	The largely unchallenged evidence filed on behalf of CBS furnishes the following chronological account. The valuation prepared for the Claimant was by no means the first prepared by McGarry of the very same property. The first was dated 28 September 2004. The client lender was Pearl Holdings Ltd (“Pearl”). Pearl was later renamed Lexi Holdings (“Lexi”) and, in administration, is the Claimant in a claim issued in 2006 in the Chancery Division No. HCO6104067. In that action Lexi seeks repayment of sums allegedly misappropriated from Lexi in respect of the purchase of a number of other properties. McGarry is the sixth Defendant and a freezing order in the sum of £625,000 was granted against McGarry by Lightman J on 1 December 2006.  
19.	The proposed borrower was Avocet Holdings (VK) Ltd (“Avocet”). This company in due course emerged as associated with Valley Estates Ltd (“Valley”), Goldgrade and a Mr. Ahmed Afsal (“Afsal”). The valuation report records the basis of the valuation in para 8.3:
“Following completion of the acquisition of the property by the borrower, the property is to be let in three parts, Units 1,2, and 3, subject to new full repairing and insuring leases. As these lease[s] are yet to be completed, our valuation is made on the assumption of full vacant possession.”
20.	On that assumption, the market value was put at £10.5million: see para 13.1. It is to be noted however that the report also expressly records:
“12.6 Best evidence of Market Rent is provided by the three current [sic] lettings on the subject property, which indicated that this is good demand for industrial properties in the area.”
21.	The very same day McGarry prepared another valuation for the property. The borrower was again Avocet but this time the lender was Bank of Scotland (“BOS”). There were some significant differences between the two valuations:
i)	It was designed to furnish BOS with the current market value as well as the value with vacant possession.
ii)	The details of the areas of Units 1, 2 and 3 were provided together with the initial rent payable under the leases to be granted “simultaneous with completion of the transaction”.
This second valuation repeated the vacant possession value of £10.5million but asserted a market value of £16million.
22.	Yet a third report of the same date was prepared by McGarry. This time the borrower was to be Valley albeit the lender is not identified. This report matches the second report.  It should be noted in passing that it was uncontradicted evidence of the Claimant’s expert that it would be highly unusual for a valuer to produce two or three reports on the same day in respect of the same property and the same borrower but on different bases.
23.	On 8 November 2004, solicitors acting for Pearl wrote to McGarry raising various queries including in particular:
“4.	Purchase Price - The Contract for the sale of the 			property refers to a purchase price of £1.4million 			whereas you have valued the property at £10.5million. 		Can you account for the discrepancy between your 			valuation and the actual purchase price?”
The letter went on to observe that, even though the property was being sold by receivers, it was improbable that they would be disposing of it so far below its “true value”.
24.	There is no direct response to this query in the papers but on the following day McGarry wrote to Pearl as follows:.
“Thank you for your facsimile of the 8th November 2004.
I can confirm that in our opinion the vacant possession value of the property on the assumption of full vacant possession and a restricted sale period of 98 days lies in the region of £9,000,000 (nine million pounds). I further confirm that this letter is supplementary to and should be read in conjunction with our report dated 28th September 2004.  I would also confirm that the purchase price of £1,300,000 (one million and three hundred thousand pounds) one of the calls to alter [sic] are the report of the valuation figures.”
25.	It was CBS’s case that these two letters, whether taken individually or jointly, were of great significance in demonstrating that McGarry was aware by November 2004 that the purchase price was in the range of £1.3 to £1.4million.
26.	I can then jump forward to February 2005. On 15 February, McGarry wrote to Valley enclosing a draft letter. The draft purported to confirm a market value for the property of £4.75million. This was to be “read in conjunction with our full valuation report in respect of the property which is to follow in due course…”   No such report has been produced by DHL.
27.	The suggested valuation appears to coincide with registration of Valley’s title. In office copy entries from the registry obtained in April 2005, Valley’s title was recorded as having been registered on 24 February 2005: “the price stated to have been paid on 15 November, 2004, ….was £4million plus £700,000 VAT.” The office entries then reveal an onsale the following day (25 February) to Ascot Marketing Ltd at a price of £10.5million (a sale not registered until 5 April 2005).
28.	Jumping ahead, the office entries record a further sale which purportedly took place on 13 April 2005 by Ascot to Goldgrade for £14.5million. It is clear that Avocet, Valley, Ascot and Goldgrade are all associated companies.
29.	Meanwhile on 18 February 2005 an introducer (Mutual Finance) contacted CBS with a funding request from “an experienced property investor client”. The purchase price was said to be £14.5million in respect of the property which was said to have “the benefit of three 20 year FRI leases covering the entire site with a total rent of £1.1million”. The loan sought was £10.5million on an interest only basis: the request went on “we believe the property will have a market value of in the region of £16 million.” 
30.	 On 7 March 2005, McGarry prepared a valuation for Northern Rock PLC on the property. The borrower was to be Goldgrade. In all material respects the report matched the report to Valley.  However Northern Rock did not proceed further.
31.	It would appear that at some stage the Valley report had been forwarded to CBS. By email dated 29 March, CBS sought confirmation from McGarry that they could rely on it. The email also raised the following query:-
“3.	Our credit committee have queried the proposed 			leases/rental incomes…Why Euro Packaging are 			leasing a much larger area for relatively little extra 			rent…Can you offer an explanation for this?”
32.	This query was prompted by the fact that Unit 1 which had a floor area of 55,000 square feet was reported to attract a rent of £450,000 whereas for Unit 3 with a floor area of only 22,000 square feet the rental was £335,000. McGarry replied by return:
“I understand from the borrower that this was partly good negotiation on the part of the tenant and partially because they are taking the multi-storey element of the property.”
33.	As explained by the Claimant’s expert, the difficulty with this answer was that, even if no rental was attributable to the upper floor, the net rent for Euro Packaging would be about £9.74 per square foot compared with over £13 per square foot for the other two tenants.
34.	CBS duly made further enquiries on the topic on 1 April 2005 asking for an explanation for the disparity in rental rates. McGarry came back on 5 April with the following very different explanation:-
“I understand from the borrowers that [Unit 2 and 3] include yard areas which have been rentalised and this is the reason for the apparently high rent per square feet.”
35.	This did not satisfy CBS. Their lending manager came back the same day as follows:
“Ian, are you satisfied that the rental reserved under the two lease, which at over £13 psf looks very high, is a fair market rent when the yard space is taken into account? Also when analysed to take into account the yard space what is the per sq ft rental for the yard space?”
36.	McGarry’s reply was:
“I am satisfied that the rent reserved under the leases is reasonable. Deducting the yard area, the rent per sq ft for the shed space is circa £5 - £6 per sq ft.”
Again it is the unchallenged evidence of the Claimant’s expert that this explanation does not work either. It involved allocating 40% of the overall rental to the yard space.
37.	In the meantime CBS had instructed McGarry to prepare a valuation. This request was made on the assumption that McGarry had copies of the proposed leases. CBS required both market value and a vacant possession value. The letter of instruction stated:
“Your report should include details of and comment on:
	…..
	Existing leases, the principal terms and implication thereof 	on the marketability / value of the property…”
38.	This McGarry valuation is dated 1 April and was forwarded under cover of a letter dated 5 April 2005. It was in similar terms to the Northern Rock valuation save that the author reports that he had been supplied with copies of the draft leases. Their significance was further emphasised:
“8.3	Simultaneous with the completion of the acquisition of the property by the borrower, the property is to be let in three parts, Units 1,2 and 3, subject to new repairing and insuring leases, each of which will be subject to five yearly rent reviews. We have been supplied with draft copies of the occupational leases, unsigned and 	without attached plans, from which we understand that each will be drawn on institutionally acceptable Full 	Repairing and Insuring terms, subject to five yearly 	upwards only rent reviews.
8.4The basic terms of the three leases are to be as follows:
Unit 1
Tenant - Euro Packaging Ltd
Initial Rent - £400,000 per annum exclusive
Term - 20 years from completion
Unit 2
Tenant - Polyfloor Ltd
Initial Rent - £375,000 per annum exclusive
Term - 20 years from completion
Unit 3
Tenant - Metsec Plc
Initial Rent - £335,000 per annum exclusive
Term - 20 years from completion
8.5Of particular relevance to valuation, the three leases impose a liability on the tenants to both put and keep the properties in good and substantial repair. We understand that the tenant is also liable for the removal/containment of any asbestos (See section 11.0 Environmental Considerations below)
8.6Our valuation is made on the assumption that these three leases are ultimately completed on the terms as advised.”
39.	Once again the market value of the property “subject to and with the benefit of three occupational leases” is said to be £16million. The vacant possession value “on the assumption that the existing lease structure is [sic] collapsed” is said to be £10.5million.
40.	In reliance on this valuation and a report on title referring to a transfer from Ascot to Goldgrade for £14.5million, CBS made an advance of £10.5million to Goldgrade on 13 April 2005.
41.	Five months later Goldgrade approached CBS for a further loan of £1million. CBS asked McGarry for a “desktop” valuation “to confirm whether or not you consider the figures provided previously still apply.”  McGarry responded on 16 September to the effect that “we have re-run our calculations” and that there had been no material alteration to the current market value of £16million. Again in reliance on the assurance, the further advance was duly made.
42.	However in February 2006, CBS received an anonymous tip-off that transactions relating to the property were fraudulent.  Shortly thereafter Goldgrade defaulted on the loans.
The approach
43.	In reality, given McGarry’s involvement, the two claims stand or fall together.  In this context, I am conscious that the burden is on the Claimant in both actions to establish that the Defendant has no realistic prospect of successfully defending the claim in deceit (and that there is no other compelling reason why the case should be disposed of at a trial): Celandor Productions Ltd v. Melville [2004] EWHC 2362, Three Rivers DC v. Bank of England (No 3) [2001] 2 AER 513, Doncaster Pharmaceuticals Ltd v. Bolton Pharmaceutical Company [2006] FSR 63.
44.	The need for caution is the greater given the nature of the cause of action: see Wrexham Ass. Football Club Ltd v Crucial Move [2006] EWCA Civ. 237: 
“I do not underestimate the importance of a finding adverse to the integrity to one of the parties. In itself, the risk of such a finding may provide a compelling reason for allowing a case to proceed to full oral hearing, notwithstanding the apparent strength of the claim on paper, and the confident expectation, based on the papers, that the defendant lacks any real prospect of success. Experience teaches us that on occasion apparently overwhelming cases of fraud and dishonesty somehow inexplicably disintegrate. In short, oral testimony may show that some such cases are only tissue paper strong. As Lord Steyn observed in Medcalf v Weatherill (2003)1 AC120 at paragraph 42, when considering wasted costs orders: 
"The law reports are replete with cases which were thought to be hopeless before investigation but were decided the other way after the Court had allowed the matter to be tried.”  And that is why I commented in Esprit Telecoms UK Ltd and others -v-Fashion Gossip Ltd, unreported, 27 July 2000 that I was troubled about entering summary judgment in a case in which the success of the claimant's case involves, as this one does, establishing allegations of dishonesty and fraud, which are strongly denied, and which cannot be conclusively proved by, for example, a conviction before a criminal court:” per Dyson LJ at para 57 ff.
45.	That all said there are certain features of the present case which are of some materiality in considering the appropriateness of summary judgment:-
i)	DHL, far from vigorously denying the allegation of fraudulent misrepresentation, merely make “no admission” ;
ii)	So far as McGarry is concerned, whilst he purports to challenge the allegation and have a good defence to the claim, he is unwilling to file a defence or otherwise give any particulars of its nature: indeed his only observation touching on the merits is a claim that, at least in some respects, he was merely obeying instructions in tendering valuations which he knew to be false;
iii)	DHL have sought to give full disclosure of the relevant documents in their files;
iv)	There was little if any issue of primary fact in the witness evidence;
v)	CBS filed an expert’s report of Mr Clarke of King Sturge which was not challenged in any material respect in the expert’s report filed by DHL: indeed it was common ground that the discrepancies between the true values and the values provided by McGarry were “massive” and the rental levels adopted were well in excess of the market;
vi)	The only contribution of Mr Farr of GVA Grimley was as follows:
“I agree that the valuations adopted by Mr McGarry were far removed from the acceptable range of conclusions that should have been reached by a qualified acting diligently and possibly rationally.  Despite the substantial over valuation in this report and the failure to advise adequately on the shortcomings of the security offered, it is not certain that these were the product of dishonesty.”
		     Even if admissible this could provide no comfort to the Defendants.
Fraud – the law
46.	The elements of the tort of deceit are well established: Derry v Peek (1889) 14 App Cas 337, Angus v Clifford [1891] 2 Ch 449, Armstrong v Strain [1951] 1 TLR 856, The Kriti Palm [2007] 1 All ER (Comm) 667.  I would summarise them as follows:
i)	The Defendant must have made a representation which can be clearly identified.
ii)	It must be a representation of fact.
iii)	The representation must be false.
iv)	It must have been made dishonestly in the sense that the representor had no real belief in the truth of what he stated: this involves conscious knowledge of the falsity of the statement.
v)	The statement must have been intended to be relied upon.
vi)	It must in fact have been relied upon.
In addition, all the elements must be established by reference to the heightened burden of proof as discussed in Hornal v Newburger Products Ltd [1954] 1 QB 247.
47.	In the present case, only (iv) above is in issue.  The fact that CBS was the object of a mortgage fraud by those controlling Goldgrade is obvious. The question therefore arises, as DHL put it, whether there is a real prospect that at trial a court might find that McGarry was also duped by the fraudsters and was merely a negligent tool to their scheme.  
Discussion
48.	In my judgment, such an outcome can be safely dismissed in the wake of the cumulative impact of the following considerations:
i)	McGarry was an experienced and fully qualified surveyor. He had become a chartered surveyor in 1996.  He had been involved in commercial property valuations with various firms ever since.  He was engaged by DHL in 2000 and became a director in 2004.  Throughout he was responsible for valuations provided by their city office.
ii)	The true vacant possession value of the property was about £1.3 to £1.5million. This is evidenced both by the expert evidence and by the original sale price.  Despite this, McGarry put the value at £10.5million involving a margin of error of about 750%.
iii)	McGarry’s attention was expressly drawn to the original sale price by Pearl’s solicitors in November 2004. Yet, with one exception, the vacant possession value remained unaltered in all subsequent valuations.
iv)	The remarkable exception was this. McGarry was content to allocate an interim vacant possession value of £4.75million in February 2005 (coinciding with an apparent sale by Avocet to Valley.) His valuation then sharply reverted to £10.5million in March.
v)	The market valuation of £16million was purportedly based on three leases. McGarry had been expressly asked to comment on the leases and the implications of them. However:
a)	He failed to comment on the fact that their apparent impact was to increase the true vacant possession value by 1000%.
b)	He failed to record the fact that the leases remained unsigned between September 2004 and September 2005.
c)	His attention was expressly drawn to the apparent discrepancies in the rent for the three units but furnished a number of explanations which made no sense.
d)	He failed to report that the rental purportedly payable under the leases was as much as 100% higher than for brand new prime industrial sites in the area.
e)	He failed to comment on the obvious disparity of total rent (£1.1million) with the rateable value of £113,000.
vi)	Leaving aside the rent the expert evidence further establishes that the lease terms were in various other respects so onerous as to give rise to obvious doubts in the mind of a competent surveyor of their bona fides. In particular he made no comment on:
a)	The 20 year term with no break clauses.
b)	The repairing obligation required the tenant to “put and keep the unit in good repair” yet the property was already in disrepair. 
Such clauses were extremely rare, rendering it virtually inconceivable that three unrelated tenants would accept the same onerous liabilities.
49.	It is accepted by DHL that McGarry was negligent (although in this context it is suggested that CBS was primarily the author of its own misfortune). But in my judgment these features of the valuation are only consistent with dishonesty. Even incompetence cannot account for the purported acceptance of the terms of the lease and the valuations based on them.
50.	This conclusion is fortified by two other matters.  First there remains the point relating to payments by Goldgrade to DHL and/or McGarry in relation to the valuation. DHL has been unable to find any record of any payment. The absence of any evidence of payment suggests that either no payment was made for the valuation or any payment was made to McGarry personally.
51.	Secondly I have already commented on the fact that there is no substantive defence advanced by DHL to the deceit claim: it is merely “not admitted”. This is all the more striking given the extensive investigations conducted by the Risk Advisory Group (“TRAG”) for DHL. The reports have not been produced. 
52.	It is suggested that in the absence of assistance from McGarry no defence can be advanced. But the circumstances of McGarry’s appearance at this hearing make it plain that no assistance, or at least none worth having, will be forthcoming. 
53.	There remains another important consideration. In 2006 Folio 923 Nationwide Building Society issued an application for summary judgment and interim payment in proceedings against DHL in which it claimed damages of about £27million on the ground that McGarry had given dishonest valuations. In June 2007 Simon J handed down a judgement stating that (absent the overnight settlement of the action) he would have granted summary judgement to Nationwide. 
54.	It is clear from his judgment that McGarry was involved in three frauds with very similar features to the circumstances in which loan made by CBS to Goldgrade was obtained - namely low value commercial properties, massive overvaluation and reliance on prospective leases.
55.	Simon J made the following comment:
“84.  I am left with the strong impression that the valuations contained in the three reports were 'desk-top' valuations based simply on the terms of the supposed leases….. It is plain that the financial terms of the leases were so much above the current market that a competent valuer would have been bound to identify the basis for such rents; and, in the absence of any explanation, a court would necessarily conclude that the valuer had been negligent. In the present case the evidence, which I have sought to identify earlier in this judgment, in particular the inexplicably high Market Values with Vacant Possession, goes very much further.
85 In each of his 3 expert reports Mr Farr uses a similar formula to express his views about the Adderley Road, Carmarthen and Oldbury Reports.……….
In answer to the specific instruction: To consider whether the conclusions/valuations adopted by [DH], in your opinion, were so far removed from an acceptable range of conclusions and valuations that they could not have been reached by a qualified surveyor acting rationally and honestly; 
Mr Farr concluded: 
“I am of the opinion that, for whatever reason, the substantial over valuations and lack of due diligence in reporting indicate a degree of irrational thinking, but I do not believe it can be viewed as certain that the qualified surveyor had been dishonest. In all the circumstances, I believe that a report by a qualified surveyor in these terms would have indicated a strong possibility that dishonesty was the motive. However, I am of the opinion that the range of conclusions and valuations could have been reached by a qualified surveyor acting incompetently and/or irrationally and not dishonestly.” 
He does not specifically deal with the significance of the high Market Values with Vacant Possession, nor with the unlikelihood that Mr McGarry carried out the inspections which DH said that he had carried out. 
Mr Farr can justifiably say that he cannot be 'certain' that Mr McGarry acted dishonestly; but the law does not require certainty. In my view DH reports, and the valuations they contained, cannot properly be viewed simply as the product of irrational thinking or of negligence. They contained false and material representations, in relation to which DH were at least reckless as to their truth. Mr McGarry intended that Nationwide would rely on the representations and, in the event, it did and has suffered significant loss as a consequence. On the present material, I am satisfied that Nationwide has proved its action in deceit against DH.” 
56.	The significance of the judgment is threefold:
i)	it demonstrates that summary judgment can be entirely appropriate in this class of case;
ii)	the absence of McGarry is no bar;
iii)	it establishes that McGarry has a propensity to commit fraud in the manner contended for CBS.
57.	For all these reasons, I conclude that CBS and, in turn DHL, are entitled to summary judgment on their claims in deceit with damages to be assessed. 
Interim payment
58.	There remains the question of an interim payment. CBS made a total loan of £11.5million. It would appear that the present market value of the property is no more than £2million. Allowing for accrual of interest, it is appropriate that an interim payment of £10million be made.