HT-2022-000417 - [2025] EWHC 1691 (TCC)

That is accurate to the extent it was based on that forecast.

However, it was then suggested Mr Taylor's "instructions as to the but-for scenario were essentially that trading would have grown in line with your 2018 forecasts had it not been for the defects". Mr Taylor was initially hesitant and unsure of the detail: "Yes, I believe so, yes".

Later in his cross-examination, Mr Taylor set out (correctly) that factors such as management, fees, CQC rating, local authority embargo were factored into the but for case when considering the steady state occupancy: "Those factors are already factored into the but-for case. The original budget was higher than the 59 residents, and we've factored those in."; and "So our original forecast was then reduced to take into account those other factors and then that's the basis of the claim."

It was not the case, as had been suggested by Simply under cross­examination, that Claim A1 is simply a comparison between the 2018 forecast and the actual (agreed) profits. There was "a substantial amount of mechanics involved in working forward from the original forecasts prepared by Abbey to something which is appropriate to use within the hypothetical but-for scenario within the joint loss model".

But, as Mr Taylor explained, but which appeared not to have been appreciated by Simply, there were newspaper adverts and advertising which had already been paid or committed to, and events which had already been organised or had been long in the organising "like the Diwali events" and those which "take months to organise". Those continued.

It was sought to be suggested that there was an inconsistency between contemporaneous references to "marketing" and to new marketing having ceased. I disagree. By the end of August 2018 and start of September 2018 Abbey had made the decision that spending additional money on new advertising was not worthwhile. This was consistent with the desire "to try and maintain occupancy" despite the scale and gravity of the revelation of the defects and their impact.

Mr Taylor explained that if Abbey "had stopped marketing, actually occupancy would have continually fallen throughout the period, and actually, during that period and throughout the whole period it was very hard work to even maintain occupancy". This was logical and credible.

It was put to Mr Taylor: "I suggest to you that up until that date December 2018, or initial remediation quotes beginning in February 2019] there was no reason for care home managers to be highlighting to potential residents, you know, we're doing X, Y and Z in terms of building works, would they?"

Further consistent with the above, Mr Taylor was convincing in his evidence as to why there remained a focus in 2019 on occupancy, and the risk of even greater losses but for Abbey's mitigation: "that's right, which obviously would have been incredibly difficult with, you know, planning for remedial works, planning on moving the elderly residents round the home and then obviously then actually having the remedial works going on as well."

Mr Taylor explained the difficulties presented by the defects, particularly with dementia patients. Abbey suppressed occupancy so that there were spare rooms to allow movement, and to preserve the same room layout (on a different floor). Further he explained the real and practical difficulties in marketing the home in mixing dementia patients with those who did not have dementia.

"Those commentaries go to our lenders in various forms, so AIB, as an example, get the section relating to their homes, and until we knew exactly what we were facing in terms of the timing, the duration, the extent of the works, we didn't share that information with them because we - - it's important with lenders to, I guess, present them with a problem and a solution in one go rather than just a problem".

Mr Taylor was not taken to the internal (as opposed to external­ facing) documents and the events in the immediate aftermath on 30-31 August 2018. The defects and their impact on the home were of immediate and sustained priority. E.g. On 31 August 2018 following the BRE inspection the day before, Mr Martin responded to Mr Lennon of BRE recognising the seriousness of the defects and their likely impact on the home: "Thanks for this draft report although disturbing findings". On 7 September 2018 Mr Taylor chased Mr Lennon of BRE: "As you will appreciate, we are running a care home and need this resolved urgently". On 7 September 2018 Mr Taylor chased an urgent update from Mr Martin: "Please can you get an update as requested. We can't afford to sit on this".

It was sought to be suggested that the hold on occupancy only came in December 2018, after receipt of the LWF report. Mr Taylor rejected that. He explained the Claimants had known ''from the start the likelihood of what would happen". This was consistent with his witness statement, that the Claimants knew from Mr Lennon of BRE immediately as of 30 August 2018 the likely significance and scale of the defects, and remediation. That was also supported by the contemporaneous exchanges at that time with BRE.

Mr Taylor's evidence in his witness statement is accurate: "From the end of August 2018, it was not viable to take on significant new additions which risked breaching the cap. Occupancy was suppressed from that point because of the defects and prospect of the required works. We had been informed of the likelihood of extensive and intrusive works which needed to be carried out. Our priority was the residents and their safety, care and comfort."

Mr Taylor gave details of his experience with the ratings by reference to his adjudication evidence (unchallenged by Simply) of other Abbey group homes: Farnworth and Hamilton.

He also explained by references to the actual occupancy figures: "CQC ratings are often out of date, and so on, so they are of limited use for, I guess, buyers of care services, and in Aarandale, you know, the two months following the CQC rating showed no change in the rate of increase in occupancy, was actually that's when you would have thought the impact would have been greatest."

Mr Taylor explained that "the CQC rating is a secondary concern for potential residents, if it's a concern at all. Often the route into finding a care home is through a website such as Carehome.co.uk. They would then contact the care home to come and have a show-around, and then they would be shown around the home to see the quality of the facilities, the quality of the food, etc, and the general atmosphere of the home, and those items are far more important than the CQC rating."

Mr Taylor explained the significance of carehome.co.uk. Mr Taylor was taken by Simply to the Jones Lang LaSalle ("JLL") report, but not to the section which recorded for this care home "a carehomes.co.uk rating of 9.3 which is very good."

Mr Taylor explained the significance of the website as the pre­ eminent authority in care home marketing: "a Tripadvisor for care homes but with far more rigour.”

There was no evidence at all, let alone any empirical evidence, that anyone left the home due to the CQC rating.

Mr Taylor's direct experience is valuable and reliable. There is no witness evidence before the Court to the contrary. Simply's directors (Messrs O'Brien and Sharp) are highly experienced in the care sector. They develop, invest in, dispose of, and operate care homes on a substantial scale. Simply could have led such evidence but chose not to do so.

Mr Taylor's evidence was consistent with Savills' literature, which recorded no difference in average occupancy depending on whether "Good or "Requires Improvement". Both were at 74%.

Mr Taylor explained that on the occupancy data: "It evidently didn't [impact] particularly, because we continued to fill at that rate for a further six months or so.”

Mr Taylor explained that Abbey "had benchmarked these fees, they looked in line with the market for similar standard care homes." He explained that the care home manager had the flexibility "to negotiate in individual cases".

Mr Taylor also explained the consequences of reducing AWF on overall profitability, and therefore the overall losses on claim A1:

Finally, Mr Taylor explained "you can fill a care home by cutting fees significantly. What you can't necessarily do is then increase their rates extortionately to try and catch that up."

Mr Taylor denied that it was a dealbreaker: "In terms of it being the issue or one of the issues that stopped the deal happening, then I don't believe it was one of the things that stopped the deal happening." This was supported by the contemporaneous exchanges. The sole stated reason from Berwin, Cave, Leighton, Paisner LLP (“BCLP”) for BlackRock withdrawing was the defects.

Mr Taylor explained why there was only a "very remote possibility" of treatment of VAT being a "stumbling block”. Mr Taylor rejected any significance in the point. This was consistent with, and is borne out by, the contemporaneous documents.

By 31 July 2018 the parties had reached an agreed position on the lease structure, from which the concern as to VAT clawback arose. That was in the context of the structure, i.e. a shorter lease of 125 years, as opposed to 999 years). 999 years was acceptable to both parties, and had been agreed as at 31 July 2018. BCLP confirmed: "I have spoken to my client and understand that a 999-year lease has been agreed."

This line of questioning focused on open, i.e. public, marketing. This focus was misplaced and misconceived.

Mr Taylor pointed out that that it had not been publicly marketed, but had been marketed significantly via their agent Gary Phillips of Lambert Smith Hampton (“LSH”). Indeed "you can see from the list of people that he did approach, [he] did approach people widely across the market". Later in his evidence, Mr Taylor reaffirmed that "Gary Phillips was doing that as he went along".

Mr Taylor highlighted the uncertainty created by openly and publicly marketing a care home. Simply highlighted no unreasonable failure to mitigate at any time. The Claimants’ conduct and approach was reasonable in the circumstances.