A High Court in Lagos has awarded N112,050,000 against Union Bank Plc for wrongly selling a property located at No. 6, Moore Road, Ikoyi, Lagos State, at a grossly undervalued price of N60 million.
Justice I.O. Harrison delivered the judgment in a suit filed by Mrs. Olubunmi Ogunde, Yewande Ogunde, and others, with Union Bank of Nigeria Plc listed as the sixth defendant in the suit marked LD/2624/1999.
The suit, which concerns loan and mortgage issues, commenced in 1999 but was later amended by the claimants in 2017.
Claimants’ Case
According to a copy of the court’s judgment seen by Nairametrics dated May 31, 2024, Yewande Ogunde stated that on September 18, 2018, her deceased husband obtained a loan of N4 million from the bank.
Using the loan, he developed a property consisting of eight four-bedroom flats, a penthouse, a ten-bedroom family house, and a three-story building with three-bedroom flats on a 2.2-acre plot at 6 Moore Road, Ikoyi, Lagos.
She stated that due to friction between the beneficiaries and the executors of the deceased’s estate, the loan was not serviced.
She contended that based on the contract, the bank surprisingly sold their property for N60 million.
Counsel for the claimants, O.V. Ekundayo, urged the court to declare that the sale of the property located at No. 6, Moore Road, Ikoyi, Lagos by Union Bank was conducted in bad faith and at a grossly undervalued rate and award damages.
Union Bank’s Response
Priscilla Esede, a staff member of the bank, stated that the financial institution followed due process for debt recovery by entrusting the sale of the disputed property to the law firm of Shade Ogundare & Co.
She explained that the estate department of the bank lawfully valued the property at N60,000,000, and it was eventually sold to Mr. Cletus Ibeto and others at that price.
“When the estate of the deceased failed to liquidate the loan despite numerous demands, the bank, as the legal mortgagee, exercised its right to sell the mortgaged property by private treaty at the request of the executors instead of by public auction,” she stated.
Trial Court’s Judgment
Delivering judgment on May 31, 2024, the judge found that both the sale of Plot 6A and the sale of Plots 6B, 6C, and 6D were grossly undervalued based on market research surveys related to similar properties or locations at the time, according to exhibits reviewed by the court.
“Exhibit C3 states clearly that properties of such a nature should have been sold for N112,050,000 (One Hundred and Twelve Million Fifty Thousand Naira) and not N60,000,000 (Sixty Million Naira) as per exhibits C3 and C4. “
The judge held that to sell a property at a price that is so low is evidence of fraud.
The judge agreed with the claimants’ case and declared that the sale of their property in Ikoyi, Lagos, by the bank was conducted in bad faith and at a gross undervalue.
“The claimants are entitled to an award of general damages for the wrongful sale of Plots 6B, 6C, and 6D at No. 6 Moore Road, Ikoyi, Lagos, and the sale of Plot 6A of the same premises at a grossly undervalued price.
“The court awards the sum of N112,050,000.00, excluding the N60,000,000.00 (Sixty Million Naira) already paid, being the difference in what should have been realized from the sale of the property known as No. 6 Moore Road, Ikoyi, Lagos, and interest on the said balance from 1998 until today (the date of judgment) at the prevailing CBN rate, and thereafter from the date of judgment until the judgment debt is fully liquidated at the rate of 10% per annum,” the judge said.
Nairametrics reports that the verdict of the high court subsists except if it is set aside by the Court of Appeal or Supreme Court following further litigation on the matter.