Union Bank Plc and a family have not come to terms regarding a judgment of a High Court in Lagos, which recently awarded N112,050,000 against the bank for wrongly selling the latter’s property located at No. 6, Moore Road, Ikoyi, Lagos State, at a grossly undervalued price of N60 million.
A Nairametrics review of fresh court documents associated with the case, which concerns loan and mortgage issues (commenced in 1999 but later amended by the claimants in 2017), shows the parties have now approached the appellate courts with various appeals, while the family’s lawyer insists on N2 billion compensation.
Justice I.O. Harrison of the High Court had, on May 31, 2024, 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.
Trial Court Judgment
According to a copy of the court’s judgment seen by Nairametrics, dated May 31, 2024, Yewande Ogunde deposed in an affidavit dated September 18, 2018, that her deceased husband obtained a loan of N4 million from the bank.
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 at the time.
Counsel for the claimants, O.V. Ekundayo, urged the court to either quash the sale of the property located at No. 6, Moore Road, Ikoyi, Lagos, by Union Bank as being conducted in bad faith and at a grossly undervalued rate or award his clients N2 billion in damages, in the alternative.
But 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.
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.
The judge also stated that there was evidence before the court that the mortgagor was not given access to his account, so the alleged purchase price at the appropriate time was not known.
The judge held that the sum of N60 million had purportedly been realized and that the bank had settled the outstanding indebtedness, “and the balance accrued to the mortgagors, even though they have refused to submit a statement of account as to how the said balance of funds was utilized, and for this balance, the law states clearly they were to act as trustees in absolute good faith.”
The judge held that selling 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 court awarded the sum of “N112,050,000.00, excluding the N60,000,000.00 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.
Union Bank, Family Go on Appeal
Disagreeing with the trial court judgment, the bank’s lawyer, Funke Agbor SAN, asked the High Court to stay the execution of the judgment pending the determination of the appeal filed by the bank against the said judgment.
In its notice of appeal seen by Nairametrics, the bank asked the appellate court, Lagos to quash the judgment, citing grounds related to fair hearing, improper evaluation, and miscarriage of justice.
The bank stated that the trial court erred in law when it held that the sale of the mortgaged property in the suit was at a gross undervalue and proceeded to award monetary damages in favour of the respondents.
“The evidence the lower court relied on does not support the family’s contention with respect to their perceived value of the subject property at the time of sale, as the prices of similar properties around the same vicinity (some on High Street) justify the reasonability of the price at which the subject property was sold by Union Bank,” the bank submitted.
The bank urged the court to hold that the verdict of the High Court was legally out of time (statute-barred), as the sale of the subject property occurred in May 1999, allegedly to the knowledge of the family and prior to when the respondent filed the suit on September 8, 1999.
On the part of the family, their lawyer, Olabisi Makanjuola, filed a cross-appeal, challenging the entire judgment of the lower court except for the portion of the judgment where the lower court held that the sale of the property at No. 6 Moore Road, Ikoyi, Lagos, by the bank was in bad faith and fraudulent.
The lawyer argued that despite the lower court’s findings, including holding that the property was sold by Union Bank at a gross undervalue, the lower court failed to set aside the sale of the property, thereby causing a “miscarriage of justice to the cross-appellants.”
The lawyer argued that the lower court erred in law and misdirected itself when it assessed the quantum of damages due to the family as the difference between the sale value and the actual value of the property.
“The appellant sought the sum of N2,000,000,000 against Union Bank as damages for its egregious conduct and bad faith occasioned by the fraudulent sale of the property at a gross undervalue and in bad faith.
“The lower court failed in its duty to assess the damages due for breach of contract and instead elected to award the difference in the sale price as damages to the appellants,” Makanjuola stated, urging the appeal court to uphold its N2 billion general damages request at the High Court, rather than the “N112,050,000.00, excluding the N60,000,000.00 already paid” approved by the High Court judge.
Nairametrics reports that the verdict of the High Court is before the Court of Appeal for further interpretation of relevant laws and determination.
Nairametrics gathered that a further hearing on the matter will be in October 2024.
