The Lagos High Court has ordered Union Bank Plc to pay N112,050,000 in damages for the wrongful sale of a prime property located at No. 6, Moore Road, Ikoyi, Lagos.
The ruling, delivered by Justice I.O. Harrison, found that the bank sold the property at a grossly undervalued price, leading to significant financial loss for the claimants.
The case, which has been ongoing since 1999, was brought by Mrs. Olubunmi Ogunde, Yewande Ogunde, and other members of the late property owner’s estate.
They accused Union Bank of bad faith in the sale of their late relative’s estate, which included eight four-bedroom flats, a penthouse, a ten-bedroom family house, and a three-story building with three-bedroom flats, all situated on a 2.2-acre plot in the affluent Ikoyi area.
The controversy stemmed from a loan of N4 million that the late property owner had taken from Union Bank.
Using the loan, he developed the property, which later became the subject of the legal dispute following his death.
The claimants argued that due to internal disputes among the estate’s beneficiaries, the loan was not serviced on time, prompting the bank to sell the property.
However, the claimants maintained that the property was sold at a grossly undervalued price of N60 million, far below its market value.
They accused Union Bank of conducting the sale in bad faith and urged the court to award damages based on the true value of the property.
Union Bank, represented by Priscilla Esede, contended that it had followed due process in recovering the debt.
The bank claimed that it had entrusted the sale of the property to a law firm, which valued it at N60 million—a figure they argued was fair at the time.
The property was eventually sold to Mr. Cletus Ibeto and others for the same amount.
In delivering her judgment, Justice Harrison rejected Union Bank’s defense, citing market research surveys and evidence provided by the claimants that showed the property’s true value was N112,050,000.
The court found that the bank’s actions in selling the property at such a low price amounted to fraud.
“The sale of the property at a price that is so low is evidence of fraud,” the judge stated. She went on to declare that the sale was conducted in bad faith and ordered Union Bank to pay the difference between the sale price and the property’s market value—an amount totaling N112,050,000.
The court also ruled that the bank must pay interest on the judgment sum from 1998 until the date of the judgment, at the prevailing Central Bank of Nigeria (CBN) rate, and 10% per annum thereafter until the debt is fully paid.
The decision represents a significant victory for the claimants and sets a precedent for other cases involving the sale of mortgaged properties in Nigeria.
Union Bank, which has the option to appeal the ruling, has yet to comment on the judgment.
The judgment underscores the importance of transparency and fairness in financial transactions, particularly in cases involving the sale of mortgaged properties.
It also serves as a reminder to financial institutions of the legal repercussions of failing to uphold their fiduciary responsibilities.
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