Bench backs bank over alleged undervalued property sale
The Court of Appeal in Northern Ireland has dismissed a property developer’s claims that the Bank of Ireland undervalued and mishandled the sale of 13 residential properties in Derry. The case centred on allegations of breach of duty, bad faith, and conflict of interest during the bank’s loan recovery process.
The developer argued that the properties were worth over GBP 4 million, but the court upheld an earlier ruling in favour of the bank.
The dispute began when the Bank of Ireland sold the 13 Derry properties for around GBP 2.17 million as part of a wider loan recovery effort. The developer, represented by Noel Shortt, claimed the bank had failed to secure the best possible price and acted improperly.
The bank defended its actions, relying on independent valuations that placed the properties’ worth between GBP 1.8 million and GBP 2.3 million. In court, the bank’s representative, John O’Brien, was supported by barrister William Gowdy KC. The court ultimately preferred the bank’s expert valuation over the developer’s, noting that the successful bidder paid over 16% above the bank’s estimated value.
An earlier High Court decision had already rejected the developer’s claims of wrongdoing. The Court of Appeal confirmed this ruling, finding no evidence of breach of duty, bad faith, or conflict of interest. It concluded that the bank had achieved the best price reasonably available at the time of the sale.
The appeal was dismissed in full, ending the developer’s legal challenge. The court’s decision reinforces the bank’s position that the sale was conducted fairly and in line with proper valuation methods. The properties sold for more than the bank’s independent estimates, closing the case without further recourse.
