Lagos High Court Orders Union Bank to Pay N112 Million for Undervalued Property Sale

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Lagos, August 10, 2024 — A High Court in Lagos has ordered Union Bank Plc to pay N112,050,000 in damages for the wrongful sale of a property located at No. 6, Moore Road, Ikoyi, Lagos. The court ruled that the bank sold the property at a significantly undervalued price of N60 million, which the court found to be evidence of fraud.

Justice I.O. Harrison delivered the judgment in a lawsuit filed by Mrs. Olubunmi Ogunde, Yewande Ogunde, and others against Union Bank, which was listed as the sixth defendant in the case. The suit, marked LD/2624/1999, revolved around loan and mortgage issues and has been ongoing since 1999, with amendments made by the claimants in 2017.

According to the court's judgment, Yewande Ogunde stated that her late husband had obtained a loan of N4 million from Union Bank on September 18, 2018. The loan was used to develop a substantial property on a 2.2-acre plot at 6 Moore Road, Ikoyi, which included eight four-bedroom flats, a penthouse, a ten-bedroom family house, and a three-story building with three-bedroom flats. However, due to disputes among the beneficiaries and executors of the estate, the loan was not serviced, leading to the bank selling the property.

The claimants argued that the property was sold in bad faith and at a grossly undervalued rate, urging the court to award damages. Union Bank, in its defense, asserted that it had followed due process in the debt recovery process, valuing the property at N60 million and selling it to Mr. Cletus Ibeto and others at that price through the law firm Shade Ogundare & Co.

In his judgment on May 31, 2024, Justice Harrison found that the property was indeed undervalued, citing market research surveys that indicated similar properties at the time should have sold for N112,050,000. The judge declared the sale of the property as fraudulent and in bad faith, ordering Union Bank to pay the claimants the difference of N112,050,000, excluding the N60 million already paid.

The court also awarded interest on the outstanding amount from 1998 until the date of judgment, to be calculated at the prevailing Central Bank of Nigeria (CBN) rate, with an additional 10% per annum until the judgment debt is fully paid.

The verdict remains in effect unless overturned by the Court of Appeal or the Supreme Court following further litigation.