The legal dispute was over the price of a land sale. Property developer firm Aodhcon brought proceedings, claiming that, among other things, the lender had sold its property at too low a price in breach of duty.
Dragonfly Property Finance had to seize the security due to a lack of repayment from Aodhcon after the term of the loan had been exceeded.
On the 6th March, the High Court Chancery Division held that there had been no breach of duty.
Jonathan Samuels, CEO of Dragonfly Property Finance, informed B&C that Dragonfly was successful in winning in not just the initial claim but the counterclaim, where it also retrieved all legal costs amounting to an estimated £80,000. The total costs paid to the bridging lender are said to rest at around £250,000.
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He said: “The judge ruled that we did not breach our duty to market the property and sell at the best price.“We followed the correct procedures and achieved the best price that the market would pay. I think the borrower was looking to recoup some losses and tried to sue us as a means of doing this.
“We are a professional lender and this professionalism extends to all aspects of the business including the very rare occasions that we need to take a property in and sell. This was reflected in the judgement.“
When selling due to a realisation, a lender has a legal responsibility to apply reasonable care to obtain the best price. In this case the lender was found to have done so.
The award winning bridging lender was represented by Stephen Innes as instructed by Brightstone Law LLP.
The original mortgage charge of £750,000 was placed in 2010 for a term of six months after planning permission was obtained in 2007 on a set of six residential units based on Roman’s Road, London.
Aodhcon sought to renovate and sell the property via a bridge sourced from Dragonfly Property Finance. However, the firm failed to repay the facility inevitably prompting the mortgagee to sell the security.
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