Norwich Union Commercial Mortgages has been granted judgment in its claim against Watford-based property boss Amarjit Mann and his company, Ablethird, over an alleged £9.3m mortgage fraud.
At the High Court, Norwich Union claimed that it had advanced a £9.3m loan to an Ablethird spv on the security of 12 commercial properties.
It claims that Ablethird had fraudulently represented that seven of the properties were subject to valuable leases granted to a company, Boylesports Holdings Ltd, and provided forged leases that purported to contain the signatures of representatives of that company.
It alleges that those signatures were forged and the leases were “pure invention” – the purported rental flow under the forged leases constituting the bulk of the value of the security under the mortgage.
Norwich Union further alleges that after obtaining the loan Mann had attempted to cover up the fraud by pretending that the leases had been surrendered for a zero premium and invented a story that the tenants had improved the properties in lieu of a premium.
After refusing an application by Mann’s lawyers to adjourn the matter, Tugendhat J entered judgment against Mann with damages to be assessed at a later date – Mann has been debarred from defending the claim after he failed to file an affidavit answering Norwich Union’s requests for information.
He was also ordered to pay Norwich Union £3.5m by way of an interim award of damages.
The court was told that the amount due on the loan was £11m and that a desktop valuation of the security properties by Jones Lang LaSalle was for £5.3m – giving a net balance of £5.9m.
The interim payment was ordered only against Mann since the proceedings against Ablethird were stayed after it went into administration in December 2009.
Norwich Union Commercial Mortgages Ltd v Mann and another Queen’s Bench Division (Tugendhat J) 15 June 2010.
Peter de Verneuil Smith (instructed by Berrymans Lace Mawer LLP, of