A property developer who was unable to meet the payments on a £75m loan after spending millions on himself has had his lawsuit against Royal Bank of Scotland thrown out by the Court of Appeal.
The three-judge panel at the Court of Appeal refused him permission to appeal in a ruling handed down yesterday.
According to the ruling, developer Oliver Morley borrowed the money from the bank in 2006 and secured it against a portfolio of commercial properties in the North of England.
“Unfortunately, the loan was concluded… not long before the sharp decline in property values during the financial crisis,” the judgment said, and he was unable to repay the loan when its term expired in 2009.
According to the ruling, £45m of the loan had been used to pay off debt, £10m had been earmarked for property development, and Morley received “some £15m to £20m for his own use”, buying a villa in the South of France, a yacht, a jet and fast cars.
According to the ruling, when he got into difficulties, instead of taking the properties that had been used as security, the bank negotiated with Morley and reached an agreement that part of the loan was written off and some properties were transferred to one of the bank’s units.
Morley, however, claims that the bank put him under “unlawful pressure” by threatening to impose a prepack sale of the entire portfolio via its Global Restructuring Group.
In January last year, following a trial at the High Court, judge Mr Justice Kerr dismissed his case and ruled that the bank had not intimidated Morley and had not acted improperly.
The judge found that the bank was not at fault in the negotiations which led to the agreement, which were commercial negotiations carried out at arm’s length and with the benefit of legal advice on both sides, and there was no threat to do anything unlawful.
Morley sought to overturn the ruling at a hearing at the Court of Appeal last month. However, the judges agreed with the High Court ruling.
“The bank’s objective throughout was to recover its loan, or at any rate as much of it as possible,” Lord Justice Males said in the ruling.
“Acquisition of the portfolio was only ever a second-best means of achieving this objective; and the deal which was eventually concluded was one which Mr Morley persuaded the bank to accept despite its reluctance to do so. As the judge correctly found… all of the bank’s actions ‘were rationally connected to its commercial interests’.
“Accordingly, this appeal fails on the facts.”
Oliver Dean Morley (trading as Morley Estates) v Royal Bank of Scotland plc
Court of Appeal (Lewison LJ, Males LJ, Birss LJ) 11 March 2021
