The Cheshire Building Society, the company at the centre of an alleged commercial mortgage fraud involving Dunlop Haywards, has filed a £9m negligence claim against the company.
The writ comes more than a year after Cheshire launched a £50,000 investigation into a valuation given by Ian McGarry, former head of valuation at Dunlop Haywards’ City office, on a property on which it loaned £11.5m.
McGarry was arrested and released without charge by
Despite a continuing investigation into the suspected fraud by the Serious Fraud Office, no charges have been brought against any party.
The building society claims Dunlop Haywards is liable to pay it £9m in damages on the grounds of deceit or negligence.
It said that “extreme inconsistencies” in McGarry’s valuations on the property in
It claims McGarry valued the vacant building at £10.5m in September 2004, then £4.5m in February 2005 and £10.5m in September 2005.
He also gave a £16m valuation based on leases that turned out to be false.
Cobbetts, the building society’s conveyancing solicitor, is listed as a second defendant.
Dunlop Haywards – owned by Erinaceous – faces claims totalling £35m over its involvement with the alleged frauds.
Last October, Nationwide launched a £26m claim against Dunlop Haywards relating to three suspect property transactions involving McGarry. Judgment is due on 14 June.
Despite the two claims against it, Erinaceous has made just a £4.4m “best estimate” provision relating to the alleged frauds. It hopes its insurance will absorb the majority of the costs.
Erinaceous declined to comment.
