A BANK is suing estate agents Jones Lang Lasalle (JLL) for €17m damages over alleged "grossly" overvaluing St Patrick's Athletic Football Club lands in Dublin in October 2007.
The valuation put the property at €33m, or up to €45m if the lands were zoned residential and commercial.
Investec Bank plc claims the correct value of the lands in October
2007 was between €5-7m but, based on the JLL valuation of €33m, it made loans, secured on the lands, of some €18m to a company of property developer Garrett Kelleher with a view to developing the lands.
Three years later, in October 2010, Des Lennon of JLL put a rough estimated value on the same lands, whose zoning had not been altered in the interim, at less than €1m, the bank claims.
The bank claims it was later advised that JLL had in October 2007 "grossly overvalued" the lands and there were "material flaws" in the methodology adopted by the firm in carrying out that valuation.
It would not have loaned the €18m had JLL exercised due skill and care, the bank alleges.
It claims JLL is liable to it for potentially more than €17m in circumstances where neither Mr Kelleher, who had provided guarantees over the loan, or his companies are able to repay the sums due.
It is alleging professional negligence and breach of contract against Jones Lang Lasalle Ltd over the October 2007 valuation report concerning the club's lands at Richmond Park, Inchicore.
Mr Justice Peter Kelly has refused to fast-track the case in the Commercial Court on grounds of the bank's delay in bringing it.
It will now proceed via the ordinary High Court procedures.
In its proceedings, Investec claims the business of the football club was operated by a company owned by another company which was 100 per cent owned by Mr Kelleher. The club occupied a 4.2 acre site at Richmond Park under various leases.
The bank said it understood Mr Kelleher acquired the club in 2006 with a view to redeveloping its land. His plan was to relocate the pitch within the site, providing an up to date stadium and leaving about 1.6 acres for mixed commercial and residential development. Mr Kelleher also apparently intended to acquire some neighbouring properties to facilitate the planned development, the bank said.
Mr Kelleher bought the site for about €11m with finance from an Irish bank and later approached Investec to refinance the deal, it is claimed. He sought €18m from Investec in October 2007, of which €11m was for refinancing and the rest for equity release to fund another project involving construction of a tower in Chicago, Illinois.
JLL had, in a March 2007 valuation for the Irish financial institution, given a €33m market value for the site, Investec claims.
It claims it then asked JLL in autumn 2007 for an up to date valuation and JLL had provided the €33m valuation.