The owner of Dublin’s Market Bar and an adjoining premises claims auctioneer Sherry FitzGerald undervalued the property for the purpose of meeting loan-to-value (LTV) requirements of his lender.
Businessman Mark Conan claims in High Court proceedings that the valuation carried out by Sherry FitzGerald (Commercial) Ltd led him to suffer a loss of nearly €841,000 after he had to sell some of his investments to meet LTV requirements.
Sherry FitzGerald denies his claim that the property was worth significantly more than the value the auctioneer put on it. It is also denied Mr Conan suffered the losses claimed.
An application to have Mr Conan’s action dismissed on grounds of delay in prosecuting the case, which was taken in 2017, was rejected by Mr Justice Mark Heslin.
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Outlining the case, the judge said that in 2012 Mr Conan was required to meet an LTV covenant on loans following the sale of his loans by AIB to Vesta Mortgages Investment, a subsidiary of the US-based private equity firm Lonestar.
His loans totalled €5.2 million on property he owned that was worth some €6.1 million, it was claimed.
In his pleadings, Mr Conan said that, at the time of the valuation, there was a shortfall of some €310,000 in the LTV covenant. The €6.1 million LTV valuation comprised the Market Bar in Fade Street and an adjoining retail unit with office/workshop premises along with an apartment in George’s Quay, Dublin, and property in Cheltenham, England.
Mr Conan says Sherry FitzGerald put a valuation of €1.68 million on the Fade Street properties when they were in fact worth €2.4 million.
The real value of the property was significantly greater than the figure reported to Vesta by Sherry FitzGerald, he says.
As a result, he says, he had to sell some of his investments, including shares in Ryanair and converting sterling cash balances to Europe. The payment to Vesta also had a consequential impact on his finances leading him to sell the Cheltenham and George’s Quay properties, he says.
Medical condition
In 2022, Sherry FitzGerald applied to the court to have his case dismissed on grounds of delay.
The auctioneers argued, among other things, they were severely prejudiced by the delay. They said that while Mr Conan had argued part of the delay was due to a medical condition he was suffering from, this did not stop him from bringing proceedings in two other cases in August 2021.
Mr Conan opposed the application,
Refusing the application to dismiss, the judge said no specific or concrete prejudice had been established.
There was no evidence of any damage to Sherry FitzGerald’s reputation and business and it had not been asserted that having these proceedings “hanging over” it had created any difficulty for its business, he said.
The judge said even if he was entirely wrong in the view that prejudice had not been established, it seemed to him that any prejudice to the defendant was of a general and minor sort which falls below what could be considered moderate.
He took the view that a fair trial remains possible now, and for the foreseeable future, as at any other time to date.
