Property development fraud victim wins money back
Posted: 23rd July 2012
A businessman who lost the entirety of a £2 million investment in a property development project has been awarded his money back by a judge who found that he was the victim of fraudulent misrepresentation and deceit.
Through a corporate vehicle, the claimant invested in the purchase of land the value of which he hoped would be greatly increased by grants of planning permission. In what he then believed would be a low risk, high return, investment, he expected the land to be sold to developers at a handsome profit within six months.
In fact, however, his money was tied up in the project for several years and his shares in the investment vehicle eventually became worthless.
The claimant, through his investment vehicle, sued various defendants involved in the promotion or operation of the project and has now been awarded £1.4 million damages by a judge who found that certain aspects of the property scheme had been fraudulently misrepresented to him.
Finding five defendants jointly and severally liable to compensate the claimant’s investment vehicle, Deputy High Court Judge Vivien Rose said that he had been the victim of deceit in that the true structure of the project had not been disclosed to him.
The judge said that two of the defendants had made fraudulent misrepresentations to the claimant whilst acting as agents for three other defendants who ‘knew about and connived in’ that deceit. The claimant had earlier settled his claim against a sixth defendant for £600,000.