Development firm loses another appeal

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A development company and its director have lost yet another appeal in their long-running dispute over multi-million pound bank loans that were not repaid.

Sam Alder, director of development company Slegaby Estates, was sued by Lloyds TSB Offshore as guarantor for funds lent to the firm in 2008 for its farm conversion scheme in Onchan.

Lloyds TSB Offshore Ltd had approved loans totalling £5.65 million, of which just under £2.6m excluding interest, charges and costs was outstanding.

In May 2012, the court dismissed defence claims by Slegaby Estates Ltd that the bank was guilty of imprudent lending and High Bailiff John Needham allowed summary judgment in favour of Lloyds, paving the way for the bank to claim back the £2.6m on a joint and several basis, and also to recover legal fees and interest.

Slegaby Estates and Mr Alder appealed but that appeal was dismissed in February last year.

An application to appeal to the Privy Council was also rejected, on the grounds that it did not raise an arguable point of law.

Subsequently, the High Court dismissed an application for the continuation of a stay of execution imposed pending the decision of the Privy Council and the appellants were ordered to pay the costs of the appeal.

In May last year, Slegaby Estates and Mr Alder issued a claim for damages of £3,970,648 for negligence and/or breach of contract and/or misrepresentation by the bank from 2006 onwards in respect of the Onchan property development.

In October that year, the bank applied to strike out the action, arguing it was an abuse of process.

And in a judgment in March this year, the High Bailiff held that the appellants were precluded from pursuing the majority of their claims and the proceedings were indeed an abuse of process.

Slegaby Estates and Mr Alder then appealed against that judgment, arguing that the test for striking out the case was not met on the facts of the case and there were special circumstances for having the case reopened.

They also sought an order callingfor Judge of Appeal Tattersall and Deemster Christie not to hear their appeal as there was a ‘real possibility that they would be biased’ when dealing with it or any related application.

The appeal judges dismissed the latter, saying they were satisfied that they should not ‘recuse’ themselves from hearing the substantive appeal which was subsequently heard in September.

Now the appeal court has given its written judgment.

Judge of Appeal Tattersall and Deemster Christie concluded: ‘We can find no merit in the appellants’ appeal and it is dismissed.’

They added: ‘We can detect no error at all in the reasoning and approach of the High Bailiff.

‘Indeed, standing back from this case it would be quite a surprising result if the proposition advanced by the appellants was correct. The consequence would be that where an action was struck out summarily without a trial it would always be open to the unsuccessful party to re-commence proceedings in relation to the same subject matter. We do not understand that to be the law at all – indeed, it would be entirely contrary to what we understand the law to be.’

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