A High Court action in which Cameron Markby (which has since merged to form Cameron Markby Hewitt and more recently Cameron McKenna), was accused of negligence in respect of a £3m land deal 10 years ago has settled on undisclosed terms.
Copenhagen-based Den Danske Bank claims that Cameron Markby should have realised that a £3.75m valuation of the 9.7-acres of land sold for development in Paignton, Devon, was excessive, and that the firm should have warned the bank.
Den Danske Bank made a £3.23m loan on the security of the land.
Mr Justice David Steel was told at the High Court that while Luton-based commercial surveyors Connell Wilson valued the property at £3.75m, Cameron Markby had documents showing that the land had been purchased for £1m earlier that year and later sold on for £1.55m.
The bank claims that, in the circumstances, Cameron Markby, which acted for the bank in the 1988 transaction, should have realised that the #3.75m valuation was unlikely to be reliable.
Den Danske Bank accuses Cameron Markby of failing to alert it to the situation.
The land was ultimately purchased by Baymex Investments, a company set up by property developer Selig Waldman, for £3m in mid 1988 to build homes.
The court was told that by June 1991, Baymex had repaid £1m of the principal loan and £1.38m interest, before the land and another property was repossessed by the bank and sold for just £575,000.
Waldman failed to meet a personal guarantee that he had given in respect of the loan and was subsequently declared bankrupt, leaving the bank out of pocket.
A claim by the bank against Connell Wilson in respect of its valuation of the site has already been settled, and the current action against Cameron Markby is for the balance outstanding.
Cameron Markby had denied negligence or breach of contract and claimed it had not formed the view that the £3.75m valuation was unlikely to be reliable.
The case has now been settled, but terms of the settlement have not been disclosed.