Developer alleges Ulster Bank mis-sold products
DEVELOPER DAVID Agar has alleged before the Commercial Court that Ulster Bank mis-sold to him a number of financial products related to interest rates on loans totalling some €87 million.
Mr Agar had never entered into a derivative agreement before, it was not properly explained to him, he was not told to get independent legal or financial advice about it and realised its implications only months later, his counsel, Mark Sanfey SC, said.
In an action that opened yesterday before Mr Justice Peter Charleton, Mr Agar claims the right to an indemnity against any loss or liability arising from the bank’s execution of the swaps. He is also claiming damages for alleged breach of contract and alleged breach of duty by the bank.
The bank denies the claims and has counterclaimed for €47 million related to loans for the Harcourt Building. The bank also contends it is entitled to appoint receivers over the building due to alleged defaults by Mr Agar.
The case arises out of a number of interest rate swap products on loans Mr Agar entered into with Ulster Bank. He claims those products were recommended to him by the bank following a meeting in July 2007 but their effects were not explained to him. He claims he was unaware until months later that the products obliged the bank to pay him a dividend where interest rates increased and obliged him to pay the bank a dividend where they fell.
The rates later fell and the bank sought the extra payments. The bank denies it recommended the products to Mr Agar or made any misrepresentations to him.
In its counterclaim, the bank is seeking judgment against Mr Agar for €47.8 million arising from the term loan advance to purchase the share of the Harcourt building, plus €5.3 million for money due under the interest rate swap agreements. In his claim, Mr Agar, of Brighton Road, Foxrock, Dublin, is seeking a declaration that five financial products purportedly entered into between the developer and the bank be rescinded.
The products are a derivative contract executed in late July 2007 for €47 million and four separate derivative contracts purportedly entered into between Mr Agar and the bank, which purportedly covered accumulated liability of €40 million.
As well as seeking to be indemnified for any loss resulting from the alleged mis-selling, he wants damages for alleged breach of contract and the allegedly unlawful appointment of a receiver to the Harcourt Building. Mr Sanfey said Mr Agar had a relationship with the bank going back to 2000. The case is expected to last several weeks.