A British businessman has challenged Irish Bank Resolution Corporation’s refusal to recognise a judgment for £113 million (€128 million) obtained by him against it over the sale of a 100-room mansion in the UK.
Baljit Singh Bhandal, also known as Barry Bhandal, says he was once the beneficial owner of Updown Court in Windlesham, Surrey and borrowed some £14 million from Irish Nationwide Building Society in 2000 to redevelop it. Following an investigation into alleged money laundering, a restraint order was placed in 2001 over his assets by British Customs (HMRC) officials and the house was sold by an INBS appointed receiver for £14 million in 2002.
The restraint order was lifted in 2006 and Mr Bhandal was never charged with any offence in regard to the alleged money laundering. He sued IBRC, as INBS’s successor in title, for damage arising out of the alleged sale of Updown Manor at an undervalue.
He claims it is worth £80 million. He got a judgment against IBRC in 2013 for £113 million. IBRC, in special liquidation, had opted not to contest the matter because, at the time, it did not expect there would be any money to pay a dividend to unsecured creditors and did not want to incur further costs. Mr Bhandal later obtained a European Enforcement Order and submitted his claim in IBRC's special liquidation. The special liquidators informed Mr Bhandal in 2017 they were not bound by his claim as, they alleged, it was not true and bona fide. Mr Bhandal then initiated proceedings in the Irish High Court against IBRC.
Opening the case before Mr Justice Tony O'Connor on Tuesday, Aidan Redmond SC, with Dave Whelan, instructed by Lavelle solicitors, said his client successfully worked for many years in the alcohol and off-licence business.
In the late 1990s he became beneficial owner of a large, then derelict property known as Updown Court, invested £8 million of his own funds in redeveloping that and also borrowed from lenders including INBS. He had hoped to sell the property but in July 2001 HMRC got a restraint order on his assets for alleged money laundering and duty evasion.
Counsel said IBRC seemed to be basing its refusal to recognise his client's debt on a 2015 judgment by the English high court dismissing Mr Bhandal's damages claim against the HMRC over the 2001 restraint order. The English high court judge, Mr Justice Andrew Collins, had concluded Mr Bhandal was involved in money laundering and that Updown Court had been acquired through the proceeds of crime.
There was nothing in that judgment which demonstrated the 2013 proceedings were anything other than a properly conducted judicial process and IBRC was not entitled to rely on the findings in the 2015 judgment, counsel said. His client denies involvement in money laundering or that the property was acquired with the proceeds of crime and he was never charged with, let alone convicted of the offences referred to by Mr Justice Collins, counsel added.
Counsel said IBRC’s actions were fundamentally unfair. Opposing the action, the special liquidators say they were obliged to look behind the 2013 judgement and entitled to rely on the findings in the 2015 judgment and their assessment of the latter was entirely appropriate and in accordance with proper procedure. The hearing continues.