Royal Bank of Scotland has won a legal case against a property developer who alleged that it ruined his business.
Oliver Morley had maintained that RBS’s controversial Global Restructuring Group (GRG) placed him under duress by seizing some of his assets after he struggled to repay a £75m loan.
But the High Court dismissed his claim.
Judge Mr Justice Kerr said Mr Morley did not put any of the money aside “for a rainy day”, spending it instead on property, fast cars, a yacht and a jet.
But that left him at a disadvantage when the global financial crisis struck, reducing the value of his business.
“Those assets turned out not to be very liquid when the impact of the downturn hit home,” the judge said.
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Mr Morley secured the loan from RBS in 2006, using part of his property portfolio as collateral.
After he had problems paying it back when it fell due in 2009, RBS transferred those assets to its West Register division, part of the now-defunct GRG.
More than 12,000 companies were pushed into RBS’s controversial restructuring group, which has been accused of exploiting firms and acquiring their assets at knockdown prices.
However, Mr Justice Kerr ruled that RBS was not at fault in Mr Morley’s case.
“The bank’s duty of skill and care did not require it to negotiate the restructuring any differently from the way it did so,” he added.
The judge said that Mr Morley’s original loan had included £15-20m earmarked for his private use.
Mr Morley, then aged 35 and single, “wanted to enjoy this new, albeit borrowed, personal wealth”. He then bought land in the south of France and built a luxury villa there.
“He bought a yacht and sailed it in the Mediterranean. He maintained residences in the north of England and London, He bought a jet, with a mortgage, and some fast cars,” the judge said.
If Mr Morley had kept £5m in reserve, he might have held on to his properties, the judge added.
Mr Morley’s spokesman declined to comment. It is not yet known whether he will appeal against the decision or what costs he might face.
RBS welcomed the ruling, saying the judge had found that it dealt with Mr Morley “in accordance with the terms of their contractual agreement following a breach of covenant and in a manner that was rationally connected to its commercial interests”.
In 2018, a report into the GRG by the Financial Conduct Authority said it found “no evidence that any member of senior management was dishonest or lacking in integrity”.