The High Court case involving West One Loans and investor Nick Clarke of Salkeld Investments Limited has been adjourned until September.
Investor Nick Clarke is suing West One Loans for not returning his investment of £235,000 made on a bridging loan.
Clarke has appointed law firm Mishcon de Reya to pursue his claim that West One Loans subsequently acted in breach of this contract by failing to obtain security on this loan – a term clearly stipulated in the contract.
This case, adjourned until September, serves as a warning to current and future investors in bridging loan finance, as well as advisers responsible for recommending such investments.
Clarke is the founder of Salkeld Investments Limited and is an experienced entrepreneur with investments across property, internet, biotechnology and natural resources sectors. He was introduced to an investment opportunity with West One Loans by his accountant.
In April 2011, West One Loans offered Clarke the opportunity to participate in a secured loan which it was intending to advance to an individual claiming to be Massimo Barbini.
West One advanced £570,000 to Barbini, partly funded by £235,000 from Clarke. As security in respect of the loan, West One Loans would obtain a registered charge over the property in Fulham, London and had an open market valuation of £950,000.
West One Loans advanced the full amount of the loan to an individual who was not Barbini and who did not own, or have any interest in, the property and without having obtained any valid security over the property. When West One Loans tried to register a charge over the property it was refused by HM Land Registry on this basis.
Mishcon de Reya, on behalf of Nick Clarke, has applied for a summary judgment on the basis that West One Loans has no real prospect of successfully defending the claim and there is no compelling reason why it should await trial.
Mark Abrahams, CEO of West One Loans, said:
“Sadly, we cannot comment on this investor matter as it’s subject to on-going legal proceedings. Having said that, I would like to take this opportunity to highlight the robust, best practice measures West One Loans has in place to combat fraud.”