BANK of Queensland has settled a multi-million dollar valuation spat, marking another step in costly fights between lenders and valuers.
The dispute has been settled confidentially with a court case being wound up. It comes as industry sources say Suncorp has reaped $19 million from a separate dispute involving a valuer.
The spats are examples of big-dollar fights, many of which erupted after the GFC.
The situation involves banks trying to recover money from a valuer when a loan has gone bad but the lender cannot recover as much as anticipated from the property offered as security. The professional indemnity insurance of the valuer is targeted in such cases.
Such disputes are often handled confidentially. One industry source reckoned only 5 per cent to 10 per cent of claims ever go to court.
Some have also suggested that big banks are less likely to press cases against valuers, and after the GFC there were concerns a continuation of disputes could decimate the valuation industry.
In one case, Landmark White Brisbane had defended a lawsuit from Bank of Queensland about a valuation for a Gladstone shopping outlet. The valuer had estimated it was worth $64 million, while the bank later alleged the market value was actually $46.5 million. Court files show the lawsuit was discontinued in September last year and both parties declined to comment on the settlement.
Brisbane-based Suncorp’s $19 million settlement from a valuer appears to be one settled outside the publicity of open court. The only publicly available information is in Suncorp’s accounts out last month, which mentioned its banking arm had received a “favourable $19 million legal settlement”.
The bank refused to confirm or deny the nature of the settlement, including whether it related to a valuation. But the settlement is becoming news among the valuation industry, although there are various explanations about the nature of the loan gone wrong.
The Courier-Mail has previously reported on lawsuits from the Commonwealth Bank against valuers over small home deals, and Suncorp has sued Landmark White (NSW), a separate entity, in an ongoing lawsuit over valuation for a Sydney CBD building, claiming the $115 million valuation was wrong.
In that case, Suncorp argued the right valuation was actually only $65 million. Landmark has defended the dispute, arguing it provided the valuation in a manner “widely accepted” as competent professional practice.Author: Liam Walsh
Source: The Courier-Mail