Lendy borrower faces £3m claim as she hunts missing ‘Mr Mohammad’

Lendy Ltd was a so-called peer-to-peer lending company which facilitated the crowd funding of loans by members of the public secured against property and other assets. It was placed into administration following action by the FCA in 2019.

One such asset was a property formally “the gatehouse to Stoke Park, a former country mansion which is now one of the most prestigious hotels and golf clubs in Buckinghamshire” and “has been altered, extended and adapted to create a modern contemporary 4 / 5 bedroom house which has been finished to a very high standard.”

In August 2016 a loan of some £1.25m, understood to have been collectively financed by 1,246 retail investors with Lendy acting as their agent, was advanced to the borrower Ms Petra Omoruyi, 40, of Bromley. 

The loan was due to be repaid on 28^th February 2017 and during its six-month-term attracted an interest rate of 1.4%/month.  Written submissions made to the court say that this increased to 4.4%/month on any defaulted amounts outstanding following the repayment date.

Following the default the charged property was sold by receivers for circa £1m leaving a balance of £301,583.30. 

Key Dates

Lendy’s Claims

The claims made by Lendy in their Particulars of Claim are quite straightforward and comprise Interest and Costs:

Rate (Per Month)	On Amount of:	From	Until	Line Total
4.4%	£1,274,490(1)	28/02/2017	10/10/2017	£412,976.66
4.4%	£739,549.96(2)	10/10/2017	10/10/2021(3)	£5,102,852

The Defence & Counter-Claim

“Save as expressly … admitted, the defendant deny each and every allegation in the Particulars of Claim” begins Ms Omoruyi’s defence statement.  She denies that the “alleged indebtedness” exists and that even if the debt exists, she is entitled to set-off or reduce any sums due by her counterclaim.

The Counterclaim alleges that during Ms Omoruyi’s negotiations with Lendy they: “…by their employee, partner or agent called Mr Mohammad made the following representations…”

It is said that Mr Mohammad “…guaranteed that on or before the [Repayment date] the Defendant would have two exit routes for the repayment or refinancing of the borrowed amount, namely the following:
Re-mortgaging or refinancing the loan via a high street bank at a much lower rate of interest or
Selling the property off at a price in excess of the borrowed amount.”

It is claimed that Mr Mohammad “represented himself as expert in the property field and specifically stated that he could be relied upon by the claimant as to the exit route he proposed for the transaction” and that he “would assist and/or arrange the refinancing or sale of the property”. 

It would appear though, as explained by Ms Omoruyi, that Mr Mohammad “is not an expert in the property field and has gone to ground and is nowhere to be found”.  She alleges that the purported representations made by Lendy through Mr Mohammed were fraudulent “in that he knew they were false or was reckless, not caring whether they were true or false”.

The second part of her counterclaim centres around the sale value of the property, which it is claimed should have sold for an additional £1.2m.  “In the circumstances [Lendy] wrongfully resold the property at an undervalue”.

The so-called special damages sought by Ms Omoruyi are said to follow within 14 days of the date of the defence and counterclaim however were not immediately available to the mouseinthecourt.

Lendy’s response

Lendy deny “each and every allegation set out in the Defence and Counterclaim”. 

In response to the “bare denials” made by the defendant that she is liable for the sums claimed Lendy say that this statement is made “without any particularisation whatsoever”.

Lendy further deny that Ms Omoruyi can rely on her counterclaim as they have no knowledge of the mysterious Mr Mohammad.  Apparently, no one by that name was working either for Lendy or the broker, David Travers of LDT Finance Limited.  Lendy says they are putting the defendant to “strict proof as to the existence of Mr Mohammad, his identity and what capacity he was involved in the agreement”.

Even if Mr Mohammad does exist, Lendy say that he would be unable to make any representations so as to bind Lendy to them.  Lendy say they will rely upon this contractual term:

“These terms and conditions and the Loan Contracts sets out the entire agreement between you and us with respect to your membership with Saving Stream and supersedes any and all representations, communications and prior agreements (written and oral) made by you or us”.

Lendy additionally deny that the property was sold at an undervalue and rely on the fact that the property was sold by receivers, who it is claimed, were acting on behalf of Ms Omoruyi.

In relation to the special damages sought by Ms Omoruyi, Lendy say that the document purporting to detail them wasn’t accompanied by a statement of truth and therefore the defendant isn’t entitled to rely upon it.

Case Progress

There was a Costs & Case Management Conference on March 3^rd 2021 before Queens Bench Master Richard Davison. The claimant Lendy Ltd was represented by Mr Lloyd Maynard instructed by Shoosmiths LLP and the defendant borrower was represented by Mr Andrew Otchie instructed by TolTops Solicitors.

It’s understood that the matter is set for trial at the end of the year with a time estimate of three days.

Mr Maynard told the court that the claim was “conservativity worth £2.4m” and due to interest accruing on a compound basis could be worth “£3m at trial“.

Mr Maynard further submitted that the claims carried a “significant stigma” to Lendy which he said justified the attendance of a so-called Grade 2 solicitor attending trial.  In addition he told the court “these proceedings are effectively the first in long chain of recover matters” and concerned whether “the lenders should be responsible for receivers conduct in selling property“.

It’s understood the parties will attempt mediation/ADR prior to trial.

*References to Lendy include Saving Stream Security Holding Limited

Case Number: QB-2020-004345
Lendy Limited and Saving Stream Security Holdings Limted v Omoruyi