The Supreme Court granted Hugh Governey leave to appeal a High Court decision concerning a failed investment linked to the Kennet Shopping Centre in Newbury, England. The Court ruled only that his proposed appeal raised arguable questions of law; it did not decide whether the investment was mis-sold or whether the Financial Services Ombudsman was wrong.
Mr Governey had bought a single-premium life assurance policy marketed by Anglo Irish Assurance Company Limited, later renamed IBRC Assurance Company Limited. He complained to the Financial Services Ombudsman (FSO), alleging that Anglo had failed to disclose material information about the investment. The FSO found in July 2012 that there had been no misrepresentation or material non-disclosure of risk.
The High Court dismissed Mr Governey’s appeal in 2013. It held that relevant evidence was before the FSO on which the decision could reasonably be based. Mr Governey then sought leave from the High Court to appeal to the Supreme Court on a question of law, but that application was refused. He applied to the Supreme Court, which had an independent power to grant leave under the legislation.
The Supreme Court said that where the statute requires leave but sets no criteria, leave should be granted if the applicant establishes a stateable basis for an appeal on a point of law. It said it should consider any reasons given by the High Court for refusing leave, but must reach its own conclusion.
Mr Governey’s proposed appeal included arguments that Anglo had not disclosed advice that the Parkway Shopping Centre would pose a risk to the Kennet centre, that Newbury was in long-term decline, and that the share of Kennet tenants with break clauses was about 36%, rather than 19%. These were allegations advanced by Mr Governey, not findings made by the Supreme Court.
The Court considered it arguable that the High Court may have been too deferential to the FSO on questions of law. It also said Mr Governey could argue that disclosing an investment’s overall risk was not necessarily the same as disclosing facts that would allow a customer to assess that risk, and that the FSO’s reasons may have been inadequate. The Court did not rule on the ultimate merits of those arguments; it granted leave for the appeal to proceed.