The High Court has dismissed proceedings by Komady Limited and Michael O’Reilly against Ulster Bank Ireland Limited, ruling on a preliminary issue that the claims were brought outside the applicable six-year limitation period and that the pleaded acts and omissions could not amount to concealment under section 71(1)(b) of the Statute of Limitations 1957.
The court was directed to decide the issue on the basis that the plaintiffs’ pleaded facts were established. It did not determine the underlying mis-selling allegations at a trial. The bank had agreed, for this preliminary issue, to treat those facts as correct, including the alleged fiduciary relationship and alleged failures concerning advice and financial regulations.
The plaintiffs said the bank advised them in July 2006 to enter two interest-rate swap agreements and represented that they suited the plaintiffs’ conservative financial objectives. They alleged that the swaps were not properly explained and that the bank failed to disclose material features, including risks and break costs. They also relied on alleged non-compliance with the Code of Conduct for Investment Business and, from November 2007, MiFID requirements. The bank’s alleged commission of about €100,000 was also raised as a non-disclosure.
The plaintiffs said they understood the swaps as a form of fixed-rate arrangement and only appreciated their nature and unsuitability after a financial review and advice in 2012. They argued that the alleged concealment postponed the start of the limitation period.
Justice Michael Peart held that the claims accrued when the plaintiffs entered the swaps, effective from 18 July 2006. The proceedings began on 23 November 2012, more than six years later. He rejected the argument that the period began only when the plaintiffs received advice or understood the extent of their losses. In his view, the pleaded facts gave them enough information to seek advice and bring a claim; the statute did not provide a general discovery test for these claims.
The judge also rejected the contention that the fiduciary relationship changed the limitation position. He concluded that the equitable claims relied on the same underlying facts and that no special limitation rule applied. The alleged non-disclosure of commission did not postpone accrual either.
On section 71(1)(b), the court concluded that the alleged conduct was not capable of concealing the plaintiffs’ right of action within the meaning of that provision. The ruling resolved the directed preliminary issue and the court ordered the proceedings dismissed.