The High Court has sent a mortgage complaint back to the Financial Services Ombudsman after finding that the Ombudsman misunderstood the borrowers’ main complaint and wrongly concluded there was no conflict of fact between them and their lender.
In a judgment delivered on 7 June 2016, Mr Justice Mac Eochaidh allowed Walter de Kretser’s appeal against the Ombudsman’s decision rejecting a complaint concerning a mortgage with ICS Building Society. The court remitted the matter to the Ombudsman for reconsideration. It did not decide whether an oral hearing should be held or determine whether the borrowers had secured an interest-only mortgage for the full term.
The couple’s complaint had two strands. They said the lender had agreed to change their original repayment mortgage to interest-only for the full term. If that was rejected, they sought further interest-only forbearance. The lender said the interest-only periods it had granted were temporary and rejected further extensions.
The Ombudsman’s decision described the complaint principally as a refusal to grant further forbearance. The judge said that account failed to reflect the first and foremost complaint: that the borrowers said they had obtained an agreement for interest-only payments for the full mortgage term, which the lender denied.
The Ombudsman had found that the submissions and evidence did not disclose a conflict of fact requiring an oral hearing. The High Court held that there was a clear factual conflict over whether the full-term interest-only agreement existed. The judge said it was for the Ombudsman, not the High Court, to decide whether that conflict required an oral hearing.
The judge noted that the couple had advanced little in support of their claim beyond their assertion. But he said he could not step into the Ombudsman’s role or assess the strength of the case. The appeal succeeded because the complaint had been misunderstood and the finding that there was no factual conflict was mistaken.