The High Court has ruled that it could not currently be said that a claim against two Bank of Ireland entities had accrued by 2011, when a borrower withdrew funds from a pension policy linked to his mortgage.
The ruling addressed a preliminary limitation issue in proceedings brought by Rachel Casey and Eoghan Casey. The defendants had sought to have the case dismissed as statute-barred. The court considered only whether any potential cause of action had accrued by the time the borrower encashed the policy in June 2011. It did not decide the underlying allegations about the advice or mortgage product.
The late Dr Casey borrowed €356,250 in 2006 to buy a property in Ennis, County Clare. The ten-year, interest-only loan required him to maintain a bank-approved pension policy, with its proceeds intended to reduce the outstanding principal. He stopped paying into the policy in 2009 and withdrew its funds in June 2011. Some of the proceeds went towards other debts, with the balance transferred to another pension policy.
The plaintiffs allege that the bank advised that the pension would be sufficient to repay the mortgage at the end of its term, and that the loan and investment were unsuitable. The defendants argued that, on the plaintiffs’ own case, the product was unsuitable from the outset and the claim had crystallised no later than the 2011 withdrawal. The plaintiffs said there was no evidence that the transaction’s burdens exceeded its benefits at that point; they argued the claim did not accrue until the bank demanded repayment in October 2019.
Justice Miriam O’Regan said the withdrawal showed a breach of the loan’s pension condition, but that did not establish actual financial damage capable of assessment in money terms. The available evidence did not include valuations of the property or pension, the amount received on encashment, the interest paid or any yield from the property. Without those figures, the court could not determine whether the borrower was worse off in 2011.
The judge also noted there was no evidence that the bank acted on being told of the withdrawal, that the borrower stopped making interest payments, or that he tried to sell or surrender the property then. The parties renegotiated repayments in 2016, which was consistent with the agreement continuing after the withdrawal.
The court concluded that the claim could not currently be said to have crystallised by 2011 on the limited agreed evidence. It left open the possibility that appropriate evidence might establish an adverse balance at that time. The judge’s provisional view was that the plaintiffs should receive their costs, but allowed the parties 14 days to make written submissions if they disagreed; absent submissions, the proposed costs order would be made.