The High Court has set aside the Financial Services Ombudsman’s finding on a complaint about a Northern Ireland property fund, directing the Ombudsman to review the matter again. The court did not decide whether the investor’s complaints were well founded.
The appeal concerned the Ombudsman’s 24 May 2012 finding on a complaint by Mary Carty-Doyle against Goodbody Stockbrokers. She alleged, among other things, that she had been told the fund would invest only in commercial property, that its borrowing exceeded what had been represented, and that the fund’s investments and fees raised contractual and conflict-of-interest concerns. Goodbody disputed aspects of her account.
Mr Justice Herbert found that there were material disputes about what was said in meetings and a recorded telephone conversation between Carty-Doyle and Goodbody representative T.J. Scully. These included whether she described herself as a seasoned and successful investor, whether she received assurances that the fund would avoid residential property, and how her stated preference for moderate risk related to the decision to invest all her funds in the fund.
The Ombudsman had decided the documentary record was sufficient and did not hold an oral hearing. The High Court held that it was not reasonable to resolve the disputed matters on the documents alone. It also found that the Ombudsman had not properly addressed the complaint about whether particular residential and development investments fell within the fund’s stated investment strategy. On the borrowing issue, the court said the Ombudsman’s reasoning did not make clear whether a significant part of the complaint had been properly investigated or why it was rejected.
The court upheld the Ombudsman’s treatment of the separate complaints about due diligence and conflicts of interest, finding no serious and significant error shown on those issues. It also considered other complaints about the fund’s structure, transparency and fees to be of minor importance in the overall context of the case.
Herbert stressed that he made no finding on the merits of any of Carty-Doyle’s complaints. The order sets aside the Ombudsman’s finding and remits the matter to the Ombudsman for review in accordance with the judgment.