The High Court has refused Ulster Bank Ireland DAC’s appeals against two Financial Services and Pensions Ombudsman (FSPO) decisions concerning borrowers who sought to return to tracker mortgage rates after moving to fixed rates.
In a judgment delivered on 22 June 2023, Ms Justice Bolger affirmed the FSPO decisions in cases A and B. She found the Bank had not shown a serious or significant error of law that justified setting them aside. The appeals were statutory appeals on points of law, not a fresh hearing of the borrowers’ complaints.
In case A, the borrowers’ 2006 mortgage offer described the tracker margin as fixed for the life of the home loan. They moved the maximum permitted amount to a 3% staff rate in 2007 and sought to return to the tracker rate in 2010. The FSPO had found that the move to the staff rate did not amend the original terms, and directed the Bank to apply the tracker rate from December 2010, refund excess interest and pay €3,500 compensation.
In case B, the borrowers moved to a tracker rate in 2006, then chose a fixed rate in 2007. When that period ended in 2010, they asked to return to the tracker rate. The FSPO found that their documents did not clearly tell them that choosing a fixed rate would permanently end their tracker entitlement. The High Court held that the FSPO was entitled to reach that conclusion based on the mortgage documents and the information given to the borrowers. The court also upheld the FSPO’s reliance on the Consumer Protection Code’s requirement for clarity when contractual entitlements are changed.
The Bank argued, among other things, that the FSPO should have held oral hearings and had failed to account for Central Bank tracker mortgage processes. The judge rejected those grounds. She held that the documentary evidence was sufficient for the FSPO to decide the complaints and that the Central Bank had made no findings about these borrowers that bound the FSPO.
The judgment did not finally dispose of case C. The parties agreed that the FSPO’s decision in that case should be set aside and remitted because it issued before the Bank’s submission period had expired. They had left the precise order over until the High Court ruled on cases A and B. The judge listed the matter for mention on 11 July 2023 to hear submissions on final orders, including case C, and on costs. Her indicative view was that the FSPO was entitled to its costs.