The High Court has affirmed a Financial Services Ombudsman finding that dismissed Paul and Mary Clark’s complaint against Ulster Bank over title deeds that were not lodged with the bank after a 2000 mortgage.
Mr Justice Hedigan ruled on 20 July 2011 that the Clarks had not shown the ombudsman’s decision was vitiated by a serious and significant error, the test for an appeal under section 57 CL of the Central Bank Act 1942. The court affirmed the finding without modification.
The Clarks said the bank had failed to tell them that their former solicitors had not lodged the deeds, despite repeated requests to the solicitors. They argued that earlier notice would have allowed them to address the problem before attempting to sell their County Cork property, or to complain to the Law Society within its five-year limit. They also said the missing deeds caused a prospective purchaser to withdraw and claimed expenses, outstanding costs and a fall in the property’s value.
The judgment records that the solicitors sent deeds to the bank on four occasions between 2001 and 2002. The bank returned them because of defects or missing material, then sent reminders every six months. When the Clarks sought the deeds in 2009, the bank said it had not received them and arranged for them to be reconstituted.
The court said the bank was not on notice that the solicitors were failing to communicate with their clients. In the usual course, it was reasonable to expect solicitors to communicate with their clients, and the circumstances did not justify requiring the bank to go behind that relationship and contact the Clarks directly. The court said the bank was protected in the meantime by the solicitors’ undertaking.
The judge also upheld the ombudsman’s conclusion that the Clarks had not established a loss caused by the bank. There was no completed contract, and the documents did not show why the purchaser withdrew. Although the purchaser’s solicitor had expressed concern about title documents in November 2009, the January 2010 withdrawal letter did not give a reason. The ombudsman had sought a letter from the Clarks’ solicitor explaining the withdrawal, but none was provided; a separate letter referred to in the correspondence was also absent.
The court said the evidence left open the possibility that planning issues, rather than the title deeds, led the purchaser to withdraw. It was therefore open to the ombudsman to find that no loss attributable to Ulster Bank had been established.