The High Court has upheld a €25,000 compensation award to nurse Mary Gallagher after a financial services firm failed to tell her clearly that it owned two apartments it sold to her in Darlington, England.
Mr Justice Bryan McMahon dismissed an appeal by Square Capital Limited against decisions of the Financial Services Ombudsman and Deputy Ombudsman.
Ms Gallagher had inherited money and approached the firm with €60,000 to invest. After meetings with director Enda Hunston, she bought two apartments in Darlington in 2004 and took out mortgages on both properties.
She later complained to the Ombudsman after one apartment was not sold as expected and difficulties arose in renting the other. During the investigation, Square Capital eventually acknowledged that it had owned the apartments it sold to her.
Most of Ms Gallagher's complaints were rejected. The Deputy Ombudsman did not find sufficient grounds to uphold claims about the prudence of the investment, an alleged promised resale profit, mortgage advice or the firm's efforts to resell the properties.
The successful complaint was narrower. The Ombudsman found that Square Capital should have been explicit about its ownership interest before the purchases and should have kept records showing that disclosure had been made.
Square Capital argued on appeal that it had acted only as a property vendor and therefore fell outside the Ombudsman's financial-services jurisdiction. The High Court rejected that argument. Correspondence described the company as Ms Gallagher's financial adviser, while other material used the name Hunston Financial Planning.
The court also rejected the argument that Ms Gallagher should simply have identified the firm's ownership from the sale documents. Mr Justice McMahon held that this did not answer the Ombudsman's finding that the company should have made full and frank disclosure itself.
The €25,000 award was also upheld. The court found that compensation could be granted for inconvenience even without proof of financial loss, and that Ms Gallagher's prolonged uncertainty about the firm's interest fell within that power.