The High Court has stopped solicitor Joseph O’Hara from pursuing a court action against ACC Bank over Solid World Bond investments, while allowing a similar claim by restaurateur Patrick Gallagher to proceed.
Both men borrowed substantial sums from ACC Bank to invest in its Solid World products. Each bought a €500,000 Solid World Bond 4 in October 2003, while O’Hara invested a further €250,000 in Solid World Bond 5 in March 2004. Their capital was returned, but the judgment records that borrowing costs substantially exceeded the investment returns.
O’Hara had first complained to the Financial Services Ombudsman, alleging matters including misrepresentation, inappropriate sales pressure and conflicts of interest. In November 2009 the Deputy Ombudsman rejected his complaint, finding no evidence that the bonds had been mis-sold or that O’Hara had been subjected to unfair sales techniques.
Mr Justice Charleton held that O’Hara could not then litigate substantially the same dispute afresh in the High Court. The Ombudsman’s determination was binding subject to the statutory appeal process, which O’Hara had not pursued. Allowing a second hearing on essentially the same allegations would amount to an abuse of process.
Gallagher’s case raised a different preliminary issue: whether his negligence claim was too late because proceedings began more than six years after he bought the bond.
For the purpose of that motion, the court assumed Gallagher could prove his allegations against the bank. Charleton J. held that buying the bond did not necessarily cause immediate financial loss. The investment could have performed well or badly over its fixed term, making the loss contingent on future market performance.
The judge concluded that, if Gallagher had been negligently advised, the tort became complete only when financial loss crystallised. His claim was therefore not statute barred and could proceed.
The ruling decided only these preliminary questions. It did not determine whether ACC Bank had actually misrepresented the products or was liable to Gallagher for damages.