The High Court has quashed a Financial Services Ombudsman decision on a borrower’s complaints about a bank’s handling of a commercial mortgage, finding serious and significant errors in the Ombudsman’s review. The complaints were remitted for further consideration; the court did not decide whether the bank had promised additional finance or was responsible for missed repayments.
In a judgment delivered on 16 November 2011, Mr Justice Cross considered an appeal by Roisin Hyde under section 57CL of the Central Bank Act 1942. The appeal concerned the Ombudsman’s finding of 27 May 2011, made on documents without an oral hearing. Most of Hyde’s complaints had not been substantiated. One complaint was partly upheld, and the Ombudsman awarded her €350 over the bank’s failure to follow her instruction to send correspondence to her home address.
Hyde said she had been offered a loan facility of about €965,000: €715,000 to buy a property and another €250,000 for renovation work. The €715,000 was drawn down. The bank maintained that its offer was for €715,000 only, and that no application or offer had been made for the additional sum. The Ombudsman concluded that the bank had not agreed to provide refurbishment finance.
The Ombudsman also found that the evidence did not establish who was responsible for setting up mortgage repayments or whether Hyde had been given a payment deferral. It rejected complaints about unanswered correspondence and found that the bank had made substantial efforts to restructure the loan. The judgment records these as the Ombudsman’s findings, not findings by the High Court on the underlying disputes.
Justice Cross held that the additional-finance complaint could not fairly be decided without an oral hearing. Hyde’s case was that the bank had made oral representations that the remaining €250,000 would be advanced later, and that its position changed after disagreements over repayments. The judge said credibility would need to be assessed to determine that claim.
He also found that the Ombudsman had misread Hyde’s October 2010 submission when concluding that she must have seen earlier letters sent to her office before December 2008. The submission said those letters had not answered her earlier request; it did not abandon her claim that she had not received them in time. The judge said an oral hearing also appeared appropriate on the repayment complaint.
The court considered the Ombudsman’s findings on the bank’s efforts to reach a compromise reasonable on the documents, but said a final decision on that complaint could follow the further hearing. It also said the €350 award was reasonable for the limited service failure found, while noting that further findings against the bank could affect that assessment.
The court quashed the 27 May 2011 decision and remitted the complaints to the Ombudsman for further consideration. Justice Cross expressly left the ultimate merits open. He reserved costs or outlay for further hearing.