The Court of Appeal has dismissed as statute barred a negligence claim concerning a pension-backed mortgage used by the late Dr Eugene Casey to purchase a property in Ennis, County Clare.
Dr Casey bought 3 Daly’s Terrace, Carmody Street, in 2006 after obtaining advice through Bank of Ireland. The arrangement involved an interest-only loan of €356,250 over ten years, linked to a pension intended to generate enough money to repay the principal when the mortgage matured.
The claim brought by his personal representatives, Rachel Casey and Eoghan Casey, alleged that the product was unsuitable from the outset. Their pleaded case was that much of Dr Casey’s income came through the General Medical Scheme and did not qualify for the pension tax relief assumed in the advice, meaning he could not afford the €5,000 monthly pension contributions required for the arrangement to work as intended.
By September 2007, Dr Casey had reduced those contributions after obtaining independent tax advice. He stopped contributing in 2009 and encashed the pension in 2010 without using the proceeds to reduce the mortgage. When the loan matured in November 2016, more than €356,000 remained outstanding.
The High Court had refused to dismiss the claim, holding that there was insufficient evidence to determine whether an actual financial loss had crystallised by 2011.
Ms Justice Caroline Costello, with Ms Justice Butler and Mr Justice McDonald agreeing, reversed that decision.
The court held that the pleaded case was not dependent on some future contingency such as market performance or property values. The alleged defect was present from the beginning: Dr Casey had entered a transaction which, according to his representatives’ own case, he could not fund as required because the expected tax relief was unavailable.
His cause of action therefore accrued when he entered the transaction in 2006. The 2021 proceedings were consequently outside the statutory six-year period and were dismissed.