The High Court has refused Danske Bank A/S’s appeal against a Financial Services and Pensions Ombudsman decision concerning a 2006 mortgage switch by Martin Moore and Martina Moore.
The Ombudsman upheld the couple’s complaint that they had not been adequately informed that fixing their interest rate meant their 2005 tracker mortgage would be redeemed and replaced with a new loan. The 2005 loan carried an ECB tracker rate plus 0.99%. The couple said they believed they could return to a tracker rate after the three-year fixed period and only learned otherwise when they sought to do so in 2009.
In 2020, the Ombudsman found the bank’s conduct unreasonable or otherwise improper under sections 60(2)(b) and (g) of the Financial Services and Pensions Ombudsman Act 2017. He directed the bank to apply an ECB tracker rate to the 2006 loan from 2006, repay excess interest, ensure the tracker rate continued to maturity and pay €4,000 compensation.
Danske Bank argued that the signed 2006 mortgage documents clearly stated that the fixed rate would be followed by the bank’s standard variable rate. It said the documents showed this was a new mortgage and that the couple’s understanding of what they signed could not override the contract. The bank also challenged the Ombudsman’s assessment of the paperwork, the treatment of the unwitnessed signatures and the significance of the shortened mortgage process.
Justice Niamh Hyland said the Ombudsman’s powers under sections 60(2)(b) and (g) allowed him to find conduct unreasonable or improper even where no breach of law had been established. The question on appeal was whether the decision contained a serious and significant error. The judge found there was enough evidence to support the Ombudsman’s conclusion that the documents, including references to “restructure of lending” and “repackage”, did not clearly explain that the existing loan would be redeemed and replaced.
The judge also rejected the bank’s argument that the Ombudsman had improperly relied on hindsight about tracker mortgages. She said the core finding was that the transaction had not been made clear; the couple’s claim that they would have stayed on their tracker loan if properly informed was not manifestly lacking in credibility. The court found no material error in the Ombudsman’s consideration of the unwitnessed signatures or the abbreviated process.
The High Court refused the relief sought. It did not set aside the Ombudsman’s decision or issue a separate redress order; the Ombudsman’s directions therefore remain undisturbed by this appeal.