The Supreme Court rejected Hugh Governey’s claim that Anglo Irish Assurance Company Limited had a duty to disclose information about the future value of the Kennet Centre shopping centre in connection with his €500,000 investment. It affirmed the High Court order dismissing his appeal against the Financial Services Ombudsman’s finding that his complaint was not substantiated.
The judgment, delivered by Ms Justice Laffoy on 21 December 2016, arose from an investment Governey made in January 2006 through a single-premium bond. The fund invested in a Jersey trust that acquired the Kennet Centre in Newbury, England. Governey complained to the Ombudsman in 2010, alleging that Anglo had failed to disclose material information, including that a proposed competing shopping centre, Parkway, could threaten the Kennet Centre, and that Savills had identified other risks affecting the property.
The Ombudsman found in July 2012 that the complaint was not substantiated. The finding referred to the fund brochure’s warnings that the investment was high risk and that investors could lose all their money. The High Court dismissed Governey’s statutory appeal in 2013. The Supreme Court later granted leave to review the High Court determination on questions of law.
The Supreme Court considered whether the bond, although described as a life assurance policy, imposed a duty of utmost good faith requiring Anglo to disclose information about the underlying investment. It concluded that the arrangement was, in substance, an investment contract. The bond provided for a return when the fund matured, or a death benefit if Governey died while it remained in force. The Court said the only insured risk was Governey’s death; the investment’s performance was not a risk for which Anglo had assumed responsibility.
The Court also held that the alleged information about the Kennet Centre’s future value was not material to the risk covered by the bond or to recovery of a claim under it. It noted that the contract documents included provisions under which Governey accepted that Anglo was not responsible for the linked assets’ performance and waived claims concerning their failure to perform as anticipated.
The Court therefore found no basis to set aside the Ombudsman’s finding or to order repayment of the €500,000. It affirmed the High Court’s dismissal. Other questions raised in the appeal, including whether the Ombudsman gave adequate reasons, were not decided because the Court considered them theoretical in light of its conclusion on the disclosure duty. Costs were left for further submissions.