The High Court has allowed Patrick Cuttle to amend his claim against ACC Bank to include an allegation of fraud over an investment in the Solid World Bond 5. The decision concerns permission to change the pleadings, not whether the allegation is true or whether Mr Cuttle will win his case.
Mr Justice Kelly said material disclosed by the Bank gave the proposed fraud claim enough factual basis to pass the low threshold for amendment. He said the documents could support that claim on one view, but a fuller view of the material might alter that interpretation. Permission was not a warranty that the claim would succeed.
Mr Cuttle’s case is that the Bank promoted the bond and associated borrowing as a suitable investment for him despite knowing, or being reckless as to whether, that representation was false. His solicitor cited discovered documents as support for allegations that the Bank encouraged customers to borrow to invest. Mr Cuttle swore that he had been offered a loan after saying he did not have the money to invest, and that he had told Bank representatives his risk appetite was low. These are allegations and evidence advanced in support of the amendment; they have not been decided at trial.
The Bank denied wrongdoing. It said it did not market the bond as a borrow-to-invest product, although it lent to eligible customers who wanted to invest. It also disputed the claim that it knew the product’s performance would be low, and said the regulator knew about the associated lending. The Bank argued that the proposed amendments lacked a sufficient factual basis and relied on documents taken out of context.
The judgment describes the bond as a five-year-and-eleven-month investment linked to a basket of shares, with capital protection at the end of the term. Mr Cuttle borrowed €100,000 from the Bank on 12 March 2004 to invest. The court also noted the Bank’s evidence that the risk-warning document explained that investment growth would need to cover loan interest and tax for a geared investment to break even.
Mr Justice Kelly said Mr Cuttle’s affidavit, alongside the discovery material, supplied enough information to support the proposed allegation. He distinguished the application from an earlier case where no factual basis had been put forward against the company accused of fraud. He also observed that Mr Cuttle might obtain redress on his existing claims without proving fraud.
The court granted leave on terms. If Mr Cuttle proceeds with the fraud claim and loses on that claim at trial, he must pay the costs attributable to that part of the case, regardless of the overall result. If he chooses not to amend, he must pay the costs of the motion. If he amends and fails on fraud, he will also be responsible for the motion costs and additional costs arising from the amendment. The judgment does not record whether he later chose to amend.