The High Court has directed that Davy’s judicial review challenge to a Financial Services Ombudsman decision be heard before its separate appeal on the merits. The ruling addresses only the order in which the proceedings will be heard; it does not decide whether the Ombudsman’s decision was legally valid or whether the complaint was correctly upheld.
The dispute stems from a complaint by Enfield Credit Union about three perpetual bank bonds sold to it by J. and E. Davy, trading as Davy. Enfield alleged that Davy failed to make clear that the bonds had no fixed maturity date and did not adequately explain their features or factors that could affect their market value.
The Ombudsman upheld the complaint in a decision dated 21 January 2008. The Ombudsman directed Davy to pay Enfield €500,000 in exchange for the bonds and refund fees and commissions paid in connection with their purchase. The judgment records that the payment and refund were due by 22 February 2008, subject to Davy’s statutory right of appeal.
Davy brought an appeal under section 57 CL of the Central Bank Act 1942 and separately sought judicial review. Its judicial review case included a claim that certain statutory provisions were unconstitutional. The parties agreed that the constitutional issue should be considered only if Davy failed on both the conventional judicial review grounds and the statutory appeal.
Davy argued that the judicial review should be heard first, saying the Ombudsman’s decision might not be legally valid. The judge accepted that sequencing. He reasoned that if the decision were invalid, there would be no valid decision to appeal, making a full hearing of the merits appeal potentially unnecessary. The judge also noted that the judicial review was expected to take a few days, while the merits appeal could take about two weeks and involve discovery and oral evidence.
The court ordered the judicial review application to proceed first and said it would give directions for an early hearing. If Davy succeeded, the court would consider whether to send the matter back for reconsideration under the law as determined by the court. If Davy did not succeed, the court would then hear the merits appeal. No ruling was made in this judgment on the validity of the Ombudsman’s decision, the bond complaint’s merits, or the constitutional challenge.