The High Court has ordered the Governor and Company of Bank of Ireland to disclose documents in a dispute over interest rates on a 2004 mortgage loan. The order concerns discovery only; it does not decide whether the bank overcharged the borrowers or breached its duties.
The underlying claim is brought by Graham Foster, Michelle Foster and James Harrington. They allege that the wrong interest rate was applied for much of the loan period, resulting in overcharging of about €35,000. They say the overcharging made the loan unsustainable and forced the sale of a mortgaged investment property. They seek damages for lost rental profits and lost capital value.
The bank’s defence denies that the rate changes breached the contract, while also pleading that Bank of Ireland Mortgage deemed the borrowers to have been charged an incorrect rate. The judgment says overcharging remains formally in dispute.
The bank told the court that the loan, associated rights and liabilities, and its documents were transferred to Bank of Ireland Mortgage Bank in July 2004. It argued that the plaintiffs had sued the wrong defendant and said the other entity would consent to being substituted. The judge noted that the identity of the correct defendant was not formally before him on this discovery application. The plaintiffs chose to pursue the application against the bank. Whether the bank must procure documents held by the mortgage bank was left for another day.
Mr Justice Garrett Simons ordered discovery in five categories: documents about the plaintiffs’ knowledge of or involvement in a May 2011 decision to change the rate to 5%; documents about the May 2013 rate change, limited to 2013; documents concerning the bank’s knowledge of the plaintiffs’ use of the property; records showing how the borrowers were categorised as consumers for the borrowings; and advice or communications about available or applicable interest rates from 1 January 2011 to 31 December 2013.
The bank must provide an affidavit sworn by Barry Vaughan within 12 weeks after the order is perfected. The judge’s provisional view was that the plaintiffs should receive their costs of the discovery application, but the decision and execution of that costs order were stayed until the proceedings’ final outcome. The bank could file submissions seeking a different costs order by 11 January 2021, with the plaintiffs permitted to respond within two weeks.