TWO PENSIONERS who sued the Bank of Ireland for negligent misrepresentation of an endowment mortgage with which they bought their home have been awarded €16,000 damages.
Their lawyers see it as a landmark decision at the Circuit Civil Court which may be followed by claims from other householders who had a similar experience with endowment mortgages.
Alex Owens SC, who appeared for the bank, yesterday indicated that Mr Justice Matthew Deery’s decision would be appealed to the High Court.
It is understood that Louis and Margaret Kilmartin, both in their early 70s, were holidaying in Nice yesterday as the Circuit Court president ruled in their favour.
The couple who live in Strand Road, Portmarnock, Co Dublin, had claimed in the Circuit Civil Court that they lost more than €22,000 over the 15-year lifetime of their mortgage. Barrister David Hardiman SC said they incurred the loss as a result of negligent advice by the bank of the superior security and return of endowment mortgages over annuity ones.
Instead of providing them with “a nice little nest egg” in retirement, they had lost out significantly.
Mr Justice Deery told Mr Hardiman he had been impressed with the clear recall of Mrs Kilmartin regarding her dealings with the bank in 1991, and had been influenced by the opinions of financial experts, including Eddie Hobbs.
If bank manager Pat Martin had warned Mrs Kilmartin on the telephone about the downside of taking out an endowment mortgage, as he claimed he had, it would have been natural to have repeated the warning, which he had not, in a follow-up letter of May 2nd, 1991.
Mrs Kilmartin had told the court that Mr Martin had recommended the endowment mortgage as best for them and she had gone along with his recommendation.
The court was satisfied the documentation to the Kilmartins had not contained language highlighting the risks involved.
“I conclude without hesitation that the documentation, far from warning of risk to the sum available at the end of the mortgage, suggested there was no risk,” Mr Justice Deery added. The advice given had been deficient in many respects, leading him to conclude the negligence of that advice on the part of the bank.
He said the Kilmartins were entitled to recover the shortfall of the endowment policy to meet the €63,000 mortgage on maturity and measured that sum at €6,039. They were also entitled to €1,963 compensation for additional premiums and interest, and €8,000 for loss of projected surplus, making a total award of €16,002.
