Brendan Burgess
Founder
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- 54,679
This is an extract from an Ombudsman's decision rejecting a complaint.
Decision Reference: 2018-0105
Lorraine and Conor were also considering changing their car and getting a car loan. During
a meeting with a mortgage consultant in April, Lorraine and Conor reported that they had
asked whether this would affect their mortgage application. According to the couple, the mortgage consultant told them that once they received their mortgage approval in principle, they could ‘do what (they) like’. The bank denied that such a statement was made.
However, I am satisfied that whatever may or may not have been said in this meeting in
April 2016, that discussion was superseded by the subsequent events, including the issue of
a new loan offer letter to the Complainants on 26 October 2016. Therefore, the precise
terms of the conversation that took place between the Complainants and the Bank’s
Mortgage Consultant in April 2016, is not determinative of this complaint. I am cognisant
indeed in that regard of the Court’s views in Ulster Bank v Deane [2012] IEHC 248 in which
it was said that, because of the parol evidence rule, borrowers could not refer to discussions
prior to formal documentation being executed, for the purposes of arguing that what was
in the signed documentation did not reflect the agreement of the parties.
The Court noted that:
" …. claims to have been told by representatives of the Bank that the loans offered
were long-term loans and that he was told this, prior to signing the two contracts
described as the First Facility and the Second Facility. The defendants have not
produced any written documentation to support this claim. It appears, therefore,
that they are seeking to alter the terms of the facility letters which are clear on their
face by means of parol evidence. This is not permissible. For reasons of public policy,
the courts have not permitted oral evidence to be admissible if it is introduced in an
attempt to contradict the terms of a written agreement between the parties. This is
known as the 'parol evidence' rule. See Macklin v. Graecen & Co. [1983] I.R. 61, and
O'Neill v. Ryan [1992] 1 I.R. 166. In short, a party is not permitted to adduce
evidence which, in effect, contradicts the reasonable construction of words used in
a written agreement."
Decision Reference: 2018-0105
Lorraine and Conor were also considering changing their car and getting a car loan. During
a meeting with a mortgage consultant in April, Lorraine and Conor reported that they had
asked whether this would affect their mortgage application. According to the couple, the mortgage consultant told them that once they received their mortgage approval in principle, they could ‘do what (they) like’. The bank denied that such a statement was made.
However, I am satisfied that whatever may or may not have been said in this meeting in
April 2016, that discussion was superseded by the subsequent events, including the issue of
a new loan offer letter to the Complainants on 26 October 2016. Therefore, the precise
terms of the conversation that took place between the Complainants and the Bank’s
Mortgage Consultant in April 2016, is not determinative of this complaint. I am cognisant
indeed in that regard of the Court’s views in Ulster Bank v Deane [2012] IEHC 248 in which
it was said that, because of the parol evidence rule, borrowers could not refer to discussions
prior to formal documentation being executed, for the purposes of arguing that what was
in the signed documentation did not reflect the agreement of the parties.
The Court noted that:
" …. claims to have been told by representatives of the Bank that the loans offered
were long-term loans and that he was told this, prior to signing the two contracts
described as the First Facility and the Second Facility. The defendants have not
produced any written documentation to support this claim. It appears, therefore,
that they are seeking to alter the terms of the facility letters which are clear on their
face by means of parol evidence. This is not permissible. For reasons of public policy,
the courts have not permitted oral evidence to be admissible if it is introduced in an
attempt to contradict the terms of a written agreement between the parties. This is
known as the 'parol evidence' rule. See Macklin v. Graecen & Co. [1983] I.R. 61, and
O'Neill v. Ryan [1992] 1 I.R. 166. In short, a party is not permitted to adduce
evidence which, in effect, contradicts the reasonable construction of words used in
a written agreement."