Ulster Summary of Ulster Bank's challenge to the Ombudsman decision

Extraneous Issue no. 2 : Similarity in wording of all three cases now before the court

Ulster Bank had complained that the Ombudsman seemed to cut and paste the wording from one decision into another.

Counsel for the Ombudsman said it was difficult to see what legal point was being raised here?

Ulster Bank is complaining on one hand that the Ombudsman's decision lacked consistency with previous decisions and now they are complaining about the consistency in the current decisions.

Extraneous Point 3: The Reasons Point

Counsel said that this was an "obiter" comment and needed no further argument. I didn't understand this.

Also known as obiter dictum. It refers to a judge's comments or observations, in passing, on a matter arising in a case before him which does not require a decision. Obiter remarks are not essential to a decision and do not create binding precedent. However, obiter remarks of senior judges, for example, may be indirectly instructive or persuasive, especially in areas in which the law is developing.
 
The employee case - Case C

Three appeals by Ulster Bank are being considered at the same time by the court. Cases A & B have the same issues and Case A was used to argue it.

Case C involves an employee of Ulster Bank - the legal issues are the same, but the facts are slightly different.

8/2006 - Employee drew down a mortgage on a tracker.
5/2007 - The employee applied, through a branch, to Ulster Bank to convert part of it (the maximum allowed?) to a staff preferential mortgage which was on a rate fixed for the life of the mortgage. This application does not appear to have been in writing by the borrower but by his branch.
6/2007 - Ulster Bank agreed to the transfer.

Apparently the borrower signed no documents to show that he understood that by fixing through a staff preferential mortgage he would be giving up his right to a tracker. The terms and conditions of the staff preferential mortgage were on the internet. (Presumably an internal Ulster Bank intranet?)

Judge: How did he know the terms?
Counsel: From the internet.

12/2010 - wanted to revert to tracker and was told no.
2017 - complained to FSPO but was put on hold due to the TME
7/2019 - told he was not impacted and that he could go to the FSPO if he was not happy with that decision.

The submission on the preliminary decision is narrower than in Case A. "C.E." (my shorthand?) sought to deal with factual issues relating the the contractual interpretation.

The nature of the staff fixed rate, the staff loans scheme rules were not signed by the employee.

The staff scheme was not a life long loan like the tracker.

With this, Counsel for the FSPO concluded her submissions.
 
Counsel for Ulster Bank then stood up to make a point on Case B.

Case B appears to be the same as Case A, but apparently the Ombudsman issued the Final Decision before the 15 days for comment was up and so the Final Decision had to be quashed - both Ulster and the Ombudsman agreed to this.

The only issue was costs and this could be determined when the final decision in Case A was issued.

Then Counsel for Ulster Bank wanted to amend some pleadings. They discussed it back and forth for 5 minutes but none of us in the public seating at the back could hear what Counsel for the Ombudsman was saying. ( Counsel for the Ombudsman was very clear even with the layout of the room and the air conditioner humming away.) We could only infer it from the Judge's responses which were not that clear either as she was speaking from behind a double screen and was quite muffled.

The judge said she was not happy to amend pleadings at such a late stage in the proceedings. She took a dim view of his wanting to amend the pleadings in one case based on what had transpired in the other case. I think that they are going to revisit this, this morning.
 
So today Marcus Dowling SC for Ulster bank replied to Eileen Barrington's reply to their initial case.

The air conditioner was humming away and he spoke quietly and indistinctly anyway so it was very difficult to follow him.

The Judge asked him to speak up.

I asked the judge's assistant to switch off the aircon but he just shrugged his shoulders.

At the break for lunch I asked the Court Clerk if he could do anything about it and when we came back, it was switched off so much easier to hear him. But he was hard to follow, in particular when he was reading through stuff - cases and transcripts and pleadings - he just fired ahead at speed with his head down.

So the following might not be complete.
 
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As it was very repetitive, here are the main points as I understood them.

Previous complaints

The former Ombudsman had rejected 4 complaints on this issue. The current Ombudsman has upheld these three cases before the court which are on exactly the same issue.

While each case is assessed on its merits, as there was such a different finding on these cases, the Ombudsman should have explained his reasons for departing from the previous decisions.

Not doing so is the essence of arbitrary decision making.

But the Ombudsman's view is extreme. He said "I can't understand how anyone would think that these previous decisions are relevant"

In some other case, (Sounded like Judge Lafoy in the PPA case) consistency was deemed to be important and you have to explain why you are not consistent - otherwise it is arbitrary.

It's a minimal requirement. A light requirement. Not a requirement to be consistent, but a requirement to explain the departure.

The Judge asked if the planning legislation (for the PPA case) and the Ombudsman were similar.
Counsel said that they were not. The Ombudsman legislation was closer to a court process than the planning process which is more administrative. For example, the Ombudsman can deal with cases which could take the court route.

Not only has the FSPO been inconsistent.
But he has not explained why.
And furthermore he has said referring to previous cases is "unhelpful".

This is the biggest red flag or arbitrary decision making. It is not judicial. It is random. So it utterly disqualifies...

These three cases before the court were before the Ombudsman before Ger Deering joined. If they had been resolved quickly, they would have been rejected. In fact, two of the rejected cases, were rejected by the Deputy Ombudsman, Mary Rose McGovern, who is still an employee of the Ombudsman Service.
 
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What is the role of the court in this appeal?

There are three standards for decision making
Judicial Review
Court of Appeal on a point of law
Statutory Appeal like this one.

Counsel for the FSPO said that it was not up to the court to hear the case de novo.

But the correct approach for the court is
1) Were there errors made?
2) Court must check if there are h.... if there were errors.

We are not asking you to rehear the case. We are asking you to look at the errors.

Counsel for the FSPO's approach was to promote an absence of rigour.

You must look at the contract. If you disapprove of the Ombudsman's decision, it vitiates the Ombudsman's decision.

The informality in the Act is a big springboard to justify a lack of rigour.

The FSPO's decisions are drafted by solicitors so they can't claim lack of resources.

The FSPO can't reject the law.
He must show independence, impartiality, openness and fairness.

Arguing for informality, gets the Ombudsman nowhere. He must still rule in accordance with the law.
 
Reviewing the meaning of the contract

We agree with the other side that interpretation of a contract is a mix of fact and law.

But this decision is based entirely on documents. There are no issues of fact to be determined. It's pure law, and the Court must not defer to the Ombudsman on a question of pure law.

No questions of fact arose or were ruled on.
There is no dispute on the meaning of words in the contract. The court must decide what the words meant.

Facts are only facts about the meaning of terms and they are not in dispute. For example, there could be a factual question over the meaning of "home loan rate" but that is not disputed.

We say he erred in law in the construction of the contract. The only way to resolve that is for you to determine what the contract meant.
 
There followed a discussion of the implications of the Utmost case.
The Judge asked if the Utmost case overruled Millar.
Barrister said he was reluctant as was the judge in the Utmost case to say it overruled Millar, but it developed the law.

The FSPO is making a point again in this case which they made (and lost?) in the Court of Appeal in Utmost.

The authorities say "You must look at the contract".
 
Is there one decision or two decisions?

Counsel for the Ombudsman said the Ombudsman had made two findings. So even if the court quashed the finding on the interpretation of the contract, it would not affect the finding that the behaviour was otherwise improper.

We say that is wrong.

Again, Utmost says that the FSPO's decision must be proportionate and the FSPO must assess its impact on the financial services provider.

The non-contractual issue is only a smidgin of the total. If the contract interpretation is quashed, the whole lot must be quashed.

Judge: What do you say to Counsel for the FSPO's argument that you must look at the adjudicative process in the round?

A lot has been made by Counsel for the FSPO that they did not have a caveat in 2007 to say that the tracker would be withdrawn if the borrower chose a fixed rate. But they could not have had that caveat as no one knew that trackers would be withdrawn due to the financial crisis. The bank did not warn the borrower of the serious consequences of fixing because they did not know and could not know the serious consequences.

Judge: Didn't your client get an opportunity to respond to the preliminary decision on the issue of the duty of the bank to notify the customer of the serious consequences?

Barrister: There is a free-standing duty of clarity.

Judge: What?

Our position is that there is only one finding and not two independent findings.

Counsel for the Ombudsman is arguing that "There was a breach of contract and in the event that there was not, the duty to be clear is a separate finding" But there was no "in the event" in the Ombudsman's decision.

If the court finds against the Ombudsman's interpretation of the contract, the whole case falls. The finding in Utmost was a legal finding.
 
Relevance of the Tracker Mortgage Examination

We 100% agree that the parties' subjective intention was not relevant. It is only the objective interpretation of the contract.

( I found this hard to follow and was delighted when the judge intervened to say "I am struggling to understand your point?")

The two findings are interwoven and not separate. They can't be separated.

If the judge finds that the two decisions are standalone, then the Tracker Mortgage Examination will have to be taken into account in determining the second decision.

The Central Bank agreed that this cohort was not impacted.
All of the cohorts were notified to the Central Bank.
They agreed that there was no contravention of the Consumer Protection Code.

An Independent Third Party also reviewed our findings.

The Central Bank was engaged in a granular review of our TME and permitted us to conclude the TME.

Why is this important?

One of the findings of the Ombudsman was that the behaviour of Ulster Bank was otherwise unreasonable. Case law is clear that such an assessment can only be made having regard to the relevant codes of conduct.

The Central Bank is the Apex Regulator. They designed the codes. They took the view that Ulster Bank complied with the regulatory standards.

The FSPO knew that this was relevant as they asked Ulster for the the TME decisions as part of their investigation.

When the complaint was made, the FSPO put it on hold until the TME was over.

When they were investigating the complaint, they asked Ulster "Did you consider this complaint within the TME?"

Judge asked "What is the evidence..."

Counsel replied: The Central Bank challenged Ulster Bank robustly on the codes. The CB interrogated them.

"The CB permitted Ulster Bank to conclude the TME on the basis that these cohorts were not impacted"
 
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Counsel for Ulster Bank sat down at about 3.20 pm which left Counsel for the FSPO at least half an hour to respond.
But she made only two short legal points.
1) There has been drift in Ulster Bank's case
2) "Greelish" is a reasons case. It just said that the reasons for the decision itself was inadequate. It did not create a precedent for the Ombudsman having to give the reasons for his departure from previous decisions.

The Judge then said that she would issue her decision "not in the very near future but she would be as expeditious as possible."
 
Nice call from Padraic Kissane to let me know the good news. Well that only took 13 years. Looking forward to a gracious apology and some reparation from Ulter Bank.
 
In the AIB Prevailing Rate case, AIB made lots of arguments, most of which were clearly nonsense. We focussed on one or two main arguments.

Ulster had 40 grounds of objection. I am reading the judgement now and the judge seems to dismiss them all. I don't understand why banks don't take a more focussed approach.

For example:


 
This was one area where I thought that the Ombudsman might be in difficulty.

Bill Prasifka had rejected 3 complaints on exactly the same issue.
Ger Deering took the opposite view.
The Bank agreed that the Ombudsman is entitled to take a different decision, but they argued that he should have explained why he arrived at the opposite conclusion. This is what the Judge thought:

 
Lets hope this is the end of it, it has been a long 14 years for us waiting on a final decision so hopefully we get one and can move on with our lives. This forum has been a great place to get information and have questions answered so thanks to everyone who took the time to get involved.
 
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