Bank won't appeal court's €16,000 award to couple for 'bad advice'
Published 25/11/2010 | 05:00
BANK of Ireland has decided not to appeal a court decision to award €16,000 to a Dublin couple who won a case after they said they were given bad advice when they took out an endowment mortgage.
The decision was made by the Circuit Civil Court in May, in a move which is expected to prompt hundreds of homeowners who took out these kinds of mortgages to also sue.
Lawyers for the bank had indicated after the award was made that the decision would be appealed to the High Court.
Louis and Margaret Kilmartin, both in their early 70s, 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.
Lawyers said they incurred the loss as a result of negligent advice by the bank regarding the superior security and return of endowment mortgages over annuity mortgages.
Instead of providing them with "a nice little nest egg" in retirement, they had lost out significantly.
Mr Justice Matthew Deery decided the couple had been badly advised. He said 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 2, 1991.
Mrs Kilmartin had told the court Mr Martin had recommended the endowment mortgage.
"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.
He said the Kilmartins were entitled to recover the shortfall of the endowment policy to meet the €63,000 mortgage on maturity, and set 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.
An endowment mortgage is usually an interest-only loan where a separate endowment policy is started and paid for separately.