Couple awarded €16,000 over bad mortgage advice
Two pensioners who sued a bank for negligent misrepresentation of an endowment mortgage with which they bought their home have been awarded €16,000 damages.
In a landmark decision which could affect hundreds of others with endowment mortgages, the award was made against Bank of Ireland (BoI).
Louis and Margaret Kilmartin, both in their early seventies, were on holiday in Nice yesterday as Circuit Court President, Mr Justice Matthew Deery, ruled in their favour.
The couple, who live in Strand Road, Portmarnock, Co Dublin, claimed in the Circuit Civil Court, Dublin, that they lost more than €22,000 over the 15-year lifetime of their mortgage. David Hardiman, counsel for the Kilmartins, said they incurred the loss as a result of negligent advice by the bank.
Instead of providing them with "a nice little nest egg" in retirement, they had lost out significantly.
Mr Justice Deery told the court 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 that Mr Martin had recommended the endowment mortgage as the better type for them and she had gone along with his recommendation.
The court was satisfied the documentation supplied to the Kilmartins had not contained language highlighting the risks involved and, as Mr Hobbs had pointed out, and had not highlighted the potential risk to one's home.
"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 said.
It had certainly not suggested any element of risk in regard to the sufficiency of funds to pay off the mortgage after the 15-year term. The advice given had been deficient in many respects, leading him to the conclusion of the negligence of that advice on the part of the bank.
The judge 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 as well as €8,000 for loss of projected surplus, making a total award of €16,002.
Counsel for the BoI yesterday indicated they would appeal the decision.