Retired broker fails in appeal to recover Anglo investment
A RETIRED insurance broker, who lost €500,000 in a property bond investment, has failed in an appeal to set aside the Financial Services Ombudsman's (FSO) rejection of his claim for the return of the money.
Hugh Governey, of Palmerston Road, Dublin 6, put the money in a property-based fund promoted by Anglo Irish Assurance Co as a highly geared investment scheme in the Kennet Shopping Centre, Newbury, England. Anglo, like its banking counterpart, later had its name changed - to Irish Bank Resolution (IBRC) Assurance Co.
The investment failed because another shopping centre attracted lucrative tenants away from the Kennet centre.
Mr Governey had made a complaint to the FSO claiming Anglo/IBRC had breached its duty to disclose all material facts, including in relation to the rival centre. Anglo/IBRC disputed the claim. The FSO found the complaint had not been substantiated.
Mr Governey had been informed by brochure he could lose all of his investment and that a geared property investment was considered high-risk, the FSO said.
In his High Court action, Mr Governey claimed that since the investment had been structured as a life assurance policy, full disclosure of all risks had to be made or else the contract would be open to rescission.
A High Court judge found the contract he had entered into was an investment risk rather than an insurance risk. The judge refused an order directing IBRC to repay the €500,000.
Dismissing Mr Governey's appeal to a three-judge Supreme Court against that decision, Ms Justice Mary Laffoy was also satisfied the contract was not, in substance, an insurance contract but an investment fund managed by Anglo.