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Sunday 22 April 2018

Court of Appeal deals blow to campaign for lower variable interest rates

Experts have claimed new mortgage rules will lead to banks discriminating against some of those looking for a mortgage
Experts have claimed new mortgage rules will lead to banks discriminating against some of those looking for a mortgage
Charlie Weston

Charlie Weston

THE Court of Appeal has overturned a ruling that the Financial Services Ombusdman (FSO) was wrong in rejecting a couple's complaint over alleged excessive interest charging by a bank.

Last September, the High Court ordered the FSO to reconsider the complaint by Kenneth and Donna Millar, Strand Road, Portmarnock, Co Dublin.

The Millars  have a home mortgage and six other buy-to-let investor mortgages on variable rates with Danske Bank.

The complained about Danske's decision to hike its variable interest mortgage rates to more than four per cent when the European Central Bank (ECB) rates were almost zero.

The FSO rejected the complaint and when then High Court judge Gerard Hogan ruled the decision should be reconsidered, the FSO lodged an appeal, as did the bank.

A three-judge Court of Appeal today ruled Mr Justice Hogan had erred in his decision and restored the FSO's finding.

In one of two separate judgements, Mr Justice Peter Kelly said he disagreed with the High Court's conclusion that a clause in the loan agreement referring to "market conditions" meant "market conditions generally". 

"I do not share that view nor do I agree the clause in question is ambiguous", he said.

The FSO was correct in rejecting a "contrived construction" which the Millars sought to place on that clause, he said.   The FSO was also correct in finding the wording was clear, he said.

In her separate judgment, Ms Justice Mary Finlay Geoghegan said the case should not be remitted back to the High Court because it had not been established the FSO was in serious error.

The Millars had not established the FSO was in error in finding the bank was not in breach of the terms and conditions of the loan agreement in making increases in 2011 and in rejecting their complaint as unsubstantiated, she said.

The court awarded the costs of the FSO's appeal against the Millars, but not the costs of the bank's separate appeal which they said was not necessary in view of the fact the FSO was appealing.

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