Clark v Financial Services Ombudsman & Ulster Bank Ltd

• Jurisdiction: Ireland
• Judge: Mr. Justice Hedigan
• Judgment Date: 20 July 2011
• Neutral Citation: [2011] IEHC 299
• Court: High Court
• Date: 20 July 2011

[2011] IEHC 299

THE HIGH COURT

[15 MCA/2011]

Clark v Financial Services Ombudsman & Ulster Bank Ltd

IN THE MATTER OF AN APPEAL PURSUANT TO SECTION 57 CL OF THE CENTRAL BANK ACT, 1942, (AS INSERTED BY SECTION 16 OF THE CENTRAL BANK AND FINANCIAL SERVICES AUTHORITY OF IRELAND ACT, 2004) AND IN THE MATTER OF AN APPEAL FROM A FINDING OF THE FINANCIAL SERVICES OMBUDSMAN

BETWEEN

PAUL AND MARY CLARK

APPELLANTS

V.

THE FINANCIAL SERVICES OMBUDSMAN

RESPONDENT

AND

ULSTER BANK LIMITED

NOTICE PARTY

ULSTER BANK v FINANCIAL SERVICES OMBUDSMAN UNREP FINNEGAN 1.11.2006 2006/56/11976 2006 IEHC 323

CENTRAL BANK ACT 1942 S57BB

CENTRAL BANK ACT 1942 S57CL

ORANGE COMMUNICATIONS LTD v DIRECTOR OF TELECOMMUNICATIONS REGULATION & METEOR MOBILE COMMUNICATIONS LTD (NO 2) 2000 4 IR 159 2000/15/5538

ACC BANK PLC v FAIRLEE PROPERTIES LTD & ORS 2009 2 ILRM 101

PROFESSIONS

Solicitors

Appeal against financial ombudsman - Whether significant error or series of errors - Title deeds not provided to bank by solicitor - Failure of bank to notify plaintiffs of non-provision of title deeds - Extent of bank's duty of care to customers - Redress from law society limited to five years after service provided - Whether egregious behaviour by solicitors - Whether bank had duty to go behind solicitor client relationship and communicate directly with clients - Whether evidence that sale fell through due to problems with title deeds - Ulster Bank v Financial Services Ombudsman (Unrep, Finnegan P, 1/11/2006) [2006] IEHC 323, Orange v Director of Telecommunications [2000] 4 IR 159 and ACC Bank PLC v Fairlee Properties Ltd [2009] IEHC 45 followed - Central Bank Act 1942 (No 22), ss 57 - Appeal refused (2011/15MCA - Hedigan J - 20/7/2011) [2011] IEHC 299

Clark v Financial Ombudsman

1 1. The appellants reside at the Old Post Office Farran, Co Cork. On the 14 ^th January, 2010, the appellants made a complaint to the respondent concerning the notice party. The respondent is a statutory officer who deals independently with complaints from consumers about their individual dealings with all financial services providers. The notice party is a bank whose registered office is located at 11-16 Donegal Square East, Belfast BT1 5UB.

2 2. The appellant seeks to appeal from a decision of the Ombudsman dated 11 January, 2011, in which the Ombudsman dismissed the appellant's claim that Ulster Bank failed in its duty of care towards them.

2 2 3.1 The appellants obtained a mortgage from Ulster Bank on the 26 ^th January, 2000, which was used to refinance an existing mortgage with AIB previously registered on the title. On foot of this mortgage the appellant's solicitors Plunkett Taaffe & Co. provided an undertaking to Ulster Bank that they would register the banks mortgage over the property and as soon as practicable thereafter lodge the title deeds with the bank. In accordance with this undertaking Plunkett Taaffe & Co sent title deeds to the bank. The bank returned these on the 12 ^th April, 2001, as a photocopy and not the original mortgage deed was forwarded to the bank. On a second occasion Plunkett Taaffe & Co sent the title deeds to the bank however the bank returned these on the 2 ^nd May 2001, as the previous charge in favour of AIB had not been cancelled from the folio. On a third occasion Plunkett Taaffe & Co sent in the title deeds which the bank returned on the 6 ^th November, 2001, as only three pages of the mortgage deeds were received. On a fourth occasion Plunkett Taaffe & Co sent in a further version of the mortgage deeds these were returned on the 6 ^th March, 2002, as incomplete. From March 2002 onwards the bank sent reminders every six months to Plunkett Taaffe & Co to send in the title deeds.

3 3 3.2 Approximately seven years later the appellants decided to sell the property and in August, 2009 a prospective purchaser for the property was obtained. On the 24 ^th August, 2009, Donal T. Ryan Solicitors acting for the purchaser wrote to the appellant's new solicitors Colm Burke & Co stating that they were awaiting contracts and title deeds. On the 27 ^th August, 2009, the appellants asked the bank to release the title deeds to their solicitors. On 8 ^th September, 2009 the bank wrote to the appellant's solicitors to say that according to their records Plunkett Taaffe & Co had the deeds. On the 9 ^th September, 2009 the bank wrote to the appellants explaining that "…every six months since the beginning of the loan term we have sent out automatic tracking letters asking for the title deeds however we never received the deeds from them." On the 9 ^th September, 2009, the bank wrote to Colm Burke Solicitors asking them to reconstitute the title deeds. On this date the bank also wrote to Plunkett Taaffe & Co asking them for the deeds. On the 9 ^th September, 2009, Plunkett Taaffe & Co wrote to Colm Burke stating that on the appellant's instructions the file had been sent to Murphy & Long Solicitors and that Mary Clark had collected the entire file from Murphy & Long. Plunkett Taaffe & Co Solicitors and Murphy & Long Solicitors subsequently merged.

4 4 3.3 On the 10 ^th September, 2009, Colm Burke & Co wrote to the appellants stating that Plunkett Taaffe & Co had informed them that they had forwarded their title deeds to Murphy Long Solicitors and that they had on file a signed receipt from Mary Clark confirming receipt of the entire file. On the 16 ^th November, 2009, the Bank told the appellants that it had appointed their solicitors Colm Burke & Co to reconstitute the deeds. On the 30 ^th November, 2009, the solicitor for the purchasers Donal T. Ryan noted the planning issues and also expressed concern that the title deeds were not available. On the 21 ^st December, 2009, Batt O'Keefe TD wrote to the appellants to say that he had being trying to secure a change of use exemption for them. On the 8 ^th January, 2010, Donal T. Ryan Solicitors wrote to the appellant's solicitor stating "We refer to previous correspondence with regard to the above. We have spoken to our client about the contents of your letter of the 7 ^th January, 2010, and notwithstanding same our client has decided that she no longer wishes to proceed with the purchase of the above property."

5 5 3.4 On the 14 ^th January, 2010, the appellants made a complaint to the Ombudsman that Ulster Bank were negligent in not notifying them that they had a problem getting their title deeds. The appellants also complained to the Law Society that their solicitors had never sent the title deed's to the bank. The Law Society advised the appellants by letter dated the 16 ^th February, 2010 that "as the service was provided more than five years ago you will note from the society's leaflet that the society can only investigate a complaint of a provision of inadequate professional service where that service was provided within five years of making the complaint." The appellants believe that it was the problems with the title deeds which caused the purchaser to withdraw from the sale. The appellants complain that they were precluded from obtaining any redress from the Law Society due to the negligence of the bank in not notifying the appellant that there was a problem with Plunkett Taaffe & Co. not lodging the deeds.

Appellants Submissions

2 2 4.1 The appellant seeks to challenge the decision of the Financial Services Ombudsman of the 11 ^th January, 2011, on a number of grounds. In page 6 of his finding the Ombudsman states "I do not believe that the complainants can show any loss in this matter." The appellants complain that they furnished the Ombudsman with fully detailed financial losses with vouching receipts showing the payment of €9,341.49 in expenses with a further €5,309.50 outstanding that the appellants are unable to discharge. The appellants further submit that their property has depreciated by approximately €100,000.00 since the sale fell through. The Ombudsman went on to state at page 6 "there was no complete contract in respect of the sale of the property." The appellants submit that the bank was advised that a sale had been agreed and was to be concluded in September 2009, however completion was not possible due to the lack of title deeds.

3 3 4.2 At page 5 of the Ombudsman's finding it is stated that the bank decided as a good will gesture to pay all costs incurred in reconstituting the title deeds. The appellants complain that in fact they themselves paid Colm Burke Solicitors the full costs of all work done by them in reconstituting the deeds and have receipts, which prove this fact. They appellants state that they have received no payment for the reconstituting of the title deeds from the bank. At page seven of his finding the Ombudsman states that "It seems to me from the evidence provided to this office that the deeds were reconstituted in November 2009." The appellants are at a loss to understand this statement as at page 3 of his finding the Ombudsman quotes from a letter from Donal T Ryan Solicitors of the 30 ^th of November, 2009, stating "it is quite serious that we are only now being made aware that the title deeds are not available." If these title deeds were fully reconstituted by Colm Burke Solicitors in November 2009, why were the purchaser's solicitors made aware of the missing deeds at the end of November 2009? The Ombudsman is in possession of a letter from First Active PLC dated 22 ^nd December, 2009 which states "Our securities department have confirmed that they have been in contact with your solicitor Colm Burke who is arranging the replacement of your title deeds for your convenience." Why would the bank be notifying the appellant that the deeds were still being arranged to be replaced when the Ombudsman states the deeds were reconstituted...