David O'Brien v Financial Services Ombudsman

• Jurisdiction: Ireland
• Judge: Mr. Justice Hogan
• Judgment Date: 07 May 2014
• Neutral Citation: [2014] IEHC 268
• Judgment citation (vLex): [2014] 5 JIC 0702
• Court: High Court
• Date: 07 May 2014

[2014] IEHC 268

THE HIGH COURT

[No. 504JR/2013]

O'Brien v Financial Services Ombudsman

BETWEEN

DAVID O'BRIEN

APPLICANT

AND

FINANCIAL SERVICES OMBUDSMAN

RESPONDENT

CONSUMER CREDIT ACT 1995 S63

GABRIEL v FINANCIAL SERVICES OMBUDSMAN UNREP HANNA 27.7.2011 2011/23/5870 2011 IEHC 318

FLAC REDRESSING THE IMBALANCE: A STUDY OF LEGAL PROTECTIONS AVAILABLE FOR CONSUMERS OF CREDIT & OTHER FINANCIAL SERVICES IN IRELAND 2014

O'BRIEN v PERMANENT TSB FINANCE UNREP FSO 21.5.2014 (REF 11/62057)

CONSTITUTION ART 40.6.1.i

HYLAND v DUNDALK RACING (1999) LTD T/A DUNDALK STADIUM UNREP HOGAN 19.2.2014 2014 IEHC 60

CONSTITUTION ART 5

CONSTITUTION ART 40.6.1

O'DONOGHUE v LEGAL AID BOARD & ORS 2006 4 IR 204 2004/38/8872 2004 IEHC 413

CIVIL LEGAL AID ACT 1995

MACAULEY v MIN FOR POSTS & TELEGRAPHS 1966 IR 345

KIRWAN v MIN FOR JUSTICE & ORS 1994 2 IR 417 1994 1 ILRM 444 1993/12/3851

LYONS & MURRAY v FINANCIAL SERVICES OMBUDSMAN UNREP HOGAN 14.12.2011 2011/31/8710 2011 IEHC 454

O'HARA & GALLAGHER v ACC BANK PLC UNREP CHARLETON 7.10.2011 2011/41/11897 2011 IEHC 367

EUROPEAN CONVENTION ON HUMAN RIGHTS & FUNDAMENTAL FREEDOMS ART 6

R (CALLAND) v FINANCIAL OMBUDSMAN SERVICE LTD UNREP MALES 21.5.2012 2013 EWHC 1327 (ADMIN)

M (K) & G (D) v MIN FOR JUSTICE & ORS UNREP EDWARDS 17.7.2007 2007/38/7754 2007 IEHC 234

NEARING v MIN FOR JUSTICE 2010 4 IR 211 2009/42/10430 2009 IEHC 489

SALMAN v MIN FOR JUSTICE UNREP KEARNS 16.12.2011 2011/46/12876 2011 IEHC 481

Financial Services – Hire Purchase Agreement – Consumer Credit Act 1995 – Credit – Arrears – Complaints – Delay – Financial Services Ombudsman – Appeal – Procedures – Arrears

Facts: The primary issue in the case at hand concerned the delays within the office of the Financial Services Ombudsman (FSO). The applicant, Mr O”Brien, was a civil servant who entered into a hire purchase agreement in May 2008 and took possession of a motor vehicle as a result. By 2010 the applicant had encountered financial difficulties and sought to terminate the agreement in accordance with s. 63 of the Consumer Credit Act 1995. He was thwarted in this endeavour by the relevant credit institution because he was informed that, given that there were arrears outstanding on the account, he could not then terminate the agreement. He was ultimately permitted to terminate, but not before he was required to make ten additional monthly payments amounting to €4,690. The applicant submitted a complaint to the FSO arising from the actions of the credit institution in question in refusing to allow a termination of the account. In April 2012 the FSO rejected the complaint; in part because the view was taken that the decision of Hanna J in Gabriel v. Financial Services Ombudsman [2011] IEHC 318 did not have retroactive effect. That decision was then appealed. Following a number of adjournments, on 14 ^th September 2012 solicitors for the respondent indicated that it was not intended to oppose the appeal. An order was accordingly made by the High Court on 8th October 2012 setting aside the earlier decision and the matter was remitted to the FSO for further review. In the course of those proceedings the applicant was represented by the Free Legal Advice Centre (‘FLAC’). On 13th November, 2012, the applicant”s solicitor complained about the delay and sought a timetable for the resolution of the complaint. Further correspondence ensued, some of it directed to the question of whether the original decision-maker should determine the remitted matter. The original decision-maker wrote to the applicant”s solicitor on 28th March 2013 to indicate that he would have no further involvement in the matter. He also pointed out that it was anticipated that re-consideration of the remitted matter would commence shortly and that the FSO would shortly be in contact in that regard. The matter appeared to have been assigned to a different case-officer in early June 2013, because she then wrote to the applicant (and the other parties) indicating that the reconsideration of the complaint had commenced. Further correspondence ensued in relation to the question of whether FLAC still represented the applicant (given that he had personally contacted the FSO on a number of occasions) and whether the parties wished to make further submission. The FSO ultimately wrote to FLAC on 2nd October, 2013, indicating that the only issue delaying the further consideration of the complaint was whether the applicant still wished to make a response, the financial services company in question having confirmed by letter dated 20th August, 2013, that it had nothing further to add. FLAC responded by letter dated 11th November, 2013, expressing surprise at the suggestion that it was somehow impeding the final resolution of this matter. In the meantime these proceedings had been commenced on 8th July, 2013. The complaint in essence was that by failing to making a decision the FSO had erred in law and, specifically, had delayed unduly in making that fresh adjudication. The applicant consequently sought an order of mandamus compelling the FSO to make a fresh decision on the remitted complaint. These judicial review proceedings were heard in March 2014 and a decision had yet to be made.

Held by Justice Hogan in respects of the submission that there had been undue delay on the part of the FSO that any such consideration could only be answered following an examination of the applicable case law. Acknowledging O”Donoghue v. Legal Aid Board [2004] IEHC 413, [2006] 4 I.R. 204 as the leading authority on the question of undue delay and decision-making by administrative bodies, Justice Hogan reasoned that given that the role and functions of the FSO in some respects duplicate those of the courts in adjudicating disputes concerning the conduct of credit institutions and having regard to the fact that a decision of the FSO is capable of creating a res judicata he reasoned that the principles articulated by Kelly J. in O”Donoghue where applicable, at least by analogy, to decisions taken by the FSO. Thus, he was of the opinion that such a decision must be taken within a reasonable time, especially considering the fact that the FSO effectively adjudicates on civil rights and obligations, including the obligation under Article 6 ECHR to determine complaints within a reasonable time. This conclusion regarding domestic constitutional law was reinforced with reference to a number of examined cases including KM v. Minister for Justice, Equality and Law Reform [2007] IEHC 234 and Nearing v. Minister for Justice, Equality and Law Reform [2010] 4 I.R. 211. Thus in assessing the question of whether there had been a breach of the O”Donoghue principles, and having examined the factual context to be taken into account, Justice Hogan determined that as the FSO only had four case-officers and given the complexity of many complaints it was not surprising that delays had occurred. Moreover, in determining that the applicant had been kept informed of all developments, he found that the delays, while regrettable, were not excessive, but where to some degree prejudicial so far as the applicant was concerned. In this regard, he stated that time must be regarded as having re-commenced when the matter was remitted to the FSO in October 2012 by order of the High Court. Acknowledging that remitted cases should be dealt with more speedily, Justice Hogan further acknowledged that it was unfortunate that it took until June 2013 before the case was re-assigned and he further agreed that the fresh adjudication on this case would seem straightforward. Nevertheless, the delays were not deemed to be of such a magnitude as to call for prescriptive judicial intervention. No time limits had been breached and the delays it was determined had not been caused by any wilful failure on the part of the FSO, but simply by reason of a lack of adequate staff and resources. Consequently, the delays were reasoned not to be so manifestly excessive as to be inexcusable and the application for judicial review was dismissed.

1 1. It cannot be any great surprise that the financial calamities which have beset this State since the middle of 2008 have brought in their wake an increased level of complaints regarding financial institutions. These developments have in turn put pressure on the hard pressed office of the Financial Services Ombudsman, whose officials carry an increasingly heavy burden in dealing with such a volume of complaints.

2 2. The issue in the present case concerns the delays in the office of the FSO. The issue arises in the following way. The applicant, Mr. O'Brien, is a civil servant who entered into a hire purchase agreement in May 2008 and took possession of a motor vehicle as a result. By 2010 the applicant had encountered financial difficulties and sought to terminate the agreement in accordance with s. 63 of the Consumer Credit Act 1995. He was thwarted in this endeavour by the relevant credit institution because he was informed that, given that there were arrears outstanding on the account, he could not then terminate the agreement. He was ultimately permitted to terminate, but not before he was required to make ten additional monthly payments amounting to €4,690.

3 3. The applicant accordingly submitted a complaint to the FSO arising from the actions of the credit institution in question in refusing to allow a termination of the account. In April 2012 the FSO rejected the complaint, in part because the view was taken that the decision of Hanna J. in Gabriel v. Financial Services Ombudsman [2011] IEHC 318 did not have retroactive effect.

4 4. That adverse decision was then appealed to this Court. Following a number of adjournments (to which the applicant had objected). However, on 14 ^th September 2012 the solicitors for the respondents indicated that it was not...