J & E Davy v Financial Services Ombudsman and Others

JurisdictionIreland
JudgeMr. Justice Charleton,Mr. Justice Kelly
Judgment Date30 July 2008
Neutral Citation[2008] IEHC 256,[2008] IEHC 64
CourtHigh Court
Date30 July 2008
J & E Davy (t/a Davy) v Financial Services Ombudsman & Ors
JUDICIAL REVIEW

BETWEEN

J. & E. DAVY TRADING AS DAVY
APPLICANT

AND

FINANCIAL SERVICES OMBUDSMAN, IRELAND AND THE ATTORNEY GENERAL
RESPONDENTS

AND

ENFIELD CREDIT UNION
NOTICE PARTY

[2008] IEHC 256

No. 140 JR/2008

THE HIGH COURT

JUDICIAL REVIEW

Fair procedures

Review - Financial Services Ombudsman - Quasi judicial hearing - Procedures to be followed by Financial Services Ombudsman when investigating complaint - Whether oral hearing necessary when deciding complaints - Whether applicant entitled to discovery - Whether Financial Services Ombudsman should attempt to engage parties in mediation before proceeding to investigate and adjudicate case - Whether breach of fair procedures - Doupe v Limerick [1981] ILRM 456, Flanagan v University College Dublin [1988] IR 724, National Maternity Hospital v Information Commissioner [2007] 3 IR 643, Royal Dublin Society v Yates (Unrep, Shanley J, 31/7/1997), The State (Williams) v Army Pensions Board [1983] IR 308, R (Heather, Moor and Edgecomb Ltd) v Financial Ombudsman Service [2008] EWCA Civ 642, (Unrep, CA, 11/6/2008), Dunnes Stores Ireland Co v Ryan [2002] 2 IR 60 and International Fishing Vessels Ltd v Minister for Marine [1989] IR 149 considered - Central Bank Act 1942 (No 22), Part VIIB - Central Bank and Financial Services Authority of Ireland Act 2004 (No 21 ), s 16 - Relief granted (2008/140JR - Charleton J - 30/7/2008) [2008] IEHC 256

J & E Davy v Financial Services Ombudsman

High Court Mr. Justice Charleton

30/07/2008 2008 No. 140 JR [FL]

Judicial review - Fair procedures - Certiorari Oral hearing - Discovery - Whether the decision of the respondent was arrived at in a fair manner and whether the request for discovery and an oral hearing ought to have been granted- Central Bank Act 1942 - Central Bank and Financial Service Authority of Ireland Act, 2004.

The applicant sought to have quashed by way of certiorari, the order of the first named defendant directing the applicant to refund the notice party €500.000 for three perpetual bank bonds purchased by the notice party and also to refund all fees and commissions paid by the notice party in connection with the purchase of those bonds. The applicant alleged that the first named respondent misconstrued his powers under the statute and fell into unconstitutional procedures. The Order sought to be impugned arose out of a complaint made by the notice party to the effect that the applicant never properly or adequately explained the perpetual nature of the bonds to them. The Deputy Ombudsman initially determined the complaint in favour of the notice party and the applicant unsuccessfully appealed that decision to the first named respondent. The applicant herein challenges the procedures utilised by the first named respondent and particularly its decision refusing discovery and declining to hold an oral hearing. The applicant also complained that the Deputy Ombudsman was not properly authorised to act and further that the matter should have been dealt with by mediation prior to investigation and adjudication. The first named respondent in his decision failed to indicate on which statutory ground he was holding against the applicant.

Held by Charleton J. in quashing by certiorari the order of the first named defendant made on 21/01/2008 and remitting the matter to him for the purposes of the complaint of Enfield Credit Union again being investigated and adjudicated upon: That in the circumstances of this case and for the fair determination of the dispute as to what explanation was provided in relation to the nature of the bonds, required that there should have been an oral hearing. The first named respondent erred in failing to provide the documentation sought by the applicant. The first named respondent had a discretion whether to hold mediation prior to investigation and adjudication. Mediation need only be embarked upon when it carries a reasonable prospect of achieving results. The remedy provided by the first named respondent, consisting of an appeal from the deputy ombudsman to the respondent himself was impermissible. Finally, the first named respondent was required to stipulate what parts of the relevant legislation constituted his findings.

Reporter: L.O’S.

CENTRAL BANK ACT 1942 PART VIIB

CENTRAL BANK & FINANCIAL SERVICES AUTHORITY OF IRELAND ACT 2004 S16

CONSTITUTION ART 34.1

CONSTITUTION ART 37

MAGUIRE & ORS v ARDAGH & ORS (OIREACHTAS JOINT COMMITTEE ON JUSTICE) [ABBEYLARA CASE] 2002 1 IR 385 2001/14/3995

BORGES v FITNESS TO PRACTICE COMMITTEE OF THE MEDICAL COUNCIL & ANOR 2004 1 IR 103 2004 2 ILRM 81

CENTRAL BANK ACT 1942 S57BB

CENTRAL BANK ACT 1942 S57CE

CENTRAL BANK ACT 1942 S57CF

CENTRAL BANK ACT 1942 S57BK

CENTRAL BANK ACT 1942 S57CB

CENTRAL BANK ACT 1942 S57CE(4)

CENTRAL BANK ACT 1942 S57CE(5)

CENTRAL BANK ACT 1942 S57CG

CENTRAL BANK ACT 1942 S57BZ(3)

CENTRAL BANK ACT 1942 S57BZ(1)

CENTRAL BANK ACT 1942 S57BK(4)

CENTRAL BANK ACT 1942 S57CC

CENTRAL BANK ACT 1942 S57BB(c)

WILLIAMS, STATE v ARMY PENSIONS BOARD 1983 IR 308 1983 ILRM 331

DOUPE v LIMERICK CO COUNCIL & ANOR 1981 ILRM 456

GALVIN v CHIEF APPEALS OFFICER 1997 3 IR 240

FINANCIAL OMBUDSMAN SERVICE v HEATHER MOOR & EDGECOMB LTD UNREP COURT OF APPEAL 11.6.2008 2008 EWCA Civ 643

EUROPEAN CONVENTION ON HUMAN RIGHTS & FUNDAMENTAL FREEDOMS ART 6

JUSSILA v FINLAND 2007 45 EHRR 39

CENTRAL BANK ACT 1942 S57BK(2)

CENTRAL BANK ACT 1942 S57BZ

ROYAL DUBLIN SOCIETY v YATES UNREP SHANLEY 31.7.1997 1998/37/14041

NATIONAL MATERNITY HOSPITAL v INFORMATION COMMISSIONER 2007 3 IR 643

FREEDOM OF INFORMATION ACT 1997

CENTRAL BANK ACT 1942 S57CI

GALLAGHER v REVENUE COMMISSIONERS (NO 2) 1995 1 IR 55

KIELY v MIN FOR SOCIAL WELFARE 1977 IR 267

FLANAGAN v UNIVERSITY COLLEGE DUBLIN 1988 IR 724

CENTRAL BANK ACT 1942 S57CA

CENTRAL BANK ACT 1942 S57BK(1)

INTERPRETATION ACT 2005 S5

DUNNES STORES (IRL) CO & HEFFERNAN v RYAN & MIN ENTERPRISE 2002 2 IR 60

CENTRAL BANK ACT 1942 S57CL

CENTRAL BANK ACT 1942 S57CM

CENTRAL BANK ACT 1942 S57BL

CENTRAL BANK ACT 1942 SCHED VII

CENTRAL BANK ACT 1942 PART VIIB CHAP 2

CENTRAL BANK ACT 1942 S57BD

CENTRAL BANK ACT 1942 S57BF

CENTRAL BANK ACT 1942 S57BF(1)(a)

CENTRAL BANK ACT 1942 S57BF(1)

CENTRAL BANK ACT 1942 S57BF(2)

UNIVERSITY OF LIMERICK v RYAN UNREP BARRON 21.2.1991 1991/6/1486

TRIBUNALS OF INQUIRY (EVIDENCE) ACT 1921

CENTRAL BANK ACT 1942 S57CI(3)

INTERNATIONAL FISHING VESSELS v MIN MARINE 1989 IR 149

CENTRAL BANK ACT 1942 S57CI(2)

1

1.On 21st January, 2008, the Financial Services Ombudsman ruled that the applicant, a firm of stockbrokers, should buy back from Enfield Credit Union, the notice party, three perpetual bank bonds at their original cost of €500,000. Out of this ruling have sprung three distinct cases before this court. Firstly J. & E. Davy have lodged a notice of appeal to the High Court against the ruling under Part VIIB of the Central Bank Act 1942, as inserted by s.16 of the Central Bank and Financial Services Authority of Ireland Act 2004. That appeal will look at the decision again and, having considered its merits, may either affirm the ruling of the Ombudsman or make a different ruling. Secondly, a constitutional challenge has been launched by J. & E. Davy to the authority of the Financial Services Ombudsman. The claim there is that the Financial Services Ombudsman, in exercising his jurisdiction under the legislation, is fulfilling a judicial function without being a judge under Article 34.1 of the Constitution and is outside the exception of the exercise of limited functions and powers of judicial nature provided for in Article 37 of the Constitution. Finally, judicial review is sought to impugn the decision on the basis that the Financial Services Ombudsman has misconstrued his powers under the statute and has fallen into unconstitutional procedures. It is this last case that I am dealing with in this judgment.

Comment
2

2.Having reviewed the papers, and having heard extensive argument from counsel, I am satisfied that the Financial Services Ombudsman, in making the rulings challenged in this review, carried out his function in good faith and with a high level of skill. The judicial review function of the High Court is concerned with examining whether powers exercised by judges of the Circuit and District Court and the Special Criminal Court are exercised within the terms of the authority conferred on them by statute and by the Constitution, whether officials conferred with quasijudicial powers and administrative functions have carried them out within their jurisdiction, whether quasi judicial functions have been exercised on the basis of fair procedures and, finally, whether an exceeding of jurisdiction is to be found by reason of a decision flying in the face of fundamental reason and common sense. Inevitably, in these cases, the argument on each side will tend to touch on the merits and demerits of any particular decision. It is not the function of the High Court, however, on judicial review of a decision to substitute its own view as to the merits of any case. Nor is it the function of the High Court to issue a judgment in such way that will constrain the decision maker in the exercise of a quasijudicial function in the manner in which any discretionary power may be exercised. In referring concisely to the facts, therefore, I am not to be taken as having formed any view as to the merits of the original ruling. This is outside my function.

Background
3

3. As I understand it, there are 438 credit unions in Ireland. The notice party is one of them. On its headed note paper it is described as a limited liability company and, I would assume, that other credit unions are similarly organised. They exist for the benefit...

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