The Court of Appeal has overturned a ruling that the Financial Services Ombusdman was wrong in rejecting a couple's complaint over alleged excessive interest charging by a bank.
Last September, the High Court ordered the Ombusdman 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 Ombusdman rejected the complaint and when then High Court judge Gerard Hogan ruled the decision should be reconsidered, it lodged an appeal, as did the bank.
A three-judge Court of Appeal on Wednesday ruled Mr Justice Hogan had erred in his decision and restored the Ombusdman'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 Ombusdman was correct in rejecting a “contrived construction” which the Millars sought to place on that clause, he said. The Ombusdman 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 Ombusdman was in serious error.
The Millars had not established the Ombusdman 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 Ombusdman’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 Ombusdman was appealing.
