A couple who alleged they "relied totally" on advice from Ulster Bank when deciding to join a property investment consortium have won a High Court order quashing the Financial Services Ombudsman's rejection of their complaint against the bank.

Nicholas and Brigid Smith suffered significant losses when the Jubilee Consortium performed badly, the court noted.

Mr Justice Max Barrett, while stressing he was taking no view on the merits of the Smiths' complaint, upheld their claims they were entitled to an oral hearing of their complaint on grounds including a considerable conflict between them and the bank on a number of relevant issues.

The ombudsman’s refusal to grant them an oral hearing was an error of such significance it must vitiate his May 2012 rejection of their complaint and require it to be reheard, the judge found.

Outlining the background, the judge said the Smiths were an “enterprising” couple who, since 1981, made a number of property investments, typically involving buying, renovating and sometimes utilising commercial and other properties, with an eventual view to selling them on. Any business or property in which they were involved was the sole source of income for their family and they were and are not major players in the property marketplace, he noted.

In 2005, when both were aged 59, the Smiths approached Ulster Bank with a view to making a property investment. They alleged the bank recommended they participate in a consortium of investors, the Jubilee Consortium, which used a combination of investor equity and loan money to buy properties in England as speculative investments.

They invested in March 2005 but the Jubilee investment performed badly and they suffered significant financial losses. The degree to which Ulster Bank encouraged the couple to join the consortium was central to their complaint, the judge said.

It was worth noting that a December 2011 letter from Ulster Bank to the ombudsman had described property investments such as the Jubilee Consotrium as “high risk”, he said.

While he was not required to make any finding on that issue, it might perhaps be perceived as “surprising” that a regulated financial services provider would countenance recommending or facilitating participation in such a venture by “possibly unsophisticated investors” reaching the end of their working lives.

A question arose whether there was a comprehensive analysis of the Smiths’ affairs and whether clear warnings were issued as to risk prior to their investing with the consortium, he said.