Investor alleges fraud over collapse in property fund value
Imvestor sues Bank of Scotland and Friends First Life Assurance
On Tuesday, Mr Justice Charles Meenan ruled Mr Buttimer’s reply to the Statute of Limitations claim has only been dealt with by him in a general way.
Declan Buttimer invested the money in October 2007 in the Investa Opportunity Fund which he says was marketed and recommended by BoS and managed by Friends First. Following the crash, Mr Buttimer says his investment dropped in value and he will ultimately only recover 70 percent of what he put in.
In 2015, he began a High Court action against BoS and Friends First claiming the investment was mis-sold and/or misrepresented to him.
He alleges, among other things, the investment was anticipated to last at least five to seven years, that it would be managed by competent and experienced property managers who had previously achieved attractive returns, that the managers’ remuneration was linked to performance and the fund was not subject to excess charges.
It is also claimed BoS was to perform an adequate risk assessment prior to recommending investment and that there would be no conflict of interest in the management/investment.
Mr Buttimer alleges breach of contract, negligence, breach of duty and misrepresentation by BoS.
Among several claims, he alleges failure to ensure that the remuneration of fund and asset managers was linked to performance.
The fund, he claims, was allowed to be subject to excess and undisclosed charges and there was failure to ensure it was suitable for euro zone investors and would be adequately diversified between the United Kingdom and Continental Europe to mitigate exchange rate risk.
BoS entered a full defence and brought a pre-trial application to have the claim barred on grounds it was brought outside the applicable time limits. BoS says Mr Buttimer got a loan from it in October 2007 when the investment was taken out.
It says the conditions of the investment were in the policy including explicit reference to charges.
The investment related to purchase of development lands in 2008 in Witney, Oxfordshire, England, property in Switzerland and in Woolwich, also England.
All those transactions took place six years before Mr Buttimer issued his proceedings in 2015 and, as a result, his case was statute barred, BoS argued.
Mr Buttimer disputed the claims and also alleged his action was based on fraud of the defendant or its agent or that his right of action was concealed by such alleged fraud,
On Tuesday, Mr Justice Charles Meenan ruled Mr Buttimer’s reply to the statute of limitations claim has only been dealt with by him in a general way. The position regarding the fraud and concealment allegations was very unsatisfactory, the judge said.
BoS was entitled to detailed particulars in relation to these allegations, he said.
In the circumstances it would be premature, at this stage, to direct a preliminary hearing concerning whether the case was statute barred, he decided.
He directed Mr Buttimer to give those details within 21 days and adjourned the BoS application generally with liberty to re-enter the matter.