Court dismisses part of action over claim of ‘catastrophic losses’ on pension schemes
Case concerns funds from closed schemes being invested in property fund
An action by the claimants remains against fund managers Wealth Options Trustees and Rowan Asset Management over the pension investment which related to the purchase of properties in central London. Photograph: iStock
The High Court has dismissed part of an action by two men who claimed they suffered “catastrophic losses” as a result of money from their closed pensions schemes being invested in a property fund.
Mr Justice Mark Sanfey dismissed the case by businessman John Pugh and sales director Rory Harte against Dublin-based PGM Financial Services and its director Patrick McEntee over delay in bringing their case.
An action by the two remains against fund managers Wealth Options Trustees and Rowan Asset Management over the pension investment which related to the purchase of properties in central London for between £2 million (€2.4 million) and £5 million.
The properties were to be bought with leases that would be “tidied up” and then sold in an 18-month to three-year timeframe.
Mr Pugh and Mr Harte claimed representations about the investment were made to them at a meeting in 2007 or 2008 hosted by Mr McEntee at which had a number of speakers gave assurances about past performance of such funds involving prestigious properties in London.
They claimed Mr McEntee told them he was the lead investor in the PGM property fund/Rowan 4 fund and had encouraged them to invest in the Rowan 4 fund.
Mr McEntee and PGM, they claimed, failed and neglected to advise them of what became of the fund or to hold anybody to account or seek a reason for the catastrophic losses suffered by the Rowan 4 fund.
Mr McEntee and PGM failed in their role to advise anybody and identify fault for the losses, they alleged.
Mr McEntee and PGM denied they made any statements or representations and that the presentation at the meeting was done by Wealth Options Trustees.
They also disputed they owed a fiduciary duty to the two or that Mr McEntee assumed personal responsibility for their money or told them they would be best served by investing in the fund.
The two plaintiffs also claimed fraudulent misrepresentation, deceit and dishonest breach of trust which were denied.
The defendants said no details of those allegations were provided by the two men despite repeated requests.
Their case was initiated in 2014.
In January last year, Mr McEntee and PGM asked the court to dismiss the case against them for delay and want of prosecution.
Mr Pugh and Mr Harte opposed the application arguing, among other things, the two defendants themselves were guilty of delay for a year in entering an appearance to defend the case.
They also claimed it was time consuming to obtain comprehensive expert reports and great time and effort was needed for this.
Mr Justice Sanfey did not accept this excused the two plaintiffs’ “own inaction in that regard”.
He found the delay inordinate and inexcusable, noting five years had elapsed since the case began and 12 years since the investment was made.
The balance of justice lay in dismissing the case because the two defendants had demonstrated they were prejudiced in defending it, he said.
They had claimed prejudice arose after the case was “significantly amplified” when the plaintiffs alleged fraud against them, he said. The judge granted the application to dismiss the case against Mr McEntee and PGM.