A retired insurance broker, who lost €500,000 in a property bond deal with Anglo Irish Assurance Co in January 2006, has lost a High Court bid to force the Irish Bank Resolution Corporation, formerly Anglo, to pay it back to him.
Mr Justice John Hedigan said Hugh Governey, Palmerston Road, Dublin, put the money in a property-based fund promoted by Anglo Irish Assurance as a highly geared investment scheme in the Kennet Shopping Centre, Newbury, England.
The investment had failed because another shopping centre, the Parkway, had attracted lucrative tenants away from the Kennet centre. Mr Governey had made a complaint to the Financial Services Ombudsman.
Mr Justice Hedigan said the essence of his complaint was that since the investment had been structured in the form of a life assurance policy, full disclosure of all risks had to be made or else the contract would be open to rescission.
Anglo had rebutted his claim, arguing that it had disclosed all material facts to Mr Governey and that the Parkway had not been seen as a risk but rather a potential positive effect on the Kennet as it would increase footfall in Newbury.
The judge said the Financial Services Ombudsman had decided that Mr Governey’s complaint against IBRC had not been substantiated. It was clear that Mr Governey’s complaint was that Anglo/IBRC had not fully appraised him of the risks involved in the investment.
Mr Justice Hedigan said it seemed to be very questionable as to whether the contract really was one of assurance. “Everything I have read and heard concerning it strongly suggests it was a contract of investment dressed up as a contract of assurance for tax purposes.”
He refused an order directing IBRC to repay the €500,000 and refused to remit the ombudsman’s finding for review.