About this case:

• Citation:
  [2025] IECA 66
• Judgment:
  External link
• Court:
  Court of Appeal
• Judge:
  Ms Justice Caroline Costello

Delivering judgment for the Court of Appeal, Ms Justice Caroline Costello opined: “The damage the deceased suffered by entering into the transaction was capable of being proved from day one, as the essential ingredient — in the context of the transaction — was the unavailability of tax relief to the deceased for the level of pension payments required for the transaction to operate as intended. The ‘injury capable of attracting compensation’ was identifiable and capable of being proved.”

Background

The late Dr Eugene Casey (the deceased) entered into a personal pension which commenced on 1 January 2004 with New Ireland Assurance Company. In 2006, he approached Bank of Ireland for advices as he wished to purchase a property in a tax efficient manner. 

The deceased was advised by the appellants that if he invested €5,000 per month in a pension product, availed of tax relief against his income from his GP practice and purchased the property with an interest only 10-year pension backed mortgage loan, at the end of the term the pension could be encashed so as to repay the outstanding principal, leaving the deceased with a fund plus the property free of debt.

On 13 October 2006, the second appellant issued a letter of loan offer to the deceased to enable him to purchase the property, offering a loan for a period of 10 years. The offer was inextricably linked with the investment in a pension which was to be encashed to repay the principal borrowed at the end of the term. 

The deceased accepted the offer on 20 October 2006, and accepted a slightly revised version of same on 14 November 2006.

The deceased’s pension with New Ireland Assurance was agreed to satisfy the terms of the offer. 

The deceased’s direct debit failed on 19 September 2007 and from November 2007, he reduced his monthly payments to €750 per month having received independent advice to the effect that he could not claim tax relief on his earnings from the General Medical Scheme for the purposes of a private pension.

On 14 September 2009, the deceased instructed New Ireland assurance to mark his policy “paid up” and ceased making payments into the policy from 30 September 2009. On 8 June 2011, the deceased advised the second appellant that all funds had been transferred out of the New Ireland pension policy, having encashed same in April 2010. He did not utilise any of those sums to reduce the liabilities secured by the mortgage.

In November 2016, the mortgage term expired and the second appellant offered an alternative payment arrangement to the deceased, which he accepted. The deceased died in tragic circumstances on 4 July 2017. 

The second appellant sent a letter of demand to the executors in respect of the outstanding debt on 10 October 2019, and on 14 May 2021, proceedings issued seeking relief in respect of alleged negligent advice and mis-selling of the mortgage to the deceased.

On 14 March 2023, the appellants delivered a defence contending that the proceedings were statute-barred as against them, and in June 2023, issued a motion seeking to dismiss the proceedings on that basis.

The respondents contended that the earliest date that the deceased could have suffered loss for the purposes of the accrual of his cause of action was the date of the maturity of the mortgage loan facility, namely 30 November 2016, but that the tort was only completed upon the issuing of a letter of demand on 10 October 2019. 

The appellants suggested that the deceased’s damage had crystallised when he enchased his policy.

The High Court

Ms Justice O’ Regan analysed the jurisprudence in the area, finding that “no loss is suffered until it is reasonably ascertainable that, by bearing the burdens, the plaintiff is worse off than if he had not entered into the transaction.”

The judge referred to the fact that the deceased had reduced, then ceased payments into the pension and later withdrew all funds by 2011, finding that “Certainly, the [deceased] may have felt that he had by then suffered a loss however, that cannot be equated with being in a position to establish actual damage capable of assessment in money terms at that time.”

The court continued, “Without the benefit of a valuation of the property, the amount achieved from an encashment of the pension policy, the amount paid by the [deceased] to the bank in interest only payments and any yield received from the property, it is impossible to determine whether or not an adverse balance was struck in respect of benefits and burdens in 2011. It may well transpire, with the assistance of appropriate evidence, that an adverse balance did indeed exist in 2011 but that evidence is not currently before the Court.”

Ms Justice O’ Regan determined that it could not be said on the evidence before her that the respondents’ claim crystallised by 2011 and refused the relief sought.

The Court of Appeal

Ms Justice Costello considered that the main issue for the court was when the deceased’s cause of action accrued, noting that the “difficulty in answering this question relates to the difficulty in analysing damage in the context of economic loss”.

Having considered the body of jurisprudence, and in particular the judgment of the Supreme Court in Smith v Cunningham [2023] 1 ILRM 407, the Court of Appeal was satisfied that in cases of pure economic loss such as the respondents’ case, the test is objective and must be considered in light of the pleaded case.

Ms Justice Costello stated it was clear from the authorities that the correct approach is to ask when the deceased could have sued the appellants, with the answer being when “provable injury capable of attracting compensation occurred”, that is when it is “available to be proved”. 

The judge reiterated that in line with Smith, the question is when was an “immediate, measurable economic disadvantage” or a loss which is “sufficiently measurable” sustained, as this will indicate when time starts to run for the purposes of s.11 of the Statute of Limitations Act 1957 (as amended).
 
The court found that the High Court erred in treating the transaction as one involving benefits and burdens where the balance is dependent on a contingency, being the value of the secured property, because on the facts, the pleaded case was “not a contingency case at all and the value of the secured property is only relevant to the quantum of damages, not to the existence of damage”.

Ms Justice Costello concluded that the deceased had suffered the damage at the time of entering into the transaction, when he incurred a liability to repay a total sum of €515,965.20 by November 2016 in order to acquire a property worth €375,000 in 2006 when he purchased it, and where his only means of repaying the debt was, in the event, unavailable to him by virtue of his personal circumstances, including his approaching retirement.

The judge emphasised: “This, in my judgment, amounted to ‘an immediate, measurable economic disadvantage’ or damage such as a lay person would consider suing for compensation.”

Conclusion

Accordingly, the Court of Appeal allowed the appeal and dismissed the proceedings as statute-barred.

Casey & Anor v The Governor and Company of Bank of Ireland & Anor [2025] IECA 66