Boost for couple in compensation battle over £46k property loss
A couple who invested nearly £50,000 in an unbuilt Caribbean holiday home have cleared the first stage in their High Court battle to secure compensation.
Kilkeel-based fisherman Paul McCullagh and his wife Mary were granted leave to seek a judicial review amid claims they received negligent financial advice.
Ruling they had established a case, a judge said the episode ended in "catastrophic results".
The couple claim they were persuaded to remortgage and buy property abroad after going to see a local financial adviser in 2008.
They spent £46,500 on a development in St Lucia that was never built and is said to have no value.
Counsel for the McCullaghs insisted it had not been their plan to seek foreign property.
Alistair Fletcher told the court: "They were going in to get mortgage advice and coming out with financial advice."
Legal action was launched after the Financial Services Compensation Scheme (FSCS) turned down their bid for repayment last year.
The statutory body decided the case involved investment advice not covered by its fund.
But Mr Fletcher argued it was linked to recommendations on his clients' mortgage situation.
The court heard claims they were told the investment was a "no-brainer".
According to Mr Fletcher, it was the financial adviser pushing the couple to put money into the development.
David Scoffield QC, for the FSCS, contended that the couple had failed to show they received negligent advice on the mortgage product taken out.
"It's plain that even if the property deal didn't work out, they were able to afford the mortgage, and it was suitable for them bearing in mind they wanted to raise funds for a property investment," he said.
Pointing to the McCullaghs' continued ability to make their repayments, Mr Scoffield also claimed there was no public interest in the challenge continuing.
Despite acknowledging those submissions, Mr Justice Maguire held there was sufficient merit to allow the action to proceed.
"The story in this case is a fairly lamentable one," he added. "The use by the applicants of this financial adviser's office - whatever precipitated it - has turned out to have catastrophic results for them. Unfortunately, it proves that the financial adviser is a man of straw, and therefore resort has had to be made to seeing compensation under the FSCS."
Granting leave to apply for a judicial review, he listed the case for review in March.