A tribunal has confirmed that former PTSB chief executive David Guinane has won an appeal against a Central Bank of Ireland inquiry sanctioning him for a role played in the State’s tracker mortgage scandal.
The Irish Financial Services Appeals Tribunal (Ifsat) said that the sole inquiry member, Peter Hinchliffe, made errors of law that were so fundamental that they negated his decision last year that Guinane be fined €80,000 and reprimanded.
The tribunal concluded in a decision published on Thursday that Hinchliffe “erred in law”, acted beyond what was established by case law elsewhere, “failed to give fair notice of certain issues”, and “failed to give reasons for his decision”.
“Moreover, it held that the errors of law in the inquiry decision were manifest from the text and were fundamental so as to deprive the decision of its basis,” said the tribunal, chaired by chaired by former Supreme Court judge John MacMenamin.
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Its conclusion still needs to be confirmed by the High Court. The Central Bank said it does not plan to appeal it.
The Irish Times first reported on the conclusion of the appeal last month.
[ Former PTSB chief wins appeal over tracker mortgage sanctionOpens in new window ]
“This deeply flawed process, which has cost millions in taxpayer funds, has had a profound effect on my family and on my career,” said Guinane in a statement on Thursday afternoon.
“With this now-discredited allegation, the Central Bank tried to single me out as a scapegoat. It is extraordinary that I was the only individual to be subject to a formal inquiry in respect of the tracker issue.”
Ifsat said that the Central Bank should pay Guinane’s legal costs for the inquiry and appeal, including his €5,000 appeal fee.
It rejected an application by PTSB, a notice party in the case, for costs. PTSB paid a €21 million fine in 2019 for its role in the industry-wide tracker mortgage scandal.
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Hinchliffe emphasised last year there was “no finding of dishonesty against Mr Guinane” and that he “did not form an intention to harm or take advantage of customers”. Guinane was also entitled to receive better support from within the wider Irish Life & Permanent Group, of which PTSB was a part at the time, he added.
The inquiry centred on a special condition in some PTSB tracker mortgages offered during the pre-crash property boom. This required customers who moved for a period to a fixed rate to instruct the bank afterwards to put them back on a tracker rate or another fixed product. Otherwise, they would default to a standard variable rate.
The ambiguous wording of the condition led to questions in early 2009 about whether a customer opting to go back on to a tracker rate was entitled to their original margin over the European Central Bank rate, or a higher margin then on offer from PTSB.
The bank adopted a strategy in January 2009, on the basis of legal advice, to only put customers who requested the original rate – or complained – on the more favourable rate. The Central Bank said Guinane signed off on the strategy when he responded to the plan, when advanced by a colleague via email in January 2009, with the words, “okay to that”.
Guinane testified during an inquiry hearing in early 2024 that while he did not remember events surrounding the decision, he understood the email to mean – based on having reviewed documents – that “any customer” coming out of the fixed rate would “go back to their original rate”. The email only contained a summary of the legal advice.
The grounds for the Central Bank’s decision to hold the inquiry were that Guinane knew and understood the strategy.
However, Ifsat said Hinchliffe reframed the allegation by removing “those critical elements of knowledge and approval”.
Instead, Hinchliffe criticised Guinane’s “failure” to ask certain questions, to make follow-up enquiries, or to take other steps which might have shown him what was happening to PTSB customers.
“The meaning of the allegation, as originally notified to the appellant was fundamentally altered in the ultimate decision,” Ifsat said.
The Ifsat decision raises questions about whether the Central Bank will still go after other bankers suspected of having played a role in the tracker mortgage scandal.
Ifsat’s conclusion marks another major setback for the regulator’s post-crisis vetting and enforcement activities.
Ifsat was previously highly critical in 2024 of a Central Bank refusal to approve a board nominee for a fund, saying the decision-making process was “flawed” and denied the individual fair procedures “at every stage”.
The Central Bank was also found in a High Court ruling, published in April, to have badly handled an enforcement investigation into a funds industry executive, saying it was “irretrievably tainted” by errors. The bank committed to learning lessons and changing procedures as a result of both cases.
