Hello Mr. Burgess,
It would be usual for a (Non-) Family Home Declaration to be signed confirming this property is not and would not become the principal residence, so did the borrower make a false declaration or was there no declaration ever made ? ... if a declaration was never made, that might offer some potential to go back at the lender but clearly that's one for the legal eagles.
Is the 9% pa a fixed rate out of interest ? If not and assuming the Borrower qualifies for a homeloan with the traditional homeloan providers, I'd be strongly recommending an immediate refinance (regardless of whether or not there is potentital to seek compensation from the current lender).
10-years is a very long time to have a loan without noticing you are on a commercial rate... not least given the amount of publicity around low interest rates, tracker rates -vs- SVRs etc. in the last few years. An experienced investor would be expected to be aware of lending rates and check their loan statements, also they might well have access to professional advisors who would assist with tax returns, legal transactions, management of finances etc. That all undermines any case this borrower might have imho.