Healy v Ulster Bank Ireland Ltd

CourtHigh Court
JudgeMr Justice Max Barrett
Judgment Date16 January 2018
Neutral Citation[2018] IEHC 12
Date16 January 2018
Docket Number2008 No. 8389 P

[2018] IEHC 12


Barrett J.

2008 No. 8389 P

- AND -



Banking & Finance - Misrepresentation - Ostensible authority - Deceit - Damages

Facts: The present proceedings were remitted for full re-hearing by the Supreme Court. The plaintiff claimed that the defendants had committed breach of contract by converting the money that the defendants appropriated from the plaintiff's account for its own use rather than using it for the purpose of the settlement of liabilities. The plaintiff sought an order for damages for breach of contract and breach of duty. The second named defendant being the successor in title of the first named defendant also sought an order for judgment against the plaintiff for the stated joint borrowings; the un-set off amount and the residual post-set off amount.

Mr. Justice Max Barrett dismissed the plaintiff's claim. The Court granted judgment to the second named defendant in relation to the plaintiff's liabilities on the stated joint borrowings and for the residual post-set off amount. The Court found that the senior officer of the first named defendant/bank to whom dealings with the plaintiff was entrusted by the first named defendant possessed the ostensible authority to give binding statements as to the plaintiff's liabilities and balances with the bank. The Court held that the ostensible authority was general in character arising when the principal had placed the agent in a position, which in the outside world would be regarded as carrying authority to enter into any kind of transactions.

JUDGMENT of Mr Justice Max Barrett dated 16th January, 2018.


(Numbers in square brackets are paragraph numbers)

I. Introduction [1]

II. Some Background Facts [3]

III. The Meeting at the Bank [5]

(i) The Evidence of Ms Healy. [5]

III. Afterwards [11]

(i) Introduction. [12]

IV. Points of Fact Arising [26]

V. Claims Now Made [28]

VI. Ostensible Authority [29]

(i) Kett v. Shannon [1987] ILRM 364 [30]

VII. Estoppel [48]

(i) Overview. [48]

VIII. Certain Torts Contended For [59]

(i) Deceit. [59]

IX. Breach of Contract [64]

X. Promontoria's Counterclaim [65]

(i) Transfer. [65]

XI. Conclusion [70]

I Introduction

Dr Healy is a registered medical practitioner and conducts a general practice in County Westmeath. The defendant is the successor in title to Ulster Bank Ireland Limited vis-à-vis certain loan and guarantee arrangements that it seeks now to invoke against Dr Healy. At all material times, Ulster Bank maintained an office in Mullingar. In August 2008, Dr Healy had a sum of US$993,983.03 standing to his credit in his deposit account with Ulster Bank at that branch. On 13th/14th August 2008 (the letter advising of the set-off bears both dates) Ulster Bank appropriated this sum by way of set off against a debit balance allegedly outstanding in respect of a facility extended under facility letter of 20th July, 2006, to Coole Property Holdings Ltd (CPHL), in respect of which, Dr Healy had entered into a guarantee of 9th August, 2006. There was also an alleged personal liability.


Dr Healy was outraged at the appropriation of the money standing to his credit in his account in respect of the alleged liabilities mentioned. He instituted proceedings against Ulster Bank in which he claimed that in appropriating the said monies the defendant Bank was guilty of unlawfully converting these sums to its own use, breach of contract, negligence and deceit. His claim was dismissed by the High Court (McGovern J.) on 17th July 2009. On appeal, the Supreme Court, on 21st December, 2015, set aside the order of the High Court and remitted the proceedings for re-hearing. The within judgment follows on that re-hearing. For the avoidance of doubt, it is clear from paras. 25 and 26 of the judgment of Hardiman J. in the Supreme Court that the within proceedings were remitted for a full re-hearing encompassing all issues between the parties.

II Some Background Facts

Dr Healy says that the sums on deposit which were appropriated by way of set-off were the balance of an initial lodgement of €2,213,607. This deposit was made on 1st August 2007. Dr Healy says that this initial deposit represented a sum derived from the sale by him of his interest in CPHL and the sale, at the same time, of his interest in a partnership in a medical practice, between him and another doctor. This other doctor, in addition to being Dr Healy's partner in general practice was also engaged with him, through the medium of CPHL, in the development of an elaborate general practice building and ancillary para-medical and housing development on the grounds of a former hospital in Coole, Co. Westmeath.


Unfortunate differences arose between Dr Healy and his former business partner. As a result, it became clear that they could no longer practice medicine in partnership or advance their joint commercial interests together. In relation to the latter, Dr Healy was keen to sell the development in which the two were engaged; his partner wished to retain it. In July 2007, Dr Healy and this other doctor reached an agreement as a result of which, in effect, Dr Healy was bought out by his former partner. The former partner paid to Dr Healy's solicitor the consideration for this buy-out. On 31st July, 2007, Dr Healy obtained a cheque representing these proceeds from his Solicitor. On the following day, 1st August 2007, Dr Healy attended a meeting in the Mullingar branch of the Ulster Bank. He had an appointment to meet Mr Alan Leech of Ulster Bank there. He was accompanied by his mother, Ms Maria Healy.

III The Meeting at the Bank
(i) The Evidence of Ms Healy.

The court has been presented with three accounts of the meeting at the bank, respectively by Dr Healy, Ms Healy and Mr Leech. The account of Dr Healy and Ms Healy largely overlapped. However, the court was especially struck by the evidence of Ms Healy. She impressed the court as an honest country-woman, she was clearly trying her best to tell the truth, she differed from her son on a couple of inconsequential points, but the fact that she differed suggested to the court that she was not reciting an agreed version of events, and although she was clearly vexed at how her son has been treated by Ulster Bank and not a little upset at the emotional toll that the within proceedings have taken on herself and her son, she sought to be fair and moderate when treating with the evidence of Mr Leech. So what happened at that meeting of 1st August 2007? Ms Healy recounted events as follows:

'Ms Healy - …This was about 12:00, 12:30….[W]e parked the car - he [Dr Healy] parked the car somewhere at the back of the bank and he said "I have to ring him [Mr Leech] and let him know" - or text him, I don't know which…and let him know that we are here.' So we went around into the bank and Neil went up to the reception and told her that he had an appointment with Alan Leech but he was expecting us. So Alan Leech came down the stairs and opened the door…I think, a glass door, and Neil [Dr Healy] said: "This is my mother". And I shook his hand and followed him upstairs….into an office. And as I said, he [Dr Healy] said: "This is my mother" and "this is Alan Leech". And I remember saying to him: "I'm delighted to meet you…to put a face on the name that I had heard so much talk over the last few months. You know, Neil would tell me "Alan Leech is doing this…" or "We are doing that and I'm meeting Alan Leech"….I was well tuned in to what was going on. So I told Alan Leech, I said: "I'm delighted to meet you." And then we sat down at a desk. The desk was in front of a window and we sat this side of it and Alan Leech sat over there and Neil said to him the closing had occurred and Alan Leech said - this is more or less what happened. And Alan Leech said "I didn't realise it had closed already. I knew it was imminent or going to happen…". And Neil said: "Yes, it has." And Alan Leech said: "And have you your cheque?" And Neil said: "Yes, I have my cheque here….Patrick Groarke [Dr Healy's then solicitor] told me that it is safe to come in here and lodge my money with you and that I have no liabilities to…Ulster Bank." And Alan said: "Yes, that's the way…it is with me as well." Now they are words that are not, maybe, 100%. But he did say that. So Neil said: "Well there is two things." Alan Leech asked him: "Are you going to lodge your money, Neil, with us now?" And Neil said: "Well that's my intention coming in…" - and that was his intention - "…coming in here today." "But", he said, "before I come to that…there are two things that I want to discuss with you, two important things, and the first thing is about the interest rates." There was something about interest rates with…AIB and, you know, can you match these interest rates? And Alan Leech said: "That shouldn't be a problem at all." And I think at that stage he went out and he got some information on interest rates and he came back in and he said: "I can do better than the AIB." And Neil said: "That's grand." And they were happy enough with that. But Neil said: "The second and most important thing that I want to find out is that I have your assurances that my money is safe in the Ulster Bank, regarding the Coole project, regarding my liabilities with the Coole project." And Alan Leech told Neil that his money was safe and he was giving his assurances that Neil's money was safe, that he was in the clear from Ulster Bank and let Alan do the worrying for…Ulster Bank after that. And Neil said to him: "Well in that case, when I have your assurances, I'm happy to lodge my money with you." …"I'm happy to lodge it, Alan, with you".'

[Why did Dr Healy seek this second assurance? He explains as...

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