Healy v Ulster Bank Ireland Ltd
| Jurisdiction | Ireland |
| Judge | Mr. Justice Brian J. McGovern |
| Judgment Date | 17 July 2009 |
| Neutral Citation | [2009] IEHC 360 |
| Docket Number | [No. 8389 P/2008] |
| Court | High Court |
| Date | 17 July 2009 |
[2009] IEHC 360
THE HIGH COURT
BETWEEN
AND
DORAN v THOMPSON LTD 1978 IR 223
RYAN v CONNOLLY 2001 1 IR 627 2001 2 ILRM 174 2001/21/5755
BANKING LAW
Guarantee
Representations - Estoppel - Whether plaintiff discharged from guarantee - Whether plaintiff acted on foot of representations - Detriment - Whether defendant estopped from denying representations - Whether clear and unambiguous representations by defendants - Set off - Whether monies wrongfully set off and converted - Candour and credibility of witness - Burden of proof - Whether court satisfied on balance of probabilities that plaintiff released from guarantee - Whether defendant entitled to set off funds - Doran v Thompson Ltd [1978] IR 223, Ryan v Connolly [2001] 1 IR 627 and Low v Bouverie [1891] 3 Ch 82 considered - Claim dismissed (2008/8389P - McGovern J - 17/7/2009) [2009] IEHC 360
Healy v Ulster Bank Ireland Ltd
The plaintiff is a medical doctor and at all material times carried on practice in Mullingar, County Westmeath. The defendant is a bank. In or about the year 2005, the plaintiff entered into a partnership with a medical colleague, Dr. Patrick Cullen, whereby they acquired lands and premises at Coole, in County Westmeath, with a view to creating a modern medical centre at a former hospital premises. The plaintiff and his partner borrowed substantial sums of money from the defendant and on 9th August, 2006, the plaintiff executed a guarantee ("the guarantee") in respect of the borrowings. His partner subsequently entered into a guarantee. By December 2006, relations between the partners were deteriorating and there were many disagreements as to how to proceed with the development at the site which included provision for not only a medical centre and ancillary facilities, but also a number of houses. In the spring of 2007, discussions took place between the parties and their advisers as a result of which it was agreed to terminate the partnership. The discussions to dissolve the partnership concluded at the end of July 2007. This involved Dr. Cullen paying a sum of €2,213,607.00 to the plaintiff. Dr. Cullen was to take over the assets and liabilities of the partnership.
On 1st August, 2007, the plaintiff lodged the proceeds with the defendant. He claims that he did so following representations made on behalf of the defendant by Mr. Alan Leech to the effect that he was discharged from his guarantee in respect of loans made to the partnership and was freed of any liability to the defendant bank. The plaintiff claims that by lodging the proceeds of the partnership settlement with the bank, he was entering into a commercial relationship under which the defendant agreed to provide various services to him in the nature of "wealth management" services which included commercial, investment and banking services. He claims that he would not have done so if he had not been given the aforesaid representations by the defendant.
On 14th August, 2008, the defendant exercised its rights on foot of the guarantee setting off the sum then standing in credit to the plaintiff against the debit balance outstanding in respect of the finance extended to the partnership. The funds transferred on foot of the purported set off were in US Dollars, as the plaintiff had funds in that currency in an account. The amount set off was US$993,983.03. The plaintiff alleges that the defendant was not entitled to use these monies and that they were wrongfully set off and converted by the defendant to its own use. He says that as a result of this he suffered loss and damage. He claims various reliefs as set out in the statement of claim, including damages and declarations, and claims that the defendant is estopped from denying the representations made to him on or about 1st August, 2007, to the effect that the plaintiff had no further liability to the defendant on foot of the guarantee executed by him on 9th August, 2006, in favour of the defendant.
There is no dispute between the parties that the defendant set off the sum of US$993,983.03 against the liabilities of the plaintiff on foot of the guarantee. There is really only one issue in this case and that is whether Mr. Alan Leech, on behalf of the defendant, made the representation contended for by the plaintiff, and if he did, whether the plaintiff acted on foot of the representation to his detriment.
InDoran v. Thompson Limited [1978] I.R. 223, a decision of the Supreme Court, Griffin J. stated at page 230:
"Where one party has, by his words or conduct, made to the other, a clear and unambiguous promise or assurance which was intended to affect the legal relations between them and to be acted on accordingly, and the other party has acted on it by altering his position to his detriment, it is well settled that the one who gave the promise or assurance cannot afterwards be allowed to revert to their previous legal relations as if no such promise or assurance had been made by him, and that he may be restrained in equity from acting inconsistently with such promise or assurance. The representation, promise or assurance must be clear and unambiguous to found such an estoppel: see Bowen L.J. at p. 106 of the report of Low v. Bouverie [1891] 3 Ch. 82."
That case was cited with approval by Keane C.J. inRyan v. Connolly [2001] 1 I.R. 627. The Chief Justice said at p. 632:
"Applying that general principle to the category of cases in which a defendant may be held to be precluded from relying on a defence otherwise available to him under the Statute of Limitations, the learned judge added:-"
'If the defendants insurers had made a clear and unambiguous representation (in the sense I have explained) that liability was not to be an issue, and the plaintiff's solicitor had withheld the issue of proceedings as a result, I would have held that the defendants were estopped from pleading the Statute of Limitations'.
In an earlier passage at p.230, Griffin J. had pointed out that, for the principle laid down in Low v. Bouverie [1891] 3 Ch. 82, to apply, it was not necessary that the representation should be one 'positively incapable of more than one possible interpretation'.
A party seeking to rely on the principle cannot, in other words, rely on a strained or fanciful interpretation of the words used, he must show that it was reasonable in the circumstances for him to construe the words used by the other party in a sense which would render it inequitable for that party to rely on the defence under the Statute of Limitations."
7. In the same judgment, Keane C.J. continued at p. 633:
"On any view, however, it is clear that a plaintiff who seeks to rely on the law as laid down in Low v. Bouverie [1891] 3 Ch. 82 and Doran v. Thompson [1978] I.R. 223, must be in a position to satisfy the court that there was a clear and unambiguous representation by the defendants that liability would not be an issue from which it was reasonable for the plaintiff to infer that the institution of proceedings was unnecessary. The issue that arises on this appeal is whether the High Court was correct, as a matter of law, in holding that in this case the principles to which I have referred applied."
8. It seems to me that these are the relevant legal principles which apply in this case.
9. The plaintiff claims that after he received the proceeds of the sale of his interest in the partnership from Dr. Cullen, he went to the Ulster Bank branch in Mullingar, County Westmeath, where he met with Mr. Alan Leech. The meeting took place on 1st August, 2007. At that time, Mr. Leech was a business centre manager with a title of 'Relationship Manager'. He was an assistant to a manager. The plaintiff claims that he arrived at the bank with his mother and that they were taken to an office upstairs by Mr. Leech. He told Mr. Leech that the deal had been done in relation to the Coole partnership and Mr. Leech told the plaintiff that he was surprised, although he knew the closing of the deal was imminent. After some preliminary conversation, the plaintiff discussed what interest rates he could secure on the monies he was about to deposit. The plaintiff informed Mr. Leech he had spent some considerable time discussing interest rates, terms and conditions that he might be able to obtain from other banks. Mr. Leech told the plaintiff that he was reasonably confident he could not only match any other offers, but could make him a better offer. The plaintiff recalled that Mr. Leech then left the room and came back later on, indicating that he would be able to do so. Then the plaintiff discussed with Mr. Leech his liabilities to the bank and informed Mr. Leech that he had been talking to his solicitor, Mr. Patrick Groarke, the day before, and that he had informed the plaintiff that it was safe for him to go into Ulster Bank with his funds and that he had no liability. The plaintiff claims that Mr. Leech concurred and said, "that is my understanding". The plaintiff claims that he said to Mr. Leech, "Alan, am I square with Ulster Bank and can you give me your assurances that I have no liability in relation to the project at Coole with Ulster Bank?" He said that Mr. Leech replied, "Neil, you have my assurances". He then added, "Alan, if I lodge this cheque with you, is it safe from you and is it safe in Ulster Bank?" He gave evidence that Mr. Leech said, "Neil, you are in the clear", and added, "you let me do the worrying for Ulster Bank". He then stated, in evidence, that he told Mr. Leech, "Alan, on the basis of those assurances, I am going to continue to do business with Ulster Bank, I am going to continue to have my practice...
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