Ulster Bank Ireland Ltd v Dermody

• Jurisdiction: Ireland
• Judge: Ms. Justice Iseult O'Malley
• Judgment Date: 07 March 2014
• Neutral Citation: [2014] IEHC 140
• Court: High Court
• Date: 07 March 2014

Ulster Bank Irl Ltd v Dermody

No Redaction Needed

Between/

ULSTER BANK IRELAND LIMITED

Plaintiff

-and-

PADRAIG DERMODY AND MICHAEL DERMODY

Defendants

[2014] IEHC 140

Record No. 4093S/2012

THE HIGH COURT

Banking - Debt collection - Application for final judgment - Bankers” Books Evidence Acts 1879-1959 - Whether officer of bank - Admissibility of bank records - Hearsay - Exclusionary rule

These proceedings concerned an appeal from a decision made by the Master of the High Court which dismissed the plaintiff”s claim against the second named defendant, Michael Dermody (the defendant). This claim was in the sum of €102,386.12 and was said to have arisen on the basis of guarantees made by the defendant in respect of credit facilities given to two companies. The motion to enter final judgment was grounded upon the affidavit of an Ulster Bank Limited employee who showed what he claimed to be copies of the guarantees, statements of liabilities and the letters of demand.

The central issue was whether the plaintiff, Ulster Bank Ireland Limited was, in applying for leave to enter final judgment, entitled to rely on this grounding affidavit. Ulster Bank Limited was related to the plaintiff company and was involved in its debt collection. The defendant contended that the employee, Mr Richard Evans, could not give admissible evidence under the provisions of the Bankers' Books Evidence Acts 1879-1959 (the Acts) as it was hearsay evidence. The plaintiff contended that these Acts did not apply and, if they did, that they complied with the relevant provisions.

Held by O”Malley Iseult J., the issues to be determined were whether the records in this case were admissible by way of a common law exception to the rule against hearsay evidence and secondly, if not, whether there was compliance with the statutory framework of the Acts. The first determination of the Court, in following the decision of Criminal Assets Bureau v Hunt, was that business records of the nature provided by Mr Evans were not admissible as prima facie evidence of the truth of their contents, without reference to the Acts. They were not exceptions to the common law rule against hearsay.

The remaining issue was whether Mr Evans could be said to be an officer of the plaintiff bank within the meaning of the Acts. The Court determined that he could not. While it was accepted that for the purposes of the Acts, an employee could be considered to be an officer of the bank—Mr Evans was not an employee of the plaintiff, but of a separate legal entity in Ulster Bank Limited. The Court was of the view that being closely related did not change the separate legal existence of Ulster Bank Limited and the plaintiff bank. The final contention of the plaintiff was that the use of the word ‘may’ in the Acts was to be read as enabling or permitting an officer or partner to give the evidence while also leaving the possibility that a different class of person could do so in their stead. The Court held that it was clear that the intent of the relevant sections was to restrict the class of witnesses to the categories mentioned.

The appeal was therefore dismissed.

BANKERS BOOKS EVIDENCE ACT 1879 S3

BANKERS BOOKS EVIDENCE ACT 1879 S4

BANKERS BOOKS EVIDENCE ACT 1879 S5

CENTRAL BANK ACT 1989 S131

BANKERS BOOKS EVIDENCE ACT 1879 S6

BANKERS BOOKS EVIDENCE ACT 1879 S9

MOORVIEW DEVELOPMENTS LTD & ORS v FIRST ACTIVE PLC & ORS UNREP CLARKE 9.7.2010 2010/37/9346 2010 IEHC 275

BANK OF SCOTLAND PLC v FERGUS UNREP FINLAY GEOGHEGAN 30.3.2012 2012/3/807 2012 IEHC 131

BANK OF IRELAND v KEEHAN UNREP RYAN 16.9.2013 2013 IEHC 631

BANK OF SCOTLAND PLC v STAPLETON UNREP PEART 29.11.2012 2012/4/848 2012 IEHC 549

HALSBURYS LAWS OF ENGLAND VOL 1 PARA 1301

MATTHEWS & MALEK DISCLOSURE 2ED 2000

PHIPSON & HOWARD PHIPSON ON EVIDENCE 15ED 2000

CRIMINAL ASSETS BUREAU v HUNT 2003 2 IR 168 2003/10/2095

MYERS v DPP 1965 AC 1001 1964 3 WLR 145 1964 2 AER 881 1964 48 CR APP R 348

Introduction

1 This is an appeal from a decision of the Master of the High Court dismissing the plaintiff's claim against the second named defendant (hereafter "the defendant"). While there may well be other matters in dispute between the parties, the central issue dealt with in the judgment on the appeal is whether this plaintiff was, in an application for leave to enter final judgment, entitled to rely upon a grounding affidavit sworn by an employee of Ulster Bank Limited. The latter company is related to the plaintiff company and deals, on its behalf, with its debt collection process. It is argued on behalf of the defendant that the employee in question cannot give admissible evidence to substantiate the claim. This argument turns on the provisions of the Bankers' Books Evidence Acts 1879-1959. The plaintiff contends that the Acts do not apply, or, if they do, that it has complied with the relevant provisions.

The evidence

2 The plaintiff's claim is stated to arise on foot of certain guarantees given by the defendant in respect of credit facilities given to two companies. The motion for liberty to enter final judgment against this defendant in the sum of euro;102,386.12 was grounded upon the affidavit of a Mr. Richard Evans, exhibiting what he averred to be copies of the guarantees, the letters of demand and statements of liabilities.

3 In the grounding affidavit, sworn on the 1 ^st February, 2013, Mr. Evans gave his address as "Ulster Bank Ireland Limited" and described himself as being "employed by the Plaintiff as a Recoveries Clerk" and as being duly authorised to make the affidavit on behalf of the plaintiff. He gave his means of knowledge as being

"facts within my own knowledge and having perused the books and records of the Plaintiff, save where otherwise appears…"

4 A subsequent affidavit sworn on the 17 ^th June, 2013 (but not filed until the 9 ^th July) gave Mr. Evans's occupation and address as "Recoveries Clerk, Collections and Recoveries Department, Danesfort, Stranmillis Road, Belfast BT9 5UB." In it Mr. Evans averred that he was in fact an employee of Ulster Bank Limited in Belfast and that the statement in the first affidavit that he was employed by Ulster Bank Ireland Limited was a typographical error. He did not otherwise alter any material averment from the earlier affidavit.

5 At a hearing of the plaintiff's application to the Master for liberty to enter final judgment on the 10 ^th July, 2013 the defendant submitted inter alia that the evidence of Mr. Evans was inadmissible as being hearsay, having regard to the provisions of the Bankers' Books Evidence Acts 1879-1959. The Master struck out the plaintiff's motion on this ground (and one other that is no longer of concern).

6 Mr. Evans swore a further affidavit for the purposes of this appeal in which he averred that he was a "Level 1 Agent" in "the Collections and Recoveries Department situated in Belfast". In it he exhibits a power of attorney, executed in April 2011, by which officers of the plaintiff bank authorised, inter alia, persons holding his position and grade in Ulster Bank Limited to

"…sign Contracts for Sale, Conveyance or transfer of title documents and any related documents which are required to be completed by the Bank as part of the recoveries litigation process for the recovery of the Bank's secured and unsecured facilities and the enforcement of the attendant security for such facilities including but without prejudice to the generality of the foregoing, any deed or document required to appoint a receiver, receiver and manager or administrator over property mortgaged or charged in favour of the Bank by way of security or required to remove or release any receiver or receiver and manager so appointed." [Emphasis added in affidavit.]

7 Mr. Evans says that he was therefore authorised to swear the grounding affidavit in these proceedings.

8 In this affidavit Mr. Evans goes on to set out the procedure followed by branch officials of the plaintiff bank in this jurisdiction where an account has gone into arrears. If resolution at branch level is not possible the account is sent forward to the Collections and Recoveries Department in Belfast. It is averred that the individuals dealing with the account in that Department have full access to the file and the full history of the account in question. (Mr. Evans has averred, for the avoidance of doubt, that he had such access to the second named defendant's file before swearing the affidavit grounding the motion in the Master's Court.)This process is described as

"simply a procedure which takes place within the internal operational administration of the Ulster Bank Group. Importantly, it is not a delegation or outsourcing of the Plaintiffs debts to some outside independent entity. Rather, the Collections and Recoveries Department operates like the Debt Collection department or section within any company, where such a department or section is charged with the responsibility of collecting a company's debts. The Collections and Recoveries Department is thus the "debt collection" department of the various entities making up the Ulster bank Group."

9 The following averments are made by Mr. Evans:-

"I should also say that in the course of your deponent's employment with Ulster Bank Limited, and in particular in the Collections and Recoveries Department therein, I am familiar with the methods of book keeping and with the ordinary conduct of business in Ulster Bank Ireland Limited. I say in particular that I am familiar with the fact that at the time entries are made in the bankers' books, the books are the ordinary books of the Plaintiff I say that I am in a position to prove same. I say also that I am familiar with the fact that entries into the bankers' books are made in the ordinary course of business of Ulster Bank Ireland...