Monday 11 December 2017

Doctor wins appeal against rejection of claim Ulster Bank wrongly appropriated funds

Ulster Bank Logo
Ulster Bank Logo

A doctor has won his appeal over the rejection of his claim a bank wrongly appropriated €667,000 in a deposit account to set off his disputed liability over a €3.4m loan.

Neil Healy had appealed the High Court's rejection of his claim against Ulster Bank.

Following a decision of the Supreme Court Monday (Dec 21), the matter will now go back to the High Court for a rehearing.

Dr Healy claimed he was released from his guarantee of the €3.4m loan during a meeting in 2007 with an Ulster Bank official.

A three judge Supreme Court unanimously upheld arguments by Mr Healy the High Court "failed to engage" with evidence of his mother Maria which was supportive of Dr Healy's account of being given certain assurances by the bank official.

Dr Healy, with an address at Lough Sheever Corporate Park, Mullingar, Westmeath, planned to develop an old hospital facility at Coole in Westmeath in 2005 with a medical colleague.

They secured a €3.4m loan from Ulster Bank Ireland and both provided guarantees for the borrowings.

Following disagreements, they later agreed in 2007 to terminate the arrangement on the basis of Dr Healy receiving €2.2m and his ex-partner taking over the assets and liabilities of the partnership.

The bank claimed Dr Healy's liability for the original loan was still in place and in August 2008 deducted €667,210 from the €2.2m against the debit balance outstanding on the €3.4m.

Dr Healy claimed the Bank had no right to do that.

He claimed, following the deal terminating the Coole partnership, Dr Healy asked Alan Leech, relationship manager at the Mullingar branch of the bank, during a meeting on August 1, 2007, what interest rates he could secure on the €2.2m.

He claimed Mr Leech told him he was "in the clear" in relation to his liability for the Coole project and he then deposited the €2.2m with Ulster Bank.

Mr Healy's mother Maria gave evidence she attended the meeting in August 2007, Mr Leech told her son he was "in the clear" with the bank and all three went for a "celebratory" lunch after that meeting.

In its 2009 decision, the High Court rejected Dr Healy's case.

Giving the Supreme Court judgment, Mr Justice Adrian Hardiman said the High Court erred in failing to engage with Mrs Healy's evidence which did not appear to have been challenged by the bank.

No alternative reason for a "celebratory" lunch was suggested other than Dr Healy had been bought out by his partner and deposited the proceedings with the bank on the terms he suggested so that "for a brief period at least, everyone was happy".

Due to a failure by the High Court to engage with this "significant" element of the evidence, the appeal would be allowed and the matter remitted to the High Court for reconsideration.

The loan involved had since been sold to another party and the case may have to be reconstituted, the court heard.

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