The High Court has rejected Dr Neil Healy’s claims arising from Ulster Bank’s use of money in his deposit account to offset debts connected with a former medical practice and property development in Coole, County Westmeath. The court accepted that a bank manager told Dr Healy in August 2007 that he was “in the clear” with the bank, but held that the assurance did not release him from his liabilities.
Dr Healy had deposited €2,213,607 with Ulster Bank on 1 August 2007, following the sale of his interests in a medical partnership and Coole Property Holdings Ltd. The court found that Alan Leech, the bank manager handling Dr Healy’s business, assured him that he had no further liability to the bank and that Leech would “do the worrying for Ulster Bank”. Dr Healy’s mother, who attended the meeting, gave evidence that the assurance was made. The judge preferred their evidence to Leech’s account.
The bank later set off US$993,983.03 from Dr Healy’s deposit against a balance owed under facilities provided to Coole Property Holdings. Dr Healy sued the bank. His case was first dismissed in 2009, but the Supreme Court set that decision aside in 2015 and sent the proceedings back to the High Court for a full rehearing.
The court concluded that the bank’s assurance was not an enforceable contract because Dr Healy had provided no consideration for a release from his liabilities. It also rejected his argument that the bank was estopped from enforcing the guarantee. The judge found that depositing the money did not change Dr Healy’s legal position: he remained liable for the underlying debts whether the money was held by Ulster Bank or another bank. Claims in deceit, negligence and breach of contract also failed.
Promontoria (Aran) Ltd, which the court found had acquired Ulster Bank’s interests in the loans and guarantee, brought a counterclaim. The court accepted its title to the relevant debt and rejected challenges concerning the assignment documents, stamp duty and whether formal demands had been made.
The judge ordered judgment for Promontoria for the amounts sought in items (1) and (3) of its counterclaim: €1,277,370.64 for liabilities on joint borrowings and, alternatively, €356,761.52 under the guarantee after the set-off. The court did not award the separate €1,064,222.75 guarantee figure sought in item (2). It left the question of costs for a further hearing.