The Court of Appeal has held that Ulster Bank Ireland Limited was permanently estopped from pursuing Neil Healy over liabilities connected with a property development in Coole, County Westmeath. The court said the estoppel also bound Promontoria (Aran) Limited as assignee of the loans. It set aside the High Court’s contrary finding on estoppel; it did not find a contract releasing Healy from the debts.
The dispute arose from lending to Healy, his former business partner Patrick Cullen and Coole Property Holdings Limited. In August 2007, after Cullen bought Healy’s interests in their medical practice and property partnership, Healy deposited €2,213,607 with Ulster Bank. At a meeting before the deposit, bank manager Alan Leech assured him that he was “in the clear” in relation to the Coole project, according to findings made at the High Court retrial. Those findings were not challenged by cross-appeal.
The High Court found that Leech had authority to give the assurances, but rejected Healy’s claims, including promissory estoppel. It ordered him to pay Promontoria €1,634,132.16: €1,277,370.64 for joint borrowings and €356,761.52 under the guarantee. Healy appealed.
The Court of Appeal dismissed his argument that a binding contract had released him from the liabilities. It concluded that the case advanced at trial had focused on estoppel, and that Healy had not established a pleaded contractual basis or consideration for a release.
On estoppel, the Court of Appeal found that the High Court judge had erred. It said Healy’s reliance included the lost opportunity, after the assurances, to return to Cullen and take steps to protect his position under their 2007 agreements. The bank had been involved in arrangements for Cullen’s buyout and knew that repayment was expected from a sale of the Coole site. Yet it allowed Healy to proceed for about a year believing he was clear, while internally maintaining that he remained liable. The Court of Appeal found it inequitable for the bank to resile from its assurances and set off the money in Healy’s account.
The court held that the estoppel was permanent in these circumstances because it would now be unfair to require Healy to challenge or undo the 2007 agreements. It therefore bound Promontoria as assignee. The court rejected Healy’s separate challenge to the finding that Promontoria acquired the loans and guarantee. It left the formal orders and costs for later submissions: Healy was given 14 days to make submissions, with the respondents to reply within 14 days.