Ruling has implications for Ulster Bank’s debt collection

A High Court ruling has significant implications for Ulster Bank’s efforts to recover debts in Ireland.

On the basis of her finding that Ulster Bank Ireland Ltd was not entitled to rely on sworn evidence from an employee of Ulster Bank Ltd in its claim for liberty to enter final judgment for €102,386 against Michael Dermody, Ms Justice Iseult O’Malley yesterday refused to enter judgment against Mr Dermody in that sum.

Because Ulster Bank Ltd deals with debt collection on behalf of Ulster Bank Ireland, the decision has significant consequences for the bank’s debt collections procedures. The bank’s lawyers indicated they intend to appeal to the Supreme Court.

The case centred on interpretation of the provisions of the Bankers Books Evidence Acts 1879-1959 and Ms Justice O’Malley upheld arguments by Ross Maguire SC, for Mr Dermody, Portumna, Co Galway, an employee of Ulster Bank Ltd cannot give admissible evidence to substantiate the claim advanced by Ulster Bank Ireland Ltd.

Ulster Bank Ireland Ltd had appealed against the Master of the High Court’s dismissal of its claim for liberty to enter final judgment against Mr Dermody arising from his guarantee of credit facilities given to two companies.

The claim was grounded on an affidavit of Richard Evans who exhibited copies of the guarantee, letters of demand and statement of liabilities, gave his address as Ulster Bank Ireland Ltd and described himself as being employed by the plaintiff as a “recoveries clerk”.

In a later affidavit, Mr Evans was described as “Recoveries Clerk, Collections and Recoveries Department, Danesfort, Stranmillis Rd, Belfast” and he said he was in fact an employee of Ulster Bank Ltd in Belfast. The statement in the first affidavit to the effect that he was employed by Ulster Bank Ireland Ltd was “a typographical error“, he said. In the hearing before the master, Mr Dermody’s lawyers argued, given the provisions of the Bankers Books Evidence Acts, the evidence of Mr Evans was hearsay and therefore inadmissible. The master agreed and refused the bank’s application.

Yesterday, Ms Justice O’Malley ruled Mr Evans’ evidence was not admissible to prove the truth of the relevant records being relied upon in seeking judgment against Mr Dermody unless it came within the relevant provisions of the Bankers Books Evidence Acts.

The issue then was whether Mr Evans could be said to be an “officer” of Ulster Bank Ireland Ltd within the meaning of the Acts, she said. In her view, he could not. While she accepted an employee may be considered an officer of a bank, Mr Evans was not an employee of the plaintiff, Ulster Bank Ireland Ltd, but rather of a separate legal entity, she said. The fact Ulster Bank Ireland Ltd and Ulster Bank Ltd are closely related did not alter this separate legal existence.