THE HIGH COURT
1986 No. 11959P
DANIEL BARRY HENNERTY
THE GOVERNOR AND COMPANY OF THE BANK OF IRELAND
Judgment of O'Hanlon J. delivered the 26th day of May 1989.
I refer to the previous judgment delivered by me on the 5th July, 1988, in the course of which I concluded that the Plaintiff was estopped from pursuing any part of the claim made by him against the Defendant in these proceedings other than a claim for damages based on an allegation that the Bank in the month of February, 1984, received payment of a sum of (.20,000 through the medium of the Plaintiff's Solicitors, for the specific purpose of transferring same to Bank of Ireland Finance Limited in reduction of the Plaintiff's indebtedness to that Corporation, but wrongfully retained the money and applied it in reduction of the Plaintiff's overdraft with the Defendant.
That claim has been pursued by the Plaintiff and is the subject of the present judgment. If the Bank acted improperly in applying these funds in reduction of the Plaintiff's overdraft with the Bank, then the loss and damage thereby caused to the Plaintiff was not very great. The amount involved was sufficient to clear off his overdraft with the Bank for the time being (save for a fairly small sum of interest which remained outstanding). Consequently, interest no longer ran against his overdraft, save to the extent that he was permitted to overdraw by a later arrangement with the Bank. However, interest continued to run against his indebtedness to Bank of Ireland Finance Limited, and at a higher rate than would have been payable on his overdraft with the Bank.
Later in the same year, the Bank paid off the amount due to Bank of Ireland Finance Limited and debited the Plaintiff's current account in the Bank with the amount so paid. Therefore any higher rate of interest that would have been payable to Bank of Ireland Finance Limited ceased to have effect from the 9th November, 1984, or thereabouts. Having regard to these factors, the actual loss attributable to the appropriation of the sum of £20,000 to the discharge of the Plaintiff's overdraft with the Bank in February, 1984, in lieu of transferring same immediately to Bank of Ireland Finance Limited, was only £194.33.
Oral evidence was given by the Plaintiff and by Mr. James Walsh, who was the Bank Manager with whom the Plaintiff was dealing with at the time, in his capacity as manager of the Laurence Street, Drogheda, branch of the Bank of Ireland. The Plaintiff claims that he made it quite clear to Mr. Walsh that the money in question, which had been raised by way of a further loan from Anglo-Irish Bank Ltd., was ear-marked specifically for the purpose of reducing his indebtedness to Bank of Ireland Finance Ltd., and that this was his purpose in obtaining the new loan facilities from Anglo-Irish Bank Limited. Mr. Walsh denied that any such arrangement had been made with him and said that the money had been paid into the Bank by the Plaintiff's solicitors, Messrs. Branigan and Matthews, with no such pre-condition attached to the payment.
A letter of the 23rd February, 1984, was put in evidence, from Anglo-Irish Bank to Messrs. Branigan & Matthews, enclosing the cheque for £20,000 drawn for the benefit of the Plaintiff, and the solicitors sent on this letter to the Bank, enclosing the cheque, and writing on the letter the words, "Attn. Mr. Walsh - Re Daniel B Hennerty - Discharge of-Undertaking - Re "The Dispensary" Stamullen Co. Meath - as per telephone conversation."
The undertaking in question was one to lodge the proceeds of sale of certain lands to clear off the Plaintiff's commitment to the Bank, and also - apparently - to hold title deeds pending sale by way of security in respect of advances made to the Plaintiff by the Bank and also by the Bank of Ireland Finance Limited.
Asked about the conversation referred to in the Memo endorsed on the said letter, Mr. Walsh said that it was understood that the money in question would be used to pay off the Plaintiff's current account with the Bank.
The Plaintiff said that when he became aware of the manner in which the money had been applied, on receipt of a letter a few days later from Mr. Walsh, he telephoned Mr. Walsh and protested, but to no avail. He did not write at any time to put his protest on record. He was allowed permission to overdraw his account up to a sum of £5,000 within a short time after the previous overdraft had been cleared off, and - in theory - could have used the full amount of that facility to reduce his indebtedness pro tanto to Bank of Ireland Finance Limited, thereby mitigating any loss he claimed to have suffered by reason of the retention by the Bank of the £20,000 paid in by his solicitors, but he failed to do so.
I have already referred, in the earlier judgment, to the averment in the Plaintiff's affidavit, sworn in the present proceedings, concerning the payment of the sum of £20,000, in which he does not dispute that it was correctly applied in reduction of his overdraft with the Bank.
The evidence fails to satisfy me, as a matter of probability, that the Bank acted improperly or irregularly, or in disregard of instructions given by the Plaintiff, when they retained that sum against the Plaintiff's liability to the Bank in the month of February, 1984, and I must therefore dismiss this outstanding claim which has not already been dealt with in my previous judgment.