Supreme Court of Ireland Decisions

1. The Plaintiff/Appellant is a registered medical practitioner and conducts a general practice in Mullingar Co. Westmeath. The defendant/respondent is a Bank. At all material times it maintained an office in Mullingar.

2. In August, 2008 the plaintiff had a sum of US$ 993,983.03 standing to his credit in his deposit account with the defendants as Bankers at their branch in Mullingar. On the 14th August, 2008 the Bank appropriated this sum by way of set off against a debit balance allegedly outstanding in respect of a facility extended to Coole Property Holdings Ltd., in respect of which, the Bank said, Dr. Healy was a guarantor. There was also an alleged personal liability.

3. The plaintiff was outraged at the appropriation of the money standing to his credit in his account in respect of the alleged liabilities mentioned. He instituted proceedings against the defendant Bank in which he claimed that in appropriating the said monies the defendant Bank was guilty of unlawfully converting these sums to its own use, breach of contract, negligence and deceit. His claim was dismissed by the High Court (McGovern J.) on 17 July 2009. This is his appeal.

The Plaintiff’s case.
4. The plaintiff said that the sums on deposit which were appropriated by way of set off were the balance of an initial lodgement of €2,213,607. This deposit was made on the 1st August, 2007. The plaintiff says that, subsequently, on the advice of the defendant Bank, some of the money was used in a series of currency trades by the defendant Bank acting as adviser and broker to the plaintiff.

5. The plaintiff further says that the initial deposit represented a sum derived from the sale by the plaintiff of his interest in Coole Property Holdings Ltd. and the sale, at the same time, of his interest in a partnership in a medical practice, between the plaintiff and another doctor. This other doctor, in addition to being the plaintiff’s partner in general practice was also engaged with him, through the medium of the Company mentioned, in the development of a very elaborate general practice building and ancillary para-medical and housing development on the grounds of a former hospital in Coole, Co. Westmeath.

6. Unfortunate differences arose between the plaintiff and his former partner, and this led to a very serious deterioration in their personal relationship. It became clear that they could no longer practice medicine in partnership or advance their joint commercial interests together. In relation to the latter, the plaintiff was keen to sell the development in which they were engaged and the development lands, whereas his partner wished to retain them. In July 2007 the plaintiff and the other doctor reached an agreement as a result of which, in effect, the plaintiff was “bought out” by his former partner. The former partner paid to the plaintiff’s Solicitor the consideration for this buy out. On the 31st July 2007 the plaintiff obtained a cheque representing these proceeds from his Solicitor.

7. On the following day, 1st August 2007, the plaintiff attended a meeting in the Mullingar branch of the Ulster Bank. He had an appointment to meet Mr. Alan Leech of Ulster Bank there. He was accompanied by his mother, Mrs. Maria Healy who had worked with him in his development venture and was familiar with it.

8. The plaintiff says that he told Mr. Leech at the meeting that the “deal” in relation to the sale to the former partner of the plaintiff’s interest in the property company and in the medical partnership had been agreed the previous day and that he had secured payment of the sale’s proceeds from the purchaser. It appears from documents subsequently obtained on discovery that the Bank had known of the discussions between the two doctors but was unpleasantly surprised that the transaction had closed and that the plaintiff had “got his hands on” the proceeds (the Bank’s phrase) without the Bank being involved.

9. According to the evidence of the plaintiff’s mother, at the meeting of 1 August 2007:

“Mr. Leech said to Neil ‘Now that you have the money, you will be looking after us. We looked after you’. And Neil said ‘Well that’s why I came in here to talk about this but before that happens ‘there are two issues which have to be resolved’. Number one:- (as far as I know some Bank had been ringing Neil up, I think it may have been AIB giving him interest rates and that kind of thing). Neil and Alan spoke about these for awhile and Alan said that he could match these, he could match these rates. So then Neil said ‘Well the second and most important item is that I need assurances from you that I am in the clear with Ulster Bank’, and Alan Leech told him that he was in the clear with Ulster Bank”. (Emphasis added)

“5. Prior to the commencement of the above described commercial relationship and prior to the plaintiff agreeing to place any funds in the charge of the defendant, its servants or agents, the defendant, its servants or agents specifically represented to the plaintiff that he had no pre-existing liability and/or exposure to it on foot of a guarantee furnished by the plaintiff to facilitate repayment on demand to the defendant of a sum not to exceed €3,485,000 extended as finance to Coole Park Property Holdings Ltd. in respect of a commercial development undertaken by that Company. The said guarantee was dated 9 August 2006”.

“It is clear that Mr. Leech was proposing that the plaintiff be cleared of the loan and the facilities which were granted, and that these be put in the name of [the other doctor]. He made this request on the 3rd September 2007”.

“Healy effectively no longer has any liability to us and as I say he has signed contracts signing over any interest he had in all lands and property at Coole to [the other doctor]. I have amended this on the security screen now. This can be changed back if not correct”.

Accordingly, the learned trial judge held at para. 30 that the internal Bank documents “do no more than show that the Bank was considering a request by Mr. Leech to have the plaintiff cleared of any liability to the Bank, but the Bank was not prepared to do so”. The learned trial judge regarded this as supporting Mr. Leech’s evidence that he had no authority to give any such assurance as was claimed to the plaintiff. It might, also, be regarded as consistent with Mr. Leech having given the plaintiff an assurance such as the latter claimed, presumably in the interest of securing a very large deposit for the Bank. This would require him to secure “that the plaintiff be cleared of the loan”.

11. In cross-examination of Mrs. Maria Healy on behalf of the Bank, after she had given the evidence summarised above, it was put to her that on the day of the meeting:

“You [Mrs. Healy] certainly had lunch with Mr. Leech in Conn’s Restaurant across from the Bank, isn’t that right?”.

“Mr. Leech shook hands with Neil, congratulated him and he invited us over to Conn’s for a celebratory lunch…”.

“You don’t have to worry about that, Mrs. Healy. Mr. O’Neill is doing his job. There is a conflict of evidence on this. Apparently Mr. Leech is going to tell me that I should believe him, that you weren’t at the meeting, and I have to resolve this difference”. (Emphasis added)

The issue.
13. The substantive issue in the case was whether or not Mr. Leech had given Dr. Healy assurances of the sort outlined in the plaintiff’s pleadings and evidence. Dr. Healy was adamant that he had done so, and stood over this allegation in evidence and in cross-examination. As we have seen Mrs. Maria Healy gave evidence to the same effect. Mr. Alan Leech, the only other person present at the meeting, said he had only a vague recollection of it and did not recollect the words alleged by the plaintiff being used. He said he would have no authority to give assurances to that effect. Dr. Healy and Mrs. Healy were however adamant that Mr. Leech had used precisely those words, presumably with a view to securing the deposit for Ulster Bank. It will be recalled that the Bank conducted various transaction on behalf of Dr. Healy with the deposit money prior to the set off, which occurred just over a year after it was lodged.

14. The case, therefore, hinges on what if anything was said to induce Dr. Healy to make a deposit of the funds at his disposal into an account in Ulster Bank, Mullingar, on the 1st August 2007. There was not, in any literal sense, a conflict of evidence about this issue in the sense of witnesses for the respective parties swearing to two conflicting accounts. There was the clear evidence of the Healys in support of the assurances which they claim to have been given and, more vaguely, there was Mr. Leech’s evidence to the effect that he did not recollect the conversation, that he was vague about it, that he did not recall Mrs. Healy being present and that it would not have been within his authority, and would not have been his custom or practice, to give assurances of the kind alleged.

15. The cross-examination of Mrs. Healy on behalf of the Bank was curious in certain respects. Their first line of attack, summarised by the judge in the passage quoted above, was that she wasn’t there at all. But this was not expressly put to her at any stage. The cross-examination of Mrs. Healy by Mr. Desmond O’Neill S.C. is in large measure consistent with the Bank taking that view that she had not been there. He asked the sort of questions one might ask if there was going to be a denial that the witness had been present at all. Thus, she was asked where in the premises the meeting took place, upstairs or downstairs in the Bank building; what was the exact location of the room in which the meeting took place; whether the room was cluttered or tidy; and whether she or her son were offered any refreshments at the meeting. Remarkably, she was only expressly contradicted on the last matter: she said she had had a coffee and Mr. O’ Neill put her to that Mr. Leech’s practice was never to offer refreshments at such a meeting. It was not expressly put to her, importantly, that, as a matter of fact, she had never been at the meeting at all. This was presumably because cross-examining counsel was by then aware that Mr. Leech’s evidence would not go further than saying that he could not recollect her being at the meeting. But the Bank’s initial stance had been as the judge summarised it: she wasn’t there at all.

16. But, as we have seen, it was expressly put to Mrs. Healy on behalf of the Bank that she had been at lunch in “Conn’s restaurant across from the Bank”. She said that she and her son had gone to lunch there at the invitation of Mr. Leech who had shaken hands with Dr. Healy, congratulated him, and invited him and his mother to lunch. The description of this lunch by Mrs. Healy as “a celebratory lunch” was not challenged by the Bank.

No case was made by the Bank, or put to Mrs. Healy, as to how she could come to be present at the lunch with Mr. Leech if she had not been at the meeting in the Bank immediately prior to the lunch. Since it was agreed that she was at the lunch, she must have either come from the Bank with the two men, or met them later. There was no account of any arrangement to meet her there, any telephone call making such arrangement or of any entirely coincidental meeting in the restaurant or on the street. There are no other possibilities.

17. The entire case turned on the meeting in Ulster Bank which was said to have started at about 12.20pm on the 1st August, 2007. The action was heard just under two years later, in May 2009 and judgment was delivered in July of that year. The judge summarised a state of the evidence in this matter as follows at para. 16 of his judgment:

“Mr. Leech was quite clear in his evidence to the Court that he would not have given a release to the plaintiff and that he had no authority to do so. He continued to assert this, although he accepted he could not remember precisely what he said. Counsel for the plaintiff laid significant emphasis on the fact that the plaintiff, for his part, was quite clear as to the assurances which were given on 1st August, 2007, whereas Mr. Leech had no recollection of what was said. If the plaintiff’s evidence is reliable on this detail then, clearly, he is in a strong position, because while Mr. Leech may not have actual authority to give him a release, he may have had ostensible authority to do so. The credibility of the plaintiff is obviously crucial to the determination of the issue of fact as to whether or not the words contended for by the plaintiff was said by Mr. Leech”. (Emphasis added)

“The plaintiff’s mother accompanied the plaintiff to the Bank for the meeting with Mr. Leech on 1st August, 2007. Although Mr. Leech did not recall her being present in the room when he was receiving the cheque from the plaintiff, I accept her evidence that she was there at the time. She said she heard Mr. Leech telling the plaintiff that he was ‘… in the clear with Ulster Bank’. But when she was asked whether there was any detailed discussion on the issue as to whether her son had a liability under a guarantee, she could not remember any such discussion”. (Emphasis added)

19. The puzzling aspect of the judgment is that, having expressly found that Mrs. Healy Senior was indeed at the meeting in the Bank on the 1st August, 2007, the learned trial judge makes no finding at all about her evidence that Mr. Leech assured Dr. Neil Healy that he was “in the clear with Ulster Bank”.

20. On the hearing of this appeal Mr. Denis McDonald S.C. for the Bank was absolutely clear that his reliance was on the learned trial judge’s factual findings. He did not dilute the strength of this submission by making any alternative or subsidiary point. He frankly conceded that there was on the transcript of the evidence certain material which supported Dr. Healy’s point of view but he simply said that the learned trial judge had found against him and that was that. He said that this Court was not entitled to engage in speculation outside the findings of the trial court, on such issues as to why a professional man such as Dr. Healy would have made the lodgement without any assurance that it wouldn’t be appropriated, as it indeed was about a year later, by set off.

Hay v. O’Grady and subsequent cases.
21. As we have seen, the thrust of the defendant’s case was that this Court could not interfere with the determination of the learned trial judge. Mr. McDonald relied very heavily on Hay v. O’Grady [1992] 210. He relies in particular on the passage from the judgment of McCarthy J. (with whom Finlay C.J., Hederman J., O’Flaherty J. and Egan J. agreed) under the heading “Appeal from a judge alone”, at p.215ff. This very well known passage refers to the established jurisprudence in appeals from jury verdicts in civil matters:

“… a verdict of a jury as to issue of facts and the inferences to be drawn from the facts as found will not be disturbed by this Court if there is evidence to support such findings and inferences. This is so even if this Court would itself have drawn inferences from those drawn by the jury”.

“1. An appellate court does not enjoy the opportunity of seeing and hearing the witnesses as does the trial judge who hears the substance of the evidence but, also, observes the manner in which it is given and the demeanour of those giving it. The arid pages of a transcript seldom reflect the atmosphere of a trial.

2. If the findings of fact made by the trial judge are supported by credible evidence, this Court is bound by those finding, however voluminous and, apparently, weighty the testimony against them. The truth is not the monopoly of any majority.

3. Inferences of fact are drawn in most trials; it is said that an appellate court is in as good a position as the trial judge to draw inferences of fact. (See the judgment of Holmes L.J. in “The Gairloch,” The S.S. Aberdeen Glenline Steamship Co. v. Macken [1899] 2 I.R. 1, cited by O’Higgins C.J. in The People (Director of Public Prosecutions) v. Madden [1977] I.R. 336 at p.339). I do not accept that this is always necessarily so. It may be that the demeanour of a witness in giving evidence will, itself, lead to an appropriate inference which an appellate court would not draw. In my judgment, an appellate court should be slow to substitute its own inference of fact where such depends upon oral evidence or recollection of fact and a different inference has been drawn by the trial judge. In the drawing of inferences from circumstantial evidence, an appellate tribunal is in as good a position as the trial judge.

4. A further issue arises as to the conclusion of law to be drawn from the combination of primary fact and proper inference - in a case of this kind, was there negligence? I leave aside the question of any special circumstance applying as a test of negligence in the particular case. If, on the facts found and either on the inferences drawn by the trial judge or on the inferences drawn by the appellate court in accordance with the principles set out above, it is established to the satisfaction of the appellate court that the conclusion of the trial judge as to whether or not there was negligence on the part of the individual charged was erroneous, the order will be varied accordingly.

5. These views emphasise the importance of a clear statement, as we made in this case, by the trial judge of his findings of primary fact, the inferences to be drawn, and the conclusion that follows.