High Court ruling throws Ulster Bank debt collection into doubt

Ulster Bank’s ability to collect its debts in the Republic has been thrown into question by the courts. The

High Court ruled yesterday that Dublin-based Ulster Bank Ireland Ltd was not entitled to rely on sworn evidence from an employee of Belfast-based Ulster Bank Ltd when seeking a judgment.

Ms Justice Iseult O’Malley yesterday refused to enter a final judgment for Ulster Bank Ireland against Mr Michael Dermody for €102,386 on the basis that the evidence given in the case by an employee of the Belfast operation amounted to hearsay because it was a separate legal entity.

Ulster Bank Ltd deals with debt collection on behalf of Ulster Bank Ireland and the decision has significant consequences for the bank’s debt collections procedures.

The bank’s lawyers indicated they intended 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, that 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 based 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”.

Changed affidavit
In a later affidavit, Mr Evans was described as "Recoveries Clerk, Collections and Recoveries Department, Danesfort, Stranmillis Road, 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 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.