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High Court of Ireland Decisions
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Cite as:  IEHC 140
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Judgment Title: Ulster Bank Ireland Limited -v- Dermody & anor
Neutral Citation:  IEHC 140
High Court Record Number: 2012 4093 S
Date of Delivery: 07/03/2014
Court: High Court
Composition of Court:
Judgment by: O'Malley J.
Status of Judgment: Approved
Neutral Citation:  IEHC 140
THE HIGH COURT
Record No. 2012/4093 S
ULSTER BANK IRELAND LIMITED
PADRAIG DERMODY AND MICHAEL DERMODY
Judgment of Ms. Justice lseult O'Malley delivered the 7th day of March, 2014
3. In the grounding affidavit, sworn on the 1st February, 2013, Mr. Evans gave his address as "Ulster Bank Ireland Limited" and described himself as being "employed by the Plaintiff as a Recoveries Clerk" and as being duly authorised to make the affidavit on behalf of the plaintiff. He gave his means of knowledge as being
5. At a hearing of the plaintiffs application to the Master for liberty to enter final judgment on the 10th July, 2013 the defendant submitted inter alia that the evidence of Mr. Evans was inadmissible as being hearsay, having regard to the provisions of the Bankers' Books Evidence Acts 1879-1959. The Master struck out the plaintiff’s motion on this ground (and one other that is no longer of concern).
6. Mr. Evans swore a further affidavit for the purposes of this appeal in which he averred that he was a "Level 1 Agent" in "the Collections and Recoveries Department situated in Belfast". In it he exhibits a power of attorney, executed in April 2011, by which officers of the plaintiff bank authorised, inter alia, persons holding his position and grade in Ulster Bank Limited to
[Emphasis added in affidavit.]
8. In this affidavit Mr. Evans goes on to set out the procedure followed by branch officials of the plaintiff bank in this jurisdiction where an account has gone into arrears. If resolution at branch level is not possible the account is sent forward to the Collections and Recoveries Department in Belfast. It is averred that the individuals dealing with the account in that Department have full access to the file and the full history of the account in question. (Mr. Evans has averred, for the avoidance of doubt, that he had such access to the second named defendant's file before swearing the affidavit grounding the motion in the Master's Court.)This process is described as
12. Mr. Langan avers that
• Ulster Bank Limited owns Hume Street Limited.
• Ulster Bank Holdings (ROI) Limited is 100% owned by Ulster Bank (Ireland) Holdings. The latter company is owned primarily by Ulster Bank Limited and in part by Royal Bank of Scotland and Hume Street Nominees Limited.
14. According to Mr. Langan, the Ulster Bank group transferred its banking business in this jurisdiction to Ulster Bank Ireland Limited in 2001. However, it is averred, the Collections and Recoveries Department in Belfast operates as the "debt collection" department of the various entities within the Ulster Bank Group.
15. Mr. Langan says that a number of persons are directors of both Ulster Bank Ireland Limited and Ulster Bank Limited. For some period of time the same person was company secretary for both entities.
4. A copy of an entry in a banker's book shall not be received in evidence under this Act, unless it be first proved that the book was at the time of the making of the entry one of the ordinary books of the bank, and that the entry was made in the usual and ordinary course of business, and that the book is in the custody and control of the bank.
Such proof may be given by a partner or officer of the bank, and may be given orally or by affidavit sworn before any commissioner or person authorised to take affidavits.
(a)in the case where the copy sought to be received in evidence has been reproduced in a legible form directly by either or both mechanical and electronic means from a banker's book maintained in a non-legible form, it has been so reproduced;
(b) in the case where the copy sought to be received in evidence has been made (either directly or indirectly) from a copy to which paragraph (a) of this section would apply:
(i) the copy sought to be so received has been examined with a copy so reproduced and is a correct copy, and
(ii) the copy so reproduced is a copy to which the said paragraph
(a) would apply if it were sought to have it received in evidence;
(c) in any other case, the copy has been examined with the original entry and is correct.
 Proof to which subsection  of this section relates shall be given-
(a) in respect of paragraph (a) or (b)(ii) of that subsection, by some person who has been in charge of the reproduction concerned,
(b) in respect of paragraph [b](i) of that subsection, by some person who has examined the copy with the reproduction concerned,
(c) in respect of paragraph (c) of that subsection, by some person who has examined the copy with the original entry concerned, and may be given either orally or by affidavit sworn before any commissioner or person authorised to take affidavits.
20. Section 9 of the Act of 1879, as amended by the Act of 1959 and the Act of 1989, defines the terms "bank", "banker" and "bankers' books". It is not necessary to set these out in full, but it may be noted that the expression "bank" specifically includes "Ulster Bank, Limited". Bankers' books include any records used in the ordinary course of business of a bank, including such as are kept in any non legible form (by the use of electronics or otherwise) capable of being reproduced in a permanent legible form.
22. With particular reference to Fergus, it was argued that the onus was on the defendant to say that the records were incorrect. If a challenge was made to their accuracy, Mr. Evans could be cross-examined and the question would then arise as to what weight should be attached to his evidence. His employment status was not what mattered- the issue was the extent of his knowledge and his authority to give the evidence.
23. As an alternative, the plaintiff says that having regard to the structure of the Ulster Bank Group, and to Mr. Evans' position within its debt collection department, he is an appropriate person to satisfy the requirements of the Acts. It was stressed by Mr. O'Donnell that this submission did not involve any question of piercing the corporate veil -rather, it was do with the way Ulster Bank Group structured its business. There were two corporate entities involved but both were part of "the Bank" and Mr. Evans was its employee. What happened to the defendant's account file was a "sending forward" and not a "sending out".
24. A final submission made on behalf of the plaintiff is that the word "may" as used in ss. 4 and 5 of the Act should be interpreted as enabling or permissory only.
25. On behalf of the defendant, Mr. Ross Maguire SC submitted that the fundamental issue in the case was the same as in Stapleton, in that the plaintiff was seeking to prove its case without adducing evidence from any person employed by it. Specifically, he argued that no-one had proved that the material examined by Mr. Evans related to the defendant's account with the plaintiff. It was stressed that the point being made was not the same as in Moorview, where the defendants had sought to argue that the official who signed the documentation had to be called in evidence.
26. With reference to the power of attorney, Mr. Maguire submitted that it did not relieve the plaintiff of the obligation to prove its case in the normal way, through an employee.
27. It was further submitted that evidence as to the relationship between the companies was irrelevant. In this regard the defendant referred to the authorities on "piercing the corporate veil" for the proposition that it was not open to a company to claim that the veil should be lifted simply because it suited its purposes.
29. In rejecting that submission, Clarke J. referred to paragraph 1301, Volume 1 of the 1st edition of Halsbury's Laws of England, where the main object of the legislation was stated to be the relieving of bankers from the necessity to attend court with their books under a subpoena duces tecum. Clarke J. continued:
31. A separate argument appears to have been made to the effect that Mr. Collison could not give evidence of matters in relation to which he was not personally involved. On this point Clarke J. said:
33. Having been called as a witness in the substantive hearing, he gave evidence of checking the electronic records of the bank in February 2011and of the figures underlying the bank's claim. He made it clear that he was relying on these records for an accurate statement of the amounts due. The plaintiff relied upon the passage from Moorview quoted in paragraph 30 above. Finlay Geoghegan J. agreed, saying
35. Ms Finnegan stated that she had had access to the records of Bank of Scotland and was able to give evidence from her knowledge of the books and records of the plaintiff.
36. In holding the proposed evidence to be inadmissible, Peart J. considered the provisions of the 1879 Act and the commentary thereon in Matthews and Malek: Disclosure (2000, Sweet & Maxwell) and Phipson on Evidence (2000, Sweet & Maxwell). He also considered the judgment of the Supreme Court in Criminal Assets Bureau v. Hunt (19th March, 2003).
37. The issue in Hunt was the admissibility of bank statements which had been provided pursuant to a statutory power to a Detective Garda, who in turn passed them on to an Inspector. The Inspector gave evidence that he had raised a tax assessment on foot of the contents.
38. Much of the argument in the case concerned provisions of the Criminal Assets Bureau legislation which are not relevant here. However, in holding that the documents were inadmissible, Keane C.J. (with whom the other members of the Court agreed) said
42. Having considered Moorview, Fergus and Stapleton, Ryan J. noted that Peart J. had not disagreed with the earlier two decisions but had distinguished them. He considered that the proposition, implicit in the defendant's submissions, that the only way the bank could prove its case was by reliance on the Acts was not consistent with these authorities, which held that a witness could give evidence by reference to the books and records of the company in order to demonstrate prima facie liability.
43. In the course of his judgment Ryan J. said
...The authorities and the textbooks make it clear that the purpose of the 1879 Act was not to facilitate banks in making their claims on foot of unpaid accounts or loans but rather to provide a practical and efficient manner of gaining access to the information in bankers' books, particularly when sought by third parties. Obviously, a bank can invoke the Act to prove specific entries in its books. As Peart J. describes in Stapleton, this relieved the bank from bringing to court their heavy tomes in which the transactions were recorded and producing the witnesses who had made the entries.
Although the evidence of the contents of the bank's records does not conform to the formal specifications in the 1879 Act as amended in a number of respects, it is nevertheless apparent as a matter of legitimate inference that the evidence of the defendant's liability emanates from the bank's books and records and that the statements are printed from its computer records. The point, however, is that the case is not about the 1879 Act and a copy of a bank book but about a liability arising on a contract entered into by written agreement signed by him and witnessed by his solicitor and an overdrawn current account. The bank is proving its case that the defendant defaulted on a loan..."
44. The issues to be determined are, firstly, whether the records in this case are admissible by way of a common law exception to the rule against hearsay and secondly, if they are not, whether there has been compliance with the statutory formulation of the Bankers' Books Evidence Acts, 1879-1959.
45. It is clear from the judgments cited above that Clarke J., Finlay Geoghegan J. and Ryan J. are of the view that business records of this nature are admissible as prima facie evidence of the truth of their contents, without reference to statute. Unfortunately, I find myself unable to reconcile this with the decision of the Supreme Court in Hunt and I have not been referred to any other authority which includes such records as exceptions to the rule at common law. (It is true that a number of nineteenth century decisions pre-dating the Act of 1879 held that entries made in business records were admissible, but this appears to have been so only where the person who made the entries was deceased.)
46. The problems that can arise in non-banking cases as a result of the hearsay rule were highlighted in the decision of the House of Lords in the well-known case of Myers v Director of Public Prosecutions  A.C. 1001. In the United Kingdom, legislation followed shortly afterwards in the shape of the Criminal Evidence Act, 1965. Since then the common law rules relating to hearsay in both the civil and criminal law spheres have been supplanted in that jurisdiction by a series of legislative measures which have significantly affected the rigidities of those rules.
47. In this jurisdiction, the Criminal Evidence Act of 1992 provides for the admissibility of business records in criminal cases. However, there has been no equivalent legislation in relation to civil matters and the common law exclusionary rule continues to apply save where modified by statute or by recognised, established exception.
48. In banking cases specific provision was made by the Bankers' Books Evidence Acts as amended. It is certainly the case that the original Act in 1876 (repealed and replaced by the 1879 Act) was intended to relieve banks of the inconvenience associated with a subpoena duces tecum in litigation between third parties. However, it is clear since, at least, the 1989 amendment (referred to in paragraph 18 above) the provisions of the Acts may also be availed of in proceedings to which a bank is itself a party. Both s.3 and s.6 are now applicable to all legal proceedings.
49. Following, as I am of course bound to, the Supreme Court decision in Hunt, I find that, in the instant case, the evidence of Mr. Evans is not admissible to prove the truth of the contents of the records unless it comes within the provisions of the Acts.
50. The issue that arises then is whether Mr. Evans can be said to be an "officer" of the plaintiff bank within the meaning of the Acts. In my view he cannot. I accept that for the purposes of the Acts an employee may be considered to be an officer of the bank. However, Mr. Evans is not an employee of the plaintiff, but of a separate legal entity. The plaintiff accepts that this is not a case in which the principles relating to lifting or piercing the corporate veil are relevant, but relies on the closeness of the corporate structure of the Ulster Bank Group. In my view the fact that the two companies are closely related does not alter their separate legal existence. I can see no legal or factual difference between the service that Ulster Bank Limited provides to Ulster Bank Ireland Limited in debt collection cases and that provided by Certus to Bank of Scotland, as considered by Peart J. in Stapleton.
51. This may be considered to be an artificial distinction, but the Ulster Bank Group structure (outlined in paragraph 12) may itself be said to be artificial. Presumably, that structure was created because it was thought to be advantageous to the participants. The benefits accruing to the existence of separate legal identities sometimes entail inconvenient consequences.
52. Finally, I do not consider that the word "may" as used in the Act should be read as simply enabling or permitting an officer or partner to give the evidence in question, while leaving open the possibility that some other, unspecified class of persons could do so in their stead. In my view it is clear that the intent of those sections is to restrict the class of witnesses to the categories mentioned. This contrasts with the provision in s.5 as amended, allowing evidence as to a comparison between an original and a copy to be given by "some person" who has examined both.