Bank Debt/Summary Judgment Cases-Lessons from the Supreme Court in Bank of Scotland PLC v Jerry Beades

You may have heard of Mr. Jerry Beades, who is a well-known anti eviction activist and businessman.

The High Court in 2012 granted a judgment against him in favour of the Bank of Scotland plc in the sum of €9,684,987.04 together with costs. This judgment was in respect of a number of loans Mr. Beades had obtained from the bank.

Mr. Beades appealed this decision to the Court of Appeal and the case ended up in the Supreme Court who delivered a judgment on 29th July 2019. (Read the full decision here).

Mr. Beades represented himself in the High Court and Supreme Court and a review of the Supreme Court decision is worthwhile on a number of levels. Let’s take a look at the Supreme Court decision.

Supreme Court

The legal proceedings had originally commenced by way of a summary summons and Mr. Beades eventually filed a replying affidavit before the case was heard in the Commercial Court.

The claim by the bank was on foot of four facility letters and the application for judgment was grounded on sworn statements (affidavits) of Bank of Scotland and Certus employees.

Mr. Beades swore a replying affidavit in which he made a number of claims:

  • That one of the bank affidavits was ‘fraudulent’ by reason of being sworn in front of a person who Mr. Beades asserted was not a registered practicing solicitor in Ireland
  • The bank was in breach of its contract and its duty of care to him
  • There were delays with drawdown of facilities
  • The bank was in breach of its own terms and conditions by reason of its alleged failure to serve a demand letter on Mr. Beades at his Fairview address

The High Court found against Mr. Beades, however, because he had not denied in any of his affidavits signing the loan agreements or receiving the money from the lender. Accordingly, he had not demonstrated any arguable issued to prevent judgment being granted against him and judgment was granted to the bank. (Read the High Court decision here).

Even if he had a counterclaim it would not be a defence to the summary judgment application because Mr. Beades had put into evidence the following extract from the bank’s terms and conditions,

‘All sums payable in respect of principal interest or otherwise shall be payable gross without deduction on account of taxes, any set-off or counterclaim or on account of any charges, fees, deductions or withholdings of any nature . . .’

The substantive issue-did you receive the money?

The Judge in the High Court had asked Mr. Beades directly if he had received the money.

Mr. Beades viewed this as an inappropriate question but the Supreme Court agreed with Kelly J. of the High Court that this was the substantive issue in the case.

The Supreme Court went on to point out that when you are defending a debt claim such as this one you must pin your colours to some mast or other. That is to say, the defendant could claim he never made the agreement, or it is a case of mistaken identity, or an agreement was made but not performed, or that he did not receive the money.

He could also argue that he received the money but the agreement was breached by the lender, or that there was some issue of illegality, or undue influence, or unconscionability, or estoppel which prevents recovery.

This is a non-exhaustive list of issues which could have been advanced by Mr. Beades but he did not put any of these arguments forward and the Supreme Court went on to point to the old rule that the denial of a debt alone is not a defence.

Moreover Mr. Beades made a number of observations at the Supreme Court appeal which were entirely consistent with him having received the money-for example, ‘they gave me the wrong facility’ and ‘the bank continued to release funds for the building work. If the bank seriously thought it had no obligation to do so, they would have cut off the flow (especially when they had liquidity problems)’ and ‘the unfinished development at Fairview could be finished and the bank could get its money back, why this Mexican standoff?’

All of these statements were admissions that he had received the loan monies.

The Supreme Court also noted that notwithstanding that it was 7 years since the bank had obtained judgment against Mr. Beades he had never put forward the argument that the bank had not lent him the money.

Mr. Beades’ Arguments

The arguments put forward by Mr. Beades were based on technical matters relating to procedure, the admission of evidence, and the swearing of affidavits.

Mr. Beades had also put forward the argument that had the High Court case been heard by a different Judge there would have been a different outcome (Mr. Beades had claimed bias against him in the High Court although did not repeat this in the Supreme Court appeal).

The Supreme Court did not agree that a different judge would have arrived at a different decision and judgment would have been awarded against him based on the facts and evidence.

Inadmissible Evidence

Mr. Beades put forward the argument that the evidence to be offered by the bank must be sworn by a bank employee and the evidence of an employee of Certus, who provided support services to the Bank of Scotland, was insufficient and inadmissible. He was relying on 4 of the Bankers’ Books Evidence Act 1879.

This argument, held the Supreme Court, was misconceived as the section on which Mr. Beades relied referred to an entry in a book held by the bank. This did not cover a situation where someone was giving sworn evidence on affidavit as to facts within their knowledge.

The Supreme Court referred to Ulster Bank Ireland Ltd. v. O’Brien [2015] IESC 96, [2015] 2 I.R. 656 as authority for the proposition that “an affidavit sworn by a person other than the plaintiff who can swear positively to the relevant facts is sufficient”.(J. Laffoy)

The essential fact in this case was the Supreme Court was satisfied that Ms Tracy, who swore the affidavit, was capable of swearing positively to the facts showing that the Bank of Scotland was entitled to judgment.

In summary the Court held the contention that there was no admissible evidence of the arrangements between the bank, its predecessor, and the borrower, Mr. Beades, was misconceived.

No demand letter served

Mr. Beades also made the argument that a letter of demand was not properly served upon him.

However, the Supreme Court held that Mr. Beades had failed to explain why evidence of delivery of a demand letter was a necessary proof when the original loan was for a facility for a fixed term and repayment was to be made at the end of the facility term and the term was up.

Affidavit evidence inadmissible

Mr. Beades had also raised a question about a further affidavit by the Bank’s side by reason of an allegation of fraud as a consequence of the solicitor who witnessed it being allegedly not a solicitor practicing in Ireland. He withdrew the allegation of fraud in the Supreme Court and accepted the solicitor was a registered practicing solicitor.

The Supreme Court also held

“In any event, O. 40, r. 15 RSC provides that “the court may receive any affidavit sworn for the purpose of being used in any cause or matter notwithstanding any defect by misdescription of parties or otherwise in the title or jurat, or any other irregularity in the form thereof…”.

Decision

The appeal was dismissed.

Read the full Supreme Court decision here: Bank of Scotland PLC v Beades [2019] IESC 61

Read the High Court case here: Bank of Scotland PLC v Jerry Beades

Conclusion

If you are facing debt collection proceedings the substantive, fundamental issue is whether you received the money or not. If you did it is unlikely any technical defence or arguments based on alleged procedural deficiencies will save the day for you.

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