The Court of Appeal have held that the High Court was correct in refusing to grant summary judgment against the borrowers, Mr and Mrs Burns. It held that the evidence was not adequate and was inadmissible because it was hearsay evidence, and the usual way around the difficulty was not open to the applicant because it was not a bank.
Promontoria had bought the debt from the lender, Ulster Bank Ireland Limited. The case is Promontoria (Aran) Ltd -v- Burns [2020] IECA 87
Background
Gerry and Anne Burns were pursued by Ulster Bank Ireland Limited in 2013 on foot of guarantees they had given the bank for borrowings for their limited companies.
In 2015 Ulster Bank Ireland Limited sold the loan to Promontoria by way of a Deed of Transfer and Promontoria then sought summary judgment in the sum of 27,000,000 euros in the High Court. The application for judgment was based on an affidavit by an employee of the asset manager (formerly Capita Assets Services (Ireland) Limited) who provides debt collection services to Promontoria.
Mr Burns challenged this affidavit evidence on the basis that the employee was not employed by the lender, Ulster Bank, and could not swear on behalf of Promontoria as he had no first hand knowledge of the borrowing or debt alleged. This was hearsay evidence and inadmissible, accoring to Burns.
The High Court agreed with this argument and refused the application for judgment on the basis that his evidence was hearsay evidence.
Bankers’ Books Evidence Act 1879
The Bankers’ Books Evidence Act 1879 provides an exception to the hearsay evidence rule and allows banks to establish the proof of a debt by reference to the books and records of the bank and a course of dealing between the parties.
Promontoria was seeking to rely on the course of conduct between Ulster Bank Ireland Limited and Burns and Promontoria’s books and records. However, the Court of Appeal held that this relief was not open to Promontoria because neither it nor its debt collection service provider were banks and, thus, their evidence did not come within the Bankers’ Books Evidence Act 1879.
Ms Justice Baker said that letters of demand or facility letters do not prove their contents: “What is required to be proved by Promontoria is that monies were advanced on foot of certain agreements for repayment and subject to certain conditions, including a condition providing for the payment of interest, and that the monies fall due for payment.”
And “Further, the letters of demand, at best, taken alone do not prove more than the making of a demand. They do not prove the debt”.
In conclusion, Promontoria is not a bank and cannot avail of Bankers’ Books Evidence Act 1879 and could not swear to relevant matters in their affidavit seeking summary judgment.
Read the full decision here. (J. Baker)
Read the concurring judgment here. (J. Collins)