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  IECA 87
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.
A Supreme Court decision of November 2019 provides some hope for anyone facing a summary summons action against them to have a debt judgment awarded.
The case is Bank of Ireland Mortgage Bank and Joseph O’Malley and involved a vitally important decision of the Supreme Court as to the level of detail the lender must provide in setting out its claim in the Summary Summons.
This case was Mr O’Malley’s appeal against the decision of
the High Court to grant judgment against him in the sum of €221,795.53,
together with the costs of the proceedings. Mr O’Malley appealed to the Supreme
Mr O’Malley had borrowed €225,000 in 2008 but experienced financial
difficulty soon after. It was not disputed that Mr O’Malley received the money
from the bank.
A summary summons was issued on behalf of the bank and the
summons stated that he had neglected to pay the entire sum due of €221,795.53.
The bank issued a motion seeking judgment and the case came
before the High Court. Mr O’Malley’s defence was that the pleadings of the Bank
of Ireland in the case were defective insofar as the Bank had failed to provide
sufficient details as to how the figure of €221,795.53 was arrived at. Mr
O’Malley argued that he should have been able to see any bank surcharges being
pursued and any penalties. He had sought a detailed breakdown from the bank and
argued that he was entitled to a calculation from the bank showing how it
arrived at the figure claimed and the bank had simply furnished a statement of
The High Court granted judgment against Mr O’Malley, however
on the basis that the statement of account was sufficient, notwithstanding the
recognition that the bank had not particularised principal and interest in the
amount claimed. Mr O’Malley appealed this decision to the Supreme Court.
The Supreme Court
The Supreme Court first recognised the general principle and
test in a summary judgment case as follows:
“the fundamental questions to be posed on an application
such as this remain: is it “very clear” that the defendant has no
case? Is there either no issue to be tried or only issues which are simple and
easily determined? Do the defendant’s affidavits fail to disclose even an
The Supreme Court recognised that a dispute had emerged in
this O’Malley case as to whether the claim was sufficiently particularised in
the summary summons, in accordance with the rules of the superior courts.
The court noted that the obligation was to provide sufficient
particulars in a summary claim to ensure the litigants know the case they have
Mr O’Malley’s case was that there was confusion and
uncertainty on his part as to his liability in respect of the calculation of
monies owed and that the method of calculating the principal and interest must
be clear for the plaintiff to discharge the burden of proof.
The bank argued that the interest rate applied would be easy
to calculate by any competent professional by reference to the statement of
Mr O’Malley, in support of his case, relied on Allied
Irish Banks v The George Limited (High Court, 21 July 1975) and Allied
Irish Banks v Marino Motor Works Limited  IEHC 522.
The Court then looked at two questions:
The level of detail that needed to be included
in the Special Indorsement of Claim to be compliant with the Court rules
The evidence which needs to be put forward to
justify the grant of a judgment on a summary basis within the confines of a
motion for judgment
“In my view, it is appropriate to start by going back to
the underlying rationale for the requirement as to detail. Order 4, r. 4 simply requires that “all
necessary particulars” should be stated.
What particulars are “necessary” is the real question. But the rationale goes back at least 140
years, to the passage from the judgment of Cockburn C.J. in Walker v. Hicks,
already cited above. The defendant to a
summons is entitled to have sufficient particulars to enable him “to satisfy
his mind whether he ought to pay or resist”.
The Court notes that the special indorsement of claim sets
out the terms of the loan, the fact that it was accepted and the monies were
drawn down, and the Mr O’Malley had failed to repay the monies demanded.
However, no detail was given as to how the sum of €221,795.53 was calculated.
The only evidence of this was contained in the Statement of Account. That
statement of account, however, did not indicate what interest rate was being
applied from time to time. Also, there was no indication of how the closing
balance of €221,795.53 was calculated.
But it does not seem to me to be too much to ask that a
financial institution, availing of the benefit of a summary judgment procedure,
should specify, both in the special indorsement of claim and in the evidence
presented, at least some straightforward account of how the amount said to be
due is calculated and whether it includes surcharges and/or penalties as well
as interest. Indeed, if it really is as
simple as counsel suggested, then I cannot see any reason why Bank of Ireland
should not have set out those calculations.
A person confronted with a claim or a court confronted with a question
of whether there is prima facie evidence for that claim is entitled to at least
enough detail to know the basis on which the sum claimed is calculated. The defendant is entitled to that information
to decide whether there is any point in pursuing a defence or, indeed,
potentially expending monies on procuring professional advice in that regard. The court is entitled to that information to enable
it to form an assessment as to whether there is sufficient evidence to say that
the debt has been established on a prima facie basis. Neither the defendant nor the court should be
required to infer the methodology used, unless that methodology would be
obvious to a reasonable person or is actually described in the relevant
documentation placed before the court.
I would, therefore, conclude that there was insufficient
evidence before the High Court to justify determining that Bank of Ireland had
discharged the initial onus on it to produce prima facie evidence of its
debt. That quite a significant amount of
money was likely to have been due can hardly be doubted, but a party claiming a
liquidated sum gets the benefit of the summary procedure precisely because it
is said that a specified amount of money is due. In those circumstances, it is not
unreasonable to require the plaintiff to show some basis to explain the
calculation and justify, on a prima facie basis, the sum claimed
The Supreme Court then decided, in the interests of the
case, to remit the case back to the High Court and the Bank could then apply to
amend the special indorsement of claim to include such details as they may
think appropriate in the light of this judgment and to “tender such further
evidence as may be appropriate to fill the evidential gap identified”. It
will then be a matter for the High Court Judge dealing with those applications.
The conclusions of the Supreme Court judgment are as
8.1 For the reasons analysed earlier in this judgment, I would conclude that the special indorsement of claim in this case contains insufficient details of how the sum claimed is calculated so as to meet the requirements of O.4, r.4 of the Rules of the Superior Courts to the effect that all necessary particulars be provided. The information is insufficient to allow, as the jurisprudence requires, a defendant served with a summary summons in that form to know whether they should concede or dispute the claim. In so holding, I have indicated that, in my view, it is possible to rely on documentation available to a defendant (such as bank statements or statements of account) for the purposes of providing sufficient particulars in a special indorsement of claim, but only where the document or documents in question are incorporated by reference into the text of the endorsement. No such incorporation occurred in this case and I am, therefore, of the view that, even if the Statement of Account provided sufficient particularisation of the claim, the special indorsement of claim would nonetheless be defective because that document is not referred to.
8.2I have also set out the reasons why I consider that Mr. O’Malley is entitled to put forward arguments based on what was said to be a lack of evidence sufficient to warrant the grant of judgment against him. I have indicated the reasons why I consider that it is necessary for a financial institution suing for a liquidated sum said to be due on foot of a loan to at least put before the court a simple account of the basis on which it is said that the precise amount claimed is due. That obligation is prior to and independent of the obligation of a defendant to put forward a positive defence. In other words, the plaintiff must establish the liquidated debt on a prima facie basis before it is necessary for the defendant to establish any defence which meets the threshold for plenary hearing.
8.3For the reasons also set out earlier in this judgment, I would hold that there was insufficient detail in the evidence submitted to provide the Court with an ability to assess whether the precise claim to the debt alleged had been established on such a prima facie basis. In my view, the observations in the summary judgment jurisprudence, which indicate that a defendant should not be given leave to defend if the basis put forward for resisting the plaintiff’s claim amounts to mere assertion, cut both ways. A plaintiff, in order that a prima facie claim to the precise debt can be established, must do more than merely assert. While the basis for there being a claim in general terms was fully set out by the Bank, it does not seem to me that the evidence as to why the precise sum claimed was said to be due amounted to anything much more than assertion. In particular, it is not clear as to what calculation led to the assertion that the sum claimed was the precise amount due, nor as to the amount of capital and interest and whether the total included surcharges and/or penalties.
8.4In those circumstances, I would allow the appeal and remit the matter back to the High Court, subject to the comments contained in the “Consequences” section of this judgment as to how the matter should proceed from then on.
The good news for Mr O’Malley is that he has successfully
prevented this application for summary judgment against him by the lender.
However, the case has been sent back to the High Court to decide how the matter
is to proceed.
You might have come across a particular type of individual since the property/economy crash in 2007/2008.
He, for it was normally a man, was up to his eyeballs in debt and was a type of amateur lawyer who had decided that easy, technical defences could be put forward if and when the crap hit the fan and the lender brought him to Court to seek Judgment against him.
These technical defences, if you could call them that, included allegations of forged signatures on loan documents, claims of being forced to sign mortgages under duress, and so forth.
As well as these ‘defences’, which were bound to fail, you may recall the Kilkenny Trust which was a most capital swizz which promised to make your debt disappear by putting your property into a trust and subsequently leasing it back at a nominal rent, thereby staying in your home and putting it beyond the reach of the big, bad banks who had made a bad decision in giving you the money in the first place.
While some might generously describe this individual as an amateur lawyer others would call him a charlatan, a chancer, a snake oil salesman, a swindler, a huckster, a con artist, a mountebank-choose your poison.
Anyway, these technical defences, if you could call them that, were put forward in Court from time to time. And what happened?
Summary legal proceedings and summary judgment
Summary proceedings are the type of legal proceedings used to pursue a liquidated sum or specific debt. An application for a summary judgment will succeed if it is clear the defendant/debtor has no arguable defence. The defendant debtor, if he claims to have a defence, will seek, on that basis, to have the case heard in a plenary hearing in the High Court, and to avoid judgment.
The test of what is required in respect of the defence has been considered by the High Court in Aer Rianta v. Ryanair  4 I.R. 607 where it was held that the test was there is no probability of a bona fide defence.
In a 2014 case, IBRC v. McCaughey  1 IR 749, it was held that it must be clear there is no arguable defence.
The Court of Appeal has now issued a judgment in May 2018 which deals with the issue again in AIB v Stack & Stack  IECA 128. AIB were seeking a judgment against the Stacks for approximately €3,000,000.
The Stacks resisted the application and argued that they had a defence to the claim and wished the case to be transferred to the High Court for a plenary hearing. The basis of their defence included the following claims of the Stacks:
Mrs Stack’s signature was a forgery
no proof that the company had accepted the terms set out in the letter of loan sanction
the loan was not conditional on guarantees being provided
Mrs. Stack had no involvement in the day to day running of the company
Mrs. Stack had never received any independent legal advice.
The High Court refused to transfer the case for a plenary hearing and held that the mere assertion of an alleged fact, such as the claim of the forged signature, did not make it true and there was no evidence to support the assertion. In like fashion the High Court held that putting forward statements or assertions without supporting evidence or documentation was not enough to prove they had a genuine defence to the claim.
The Stacks appealed to the Court of Appeal and a decision was delivered on 10th May, 2018 in AIB v Stack & Anor.
The Court of Appeal agreed with the High Court and dismissed the appeal.
It held that the Court must be very clear that there is no defence to the proceedings before it will grant judgment. It acknowledged that the bar to have the case sent into a plenary hearing was a low one but the Stacks had failed to clear that hurdle as they were unable to put forward anything but bald assertions and statements.
The Court of Appeal confirmed that there must be a credible defence based on facts. In this case the Court held that the Stacks failed to put forward any evidence to support the facts which they alleged-for example, the allegation of the forged signature.
The bar to overcome to avoid judgment is a low one but the defendant must have a real defence based on facts supported by evidence. Statements or denials or assertions will not be enough.
And if you are approached in a bar by a middle aged man who claims to have found an easy way to avoid judgment for an eye watering debt, treat him with great caution.