Supreme Court: Mortgage bank must provide further details in application for summary judgment
A man who appealed against the High Court’s decision to grant summary judgment of €221,000 to Bank of Ireland Mortgage Bank has successfully argued that the bank provided insufficient details to be entitled to its claim.
Chief Justice Frank Clarke said the obligation 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”.
Mortgage loan facility
In 2008, Bank of Ireland Mortgage Bank (BOI) advanced a mortgage loan facility of €225,000 to Joseph O’Malley, secured by legal charge over a property in Westport, County Mayo.
After the agreement was entered into, Mr O’Malley experienced financial difficulty to the extent that full monthly repayments on the loan ceased in November 2011. In January 2014, BOI sought summary judgment for €221,795.53.
In the High Court in July 2014, Mr O’Malley argued that BOI’s pleadings were defective due to a lack of detail concerning the sum sought, and that in order for BOI to be entitled to summary judgment, there had to be sufficient calculation set out as to how the amount claimed was due.
Considering Mr O’Malley’s argument that the requirements of the law as stated in Allied Irish Banks v The George Ltd (Unreported, High Court, 21 July 1975) had not been complied with, Mr Justice Kevin Cross noted that BOI’s affidavit did not “particularise principal or interest as you would like it”.
However, he said the Statement of Account provided was sufficient to allow Mr O’Malley “to know in terms of more modern law as to what case he has to meet…”. Stating that Mr O’Malley was clearly in breach of the loan agreement, Mr Justice Cross held there was “sufficient evidence there to satisfy the requirements of law” and granted judgment in favour of BOI for €221,795.53
Mr O’Malley sought an order setting aside Mr Justice Cross’s decision.
BOI contended that the sole issue was whether the claim contained in the summary summons has been adequately particularised having regard to the requirements of Order 4, rule 4 of the Rules of the Superior Courts.
Chief Justice Clarke said it was well settled in the case law that “the general obligation to provide sufficient particulars in a summary claim has the objective of ensuring that litigants properly know the case which they have to meet” (Walker v Hicks (1877) 3 QBD 8 considered). Chief Justice Clarke also considered Allied Irish Banks v Pierce  IECA 87, in which Mr Justice Gerard Hogan stated that it was for the Court to consider whether, in the absence of certain additional particulars, “the fair defence of the proceedings would be compromised”.
It was BOI’s case that the nature of the claim against Mr O’Malley was such that the Special Indorsement of Claim made the case clear, given the references to the Statement of Account and the 2008 loan offer letter.
Mr O’Malley submitted that the Court had to determine the detail required to be included in the pleadings, and also the evidential burden of proof to be discharged by the plaintiff on a summary application such as this. He said there was confusion regarding the calculation of the monies allegedly owed to BOI, and that for BOI to have discharged the burden of proof it had to establish the amount of the principal due and owing and the amount of interest accrued and its method of computation.
Mr O’Malley relied on in Allied Irish Banks v The George Ltd, which held that the Special Indorsement of Claim as pleaded was sufficient but that the affidavit verifying the plaintiff’s claim was defective. In those circumstances, it was necessary to “…identify and prove the amount of the principal and to aver and prove what was the current rate of interest in force during the currency of the debt and if applicable to aver and prove what were the normal bank charges due in the same period…”
No more than mere assertion
Chief Justice Clarke said that the Special Indorsement of Claim contained insufficient details of how the sum claimed was calculated, and therefore did not meet the requirements of Order 4, rule 4 of the Rules of the Superior Courts.
Finding that the information was not sufficient to allow Mr O’Malley to know whether he should concede or dispute the claim, Chief Justice Clarke added that it was possible to rely on available documentation (such as bank statements, etc) but only where such documents “are incorporated by reference into the text of the endorsement”. However, no such incorporation occurred in this case. Chief Justice Clarke said 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”.
Stating that it was “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”, Chief Justice Clarke said that obligation was “prior to and independent of the obligation of a defendant to put forward a positive defence” – i.e. “the plaintiff must establish the liquidated debt on a prima facie basis” before the defendant is required to establish an arguable defence.
Allowing the appeal and remitting the matter back to the High Court, Chief Justice Clarke said the amount BOI said was due was no more than a mere assertion, and said that “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”.
© Irish Legal News Ltd 2020