Court of Appeal: Adducing new arguments on appeal in summary cases only permitted in exceptional circumstances

Killian Flood BL

About this case:

• Citation:
  [2021] IECA 130
• Judgment:
  External link
• Court:
  Court of Appeal
• Judge:
  Mr Justice Seamus Noonan

The defendant attempted to adduce new grounds of appeal based on the important decisions in Bank of Ireland Mortgage Bank v. O’Malley [2019] IESC 84 and Promontoria (Aran) Limited v. Burns [2020] IECA 87.

However, in an ex tempore decision, the Court of Appeal refused the application on the basis that the new grounds of appeal were not raised at all in the High Court hearing.

In so holding, the court considered the effect of the recent Supreme Court decision in Ennis v Allied Irish Bank plc [2021] IESC 12 regarding the proper approach to new grounds of appeal applications.

Background

The plaintiff, Promontoria (Arrow) Limited, had bought the defendants’ loans from National Asset Loan Management DAC. The loans were worth approximately €1.8 million and the plaintiff issued summary proceedings when the loans were not repaid on demand. The defendants were Mr Cathal Mallon and Mr Michael Shanahan.

There was no dispute that the loan facilities had been executed, the monies had been drawn down and that they had been used for the purchase of a development site.

In defending the summary proceedings, Mr Mallon appeared as a litigant-in-person. In two affidavits, Mr Mallon claimed that he had an agreement to limit his personal liability with the Bank. It was argued by Mr Mallon that the proceedings had to be sent to plenary hearing, so that he could receive discovery of emails that would indicate the negotiations with the Bank limiting his liability.

Importantly, Mr Mallon never raised any issue regarding the proper particularisation of the debt. Further, Mr Mallon did not raise an issue with Promontoria’s proofs or the entitlement of its deponents to swear to the evidence.

In March 2018, summary judgment was granted against Mr Shanahan, who did not appeal. Later, in October 2018, summary judgment was granted against Mr Mallon, which was stayed pending an appeal. The High Court was not satisfied in either case that the defendants had established an arguable defence and that the claims of a “non-recourse loan” were not credible. Further, Mr Mallon’s claims regarding the discovery of documents were determined to be bald assertions.

For the appeal, Mr Mallon was legally represented. Three grounds were contained in the Notice of Appeal, all of which related to issues raised during the High Court hearing. However, Mr Mallon subsequently brought a motion to adduce further grounds of appeal.

The first ground took issue with the plaintiff’s particularisation of the debt, per the O’Malley judgment. The second ground derived from the Burns decision and claimed that the plaintiff’s evidence was not sufficient and the business records failed to establish a course of dealing between the parties.

Court of Appeal

Delivering the ruling of the court, Mr Justice Seamus Noonan began by outlining the decisions in O’Malley and Burns. The court noted that O’Malley did not introduce a new law, but rather restated the well-established principle that claims had to be fully particularised. The same was true in the Burns decision, which highlighted issues of hearsay evidence for assignees of loans, but did not introduce any new rule of evidence for summary judgment cases. In both scenarios, it was always open to the defendant to raise these issues in his defence of the proceedings.

If either of the new points of appeal had been raised in the High Court, the plaintiff would have had an opportunity to amend its pleadings or swear further affidavits, the court said. Further, the fact that the defendant was a litigant-in-person for the High Court hearing was not an acceptable excuse for not raising the issues at first instance. It was held that “the rules are the same for everyone, be they represented or not”. (Lough Swilly Shellfish Growers Co-Operative Society Limited v. Bradley and Ors. [2013] 1 I.R. 227.

The court relied on the previous authorities in AIB v O’Callaghan [2020] IECA 318 and Havbell DAC v Hilliard (unreported, Court of Appeal, 18 December 2020), which held that it was not appropriate for particularisation of a debt to be raised only at an appeal stage.

However, the court noted the recent decision in Ennis made it clear that the threshold for introducing new evidence or arguments on appeal was “somewhat reduced” in summary proceedings. Considering the judgment in detail, Mr Justice Noonan held that the decision in Ennis had not “recalibrated the balance of this area of law in a dramatic way.” While Ennis allowed for greater flexibility in adducing new evidence or arguments, it did not displace the general principle that an appellate court should not hear matters which were not argued/determined in the court below, save in exceptional circumstances (K.D. v M.C. [1985] 1 IR 697).

The court distinguished Ennis from the present case, stating that the factual circumstances were “truly exceptional and placed it within a rare category” of cases that it was appropriate to adduce new arguments on appeal. The present case was straightforward and there were no exceptional circumstances which warranted the new arguments to be made.

Conclusion

While the court sympathised with the difficulties Mr Mallon encountered in the High Court regarding his inability to pay lawyers at the time, it did not give rise to a “right to agitate a new case on appeal”.

The case law required the court to be mindful of an injustice created where new arguments were made. The defendant did not satisfy the court that it was appropriate to allow the application. As such, the application was dismissed.