Proving Banks Debts: Clarity at Last
18 Dec 2015
In O'Brien the bank claimed repayment of three loans totalling €888,000. It grounded its application for summary judgment on an affidavit of a relationship manager that the facilities were offered to the defendant borrowers who subsequently defaulted. The affidavit set out the amount due and exhibited a print-out of the relevant accounts. The relationship manager was not cross-examined by the defendants on her affidavit. Nor did the defendants lead any evidence in defence of the claim.
The Master of the High Court (an administrative judicial officer) agreed with the defendant's argument that the bank's evidence was hearsay because it had not complied with BBEA. BBEA sets out a process of proving entries in "bankers' books" whereby the witness, being a partner or officer in the bank, gives evidence of having compared the copy entries with the originals and that the entries were made in the ordinary course of business. That gives a flavour of how outmoded the BBEA is in this highly computerised age.
The High Court set aside the Master's decision on appeal by the bank. The borrower's appeal to the Supreme Court failed. Although different approaches were taken by each of the Supreme Court judges, the common theme in their judgements was that the bank had proved its case by adducing admissible evidence. It had proved the loan and the borrowers' default. The borrowers had adduced no evidence whatsoever, still less evidence that disproved or undermined the bank's claim.
Laffoy J held that the BBEA had no relevance to the case and the bank did not have to rely on the processes in that Act simply because it was a bank. It was entitled to prove its case like any other litigant. Laffoy J approved previous High Court decisions stating that a bank witness is entitled to give evidence of the bank's records showing the amount due by a customer of that bank. That evidence and those records provide prima facie evidence of the liability. Charleton J concluded that the absence of a denial of the loan and default was significant given the bank's evidence. MacMenamin J held that the contention that the witness' evidence was hearsay was wrong. The witness was the bank's main witness and had signed the letter of demand. Her evidence was first hand testimony of her own actions: this was not hearsay.
Legal commentaries on recent decisions often welcome them as providing "clarity" to difficult areas of the law. That observation is especially true of this decision. The next logical step is to ask whether the BBEA serves any useful purpose and on that basis should be repealed.
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