Supreme Court holds that debt must be particularised in summary proceedings

Speed Read

In Bank of Ireland Mortgage Bank v. O’Malley [2019] IESC 84, the Supreme Court has indicated that, if a lender wishes to use the High Court summary summons procedure for debt recovery, each of the component elements of an overall debt being claimed (i.e. principal, applicable interest rates, bank charges etc.) need to be specifically explained.

The Supreme Court allowed the Defendant's appeal against the High Court order of Cross J. entering summary judgment against the Defendant in the sum of €221,795.53 together with costs. The special indorsement of claim on the summary summons contained only a bare assertion of the amount claimed, although the affidavit evidence relied upon by the Plaintiff  did exhibit a statement of account in relation to the relevant mortgage loan facility.

Legal issue

The central issue in the appeal concerned the level of detail that must be set out in a claim initiated by way of summary summons – both in the summons itself, and in the evidence put before the court to substantiate the claim. The defendant in the matter before the court claimed that it was not possible to discern from the pleadings which elements of the sum sought constituted principal, which elements constituted contractual interest, and whether bank surcharges and penalty sums had been included in the sum claimed.

Judgment

Clarke CJ held that a court may be entitled to take into account, in assessing whether a debt claim has been adequately particularised, any documentation that was sent to the defendant before proceedings were commenced. He found that the provision of information in this manner might justify a shorthand way of describing how the amount due was calculated in the summons, but details of documentation sent should at least be referenced in the special indorsement of claim on the summons.

In the case before the court, the special indorsement of claim was insufficient, as it contained no detail as to how the overall sum due and owing was calculated. The court found that it could not see that "a person receiving such a summons could have the 'necessary' details to decide whether they should concede or resist". The court was satisfied that other relevant elements of the claim had been fully established, but notwithstanding that,  it found that it would not have been obvious to a reasonable person how the global figure was reached. 

The court held that it was not "too much to ask that a financial institution, availing of the benefit of the summary judgment procedures, 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". 

Thus the court concluded that there was insufficient evidence before the High Court to justify the decision that the plaintiff had satisfied its obligation to provide prima facie evidence of its debt. It allowed the appeal and remitted the matter to the High court where the plaintiff could apply to amend its special indorsement of claim, and provide further evidence.

Implications

This decision will impact on the way in which special indorsements of claim must be drafted if a lender wishes to use the summary summons procedure, and is likely to increase the level of evidence required to support an application for summary judgment.

For further information plase contact Helen O'Connor, Knowledge Lawyer in the Litigation and Dispute Resolution Department.

Date published: 5 December 2019