Court of Appeal: Promontoria’s appeal on inadmissible hearsay dismissed

The Court of Appeal has upheld the order of the High Court that the evidence of a loan servicer was inadmissible hearsay.

The proceedings concerned the admissibility of the evidence adduced by Promontoria in its application for summary judgment against Gerry Burns and Anne Burns, and whether it was sufficient to support the grant of judgment.

The proof of debt was complicated by the fact that Promontoria is not a bank and is an assignee of the original lender.


The proceedings were issued in December 2013 by Ulster Bank Ireland Limited, with which Mr and Mrs Burns and companies associated with them had an ongoing business relationship spanning many years. The claim against Mr Burns was largely on foot of various guarantees entered into with Ulster Bank Ireland related to the indebtedness of four limited liability companies pleaded to be in default.

In December 2015, Mr Justice Tony O’Connor granted Ulster Bank an order amending the title of the proceedings to substitute for it as a plaintiff its successor in title, Promontoria, pursuant to evidence of “A Global Deed of Transfer” made on 16 December 2014 by which Ulster Bank Ireland Limited assured certain defined loan assets to Promontoria. Promontoria then sought liberty to enter judgment in the sum of approximately €27 million.

Promontoria’s application for summary judgment was grounded on the affidavit of Andrew Harris, a senior asset manger at Link ASI Limited, formerly Capita Assets Services (Ireland), the “servicer” which administers debt collection of behalf of Promontoria. 

Mr Burns responded by way of affidavit in which he averred that Mr Harris was “not directly employed by the plaintiff and is not a party to the within proceedings and cannot make any averments on behalf of the plaintiff. He has no first-hand knowledge of any of the events to which he refers and is relying on hearsay. Hearsay evidence is no evidence.”

In the High Court, Mr Justice Seamus Noonan held that the evidence of a loan servicer was inadmissible hearsay. He said that Mr Harris was not in a different position to “any person who was given authorisation by the plaintiff to swear and affidavit”, and that the mere fact that a plaintiff authorises a person to swear an affidavit is “of no materiality in the context of whether it is hearsay or not.”

Promontoria appealed the judgment on the basis that the High Court had erred in fact and  law in holding that neither deponent could, in the language of Order 27, r.1 of the Rules of the Superior Courts, “swear positively to the facts” averred to. It argued that Mr Justice Noonan failed to consider whether the documents actually amounted to hearsay evidence rather than original evidence. 

Hearsay evidence

The Bankers’ Books Evidence Act 1879 provides a means by which a bank, as defined in section 9, may establish proof of a debt whether on behalf of a third party or in a claim for judgment for monies due to itself. That created “an important, and often used, exception to the hearsay rule in respect of the receivability of documents and evidence adduced on the part of a bank”, both for the purposes of litigation in which the bank is a party, or where the bank gives evidence on behalf of a third party.

The Court of Appeal held that as Promontoria was not a bank, pursuant to the meaning provided in section 9 of the Bankers’ Books Evidence Act 1879, it was not entitled to rely on the provisions of the 1879 Act with regard to the statutory exception to the hearsay rule

Delivering the lead judgment, Ms Justice Marie Baker said that the issue of the admissibility of the evidence brought to bear “a number of somewhat inconsistent and discordant judgments of the superior courts and more especially the Supreme Court, concerning the hearsay rule of evidence and the reach of the various statutory and common law exceptions to the strictness of its application”.

She cited the judgment of Ms Justice Mary Laffoy in Ulster Bank (Ireland) Limited v O’Brien [2015] 2 I.R. 656 which bolstered the judgment of Mr Justice Frank Clarke in Moorview Developments Limited v First Active plc [2010] IEHC 275 wherein he ruled that a plaintiff could sue on foot of a contract by reference to books and records and where it was possible to infer the reliability of the records from a course of dealings, and the prima facie credibility and reliability of evidence from business records.

Promontoria relied on the dealings between the Burns and Ulster Bank, as well as the fact that Mr Harris’ averments arose from his examination of the books and records of Promontoria and argued that the evidence was supported by a statement of account.


Ms Justice Baker said that it was “difficult to discern a clear line of authority” on the issue. However, she concluded that the present state of the law is that in order to rely on evidence which does not come within the Act of 1879 because the plaintiff is not a bank. The court found that the Global Deed of Assignment is a document the proof of which by production is not hearsay evidence. 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.” She went on to find that the content of the letters is relevant to show that “demand was made but not whether the debt was due, or by whom and in what amount”.

She said that the documents of loan does not amount to anything other than a link in “the chain of activity leading to the completion of a contract by acceptance of its terms, and there is no statement in the letters of offer which have a legal effect without proof of acceptance. 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”.

Mr Justice Maurice Collins delivered a concurring judgment. He noted that the “route to Order 37 summary judgment is fraught with difficulty” for plaintiffs who are suing on foot of an assignment of debt, particularly assignees that are not banks within the meaning of section 9 of the Bankers’ Books Evidence Act 1879. He said that there are “many such plaintiffs that appear frequently before the courts. Promontoria is one. It is not a bank and therefore cannot avail of the provisions of the Bankers’ Books Evidence Act.” He held that neither Promontoria nor the servicer were in a position to offer averments to relevant matters, and opined that the “law in this area is in a most unsatisfactory state”.

The Court of Appeal dismissed Promontoria’s appeals.

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