THE HIGH COURT[2015 No. 1272 S.}
ALLIED IRISH BANKS PLC
DECISION of the MASTER of the HIGH COURT delivered on the 26th day of November, 2019
1. The fallout from the economic collapse ten years ago included a flood of claims by banks. Virtually all of these ended up in applications for summary judgment on the fast track summary summons Order 37.
2. Many defendants resisted these claims, but only a small number could be said to have put forward an “arguable” defence. To avoid summary judgment on affidavit, a defendant must be given “leave to defend” on the basis of an arguable defence. Because of their experiences over the past ten years, we now have a whole generation oflawyers – some now judges – who do not know how to argue their client’s entitlement to defend the case in a full trial, and a generation of bankers who think its fair game to push for a “balance of probability” judgment on the basis of the affidavits without discovery or cross-examination. The test is not, and never has been, a balance of probability. It is: “is it very clear that the defendant has no defence, not even an arguable defence”. That is the threshold. It is low.
3. It is not for nothing that Michael McDowell (former Attorney General) asked (in his contribution to a book of essays in honour of the late Rory Brady SC (“Law and Government” Round Hall):- “Is it not the first duty of lawyers to form an understanding of the purpose and design of the system of laws in which they work and by which they, like everyone else, are bound? “
4. Here then is the “purpose and design” of the summary summons procedure. Of course bank creditors should get fast track judgment when there is no arguable defence. But if the judgment instead turns on the credibility of the defendant, the, assessment must be on the balance of probability. And if the balance of probability is the yardstick, the defendant is entitled to confront and cross-examine the witnesses disputing his evidence. He is entitled, in natural and constitutional justice, to a full plenary hearing. Some lawyers and some judges appear not to understand this. Do they understand, for example, the word “arguable”? Quite clearly, a defence which qualifies as “merely arguable” is not one which rates as a “probable” litigation outcome in the defendant’s favour. It’s just a possibility.
5. Even under the new rules in the UK, where the test is no longer an “arguable” defence, but a “real prospect of success”, the balance of probability test is not appropriate. See Royal Brompton Hospital NHS Trust v. Hammond No. 5  AER (D) 130:- “Since the standard to be applied is a “real prospect of success “, it would be surprising if the court could give judgment, without a trial, adopting the standard applicable to a trial, namely, the balance of probability”.
6. But we do not need to look to UK precedent to help us. The “leave to defend” jurisprudence, which is the flip side of the summary judgment order, is well known to 3 judicial review practitioners. It is the leave application at the judicial review ex parte stage. In both instances, a litigant is applying to be allowed to fully argue his case and his application must be grounded in a reality which is set out in affidavit: a factual matrix which is asserted, though not proved in satisfaction of any burden standard. In G v. DPP  1 IR 374, Finlay C.J. set out the tests to be applied in considering whether leave should be granted, and included:- “(e) that the facts averred in the affidavit would be sufficient, if proved, to support a statable ground for the form of relief sought by judicial review. “(c) that on those facts an arguable case in law can be made that the applicant is entitled as to the relief which he seeks “.
7. Now here is the problem as I see it. If new rules are proposed shortly here which mirror the UK’s “real prospect of success” test, defendants may be denied natural justice if summary judgments are casually handed down on a prospective balance of probability basis. This, in turn, will mean Ireland will be in the dock for failing to operate its judicial arm in accordance with the European Convention of Human Rights.
8. Can anyone seriously dispute that scenarios that were thought to be “farfetched” back in 2000 (particular in the area of banking) are now often, unfortunately, astonishing but true.
9. It is not often referred to now, but Article 36(iii) of the Constitution leaves “all matters of procedure” in court to the Oireachtas, not the judges. Back in 2011, the Irish Human Rights Commission wrote to the Minister for Justice and the Chief Justice and proposed changes to Article 37 of the Rules of the Superior Courts. If new model rules are to be considered, stakeholders should be consulted, and the Oireachtas should oversee the final shape of the rules.
10. The real danger is that judicial statements as to the law (which are outlined hereinafter) will not be drawn to the attention of the judge by counsel appearing on a bank’s behalf, particularly when the defendant represents himself in court. The obligation on counsel to do so, in discharge of his duty to the court, is often only paid lip service. The purpose of the duty is to ensure that the judge makes his decision in the full knowledge of relevant, and especially recent, case la~. In this way, the law is applied consistently even by judges who were not familiar with this body of precedent.
11. Curiously, I have not seen much use being made by other judges of the Chief Justice’s “double negative” formula on summary judgement applications when adjourning for plenary hearing:- “I am not satisfied that the defendant does not have an arguable defence”. (emphasis added). Perhaps it is difficult to understand?
12. Delany and McGrath on Civil Procedure, 4th Ed refers us to most of the leading cases on this point, but they fail to quote from a 2015 judgment of Clarke J. (then of the High Court), namely Pansea Limited v. Home Appliance tla DID Electrical  IEHC 5, in which, at para. 6 he said:- “Provided a defendant comes up with any arguable defence, a bid to recover monies from such defendant by way of summary summons is almost destined to fail,… Indeed given the present unlikelihood of success for a plaintiff in summary proceedings, except in the most clear-cut and straightfOrward o(cases, (emphasis added) is an aspect of such proceedings that the well-advised client would do well to bear in mind before commencing same “. And see the recently published Article by Barrett 1. (“Aer Rianta revisited”) Commercial Law Practitioner, October, 2019 where he concludes that “somewhat counter instinctively” the fast track is quite busy even though “the practical result of Aer Rianta would be that (i) leave to defend would typically be granted more often than not, with the result that (ii) summary application would generally be considered an unattractive way for a creditor to proceed against a debtor.
13. In a 2009 judgment, GE Capital v. Aktiv Kapital  IERC 512 Clarke 1. develops the leave to defend test by observing at 6.5, that:- “Where a defendant establishes a credible basis for suggesting that witness will be available who will depose to facts which might arguably give rise to a defence, the fact that the evidence of those witnesses is not strictly speaking in the form of an affidavit sworn by such witness will not be necessarily be fatal”. And again, at 6.6:- “It seems to me that where a defendant satisfies the court that there is a credible basis for asserting that a particular state of facts might exist which state of facts, if same were in truth to exist, could be established by appropriate discovery and/or interrogatories, then such defendant should be entitled to liberty to defend. It should, again, be emphasized that mere assertion is insufficient. A credible basis for the assertion needs to be put forward even if it is not, at the stage of the motion for summary judgment, possible to put before the court direct evidence of the assertion concerned”,
14. In IBRC (in special liquidation) v. McCaughey  1 I.R. 149 Clarke J. said the following (though not in this sequence):- (I (i) It needs to be emphasised again that it is no function of the Court on a summary judgment motion to form any general view as to the credibility of the evidence put forward by the defendant. (ii) It is important, therefore, to reemphasise what is meant by the credibility of a defence. A defence is not incredible simply because the judge is not inclined to believe the defendant. (iii) Facts which amount to a mere assertion unsupported either by evidence or by any realistic suggestion that evidence might be available, or facts which are in themselves contradictory and inconsistent with uncontested documentation may not provide an arguable defence, and (iv) Insofar asfacts are put forward, then, subject to a very narrow limitation (my emphasis) the Court will be required to accept that facts in respect of which the defendant puts forward a credible basis for believing that evidence may be forthcoming, are as the defendant asserts them to be”.
15. Use of general credibility test to determine a summary judgment application is virtually indistinguishable from applying the balance of probability, and is therefore an error in law by the judge. At the summary judgment stage the determining test is different. I have pointed out in a 2014 Decision (Allied Irish Bank PIc. v. Gerard a ‘Connor  898 SP) that the judges may be confusing their two roles, judge as law finder and judge as fact finder (qua jury). The latter role is for another day and for a plenary trial.
Supplemental affidavits from the plaintiff
16. Why is a plaintiff even allowed to file a supplemental affidavit at all? What is the process appropriate (“due”) at the stage of an application for liberty to enter final judgment (otherwise, the defendant’s application for “leave to defend”) 037? If, as we are constantly reminded by the Supreme Court, the defendant’s evidence is to be “deemed”, for this purpose only, to be true, why does the Court even entertain “supplemental” evidence from the plaintiff contesting that evidence? A plaintiff s such “supplemental” affidavit should play no part in a process premised on that legal “fiction”. Defendant’s rarely oppose a plaintiffs request for time to file a supplemental affidavit, (and indeed the Central Office cannot refuse to file it if lodged in time) but I have, on occasions, refused a request to adjourn to that end on the grounds that the plaintiff is not thereby denied due process since such an affidavit falls altogether outside the scope of that process given that the defendant’s evidence is deemed to be true at that stage.
17. No new allegation of fact in a plaintiff s affidavit can cancel out the effect of the defendant’s evidence, surely? The answer to that question is: conceivably, a new fact (particularly an exhibited document) may, if indisputable, wholly undermine the averments of the defendant, and if such be the case, a plaintiff should not be shut out of an opportunity to state such a fact.
18. But surely the admissibility of a supplemental affidavit by a plaintiff is limited strictly to such a situation? Plaintiffs clearly think not. And apparently the Court isn’t overly concerned at the misuse of the opportunity by a plaintiff who chooses to load the dice with (inadmissible) fake evidence. By “fake evidence” I am referring not to untruths but to content which looks like relevant evidence, but is not, though the layman would never guess it!
19. I know of one reported case in a similar process (application for leave to judicially review) which is designed to be litigated on affidavit only (no cross- examination) where the Supreme Court noted that the applicant would have no opportunity to cross-examine an expert witness on his report which had been exhibited, and opted to strike out the affidavit and exhibit altogether (reversing the decision of the High Court on the point). The case is significant. It offers to a Court the option of striking out an affidavit (or part thereof) in any affidavit – based procedure, where such evidence could not, as a matter of law, be adduced in evidence during a fair trial.
20. The case is JF v. DPP (unreported) Supreme Court 26/4/05. A written judgment of the late Judge Hardiman explains the Supreme Court’s reasoning. The Director had filed an affidavit disclosing and relying on the opinion of the psychiatrist he had retained to report on the complainant in a historic abuse prosecution, but the complainant refused to be assessed by the accused’s expert, (even though he did not himself suggest that such an assessment would be oppressive or unduly intrusive).
21. Amusingly, the Director initially submitted that as a party with “an overwhelming commitment to the public interest”, professional reports furnished on his behalf “should be entitled to a presumption of objectivity “.
22. This sort of establishment viewpoint (which Hardiman J. described as.a “remarkable submission “) is evidently shared by some banks who think they can say anything they like, and demand judgment as of right. Unlike Hardiman J’s richly deserved ridicule of the DPP’s expert’s suggested “presumptive superior status”, some judges are noticeably slow to check the caustic and superior comments of bank deponents in summary judgment applications.
23. But of even more obvious relevance to such applications was the exercise by the Supreme Court of its “inherent jurisdiction” to strike out of the filed affidavits material which the accused had no opportunity to challenge at that (trial by affidavit) stage. Since the trial was to be by affidavit alone, the issue was not about the right to cross-examine. (Hardiman J. also noted other “irrelevant and prejudicial material” in the prosecutor’s affidavits). “The point here is that egalite des armes is not a new concept but rather a new and striking expression of a value which has long been rooted in Irish procedural law. In Steel and Morris v. UK  41 EHRR 403, the European Court of Human Rights said:- “The adversarial system … is based on the idea that justice can be achieved if the parties to a legal dispute are able to adduce their evidence and test their opponent’s evidence in circumstances of reasonable equality … the Court recalls that the Convention is intended to guarantee practical and effective rights. This is particularly so of the right of access the court in view of the prominent place held in a democratic society by the right to a fair trial (see the Airey v. Irelandjudgment of 9th October, 1979). It is central to the concept of fair trial in civil as in criminal proceedings that a litigant is not denied the opportunity to present his or her case effectively before the Court and that he or she is able to enjoy equality of arms with the opposing side … “. (paragraphs 50 and 59). “
24. And Judge Hardiman added the very quotable comment that “if there is one place everyone is equal, it is in a court of law”.
25. The motion for summary judgment is a A6 trial by affidavit. It may be a counsel of perfection to urge trial judges to accept that, at the trial by affidavit motion for final judgment, material which is irrelevant or prejudicial (or which might, probably deliberately, mislead the Court into thinking the issue to be decided is the defendant’s credibility) damages the prospects for a fair A6 hearing, and probably irretrievably. Time, perhaps, for judges to start striking inadmissible evidence out of banks’ supplemental affidavits?
26. A plaintiff is, by the rules of the limited inquiry at the fast track summary judgment motion stage, permitted only to adduce additional documents which are cogent (irrefutable) evidence from which the court cannot otherwise conclude but that the defendant’s evidence is wrong and his “arguable” defence “bound to fail”.
27. In short, the judicial determination as to whether the defendant is a truthful witness is for another day and for a plenary hearing. To raise it at the stage of the motion for summary judgment is to introduce evidence irrelevant to the limited issue before the court at that stage, and, indeed, could be properly characterised by the term “scandalous” meaning, in law, (inter alia) “anything unnecessary bearing on them, oral character of an individual” (Lord Eldon in Ex Parte Simpson 15 Ves 4 7b).
28. Yes, the application for summary judgment, is an artificial inquiry (almost a “seeping” exercise) but the reason is clear: once the truthfulness of a witness is challenged, on a material assertion, the matter, must, as a matter of natural justice, adjourn to plenary hearing. So if a plaintiff chooses to introduce evidence to discredit the defendant, since the matter cannot then fairly proceed on the fast track, the plaintiff s said choice amounts to an election to revert to the slow track.
29. I have commented before that we have a real and growing problem with plaintiffs swearing supplemental affidavits which are drafted to “condition” the judge and secure the summary judgment. Judges fall into this “fake evidence” trap so very easily: they presume the bank’s paperwork must be accurate (and if error is spotted, excuse same as “sloppiness”), they willingly listen to bank witnesses telling the judge (inadmissibly) what the law is, and as to their (inadmissible) opinion of the credibility of the defendant’s “assertions”.
30. In the instant case, for example, the plaintiff’s deponent for the supplemental affidavit protests that he has been insulted professionally by the defendant. That is evidence? The deponent is insulted? What does that prove? Nothing except that he disputes the defendant’s evidence. It is a smear. As a fellow professional, the judge will understand.
31. If this process of summary judgment on affidavit is to be extended across the board (with the new tougher UK test, namely does the defendant have a “real prospect of success “) we need to make much firmer guidelines for the content of such affidavits. Experimenting with a “real prospect of success” test on the fast track will only encourage mudslinging. In the UK, where they use “witness statements” for such procedures, Lord Woolf commented in 1995 that:- “the exchange ofwitness statements presented an opportunity for the employment of the draftsman’s skill often used to obscure the original words of the witness”. Statements were being treated by the parties as documents” which had to be as precise as pleadings and which went through many drafts and had ‘ceased to be the authentic account of the lay witness: instead they have become an elaborate, costly branch of legal drafting”.
32. Lord Woolf was the chair of the group which produced radically new procedural rules for the UK Courts in use now since April 1999. He recommended that witness statements should be in the witness’s own words and that the witness should so confirm. Further, he suggested that witness statements should be brief and as simple as possible, that they should focus on the facts, and that they should avoid discussion of legal propositions or comment on documents.
33. In Renehan v. T&S Taverns Limited tla Red Cow Inn  IESC 8, Judge O’Donnell, speaking for the Irish Superior Court, quoted with approval the observations of a Northern Ireland judge that:- “The affidavits of all parties should be drafted in clear unambiguous language. The language must not deliberately or unintentionally obscure areas of central relevance and draftsmen should look carefully at the wording used in any draft to ensure that it does not contain any ambiguity or is economical with the truth of the situation. There can be no place in affidavits in judicial review applications for what in modern parlance is called “spin””.
34. My view is that unless lawyer-drafted affidavits conform to this model the lay litigant will always be unable to “effectively participate”. In case T-320/09 Planet v. Commission the ECJ held, at para. 76, that:-” . respect for the rights of the defence in all proceedings which are initiated against a person and are liable to culminate in a measure adversely affecting that person is afundamental principle of Community law which must be guaranteed, even in the absence of any specific rules concerning the proceedings in question (see judgments of 13 February 1979 in Hoffman-La Roche v Commission, 85176, ECR, EU:C:1979:36, paragraphs 9 and 11, and of 1October 2009, Foshan Shunde Yongjian Housewares & Hardware v. Council, C141108 P, ECR, EU:C:2009:598, paragraph 83 and the case-law cited). “
35. In the House of Lords in 2003 Lord Hoffmann cited Golder v. UK  EHRR 524 as confirming that “if you claim a civil right, you have a right to have that question determined by a court”. And Lord Neuberger, former President of the UK Supreme Court, recently wrote that “it is an affront to justice if people cannot understand or enforce their rights” (New Thinking for 2019). He added: “those getting sued must get access to legal advice”. “Leave to defend”: the tests.
36. “Cogency” was first introduced as a term of art by Laffoy 1. in ACC Bank Pic v. Malocco  3 LR. 191 in the following passage:- ‘The Court has to look at the whole situation … looking at the whole situation must involve an assessment of the cogency of the evidence adduced by the plaintiff in relation to the given situation which is to be the basis of the defence”.
37. In Harrisrange Ltd v. Duncan [2001 4 IR 1, McKechnie J.’s listing of methodological elements forming the basis ofthe court’s assessment regarding leave to defend he includes “the plaintiffs evidence” in the following terms (at iii):- “In so doing the Court should assess not only the defendant’S response, but also in the context of that response, the cogency of the evidence adduced on behalf of the plaintiff, being mindful at all times of the unavoidable limitations which are inherent on any conflicting affidavit evidence. “
38. “Cogency” is also mentioned by Clarke J. in a 2005 case Chadwicks v. P. Byrne Roofing  IEHC 47:- “it may be clear that the facts asserted by the defendant cannot be true by reference to indisputable or cogent evidence”
39. The use of a supplemental affidavit by a plaintiff is also referred to in a 2012 High Court case, National Asset Loan Management Limited v. Barden  IEHC 32. At para. 5 of his judgement, Charleton 1. notes that “a defence must, if the matter is to be remitted (sic) to plenary hearing, have some reasonable foundation … “. It is for each such allegation to be analysed in the new context of whatever claim the plaintitfmav make in response bearing in mind that the summary judgment procedure does not involve the weighing of competing facts “. (emphasis added).
40. Here, then, is the small window of opportunity for a plaintiff who seeks to undermine the factual content in a defendant’s replying affidavit. He doesn’t need an affidavit to make submissions on the internal inconsistencies and/or contradictions in ‘that affidavit, but if he has additional documentary material which he can prove, and which is incontestable (emphasis added), an affidavit in response is appropriate.
41. So we appear to have arrived at the following guideline for summary judgment application under O. 37, as follows:- If the defendant’s affidavit sets out an arguable defence, (not just a bald assertion), he will get leave to defend even though the judge may doubt the veracity of his affidavit. The test loosely described as the “credibility” test applies where the plaintiff responds with unchallengeable “cogent” evidence clearly at odds with the defendant’s account. Has the probability of his having a real defence now been reduced below a reasonable point: “highly unlikely”? lf the defendant’s testimony is (virtually) totally undermined in this way, he will be refused leave to defend and the plaintiff will get summary judgment.
42. By way of illustration of the key role played by exhibited documents it is useful to recall the facts in Aer Rianta Cpt. v. Ryanair Limited  4 LR. 607 and the reader is referred to the narrative described in the schedule to this decision. In that case the defendant was given leave to defend even though his replying affidavits deposed to the existence of an unwritten agreement (disputed by the plaintiff) to which no reference was found in exhibits where one would expect to find it, given the business context.
43. But for Hardiman J. it was not “very clear indeed” that the defendant had no case even though the plaintiff had “radically disputed” the defendant’s evidence. For me, the real significance of this oft-quoted case is that even if a plaintiff submits a supplemental affidavit aimed at “proving” that the defendant is lying about hism arguable defence, such an affidavit serves no purpose because the court cannot resolve the dispute in the plaintiff s favour at that stage unless the supplemental evidence is “cogent”. An attack on the truthfulness of the defendant is never a cogent response and will not, of itself, secure summary judgment for the plaintiff.
44. Certainly, at the very least, the ordinary rules of evidence should apply, and inadmissible evidence should be struck out of the affidavits “going forward”. Even if for the sake of its own reputation, a Court should not tolerate any supplemental affidavit which strays into personal abuse about the defendant’s credibility. Perhaps a plaintiff who is abusing his access to the Courts in this way should be offered the choice of either a strike out of the material or a consent to consent to adjournment of the proceedings to plenary hearing “Bound to fail”
45. Actually, the legal basis for an order striking out a statement of claim which “does not disclose a reasonable cause of action” O. 19. r. 28 and for an order refusing a defendant leave to defend on a plaintiff s motion for liberty to enter final judgment O. 37 are identical. For the first, the plaintiff s claim is “bound to fail”. For the second, the defendant’s asserted defence is not even arguable.
46. Since both applications may result in a judgment concluding the case, both are “trials” attracting the application of ECHR Article 6. Perhaps there the similarity ends.
47. The process (which must be “due process”, as for a trial) is different, particularly as to the requirements regarding evidence. There is a strong “home ground” advantage for the plaintiff in both of the procedures, the case is his, he has acted, not reacted; he is knocking at the court door seeking justice, and the court is loath to refuse access, unless the claim is “vexatious” (ex turpe causa or worse) or frivolous (de minimis, or just ajoke).
48. But has this understandable sympathy for a “wronged” plaintiff become so strong that he starts his action almost (in the court’s eyes) “bound to succeed”?
49. In both instances, does the plaintiff get all the breaks? Provided his case as pleaded is “stateable”, he will see off a defendant’s challenge in an o. 19, r. 28 application without adducing any evidence. But a defendant in an 0.37 application will lose if he has no evidence (other than bare assertions) to substantiate his “arguable” defence.
50. In short, the latter application involves a first “scoping” probe into the merits of the case which does not feature in the former.
51. The justification for this discrepancy (the use of two different processes, each apparently considered “due”) is that the context is different. For the former, the defendant will have his opportunity to answer the claim in a full plenary hearing later. And for the latter, the procedure is an exception to the general, and limited to a particular class of liquidated claims which is peculiarly suited to summary adjudication. Unfortunately, even that “summary” characterisation reinforces the perception that in such claims the plaintiff enjoys a presumption that he is “bound to succeed”.
52. The perception is heightened when it is realised that the plaintiff’s evidence can be as limited as a hearsay production of business records. Further, that a plaintiff can assert his “belief’ that the defendant has no defence, and that this assertion clears away all doubts in the court’s mind unless the defendant offers convincing evidence to the contrary (in a replying affidavit at a hearing for which he got four clear days’ notice). And, for good measure, a plaintiff unnecessarily often adds his opinion that the defendant is just defending to delay the inevitable: this amounts to an allegation of abuse of process, by another name, not quite so blunt.
53. Defendants in bank debt cases face the additional reality that they borrowed money and must pay it back (unless they didn’t borrow it, do not have to pay it back right now, or have paid it back already) This undoubtedly feeds into the impression that the court has pre-determined the outcome, based on the sheer number of un- defendable cases which are being processed before it.
54. All the more important then for the court to be fastidious in making available to defendants each and every procedural safety net when Article 6’s “effective participation” rigour is indicated. So it is disturbing to note that the options of cross- examination and discovery of documents are considered not to be available when the court proceeds to summary judgment. This flouts the Supreme Court’s guidelines that any summary judgment application which warrants cross-examination and discovery should, instead of going there, simply adjourn for full plenary hearing.
55. If I were to insert here a large blank box to be “populated” by the features of their experience which bank case defendants found to be suggestive of prejudice against them, it would quickly fill up.
56. And plaintiffs sense it too. They’re pushing an open door. They get away with a steady stream of spin, fake “evidence” and comment about the defendant’s affidavit because the court never acts to curb this bad habit. In practice, the court never interrogates the plaintiff’s evidence at this stage: it’s for the defendant to challenge it without any prompting from the bench.
57. Here’s a good example of jurisprudential “creep” in the evolution of judicial treatment of defendants. (Unfortunately, it’s a drift against the defendant instead of one employed to correct any pro-plaintiff impression). Consider the emerging use of the formula “a bare assertion “. Originally, we all understood it to mean a bald averment such as “I do not owe the money”. But if a defendant goes further and specifies the circumstances on the basis of which that bald assertion has been made, it is no longer “bare”. So, for example, “I never drew down the loan” or “the monies were repaid”, or “the debt was forgiven” would be sworn evidence supporting his characterisation of his position that “1 do not owe the money”.
58. But no. Now the plaintiff dismisses this sworn testimony as a “bare assertion” on the basis that there is no documentary corroboration of the assertion.
59. In short, the charge of “bare assertion” by a plaintiff has morphed into a covert submission that the defendant’s evidence is not credible. And that is how a defendant “reads” the charge. And that is how a defendant might, rightly or wrongly think how the judge “reads” it too. The evidence of the men in suits is to be preferred (even though it is only hearsay!).
60. Another prejudicial practice, and for exactly the same reason, is the plaintiffs averment in a supplemental affidavit that, while he is not answering every point made by the defendant in his replying affidavit, he is not to be taken as accepting as fact the defendant’s assertions which he does not comment on individually. Suggesting the defendant’s evidence is so obviously incredible, he does not even need to .dispute it.
61. And we have the plaintiffs’ disparaging terminology. Euphemisms abound. The defendant “seems to be suggesting” or the defendant “asserts”, (while, by contrast, the plaintiff “avers “), or “it is noted that the defendant has failed to … “, or “the defendant purports to … “; “for the avoidance of doubt” “while] am advised that it is more properly a matter for legal submission remain of the view that what is “asserted” is not a defence on the merits” etc. etc. These are patronising “put down” lines, born of an arrogance which suggests an inside track, and no likelihood of judicial sanction. An exercise in “signalling”.
62. The level of condescension shown by bank deponents in these supplemental affidavits is toe-curling. Most have never met the defendant. Their evidence does not cogently demolish the defendants’ arguments. It just contextualises it: these people are creditors. It is loaded to foreclose on the fast track.
63. Note that a plaintiff will often avoid a direct allegation of lying. Perhaps he hopes the trial judge will have forgotten the strictures of Hardiman J. who in Boliden Tara Mines v. Cosgrave & Ors  lESe 62, at para. 43 said that “it cannot be too strongly emphasised that, where evidence is presented on affidavit, a party who wishes to contradict such evidence must serve a Notice of Intention to Cross- examine. ” In my experience, banks never go down that road. Instead, they insinuate. They say to the judge: don’t believe everything you read: we can prove he is lying. In my view, that’s an abuse of process.
The plaintiffs supplemental affidavits in this case
64. The AlB deponent Ronwyn Rowan, appears to advance as probative evidence the contents of the bank’s file. This, of course, is hearsay and, as such, cannot stand if challenged by the defendant. It’s not “cogent” just because its recorded in the bank’s file. Any belief to the contrary misunderstands the scoping exercise now being carried out.
65. The deponent’s opinion that the defendant is lying may be her opinion but is not admissible evidence.
66. But the deponent goes further, offering as “evidence” comment, derision and irrelevant fake evidence of the sort described elsewhere in this decision. Most of this is not evidence at all, let alone being relevant in the limited context of whether the defence is arguable. Some of it is just “scandalous” in the sense above outlined. The judge’s cards are being marked. This is what she says:- “Par 4. Par 5. Par 5. Par 6. Par. 7. Par 7. Par 8. Par 8. Insofar as this Affidavit remains silent on any issue raised by Ms. McDermott in her Affidavit, such silence should not be considered as acquiescence and/or as to agreement in any matter not dealt with hereinafter. The vast bulk of Ms. McDermott’s Affidavit is based upon hearsay evidence and allegations which are not supported by any documentation whatsoever. Ms. McDermott could not have been merely handed two pages as alleged. The Plaintiff was also clear on the fact that a repayment capacity was evident by the Defendant with good security. The defendant appears mistaken in her assertion that the said documentation was signed in Limerick. The defendant appears to have provided an authorisation to ‘Jason’ to issue a draft to Mr. McDermott for the amount of €700, 000 from account ending 4120. It is clear that the contents at paragraph 10 of Ms. Mcliermott’s affidavit are untrue. The contents at paragraph 11 of Ms. Mcliermott’s Affidavit, particularly in respect of the ‘manipulation of a situation’ is frivolous, vexatious and averred to purely in an attempt to cause embarrassment to the Plaintiff. 21, Par 9. Par 9. Par ? Par 14. Par 15. Par 15. Par 16. Par 18. Par 19.·It was at all times the Plaintiff’s understanding and belief that the sums borrowed were solely for the benefit of Ms. McDermott. A lender’s report was provided. It is expressly stated that it was never acknowledged, nor was it in fact the case that the Defendant’s loan had ‘nothing whatsoever’ to do with the Defendant. In contrast to the averment of the Defendant, the personal assets of the Defendant were discussed. The contents of paragraph 18, in particular is hearsay. No evidence has been provided by any person who attended such alleged meetings. This is particularly unusual. The Defendant appears to be stating that she was not at any such meetings. The contents of paragraph 20 is at best supposition and cannot be considered to advance the Defendant’s position. The true nature of the facility was to allow Ms. McDermott to invest in a mezzanine inance namely Sorrento S505 Chicago Investment. In the circumstances, I say, believe and am advised by AC Forde & Co., Solicitors for the Plaintiff, that the Defendant, does not have a defence to these proceedings, either bonafide or at law”.
67. Jason Farrell (now of KBC) offers little more than denials. These prove nothing conclusively (how could they?): -22, “Par 5. Par 7. Par 8. Par 8. Par ? Par 11. Par 16. Par 17. Par 18. Par 18. Par 19. Par 20. I dispute the assertion that I was :So of the view that he could request that a family member obtain such borrowings as ‘a way around it ‘. Such an allegation is professionally insulting. I deny that I ever suggested or advised that I would be able to work around the Plaintiff’s internal credit policy. It was never suggested by me that the loan would only be in the Defendant’s name for the purpose of ‘internal administration purposes’. For the avoidance of doubt, it was not within my power to provide a non-recourse loan facility. I vehemently deny that the defendant was ever asked to backdate paperwork for the facility. I expressly deny that it was ever asserted that the signing of such documentation was ‘only a paperwork exercise ‘. She was at all times aware of the nature of the transaction. The defendant was not provided with ‘three loose pages to sign’ as is alleged, rather she would have been provided with the full documentation. I specifically deny that it was ever asserted that she was “participating in a paperwork exercise or ‘a work around’. I never advised the Defendant that the loan was her ‘father’s loan’ or that it was ‘secured by a watertight investment ‘ I do not believe that 1 would ever have suggested any investment was ‘watertight ‘ I have no specific memory of providing print-outs. 23, Par 21. The facility letter of 1February, 2008 could not have issued in the absence of such a review, Par 22. Iam astounded by the allegations of Mr. McDermott and Ms. McDermott. I did not and could not have made the assertions set out.
68. Even on the material in the bank’s file, it is hard to see how the plaintiff’s solicitor could have reached the view that the defendant has no defence, “either bona fide or at law”. Was a plenary summons not considered? Did he spot the following on his client’s file? A. The bank account which the loan was drawn was opened on 8/2/08 but immediately emptied by a transaction described on the statement (Exhibit RR4 p.l) as “to S. McDermott”. This was account no. 11754159. But the strangely worded authorisation dated the same day, in manuscript (not a standard debit authorisation, surely?) (exhibit 2RR3) refers to another account, namely 17754120. B. The internal paperwork is replete with references to Trudy’s father and appears to contemplate a single investment in the mezzanine fund. This, too, would be inappropriate if Trudy was to be an entirely separate customer and account. C. There is early reference to Ms. McDermott disputing her alleged liability (and this was before proceedings commenced) and the exact basis of her stance. D. The renewal facility in 2008 contains the provision that repayment was to be on realisation of the investment the following year, and in the bank’s “credit agreement” with the defendant dated 19th June, 2009, the 24 Special condition again specified “loan to be cleared in full on receipt of Sorrento Investment funds by mid-July, 2009”, but neither required any charge to secure same. Was this because there was no investment in Trudy’s name which she could offer as security? E. Why would the bank offer a loan of €700k to a non-bank customer earning only €45k gross per annum? What loan risk safety requirements (as required by banking regulators) were circumvented?
69. Has the solicitor familiarised himself with the Supreme Court judgment in Whelan & Ors. V AlB pic. And Ors.  lESC 3? In that case, Mr. Lynch (“a successful and experienced business man “) asserted that he had drawn down a €25m facility in 2017 for the purchase of 86 acres in Waterford in the joint names of himself and his wife and children, but only on the basis that it was non-recourse. The High Court and, on appeal, the Supreme Court rejected that assertion. In this judgment O’Donnell J. said:- “I have been troubled however by an aspect of the case which was not to the forefront of the argument. There is, and was, a significant difference between the position of Mr. Philip Lynch and the position of his wife and children. The bank, it appears, was at all times happy to provide funding for the transaction on the basis of Mr. Lynch’s substantial net worth. When Mrs. Lynch and the Lynch children were introduced into the transaction it was for Mr. Lynch’s own, understandable, private wealth management purposes. The bank had no interest in those parties, and their addition to the transaction neither created additional risk for the bank, nor provided any additional security in terms of repayment. 25 Nevertheless, the fact is that these individuals whose net worth may be limited now face a potentially ruinous personal liability of which they were not advised, and which the bank never sought or relied upon at least from a commercial perspective and only obtained in order to facilitate the enforcement against the principal borrowers. In those circumstances there may be a residual question whether it would be equitable to permit the bank to enforce its legal claim against the wider members of the Lynch family. I would accordingly, and to this limited extent, set aside the judgment obtained by the bank against the first, second, fourth, fifth and sixth named plaintiffs”.
Trudy McDermott’s defence
70. Does Trudy McDermott have an arguable defence or, having regard to the bank’s response, is it very clear that her defence is now not even arguable?
71. Is this one of those very rare cases when a defendant’s defence is that he never drew down the loan?
72. Clearly, given that her father has furnished an affidavit corroborative of her evidence, the grounds of defence she advances are not bare assertions.
73. 73. And whatever happened to the presumption of undue influence as between parent and child? Does the bank not have a duty to take measures to seek to ensure that anyone (guarantor, spouse, child of the principal debtor) under such presumed influence is openly and freely agreeing to enter into the transaction?
74. In her recent Irish Law Times Article (July, 2019) Hilary Delaney looks at when a financial institution will be fixed with constructive knowledge of the conduct 26 (“generally but not invariably undue influence”) and when the bank is put on inquiry, and reviews recent case law.
75. A parent child relationship when an elderly parent is going guarantor for his son (similar to Bank of Ireland v. Curran  IECA 399) may not automatically suggest undue influence, but when a daughter is acting in support of a father the presumption is self-evidently correct. The bank in this case even noted that the father requested that €700k being part of an overall €1.5 facility to him be “in the name of his daughter” (exhibit 2RR2), even though it was to enable him to make a property investment. In a sense he was asking the bank to give his daughter €700 so that she could lend it to him: what, then was the arrangement for the repayment of this “loan”? Did the bank enquire? See Ulster Bank v. Roche & Buttimer  1 LR. 765.
76. There is an arguable defence and no cogent response.
77. I am driven to the conclusion that the plaintiff’s purpose in filing affidavits filled with these sorts of irrelevant material is to persuade the Court that the bank should win the case. It appears that the bank has some notion that this is the likely outcome, if they create this sort of smokescreen to obscure the defendant’s defence. Is there some dysfunctionality in the judicial process currently in operation? “Summary justice” is a euphemism for injustice. Summary judgment should not go the same route.
78. I am going to adjourn this motion to plenary hearing. It is not because to do otherwise would be a waste of court or waste of costs. It is because I have concerns that the court will not follow the law as set out by the Supreme Court.
79. There may be an information deficit affecting the judges dealing with these motions. They appear to be unaware of the precedents and dicta cited above. This 27 may be because, perhaps unsurprisingly, counsel for the banks do not inform the judge that these cases mean that a defendant should usually, be afforded a plenary hearing. It is not in the interests of the banks that the judges should be so informed, but it is the duty of counsel to do so, even if it is not in his client’s interests.
80. Whatever the reason, the recent judgment in Governor and Company of the Bank of Ireland v. Timmons  IERe 420, 30th May, 2019, is not an outlier. Although credibility is nowhere referenced in his written judgment, Meenan 1. records that the defendant “states (sic) that the accounts were cleared in full”. This, presumably sworn, testimony is rejected because “it is entirely clear that these monies were not repaid”. The judge notes that “the various issues which the defendant has raised concerning the background to the loans is (sic)fully answered in the documentation exhibited”. The judge is clearly weighing the sworn evidence of the defendant against the hearsay evidence of the plaintiff s documentation and concluding, on the balance of probabilities, that the arguable defence is bound to fail. 81. I do not know whether to characterise this as a “real prospect of success” decision or a balance of probability, but what it certainly is not is a case where the court can be satisfied that it is very clear that there is no arguable defence. Instead, he has judged that the defendant is lying. The bank’s documentation, being hearsay, cannot be considered as “cogent”. Other comments, and language, in the written judgment suggest that the judge saw the defendant as a particular type of defendant who is “bound to fail”, like most debtors? It may be convenient to dispose of these defendants on the fast track, but it is not due process.
81. If I apprehend that a motion for summary judgment might be determined on the basis of the bank’s irrelevant and inadmissible material, (and this is apparently the belief ofthe bank, else why would they include it), I have to have regard to Section 3. 28 of the European Convention on Human Rights Act 2003 and, the provisions of Order 37 notwithstanding, I have to follow substantive fair process law and not procedural rule, (for the former outranks the latter).
82. A recent Court of Appeal decision on 0.99 rule 1(a) appears to be something of a watershed moment. In Ganley v. RTE  IECA 18 the trial judge was found to be in error in failing to award the plaintiff the costs of an interlocutory motion “and should not have postponed the issue until the conclusion of the proceedings”. There is guidance too in regard to the costs of an unsuccessful motion for summary judgment inACC Bankplc. v. Hanrahan  IESC 40 as follows:- “Is there a sufficient basis on which it can be said that ACC acted in a manifestly unreasonable way so as to displace what might be considered to be the normal position of costs in cases such as this being directed to be costs in the cause or being reserved to the trial judge?… the Court should retain, in an appropriate case, an entitlement to impose some or all of the burden of the costs of the motion for summary judgment on an unsuccessful plaintiff if the Court is satisfied that the plaintiff acted unreasonably in the way in which the motion was approached including any unreasonable failure to agree to a matter going to plenary hearing in the light of affidavits filed. In such a case a plaintiff who acts unreasonably in that manner must be at risk that any additional costs incurred by virtue of a lengthy and disputed summary judgment application (which becomes a centre of costs in itself) may be awarded against them…. there may be circumstances where the Court remitting the matter to plenary hearing is satisfied that a plaintiff has acted in a particularly unreasonable 29 manner in not agreeing to the matter going to plenary hearing. In those circumstances the Court should consider whether the justice of the case requires that some or all of the costs of the summary judgment motion should be borne by the plaintiff who has acted in such a manifestly unreasonable way …. the proper question to be asked is as to whether it can be said that ACC acted in a manifestly unreasonable way in failing to agree that the matter should go to plenary hearing, at least when all of the replying affidavits had been filed … “
83. I am adjourning this case to plenary hearing, and awarding costs of this motion to the defendant. Schedule: excursus Aer Rianta v. Ryanair [2001J (i) The defendant launched two new routes on February 7th, 1997 but, when invoiced for landing charges into Dublin contended that the figures did not reflect an earlier, unwritten, agreement as to the baseline for calculation which agreement, the defendant stated, had been a pre-condition for the launch. At first instance Kelly I. (5/1/2000) recorded that “the plaintiff contends that the line of defence is, on the evidence adduced, not credible and/or that there is no fair or reasonable probability of the defendant having a real or bona fide defence”. Kelly 1. was of the view that the correspondence adduced provided no support for the defendant’s position and, indeed was “inconsistent” with the pre-launch agreement alleged. In particular, a letter of the 17th February offered as evidence “that there was no doubt about the matters” “was wholly inconsistent” and “destroys any claim of promissory estoppel” on the strength of promises allegedly made prior to 7th February. 30 (ii) The summary motion judge concluded “in my view far from establishing an “express agreement clearly set out in correspondence” (as asserted by the defendant) the documents in this exhibit demonstrate the opposite “. … I have to ask myself “is what the defendant says credible? In my view it is not. Mr. O’Leary’s credibility is undermined by the very documents which he exhibits “. (iii) There were ten (!) grounds of appeal. (iv) In the Supreme Court judgments, McGuinness 1. stated (at p. 615) that:- “The question is whether the proposed defence is so farfetched or so self-contradictory as not to be credible “. She concluded “it is clear there are considerable weaknesses in the defence performed by Mr. O’Leary in his affidavits. … The correspondence exhibited is, to say the least, lacking in clarity … nevertheless … ” (v) Hardiman J. reviewed case law “since the early days of the procedure in the late nineteenth century”» “In all of these cases, however, the issue of credibility arose rather starkly. In National Westminster Bankv. Daniel [1993J 1 W.L.R. 1453 the defence affidavits were mutually contradictory. In Banque de Paris v. de Naray 1 Lloyds Rep. 21 the defendant’s averments were flatly contradicted by those of the plaintiff’s private detective which were accepted to be accurate. In First National Commercial Bank v. Anglin 1 I.R. 75, the indisputable documentation of a commercial transaction rendered the alternative chronology proposed by the defendant quite untenable. ” (vi) He didn’t employ the “stark” credibility yardstick in his judgment (” because it was misleading if read without reference to their own unique facts “}. He noted the plaintiff s “radical degree of factual dispute” with the defendant, saying e.g. “there were no negotiations … I reject everything that is said … none of the events occurred … for the avoidance of doubt I wish to make it clear … I regret to say there is no basis from the contentions … no assurances of any kind were given by me … etc., ” and concluded that “there is a conflict of evidence of a much more radical and downright sort than is usual in commercial 31 transactions” and that “both parties claim that the commercial realities of their relations, properly understood, make the other’s contentions implausible to the point of near impossibility”. (vii) Hardiman J. observed that:- “Order 37. r. 7 expresses the overall principle: the court must arrange for the determination of the issues in such manner as seems just … (including plenary hearing) with the directions as to pleadings or discovery. … since the order provides for alternative, more searching and elaborate, methods of resolving the issue, the plaintiff’s entitlement must appear closely enough (and despite what the defendant has deposed to) renders these unnecessary. ” He doesn’t mention “cogency” as such, but notes that the plaintiff conceded (t’as it may not have done in the High Court”) that one sentence which appeared twice in the exhibits was “consistent only with the view that there was some variation of the scheme” as asserted by the defendant. Consequently, it was not “very clear indeed” that these defendant had no arguable defence. “It is clear’ there is a very substantial conflict of fact in the averments of the respective parties. One cannot be confident where the justice of the case lies, without hearing oral evidence and cross-examination “. (viii) The plaintiff won in the High Court, but lost the appeal, (regarding the defendant’s car crash affidavit the Supreme Court took a forgiving “there may be more to this than meets the eye” approach, the plaintiff s protestations notwithstanding). Averments that the defendant was, lying served no useful purpose whatsoever, in either court! And, of course, how could it? As a matter of Constitutional justice, a material factual dispute must go to plenary hearing. (ix) This case raises an issue about the appellate jurisdiction. Judge Kelly did not err in law. He applied the correct test. The Supreme Court disagreed with him on his assessment of the facts. It is not uncommon for appellate judges to decline to entertain any appeal against a trial judge’s finding of facts. Perhaps this case will be of help to the defendants who find themselves in the appeals list.
THE HIGH COURT[2015 No. 1272 S.}