ON 29 November 2019 the Supreme Court delivered a judgement which will have a major impact on the level information to be included in Summonses.
In the case of Bank of Ireland Mortgage Bank v Joseph O’Malley, Bank of Ireland sought judgement in the sum of €221,795.53. The fact that the Defendant drew down the loan and that there were arrears outstanding was not in dispute. Rather, the case centred on whether the Bank had provided sufficient detail in the Summary Summons and subsequent pleadings to demonstrate a prima facie debt.
The Court concluded that, at the very least, a Summary Summons must set out precise details as to how the sum said to be due was arrived at. This means setting out the principal sum, how interest is calculated, any applicable bank charges, and credit for repayments made.
The Chief Justice held that the Court may be entitled into take into account documentation sent to the Defendant prior to the commencement of proceedings. The more detail given in advance, the more a Bank can justify describing the debt in basic terms in the Special Endorsement of Claim. However, the Special Endorsement of Claim must make specific reference to the document previously furnished evidencing the debt, such as a Statement of Account.
However Justice Clarke’s judgment also has implications for relying on Statements of Account in Special Endorsements of Claim. The Statements must now make the methodology for calculating balances apparent on their face.
Moving forward, the level of detail surrounding the information given to borrowers prior to and after the commencement of proceedings will have to examined carefully, which may include amending the standard format of Statements of Account furnished to borrowers.
For advice on commercial litigation, including debt recovery, contact Emma Ledford.