Incorporating Terms By Reference

Introduction

A recent decision1 has reaffirmed that, depending on the facts, terms and conditions of lending can be incorporated and apply to a bank/client relationship in circumstances where it is contended that those terms and conditions were never furnished to the borrower as part of a summary judgment application. Although the decision was given in the specific context of a bank/client relationship, it is of broader interest in terms of the incorporation of contractual terms and also sets out a useful overview of the summary judgment jurisdiction, which is typically used for liquidated damages (or debt) claims.

Background

The plaintiff was the national agency which took over non-performing loans from the state's banks. The defendant was involved in a property investment transaction for which money was loaned by one such bank. The loan was subsequently transferred to the plaintiff, which ultimately sought summary judgment against the defendant for over €1.25 million.

Summary judgment process

The court outlined that the summary judgment jurisdiction involves a decree being entered on foot of affidavits exhibiting contracts and scrutinising any replying affidavits to see whether there is a defence. This jurisdiction, it noted, is an exception to the constitutionally mandated requirement that courts should hear witnesses, allow cross-examination and listen to any submissions made at the end of such a process. However, summary judgment is a means whereby liquidated sums can be recovered in short form where there is proof of the existence of a debt and where no defence is disclosed by the defendant. It must be clear that the defendant has no defence. If the defendant shows factual material which, if accepted, could amount to an answer of the claim, the summary proceedings are remitted to plenary hearing to be dealt with in the ordinary way (eg, pleadings, discovery, witness evidence, etc).

The court then examined the relevant case law regarding entering summary judgment and noted that the Supreme Court decision in Danske Bank v Durkan New Homes Ltd2 summarised the position referring to other authorities - "is it 'very clear' that the defendant has no case"3 - and that summary judgment should be entered only:

"where the issues which arise are relatively straightforward and where there is no real risk of an injustice being done by determining those questions within the somewhat limited framework of a motion for summary judgment."4

The court...