The Supreme Court Provides Welcome Clarity On The Bankers' Books Evidence Acts

Ulster Bank Ireland Ltd. V Rory O'Brien, Danny O'Brien & Michael McDermott [2015] IESC 96

Introduction

The decision reached by the Supreme Court (Charleton J., Laffoy J. and McMenamin J.) on 16th December, 2015 in Ulster Bank Ireland Ltd. v Rory O'Brien, Danny O'Brien & Michael McDermott has provided some welcome clarity around questions related to the application of the rule against hearsay and the Bankers' Books Evidence Act 1879 (as amended) (the "Act") in enforcement proceedings arising out of default by a borrower on a bank loan.

Background

The issue in the case was whether the affidavit of Ms. Mary Murray, a senior relationship manager with Ulster Bank Ireland Limited ("UBIL"), grounding UBIL's application for summary judgment against the defendants in the amount of circa €890,000, was admissible, given that some of the evidence in her affidavit was hearsay, yet her affidavit did not meet the requirements of Sections 4 and 5 of the Act.

Sections 3, 4 and 5 of the Act created a statutory exception to the rule against hearsay, permitting a bank's records to be admitted as prima facie evidence of the transactions and accounts in those records. To avail of this exception to the hearsay rule, evidence must be given by an officer of the bank that the books relied upon are from the ordinary books of the bank, and that the entries were created in the usual course of the bank's business, and the books are in the bank's custody or control. Under Section 5, specific matters must be proven to show that the copy record presented to the court is an accurate copy of the original record.

The defendants did not deny the debt, but argued that Ms. Murray's affidavit did not comply with the requirements of the Act and that it therefore constituted hearsay evidence which was inadmissible.

The Master of the High Court found in favour of the defendants, dismissing UBIL's motion for liberty to enter final judgment. On appeal, the High Court (Hedigan J.) overturned the decision of the Master, finding in favour of UBIL. The defendant borrowers appealed the High Court decision to the Supreme Court.

The Supreme Court decision

The Supreme Court unanimously found in favour of UBIL. Written judgments were given by all three judges. Judgment was given by Charleton J, with whom the other two judges agreed. His reasoning was as follows:

1. the defendants had not replied to UBIL's letter of demand or responded to the affidavit of Ms. Murray in which it was contended...