Issues to be litigated outside of bankruptcy

Ms Justice Dunne said it was clear from the authorities that the conclusive evidence clause can be relied on by a bank against a surety in a case such as this. Nonetheless, this judgment left open the possibility of challenging the validity of the underlying debt referred to in the certificate.

If a certificate was to be relied upon on foot of a “conclusive evidence” clause, it must comply strictly with the terms provided for in the particular contract. In this case there was an argument as to whether it complied with the requirement that it be a certificate of an officer of the bank. This was a real and substantial issue which was arguable and had some prospect of success.

Referring to the status of such certificates in general, she said she did not accept a statement from Lord Denning that their standing was analogous to, if not higher than, certificates from an architect, engineer or arbitrator.

These were independent third parties who did not stand to benefit from the giving of a certificate.

There must be an argument in an appropriate case for a challenge to be made to a conclusive evidence certificate in the event that it could be demonstrated there was a significant error in the figures certified.

She said there were limits, already examined by a very recent English Court of Appeal decision, as to the extent to which such a certificate could be relied upon. There were a number of issues in this case relating to the fees due to the receiver and the charging of interest.

The certificate relied upon by the bank did not preclude the debtor from challenging the amount said to be due either on the basis that it was overstated or that he was entitled to a set-off in relation to alleged overpayments. The debtor had raised issues that have to be litigated separately outside the bankruptcy process. Therefore she dismissed the bankruptcy summons.

The full judgment is on courts.ie

Eileen Barrington SC and Ciarán Lewis BL, instructed by Gartlan Furey Solicitors, for the applicant bank; Brian Conroy BL, instructed by Ensor OConnor Solicitors, for the respondent debtor