Master questions the practices of solicitors and banks
THE MASTER of the High Court has expressed concern that some solicitors are failing to properly assess “standard” sworn claims by bank officials that people being pursued over unpaid loans have no defence to summary judgment being entered against them.
Master Edmund Honohan also queried whether the pursuit of summary judgment over unpaid loans is the best or most efficient procedure available to financial institutions. Summary judgment can only be granted based on a sworn honest belief there is no defence and if the summary procedure is not appropriate, it will be struck out, he warned.
He made the remarks in a decision striking out a bid by ACCBank to get summary judgment for some €4.2 million against Thomas and Mary Heffernan over a loan issued to refinance borrowings from AIB for the purchase of a farm. It remains open to the bank to pursue the couple via plenary summons, he indicated.
Choosing to proceed by summary summons in this case was “misconceived”, he said. Solicitors well know in a summary summons, the legal test requires a plaintiff bank to show the defendant has “no arguable case” and there is no real issue for a court to determine.
If a solicitor cannot conscientiously offer their legal opinion that there is no arguable case, the bank should apply for judgment by plenary summons and not via the summary procedure, he said.
In this case, having sworn an affidavit seeking summary judgment on the basis that the couple had no defence, the bank received the couple’s replying affidavit outlining a defence effectively contending that the bank had essentially engaged with them in a joint venture. The Master added that the issue was not about accepting a defendant’s word but, whether on reading all the material, that it was patent that a prima facie defence existed and was, or should have been, known, to the bank’s solicitor before he offered his opinion that there was no defence and opted for the summary summons procedure.
It seemed the three bank officials simply appeared to be “reconstructing the case second-hand” from a perusal of the file and that was hearsay and an exercise in “spinning the file”, he said. If the first affidavit from the bank was “not the whole truth”, then how could the courts be sure the later affidavits were “any more complete”, he asked.