Master of High Court warns on hearsay business records

Concerns raised in adjournment of AIB application for summary judgment

The Master said the application by the bank for judgment against Mr Lennon raised issues over the use of hearsay business records and the entitlement of loan holders to enforce the right to recover from a guarantor. Photograph: iStock

The Master of the High Court has warned that hearsay business records should be excluded from being used as evidence in legal actions unless certain criteria have been fulfilled.

Master Edmund Honohan raised the concerns in a detailed, written decision where he adjourned generally an application by Allied Irish Banks for final summary judgment against company director Gary Lennon.

The Master, who deals with pre-trial issues in cases before they go before the High Court, said the application by the bank for judgment against Mr Lennon raised issues over the use of hearsay business records and the entitlement of loan holders to enforce the right to recover from a guarantor.

In its claim, AIB alleges that Mr Lennon gave a personal guarantee in respect of certain credit facilities, including an overdraft facility, advanced by the bank to Forrest Lennon Business Support Services in August 2009.


The company, of which Mr Lennon was a director and shareholder, carried out the business of insolvency practitioners and was dissolved in 2014.

AIB claims that in 2017 it made a demand on Mr Lennon to repay the monies.

However, it claims he has not repaid the sum demanded and seeks judgment in the sum of €150,000 plus interest.

Mr Lennon, a company director from Braemor Avenue, Churchtown, Dublin 14, claims the bank had been repaid all the monies due to it on foot of the guarantee, and has wrongly commenced proceedings against him.

He also claims that when the company dissolved, unhappy differences arose between him and his former business partner Barry Forrest in relation to its business in 2009.

Mr Lennon claims AIB did not act in an impartial manner and sought to exert undue pressure on him concerning the execution of the guarantee.

Mr Lennon made a complaint about this conduct, which he says remains unresolved.

He further claims AIB failed to bring the proceedings against him within the required statutory period of six years, and therefore the bank’s action is out of time.

In his ruling, the Master said the case had raised issues about the use of what he described as hearsay business records as part of proceedings.

The Master said that arising out of a decision of the Court of Appeal, legislation had been introduced in 2020 concerning the admissibility of business records in cases.

The new laws are to ensure that paperwork submitted in a case is inherently reliable.

Business records, he said, are admissible unless a copy of the record has not been given to the other party, where the information is privileged, and if the information was compiled for the purpose of civil or legal proceedings.

However, while the law had clearly been restated by the Oireachtas, the Master said, he was concerned that the courts had been "somewhat less than firm in excluding hearsay business records in recent years, using "some sort of unfettered discretion".

This he said, “must stop now”.

The Master said that in the case before him, AIB had offered an unsigned and undated notice listing some 15 documents that AIB intended to rely on in its claim.

The Master added while AIB may seek to apply to admit this material as evidence in its claim, that application must be grounded on some admissible evidence.

No such evidence had been put before him.

Business records

He said he must conclude that either the bank’s lawyers have not grasped the scheme of new law, or that AIB doesn’t intend to offer any supporting evidence and will rely on the appearance of the documents and nothing else.

He added that he was somewhat concerned about the documents put before him, adding that some of them don’t appear to be business records as generally understood.

Unless there is evidence concerning the provenance of these documents, they remain pieces of paper and are evidence of nothing, and under the new law could not be deemed as admissible, he said.

The Master added that while there has been a lot of litigation regarding originating lenders against borrowers, what has not surfaced are issues of entitlement of loan originators to seek to continue to purport to act as owner of the right to recover from a guarantor.

Any party seeking to enforce a guarantee needs to present a paper trail.

He said a claim for summary judgment against a guarantor was a good deal more complicated that a claim for a principal debtor.

A complex case, he concluded, needs a full trial.