The Master of the High Court has refused liberty to enter final judgment in a number of recent cases on the basis that the plaintiff bank did not prove the debt due to it in accordance with the requirements of the Bankers’ Books Evidence Act 1879 (as amended) (the “Bankers Books Act”). The Master had also required that affidavits should be sworn by an officer of the bank, which the Master has construed as being a board director or the company secretary of the bank.

In The Governor and Company of the Bank of Ireland v Paul Keehan1 the Master of the High Court had refused the bank’s motion for liberty to enter final judgment and dismissed the bank’s claim, awarding costs to the defendant, on the basis that the bank did not prove the debt due to it in accordance with the requirements of the Bankers Books Act.

The bank appealed to the High Court to have the Order of the Master set aside.

The High Court judge overturned the Master and agreed that the Bankers Books Act simply has no relevance to a debt claim being brought by a bank for money due to itself. He quoted, with approval, from Moorview Developments Limited v First Active plc2:

“That legislation [the Bankers Book Act] is irrelevant to a case where the contents of the bank’s books are proved in the ordinary way by a witness who can give direct evidence of having analysed the books.

and

“a witness from a bank is entitled to give evidence of the bank’s records showing the amount due by a customer of that bank. That evidence and those records provide prima facie evidence of the liability.”

The judge also referred to the case of Bank of Scotland v Stapleton3 but did not consider its finding to the effect that an employee of the bank itself and not some person employed by another company to whom the task of collecting the debt has been outsourced, is required to give sworn testimony of debt due to the bank.

Comment

This judgment is a welcome development that should simplify and reduce costs in litigation relating to bank claims. It makes it clear that:

  1. an employee of a bank is entitled to give evidence on affidavit of matters such as loan agreements, account balances and transaction histories, from an examination of the bank’s books and records, and that this evidence will be prima facie evidence of debt;
  2. if credible evidence is given that the bank’s records are wrong, further evidence from the bank may be necessary in rebuttal.

Bearing in mind that the employee who gives evidence, whether on affidavit or orally, may be cross examined, such persons should be relatively senior and experienced.

The judgment in Bank of Scotland v Stapleton remains unaffected, which means that an employee of the bank itself and not an employee of a company to whom the task of collecting a debt has been outsourced, should give evidence of debt on behalf of the bank. However, non-employees can of course give other factual evidence of which they have direct knowledge.

It is unnecessary to stipulate that the person swearing the affidavit is an “officer” of the bank as an employee is sufficient. Accordingly, the narrower construction of officer preferred by the Master is no longer relevant.

The Bankers Books Act is in fact largely relevant only to situations where a bank wishes to put evidence before a court without needing to provide a witness who can give evidence of having analysed the bank’s books. This arises primarily in cases in which the bank, whose records are required as evidence, is not a party to the proceedings itself.