The Supreme Court has clarified the level of detail required when particularising amounts claimed in summary proceedings and in particular, which elements of the amount claimed are represented by principal, interest, and any bank surcharges or penalty sums.
In Bank of Ireland Mortgage Bank v O'Malley,1 the Supreme Court allowed the borrower’s appeal of a High Court decision granting summary judgment in favour of the plaintiff bank on the basis that the pleadings lacked sufficient detail of the amount claimed to be due, and the constituent elements of the debt. The case highlights the importance for lenders of thoroughly particularising any amounts claimed, both in the pleadings and evidence put before the court in summary proceedings, as well as in any demand issued prior to initiating proceedings.
The plaintiff bank initiated summary proceedings seeking the recovery of amounts due to it after the borrower had defaulted on his loan. The High Court granted judgment in the plaintiff’s favour in the sum of €221,795.53 (plus costs). The borrower appealed to the Supreme Court arguing, in essence, that the bank’s case had not been adequately particularised either in the pleadings or the affidavit evidence before the High Court.
The Supreme Court looked first to the wording of the Rules of the Superior Courts which require that “all necessary particulars” should be stated in a summary summons. This means that all particulars necessary to enable a defendant to understand whether he ought to pay the amount claimed or seek to resist the claim must be included.
The court was satisfied that adequate details had been provided of the terms of the loan, its acceptance, the drawdown of the funds by the defendant, and the defendant’s failure to repay. However, there was only a “bald reference” to the amount of €221,795.53 said to be due with “absolutely no details of how the sum said to be due is arrived at”.
An account statement recording the amount claimed had previously been sent to the defendant, and was also exhibited to an affidavit in the proceedings. However, the Supreme Court noted that there was no detail provided in the account statement as to how the sum due was calculated. The account statement contained no methodology or basis of the calculation for the sum said to be due such that the court was “not satisfied that it would have been obvious to a reasonable person” as to how the sum claimed was calculated. Accordingly, the defendant could not be said to have had “all necessary details” to enable him decide whether he should pay or not.
The Supreme Court took the view that it should not “be too much to ask that a financial institution, availing of the benefit of a summary judgment procedure, should specify, both in the special indorsement of claim and in the evidence presented, at least some straightforward account of how the amount said to be due is calculated and whether it includes surcharges and/or penalties as well as interest.”
Having concluded that the bank had not placed sufficient evidence before the court to discharge its initial onus to provide prima facie evidence of the debt claimed, the Supreme Court remitted the matter to the High Court to give the plaintiff an opportunity to apply to amend the special indorsement of claim to include such details as may be appropriate in light of the judgment.
The judgment emphasises the importance in summary proceedings seeking the recovery of a debt of providing as much detail as possible of the debt and the manner in which it was calculated. Lenders should also be mindful of the importance of providing details prior to initiating proceedings in light of the Supreme Court’s comment that the “more detail the borrower has been given in advance, the more it may be possible to justify a relatively shorthand way of describing how the amount due is calculated” in the pleadings.