The High Court has refused Allied Irish Banks plc permission to rely on two affidavits without making their deponents available for cross-examination in proceedings over an alleged outstanding loan balance.
Mr Justice Garrett Simons ruled on 18 January 2021 that the bank’s application for special leave under Order 37, rule 2 of the Rules of the Superior Courts should be refused. The application followed a notice from fourth-named defendant Brendan Neligan requiring the bank’s deponents to attend for cross-examination.
The proceedings concern a loan facility said to have been made available in September 2008. The facility restructured an earlier loan and included additional funds, secured on land where the borrowers later erected apartments. The bank issued its summary summons in 2016 and sought liberty to enter judgment in 2017. Judgment had already been entered against the third-named defendant after no appearance was entered on his behalf.
Neligan’s affidavits set out grounds on which he sought leave to defend. He alleged that the facility was granted to a partnership in which he held a 10 per cent share, that the bank knew of the arrangement, and that his exposure was limited. He also alleged that bank management misrepresentations led him not to sell shares in the bank that were pledged as additional security. A further complaint concerned the bank’s handling of a proposed sale of apartments on the mortgaged land.
The bank’s replying affidavit, sworn by Andrew Osborne, disputed parts of that account. Among other things, it stated that Neligan had not received advice about the value of his shares, had not been induced to provide them as security, and that delays in selling the property arose from difficulty obtaining vacant possession. The judge said these statements went beyond describing documents and appeared to contradict Neligan’s evidence on relevant matters.
The court said the interests of justice govern an application for special leave. A defendant’s ability to test affidavit evidence by cross-examination is a protection under the rules, and the bank had to provide some justification for dispensing with it. The judge found this was not an appropriate case to grant special leave. Neligan may cross-examine Osborne and the first deponent, whose affidavit was linked to Osborne’s through exhibited documentation.
The ruling did not decide whether Neligan or the other borrowers had a defence to the loan claim, nor did it determine the bank’s application for judgment. That application remained to be listed for hearing. Neligan was awarded costs of the special-leave motion, stayed pending determination of the proceedings, including any appeal. No costs were awarded to the other defendants.