The Court of Appeal has dismissed Promontoria (Aran) Limited’s appeals in two debt proceedings against Gerry Burns and Anne Burns, finding that the evidence submitted to support summary judgment did not sufficiently establish the debts.
In a judgment delivered on 7 April 2020, Ms Justice Baker said the High Court was right to adjourn the cases to a plenary hearing on the single issue of whether Promontoria had led admissible evidence. The appeal concerned the evidence supporting the claims, not whether the loans had been transferred from Ulster Bank Ireland Limited to Promontoria. That transfer had been established in the High Court and was not appealed.
Promontoria sought summary judgment using affidavits from Andrew Harris, a senior asset manager employed by its servicer, Link ASI Limited. Harris relied on facility letters, guarantees, letters of demand and statements of account. The statements began with balances calculated after the loans had been transferred to Promontoria. The Burns argued that Harris lacked first-hand knowledge and that his evidence was hearsay.
The Court of Appeal described the law on proving debt through business records and a course of dealings as unsettled. It said a non-bank lender may, in some circumstances, rely on credible evidence drawn from business records and a course of dealings. But the evidence must carry indications of reliability, and a defendant’s bare denial may not be enough to prevent the court drawing an inference from it.
The court found important gaps in Promontoria’s evidence. The affidavits did not establish that the servicer had examined Ulster Bank’s historic loan records or that the exhibited copies were true copies of originals held by or for Promontoria. No periodic bank statements were shown to have been sent to the Burns. The account statements produced appeared to have been prepared for the litigation, and the evidence did not connect the loan agreements to the amounts demanded.
The court accepted that the guarantees could provide evidence that guarantees had been created, but said the issue was proof of the underlying debt. Letters of demand could show that demands were made; they did not, by themselves, prove that the debt was due or establish its amount.
Ms Justice Baker concluded that the evidence fell short of what was needed to establish a reliable course of dealings or a sufficient evidential basis for the claims. The appeals were dismissed. The High Court order left the cases for a plenary hearing confined to admissibility of Promontoria’s evidence, with Promontoria permitted to lead any evidence it wished at that hearing. The Court of Appeal did not determine the underlying debt claims.