High Court partially allows special leave for cross-examination in summary loan proceedings due to factual conflicts.

THE HIGH COURT

[2025] IEHC 351

[Record No. 2017/65S]

BETWEEN

MARS CAPITAL FINANCE IRELAND DESIGNATED ACTIVITY COMPANY

PLAINTIFF

AND

SEAN FARRELL AND VERONICA FARRELL

DEFENDANTS

Judgment delivered by Mr. Justice Micheál O’Higgins on the 4th day of June 2025

Introduction

1. This is an application by the plaintiff (“Mars Capital”) for an order pursuant to O.37, r.2 of the Rules of the Superior Courts, 1986 granting the plaintiff special leave in summary proceedings to admit its affidavits without the necessity for the deponents to attend for crossexamination.

2. The plaintiff contends that cross-examination is unnecessary as the defendants have failed to identify specific conflicts of fact to justify such cross-examination. The plaintiff emphasises the summary nature of the proceedings, and contends that the issues in the case fall to be determined by reference to the loan documentation. The defendants disagree, stating that sufficient conflicts of fact and inconsistencies in the plaintiff’s case have been identified so as to warrant cross-examination. The defendants submit that, while the plaintiff has chosen to bring its case by way of summary summons, it is striking that it has filed countless affidavits from different deponents. These affidavits address substantive issues as well as procedural points. The defendants say that the multiplicity of affidavits is an unusual feature in summary proceedings and difficult to reconcile with summary process. On this basis, the defendants say that the issues in the case are neither straightforward nor devoid of factual conflict.

Procedural background to the underlying proceedings

3. These proceedings were commenced by summary summons dated 16th January 2017. An appearance was filed on the 24th January 2017, and the plaintiff issued a motion for liberty to enter final judgment in the sum of €3,010,421.01 on 28th March 2017. The grounding affidavit of John Hackett, sworn 27th February 2017, avers that on foot of a Letter of Loan Offer dated 15th March 2007, the plaintiff’s predecessor advanced a loan facility to the defendants in the sum of €2,200,000. It is averred that the defendants defaulted in their repayment obligations such that €3,010,421.01 remains due as of the 23rd February 2017, despite demand having been made for repayment of the debt.

4. An important detail to bear in mind is that Sean Farrell, the first named defendant, is now deceased. The late Mr. Farrell has sworn some seven affidavits in the proceedings, including procedural affidavits. I am not concerned here with any admissibility issues concerning Mr. Farrell’s affidavits.

5. On the 5th March 2018, Mr. Farrell swore a replying affidavit challenging the sufficiency of the plaintiff’s proofs. A supplemental affidavit of the plaintiff was sworn on the 17th July 2019 updating the plaintiff’s proofs. On the 18th October 2019, Mr. Farrell swore a second affidavit and criticised aspects of the facility letter and transfer deeds exhibited by the plaintiff. This affidavit also referenced Circuit Court proceedings between the parties. At para. 5 of that affidavit, Mr. Farrell states that he has closely examined the 2014 deed which purportedly transferred the 2007 loan from Irish Nationwide Building Society (INBS) to Anglo Irish Bank Corporation Ltd and its purported sale to Mars Capital. Further, he stated that his and his wife’s names appear on an unnumbered page after page 48. He says this is the only page where their names appear on the 2014 deed provided by the plaintiff. He says that this page is of critical importance as its authenticity is a cause of concern in light of the plaintiff having produced what was claimed to be the “same” deed in the Circuit Court. However, the deed so produced exhibits an entirely different layout of this critical page. Mr. Farrell contrasts the page as it appears in the present proceedings with a copy of the same page as relied upon by the plaintiff in the Circuit Court proceedings.

6. At para. 6 he says that, by virtue of the Circuit Court proceedings, he became aware that at least one page in the 2014 deed, which he says indicates that a 2002 INBS loan in his and his wife’s names was transferred to the plaintiff, had been redacted. He says he and his wife were not aware of the transfer of this redeemed 2002 INBS loan. He says this fact contradicts the plaintiff’s claim that the 2007 loan was transferred to it, and denotes the possibility that the plaintiff purchased a 2002 INBS loan, but not the 2007 loan the subject of these proceedings. He contends that the redaction of this page, along with other information relating to himself and his wife, prejudices their ability to defend the proceedings. He says that the plaintiff wrongly relied upon this page to assert that it held security over their family home. He states that it took the filing and serving of three affidavits in the Circuit Court proceedings by him before the plaintiff, after much delay, conceded that it did not have legal title to the 2007 security/mortgage. In that connection, he refers to Circuit Court affidavits of Joe Carter dated the 4th April 2019 and the 13th August 2019. Based upon these matters, he contends at para. 8 of this affidavit that he and his wife dispute the 2007 loan and any purported transfer of it to the plaintiff. He also says the plaintiff has not to date provided a full statement for the 2007 loan account back to origination, outlining the interest rate applicable at each period.

7. On the 7th February 2020, the plaintiff swore a further affidavit in answer to the defendant’s most recent affidavit. This affidavit exhibited the “Hello” and “Goodbye” letters, together with the executed version of the facility letter the subject matter of these proceedings. The plaintiff contends that, by this time, the debt had increased to €3,532,810.71 as the last payment was made on the 11th July 2011.

8. A third affidavit of Mr. Farrell was sworn on the 9th October 2020, challenging the chain of title and again drawing attention to what are said to be deficiencies in the plaintiff’s proofs. This affidavit also carried out a comparison between these proceedings and the possession proceedings in the Circuit Court.

9. By order of Mr. Justice McDonald made on the 25th March 2022, the then plaintiff merged into the current plaintiff, and this was reflected in an order of Mr. Justice Hanna made on the 9th May 2022.

10. On the 21st July 2022, the plaintiff brought an application to amend its summary summons to comply with the judgment of the Supreme Court in Bank of Ireland Mortgage Bank v. O’Malley [2019] IESC 84. Mr. Justice Coffey made an order on the 14th November 2022 granting the plaintiff leave to amend its summary summons.

11. On the 30th January 2023, the defendant’s solicitor served a notice for crossexamination of four deponents. I need not identify the deponents concerned because that notice has since been overtaken. There was then a further exchange of affidavits in relation to the motion for liberty to enter final judgment. The plaintiff filed an affidavit of Joe Carter sworn on the 13th February 2023, and Mr. Farrell swore affidavits on the 10th February 2023 and 14th April 2023.

12. Separately, there was an exchange of affidavits in relation to an extension of time application by the plaintiff to deliver the amended summary summons. By order of the Deputy Master made on the 20th April 2023, the plaintiff was granted an extension to deliver the amended summary summons.

13. On the 23rd January 2024, an affidavit of Stephen McKeever was sworn on behalf of the plaintiff in support of the application for judgment.

14. The present motion of the plaintiff issued on the 28th February 2024 and is grounded on an affidavit of Rory Knight of Lavelle Partners LLP. A replying affidavit of Mr. Farrell was sworn on 3rd April 2024.

Order 37, Rule 2 of the Rules of the Superior Courts, 1986

15. Order 37, rule 2 provides as follows: “Save in so far as the Court shall otherwise order, a motion for liberty to enter judgment under this Order shall be heard on affidavit: provided that any party desiring to cross-examine a deponent who has an affidavit filed on behalf of the opposite party may serve upon the party by whom such affidavit has been filed a notice in writing requiring the production of the deponent for cross-examination, and unless such deponent is produced accordingly his affidavit shall not be used as evidence unless by the special leave of the Master or the Court, as the case may be. In cases in which the Master has jurisdiction, he shall have the same power as the Court to hear oral evidence.” (my emphasis)

Relevant caselaw

16. Order 37, rule 2 has been considered in a number of cases including Ulster Bank v. Quinn [2015] IEHC 376, Rooney v. Minister for Agriculture [2016] IEHC 729, Danske Bank v. Connotes Ltd. [2016] IEHC 183 and Allied Irish Banks PLC v. O’Callaghan & Ors. [2021] IEHC 14.

17. In O’Callaghan, Simons J. carried out a helpful analysis of the relevant legal principles. These are summarised at paras. 16 – 24 of the judgment. I won’t try to improve upon Simons J.’s list of the applicable principles, save to indicate a number of the themes discussed which are relevant in the present case: In practice, applications to enter judgment in summary proceedings are almost always heard on the basis of affidavit evidence, without cross-examination. This is because a court, faced with a conflict of fact on the affidavit evidence, will generally decide to remit the matter to plenary hearing rather than attempt to resolve that conflict of fact by cross-examination. Simons J. observes that, while that is the case, the Rules of the Superior Courts expressly envisage that there may be crossexamination on an application to enter judgment; the wording of O. 37, r. 2 makes that clear. As appears from the wording, the default position is that a party who fails to produce a deponent in response to a notice to cross-examine will not be entitled to use that deponent’s affidavit unless by “special leave” of the court.

18. The ability to cross-examine was described as “protective” of a defendant by Laffoy

J. in Ulster Bank v. O’Brien [2015] 2 IR 656.

19. In adjudicating upon an application for special leave, the paramount consideration must be the interests of justice. The court must arrange for the determination of the issues in such manner as seems just.

20. Order 37 envisages that each party will, generally speaking, be entitled to test the other party’s affidavit evidence by way of cross-examination if they so require. This is especially important in the case of a defendant where judgment is being sought against them without the benefit of a plenary hearing. The ability to cross-examine the plaintiff's deponents is intended as a protection for a defendant, and there must be some justification for dispensing with it. One such justification could be that there is no conflict of fact on any issue relevant to the determination of the application to enter judgment.

21. Any decision to grant special leave must be based on the actual content of the affidavits themselves, and not on any subsequent submissions which seek to downplay the meaning of those affidavits. If a deponent chooses to make sweeping statements on affidavit, then they may have to answer for those statements by way of cross-examination.

22. The time taken up by cross-examination in summary summons proceedings is likely to be short. This is because in most cases there will either be no material conflict of fact, or the material conflict of fact will be so significant that the appropriate course will be to remit the matter to plenary hearing.

23. In a general sense then, the caselaw distilled by Simons J. emphasises three main themes: firstly, the court has discretion on this matter. Secondly, the court should keep to the forefront of its mind that its paramount consideration is the interests of justice. Thirdly, the default position under the rule is that a party seeking to avoid producing a deponent for crossexamination must obtain “special leave” from the court.

24. Before leaving the caselaw, I will mention one further relevant authority: the decision of the Supreme Court in RAS Medical v. Royal College of Surgeons [2019] 1 IR 63. This case illustrates that it may be inappropriate to reject sworn affidavit evidence by reference to other sworn affidavit evidence or documentary materials, without giving the deponent concerned an opportunity to answer any questions as to why the sworn evidence should not be regarded as credible or reliable. It should be noted that while RAS Medical was not an application for summary judgment, the principle I have referenced may feature in argument, depending on how the issues and evidence play out. Without stretching the point, this factor in my view tends in favour of allowing cross-examination on the facts of the present case.

Application of the legal principles to the facts of the case.

25. The parties sought to be cross-examined are:

(a) John Hackett of Mars Capital on his affidavit sworn 27th February 2017;

(b) Anthony Noonan of Mars Capital on his affidavit filed 19th July 2019;

(c) Joe Carter of Mars Capital on his affidavit filed 13th February 2020;

(d) Hannah Brady, solicitor on her affidavit filed 21st July 2022;

(e) Joe Carter of Mars Capital on his affidavit filed 13th February 2023;

(f) Stephen McKeever on his affidavit filed 8th February 2024.

26. At the conclusion of the hearing of this matter, I gave the parties an opportunity to reduce to writing a list of the disputed issues of fact and inconsistences which it was contended may necessitate cross-examination. The court was provided with a helpful sevenpage document containing the defendants’ suggested list of conflicts and, underneath, the plaintiff’s responses marked in red. This ruling should be considered in light of the detailed submissions made by the parties.

Analysis of the plaintiff’s application

27. The defendants have sought to identify material conflicts of fact which they contend arise from the affidavits in this case. With respect to the bulk of the suggested conflicts, the plaintiff contends that they do not involve a conflict of fact which can be resolved by crossexamination. Rather, they constitute suggested deficiencies in the plaintiff’s loan documentation and exhibits which can be the subject of legal submission before the trial judge and therefore, says the plaintiff, do not require cross-examination. Moreover, the plaintiff emphasises that the defendants do not appear to dispute core facts such as whether the monies were advanced and whether they were repaid.

28. It seems to me that the plaintiff has a valid point in contending that some of the defendants’ suggested conflicts involve matters that can, in large measure anyway, be pursued by way of legal submission. However, for a number of reasons, that cannot be determinative of the question. Firstly, the factual foundation for any legal submissions that may be made would be confined to the bank of facts marked out within the existing affidavits, and not on any enlarged factual picture that may emerge from cross-examination.

29. Secondly, on a fair reading of the affidavits, potentially legitimate questions have been raised which warrant being explored and teased out in oral evidence. These issues include suggested discrepancies in loan documents, alleged inconsistencies in the plaintiff’s interest calculations, issues as to which loans the plaintiff purchased from its predecessor and conflicts as to precisely which loan the monies were advanced under.

30. Thirdly, the defendants have sought to raise a question mark over the validity of some of the plaintiff’s exhibits and have suggested discrepancies as between documents exhibited by the plaintiff in the present proceedings and documents exhibited in Circuit Court proceedings referenced in the affidavits.

31. Based on all these matters, the defendants assert that false and misleading information has been provided by the plaintiff. In that context, I find it difficult to understand the averment made at para. 15 of the plaintiff’s grounding affidavit where Mars Capital avers that the claim for judgment is based on the documentary evidence exhibited to the plaintiff’s affidavits, and that “the authenticity of these documents is not in dispute in these proceedings.” While the plaintiff may feel the defendants’ claims are unsustainable, that should not be conflated with the separate question as to whether the authenticity of the plaintiff’s exhibits has been put in issue. The defendants’ affidavits do seek to challenge the authenticity of certain documents. Of course, while that may be so, it is not the role of a motion judge to adjudicate on these disputed claims, as these are matters for the trial court.

However, in my view, care should be taken to ensure that the information contained within a grounding affidavit is fully accurate.

32. Fourthly, there are aspects of the case that are somewhat unusual. The plaintiff has chosen to prosecute its claim by way of summary summons, thereby suggesting that the issues are straight forward. Yet, the plaintiff has considered it necessary to file some six affidavits in the proceedings to date. Without in any sense commenting upon the merits of the substantive proceedings, I think the defendants have a point to the effect that the multiplicity of affidavits on the plaintiff’s side is not immediately suggestive of a straightforward claim.

33. Moreover, summary proceedings, by definition, are supposed to be progressed with expedition. That has not been the case here. The proceedings have been ongoing for some eight years. Again, without trespassing into the merits of the case, it can be said by way of general comment that that is not immediately suggestive of a straightforward or uncomplicated claim.

34. On the other side of the coin, I think that the defendants are guilty of over-reach in issuing notices to cross-examine in respect of every one of the plaintiff’s deponents. To allow cross-examination of all deponents would risk rendering the proceedings unwieldy and protracted, and would be unlikely to contribute to the prospects of an orderly hearing. It seems to me there is a balance to be struck here: a balance that recognises the emphasis in the case law that the provisions of O. 37 should be viewed as being protective of the defendant, versus the necessity not to allow summary proceedings which are ordinarily dealt with on affidavit to become unwieldy.

Conclusion

35. Applying the legal principles identified by Simons J. to the facts of the case, and bearing in mind that the court enjoys a discretion which should be exercised having regard to the circumstances of the case, I am not persuaded that the plaintiff should be granted special leave with respect to the following three deponents:

(a) John Hackett of Mars Capital on his affidavit sworn 27th February 2017;

(b) Anthony Noonan of Mars Capital on his affidavit filed 19th July 2019;

(c) and (e) Joe Carter of Mars Capital on his affidavits filed 13th February 2020 and the 13th February 2023.

36. In my view, the interests of justice would be served by granting the plaintiff special leave with respect to the following two deponents only:

(d) Hannah Brady, solicitor on her affidavit filed on the 21st July 2022; and

(f) Stephen McKeever on his affidavit filed on the 8th February 2024.

37. I will hear the parties on the terms of the final order and on the question of costs.

Signed: Micheál O’Higgins

Appearances: For the plaintiff, Rudi Neuman B.L. instructed by Lavelle Partners LLP. For the defendants, Cian Farrell, Solicitor of Fitzwilliam Legal.