Bankers' Books Evidence: 'Custody and Control' Essential

The traditional interpretation of the Bankers Books Evidence Act, 1879 (as amended) (the “Act”) was that of an attempt by the legislature to simplify evidence needed in relation to bank records required to prove debt at court hearings. Up until recently it was thought that the very purpose of the legislation was to avoid the necessity of a bank having to produce all original banking ledger books relevant to a case in court. However, two recent and unrelated High Court decisions by different judges suggest that the court’s interpretation of the Act imposes a heavier burden of proof on banks, particularly in terms of their control and custody of records. Recent case law imposes a higher standard of proof on banks In judgments delivered in ACC Bank plc -v- Michael Byrne & Sean O’Toole [2014] and Ulster Bank Ireland Limited –v- Dermody [2014] the judiciary has expressed views which are at odds with earlier decisions of the High Court, where a less rigorous interpretation of what is required in proving a debt has been used. Although the judge held that the courts should have regard to “commercial life as they consider legislative provisions” in the ACC case (published only this month), he could not reconcile the evidence before the court with the only Supreme Court decision where an analysis of the admissibility of bank statements in evidence was undertaken. In the Ulster Bank case the judge formed a similar view notwithstanding that no objection was made to the monies having been actually borrowed in either case. Detailed standard of proof required In the ACC case the court set out its interpretation of the requirements of the Act, where details of loan accounts are kept on computer. In summary he said that a copy of an entry in a banker’s book (e.g. a bank statement) will not be accepted as evidence unless it is proved that:

• at the time of the making of the entry the book was one of the ordinary books of the bank;
• the entry was made in the usual and ordinary course of business;
• the book is in the custody or control of the bank; and
• copies must be compared with original entries and confirmed that they have been cross checked with the originals (which means that a copy of a copy must also be verified!)

Custody and control of records is crucial Until further guidance is provided by the Court of Appeal, the Supreme Court or the legislature, it appears that blanket statements purporting compliance with the Act will not suffice. All matters requiring evidence must be proved by the relevant person having control of the records and particular reference must be made as to how the bank operates accounts on a day to day basis. This has even broader practical implications for debt collection where the loan remains with a bank but recovery of which is outsourced to a third party and where entire books of debt are sold. There is no doubt that these requirements are impractical for banks. However, the recent judgments have set out well-reasoned interpretations of the law and therefore, until such time as the conflicting interpretations of the High Court are resolved, a bank should provide strict evidence as to custody and the control of its records. In addition, original documents should be available to the court. Otherwise a mere technical objection to proofs falling short of the court’s new requirements may defeat what should otherwise be a straightforward claim for recovery of debt.