MASTER OF THE High Court Edmund Honohan has said he is not sure if TDs were “fully informed” about emergency Covid-19 legislation that was debated in the Dáil and passed all stages in just one day last year. 

The Civil Law and Criminal Law (Miscellaneous) Bill, which was pushed through in July 2020 as an urgent measure, looked to assist the Courts Service as it was dealing with challenges arising from the pandemic.

The Bill was signed into law by President Michael D Higgins on 6 August 2020.

The laws dealt with the transport of prisoners to court and between prisons; civil proceedings and coroner law (for example, it allowed for more court cases to take place through video conferencing); and ending the requirement for witnesses in court to swear before God.

The Act also included a statutory exception to the rule against hearsay.

The rule against hearsay prevents a witness giving evidence in court on what someone else told him or her (as opposed to what they saw or did).

The rule against hearsay has resulted in difficulties in some circumstances where a document would be inadmissible or not allowed to be used as evidence if the person who originally created that document was not available to appear in court for cross-examination.

Last year, a number of TDs questioned the inclusion of a particular measure in the Bill that they claimed was to the benefit of banks and vulture funds.

Sinn Féin spokesperson on Justice Martin Kenny accused the government at the time of attempting to use Covid-19 emergency legislation as cover to enact a law that favours vulture funds. 

Prior to the legislation being introduced, the rule against hearsay presented difficulties for vulture funds which bought up non-performing loans from the banks. Vulture funds are not given any after sales service or help by the banks once the loans have been bought.

Essentially, banks do not supply witnesses who can give first-hand evidence in cases the vulture funds take against mortgage holders – which were previous customers of Ireland’s mainstream banks.

Such difficulties were highlighted in the Promontoria v Burns case in 2020 – a case which took many investment funds by surprise. 

The Court of Appeal’s judgment ruled that the fund, Promontoria, could not give direct evidence in court on the level of the debt owed and they were unable to bring themselves within any of the exceptions to the hearsay rule, as they couldn’t obtain someone to swear positively to the facts in court. 

Following that ruling, the Civil Law and Criminal Law (Miscellaneous) Bill, sought to deal with such issues.  

Speaking at the time, Sinn Féin’s Kenny said, “The bill would ensure certain court evidence given by vulture funds is no longer deemed as hearsay and inadmissible. This would have serious implications for debtors to funds.”

He also said a briefing to opposition parties by the government on the new laws failed to mention the areas that related to records and the change to the hearsay rule.

“These provisions, particularly Section 14, appear to solve a difficulty felt by vulture funds, whereby they cannot avail of the provisions of the Bankers’ Book Evidence Act.

“But this is not a Covid-related measure – it has nothing to do with addressing difficulties arising from the pandemic. In reality, it is a legislative leg-up for vulture funds in the courts,” he said.

Three Fianna Fáil TDs – Jim O’Callaghan, John McGuinness and Willie O’Dea – also expressed major concerns on those issues.

Speaking in the Dáil this month, McGuinness said the aspect of the bill relating to hearsay evidence “is a further example of how we have armed the banks with the necessary tools to treat people badly”. 

While the new law seeks to ensure some hearsay evidence is admissible or acceptable in court, which could be seen as a benefit to vulture funds seeking judgement against mortgage holders, in his decision on the Act last week, Honohan said:

It may come as a shock to realise that the Act is, in effect, a confirmation that hearsay evidence is generally inadmissible… the rule against hearsay still stands.

In his decision in a court case involving AIB, Honohan is understood to have alerted lawyers to aspects of the new position he ruled upon as regards the law, that despite the legislation seeking to allow some hearsay evidence, it remains the case that there is no alternative way of getting hearsay evidence admitted into court.

“… there is actually no evidence at all of the circumstances which are set out in the Act as preconditions of admissibility,” said Honohan.

Honohan, who is Master of the High Court, and who has been forthright in his opinions on the banks and so-called vulture funds over the past decade, said the Explanatory Memorandum on the Bill (which is supplied to politicians and also published on the Oireachtas website) “contained many doubtful propositions and spin”.

“I am not sure that the TDs were fully informed when the Bill was being debated,” he said. 

In his decision, that was read to the court, he said the the Bill did not go through any cross-party pre-legislative scrutiny, with Honohan pointing out that the legislation went through “all stages in one day”.

“And strangely for an emergency Covid measure, there was no sunset clause,” Honohan said.

Despite the intention of the Bill to permit hearsay evidence in some cases, Honohan decision will alert lawyers to aspects of the new position, taken by him, on the law.

“What is clear, however, is that unless business records are admissible under the constraints set out in the Act, it is now Statute law that they are not otherwise admissible.

“Equally (and this may not have been the intention of the Oireachtas but instead is an inadvertent side effect) the evidence required to prove compliance with Statute must not itself be hearsay.

“It must be admissible as direct evidence probative of the facts material to the circumstances which must be proved as pre-conditions to admissibility of the hearsay.

“Fail to satisfy a pre-condition on the balance of probability, with direct evidence, and the business record is inadmissible.

“It seems clear that for the Oireachtas to have constructed, on the one hand, a mechanism for admissibility of hearsay and, on the other, to have also provided that the court could just ignore that altogether and admit, would be an absurdity. The terms governing admissibility would be otiose.”

At the time that the legislation was introduced by government, the then Justice Minister Helen McEntee told the Dáil that the new law was “not something that has been brought in in the dead of night or which will benefit vulture funds”.

“It is part of a wider package of measures that we want to introduce to ensure that our court system can start to function as close to 100% as possible… the measures will not in any way support vulture funds or hinder anybody in ensuring that justice is served,” she said. 

McEntee also rejected the idea of sunset clause but said she would report back to the Dáil after 12 months.

“I will monitor the situation carefully and I fully take on board the points Deputies have made. If what they are suggesting does happen, then I will respond. I do not believe that will be the case. If what they have said will happen does happen, I can assure the House I will address that,” she said.