The High Court has directed Dunboyne and District Credit Union to place €51,386.55 on joint deposit after finding it had sufficient notice of a court order concerning the payment from the sale proceeds of a Spanish property.
Mr Justice Michael White delivered judgment on 22 February 2013 in proceedings between C.M., the applicant, and A.M., the respondent. The order followed submissions by the credit union, which had been given an opportunity to make representations after an earlier High Court order directed that the payment be reversed, subject to those submissions.
The dispute arose during family law proceedings. The parties’ family home was in joint names and subject to five mortgages. The applicant’s Circuit Court claim sought transfer of the home into her sole name. The Spanish property was sold to the applicant’s sister and brother-in-law, producing net proceeds of €147,948. Correspondence between the parties’ solicitors recorded proposals to hold the proceeds jointly and later a dispute over whether the respondent could use some of the funds to pay debts.
On 1 October 2012, the respondent’s solicitors sent the credit union a €51,386.55 bank draft to discharge a loan of €55,000 made to the respondent for car and education purposes. The applicant was not a party to that loan. The following afternoon, the credit union received a fax from the respondent’s solicitors asking it not to present the draft and to return it, referring to a court order made that morning. The credit union did not contact the bank handling the draft to try to stop its processing.
The credit union argued that the payment was made for valuable consideration and that it had acted in good faith without notice that the respondent intended to defeat the applicant’s claim for relief. The applicant’s counsel argued that the credit union was bound by the earlier order and pointed to its failure to try to halt the draft.
The judge accepted that the credit union acted in good faith, but rejected the claim that it acted without notice. He said the fax, received on the same day as the Circuit Court order, gave sufficient notice for the purposes of section 35 of the Family Law Act 1995. The court also noted that other disbursements had been allowed where the parties consented or the payment was clearly for their mutual benefit; this loan repayment did not fall into either category.
After considering the credit union’s submissions, the court directed it to place the €51,386.55 on joint deposit in the names of the solicitors for the applicant and respondent. The judgment does not decide the wider family law claims, including the applicant’s request concerning the family home.