The High Court granted Allied Irish Banks p.l.c. summary judgment for €146,874.35 against Gerard J Smith, finding that allegations about earlier payments from his account did not provide a defence to the overdraft debt now claimed by the bank.
In a judgment dated 13 November 2015, Mr Justice Max Barrett said AIB had demanded repayment of the overdraft in June 2011. The facility was repayable on demand, and the judgment said Mr Smith had made no payment since then.
Mr Smith argued that a substantial part of the overdraft had arisen because his then wife allegedly forged his signature on a direct debit form to pay credit card debts she had incurred. He also alleged that AIB had been negligent in allowing money to be taken from his account. The judgment treated the alleged forgery and negligence as allegations, not findings.
The court examined account statements showing that, from August 2007 to August 2009, payments from Mr Smith’s current account covered four credit cards, including one in his then wife’s name. From September 2009, payments covered only three cards, all in Mr Smith’s name.
Applying the presumption associated with Clayton’s Case, the judge said payments into a running account were taken to repay liabilities in the order they arose. The judgment described this as a rebuttable presumption and said no agreement or statute had been identified that displaced it in this case.
The court found that €188,691.83 was paid into the account from September 2009 until it was stopped and the overdraft facility withdrawn. It concluded that this repaid the earlier overdraft used for the credit card payments and other bills. Mr Smith then overdraw the account again, creating the €146,874.35 debt AIB claimed. The judge said that later debt was not tainted by the alleged earlier fraud.
The court said Mr Smith could pursue separate options, including reporting his former wife to Gardaí or bringing claims against her or AIB, but those matters did not provide a defence to AIB’s summary judgment application. It also considered the statutory provisions and cases cited for Mr Smith and found no basis to depart from its conclusion.
Applying the summary judgment test, the court held that Mr Smith had no defence, even an arguable one, and granted the judgment sought. The decision was limited to the application before the court; it did not determine whether the alleged forgery or negligence occurred.