The High Court ordered Paul Browne and Bairbre Wall to repay €111,320 jointly and severally to Vanguard Auto Finance Limited, with interest, after finding they dealt with the cheque proceeds knowing the payment had been made for lodge fit-out goods that did not exist.
The judgment was delivered by Mr Justice Bernard Barton on 14 October 2014. Vanguard had acquired the bank’s rights under a lease and guarantee. Its claim against Browne and Wall concerned a cheque issued by Lombard Ireland in August 2008 for goods said to be needed to fit out lodges at Kilkea Golf Club in Co Kildare.
The court found the invoice was fictitious. The goods were never ordered or supplied, and the bank had paid under the mistaken belief that it was buying them to lease to Arnosford Ltd. The bank had not inspected the goods before issuing payment. When it later sought to realise its security, an inspection found that no fit-out had taken place.
Wall, an interior designer retained on the project, lodged the cheque in her bank account. €106,320 was transferred to Browne Corporate Finance Ltd for project management fees said to be owed by Arnosford; the remaining €9,600 was later transferred to Arnosford. Browne was the finance company’s managing director and majority shareholder, and Wall was his spouse and held one share in the company.
Browne said he instructed Wall to transfer the money while awaiting clarification from a fourth defendant who was seeking additional finance. He maintained that he did not know the true circumstances behind the invoice at the time. Wall did not give evidence and applied for a non-suit at the close of the plaintiff’s case. Her defence said she acted in good faith on instructions and had no personal benefit.
The judge found that the cheque came with a bank printout identifying the lease and the payment’s purpose. He concluded that both defendants knew, by the time the funds were transferred, that the cheque was for lodge fit-out goods. The court also found they should have made enquiries about the unexpected payment before negotiating it. Their use of the proceeds for other purposes was a wrong against the plaintiff and unjust enrichment, making them personally liable.
The court did not find sufficient evidence to establish deceit or conspiracy, including no finding that an employee who issued the invoice had acted dishonestly. It made no finding on whether Browne Corporate Finance was also liable, as that issue was not before it. A €123,175.18 judgment previously obtained against the fourth defendant on the guarantee remained unsatisfied; the court’s order in this case was against Browne and Wall for €111,320 plus statutory interest.