Judgment Title: O'Meara -v- Bank of Scotland PLC
Composition of Court:
Judgment by: Laffoy J.
Status of Judgment: Approved
Neutral Citation Number:  IEHC 402
THE HIGH COURT
2010 5874 P
BANK OF SCOTLAND PLC
Judgment of Miss Justice Laffoy delivered on 28th day of October, 2011.
1. The factual background
1.2 These proceedings relate to the monies in two deposit accounts in the joint names of John O’Meara (Mr. O’Meara), the plaintiff’s late husband, and the plaintiff, which were opened in November and December 2008 with the defendant, the earliest bearing account No. 929260/101, to which I will refer as joint deposit account No. 101, and the later bearing account No. 929260/102, to which I will refer as joint deposit account No. 102. The primary relief sought by the plaintiff is a declaration that all monies standing in both accounts on 28th November, 2009, the day following the death of Mr. O’Meara, are the property of the plaintiff. The defendant’s primary answer to that claim is that the set-off by the defendant of the monies standing to the credit of those accounts against the monies due by Mr. O’Meara on foot of a loan account in his sole name bearing No. 471216/128, to which I will refer as the loan account No. 128, which was effected on 5th January, 2010 by the transfer of monies aggregating €1.6m from the joint deposit accounts to loan account No. 128, was valid. The defendant seeks a declaration on its counterclaim to that effect.
1.3 Mr. O’Meara had been a respected and a valued customer of the defendant for many years prior to October 2008, when the events which have given rise to these proceedings commenced. Indeed, he had become a customer of the defendant’s predecessor, ICC Bank Plc, as far back as 1994. Mr. O’Meara was involved in farming and in the beef industry. He reared, and purchased and fattened, livestock, and exported livestock to the Middle East. From the year 2000 onwards he had become involved in property investment, in respect of which he borrowed from various lending institutions, including the defendant. By the end of 2008 he had eleven loan accounts with the defendant.
1.4 Sometime before 26th November, 2008, probably during the previous week, Mr. O’Meara got in touch by telephone with Mr. Dave Savage (Mr. Savage), who was the divisional director of lending at the defendant and asked to meet him. The meeting took place at the defendant’s office at St. Stephen’s Green, Dublin, 2. It was attended by Mr. Savage, who was accompanied by Ms. Ruth Corrigan (Ms. Corrigan), a lending executive with the defendant, and by Mr. O’Meara. Mr. O’Meara indicated that he wanted a loan facility in the sum of €1.6m for working capital for his business. Mr. Savage’s evidence was that he explained to Mr. O’Meara that the matter was not as straightforward as other loans which had been advanced in the past because the defendant’s credit committee was getting “much tighter”. Mr. Savage’s evidence was that Mr. O’Meara indicated that he could “cash back” the loan facility and that he would put in place a deposit with the defendant. The defendant’s officials understood that the monies for the deposit were monies that were coming to Mr. O’Meara from Anglo Irish Bank Corporation Plc (Anglo). The meeting was told that the purpose of the loan was to buy cattle for Mr. O’Meara’s business. The joint deposit accounts Nos. 101 and 102 and the loan account No. 128 were put in place as a consequence of that meeting in the circumstances which I will outline below.
1.5 Joint deposit account No. 101 was set up first. It was the understanding of Mr. Savage and Ms. Corrigan at their meeting with Mr. O’Meara that the funds he had available to set up the deposit account were the sole property of Mr. O’Meara. However, when Mr. O’Meara arrived at the defendant’s office on 26th November, 2008 to open the account he had a cheque drawn on Anglo in the sum of €1,534,126.60 on which the payees were named as “John and Claire O’Meara” and which was crossed “Account Payee only”. The plaintiff’s signature appeared on the back of the cheque. Although the procedures were gone through to do so and Mr. O’Meara signed an application form to open an account in his sole name and the account, which I understand to be deposit account No. 471216/126 referred to in the defence, was set up, it was decided by the officials of the defendant that the cheque could not be used to open a deposit account in the sole name of Mr. O’Meara. A decision was made to open a joint account in the joint names of Mr. O’Meara and the plaintiff.
1.6 Mr. O’Meara was given an application form to open a six month fixed deposit account to take away to be completed by both himself and the plaintiff, while the Anglo cheque was retained by the defendant. Some of the details on that form were completed by Ms. Susan Dwyer (Ms. Dwyer), an official in the deposits section of the defendant. Both Mr. O’Meara and the plaintiff signed the form at the appropriate place on the third page. Towards the end of the form on the fourth page, the mandate provisions under the heading “Withdrawal Instructions” appeared. It was stated on the form that instructions were to be given to the defendant by such persons and in such manner as was set out in the “Deposit Account Mandate” attached. As I understand it, what followed was the “Deposit Account Mandate”. A number of options were then set out as follows:
1.7 The Account which was opened, joint deposit account No. 101, was a six month fixed deposit account on which the rate of interest payable was 5.5% per annum. The defendant’s general conditions governing that type of account contained special provisions in relation to joint accounts. Paragraph (a) of clause 3 provided:
1.9 There were a number of steps in the process whereby the loan of €1.6m to Mr. O’Meara solely was sanctioned. The officials in the lending department submitted an application to the defendant’s credit committee. The credit committee sanctioned the loan, whereupon a letter of offer issued to Mr. O’Meara, which was dated 17th December, 2008. The original of the letter of offer with acceptance signed by Mr. O’Meara was not available to be put in evidence. However, I am satisfied that, despite thorough searches, the original cannot be located and that the photocopy which was put in evidence is a true copy of the original. The document comprised twelve pages, which were stapled together. The first five pages set out the terms of the offer. The next two pages related to acceptance. The next four pages comprised attachments designated (1), (3) and (4). The latter attachment contained two pages. The final page was designated “Attachment (5)” and it is of very considerable significance in the resolution of the issues which arise in these proceedings.
1.10 As regards the offer of the loan, the purpose of which was expressed to be for working capital and no other purpose, and its terms, the advance was to be in the sum of €1.6m and the term was to be three years. Interest on the loan at the rate stipulated, was to be paid by monthly direct debit and the principal was to be repaid by one repayment at the end of the three year term. The loan was to be secured. It was provided that the security for the loan, which would extend to cover Mr. O’Meara’s general liabilities to the defendant, would include five securities, two being extensions of two existing first specific charges over specified land held by the defendant, one being a continuing lien over a certain Portfolio Investment of Mr. O’Meara, and one being a continuing equitable deposit over Mr. O’Meara’s share certificates in a certain development. As I understand the evidence, Dillon Eustace, Solicitors, were retained by the defendant in relation to the foregoing elements of the security. The final element of the security, which was dealt with “in-house”, was described as follows:
1.11 Attachment (5), which is the twelfth page of the letter of offer, is headed “RIGHT OF SET-OFF”. It is addressed to the defendant. Its text is in the following terms:
1.12 When Mr. O’Meara attended at the defendant’s office on 22nd December, 2008 he had not completed the acceptance on page 7. Ms Corrigan got him to sign the acceptance and, as she felt she could not witness his signature, she asked Mr. Abdullah, who was a security man in the defendant’s premises at the time to witness Mr. O’Meara’s signature and he did so.
1.13 To recapitulate in relation to the joint deposit account No. 101, the position as at 22nd December, 2008 was that the balance on the account was €934,126.60, following the withdrawal by Mr. O’Meara of the two amounts of €300,000 each in December 2008. Accordingly, there were not sufficient funds in that account to satisfy the lien/set-off requirement in the letter of offer of 17th December, 2008. What the defendant did in order to bring the monies on deposit with it in the joint names of Mr. O’Meara and the plaintiff up to €1,600,000 was to open a second joint deposit account, that is to say, joint deposit account No. 102, in the joint names of Mr. O’Meara and the plaintiff and to transfer €665,873.40 from loan account No. 128 to that account. This was done on 23rd December, 2008. The sum of €665,873.40 represented the two withdrawals of €300,000 each which Mr. O’Meara had made in December together with the difference between the amount of the Anglo cheque and the sum of €1,600,000. The reason a new account was opened, rather than transferring those monies to joint deposit account No. 101, was that in the interim since the opening of that account the rate of interest payable by the defendant on six months fixed deposit accounts had been reduced from 5.5% to 5%. Although, on the evidence, Mr. O’Meara did not sign any documentation in connection with the opening of the new account nor have any involvement in it, it is reasonable to infer that he tacitly consented to the approach adopted by the defendant. On the expiry of the fixed terms of the two joint deposit accounts during 2009 the accounts were rolled over for further fixed terms, albeit at lower interest rates. In my view, nothing turns on this.
1.14 As regards loan account No. 128 which had been opened on 23rd December, 2008, in addition to the transfer of the sum of €665,873.40 to joint deposit account No. 102, Mr. O’Meara drew down the sum of €250,000 on 23rd December, 2008. In the first four months of 2009 Mr. O’Meara drew down further amounts aggregating €680,000. Some of the withdrawals were effected by transfer by the defendant to the account of Mr. O’Meara at the Naas branch of Bank of Ireland, that is to say, the account named “John O’Meara Farms” and others by cheques in favour of Mr. O’Meara, which were collected by him. The interest due on the loan account was paid monthly up to and including the month of September 2009. The debit balance on loan account No. 128 at that stage was €1,597,057.40, which factored in some small amounts debited for bank fees. The next direct debit for interest was due on 23rd October, 2009.
1.15 On 8th July, 2008 Mr. O’Meara had informed the plaintiff that he had been diagnosed with cancer and that he had between a year and eighteen months to live. Despite that and a serious setback in the summer of 2008, Mr. O’Meara continued to run his business. The evidence of the officials of the defendant who met him between October and December 2008 was that they were unaware that he was unwell, although, when his accounts were reviewed in July 2009, the fact that he had lost a considerable amount of weight was remarked on. In any event, on the evidence, I am satisfied that the officials of the defendant were not told by the defendant that he was terminally ill and that they were not aware of that fact during 2008 or during the first three quarters of 2009. On 16th October, 2009 Mr. O’Meara’s accountant, John P. Greely, wrote to Mr. Savage referring to the fact that Mr. O’Meara had been in hospital and would, hopefully, be released the following weekend. Mr. Greely stated that Mr. O’Meara had been advised by his doctor, in order to assist with a speedy recuperation, not to take any act or part in the business for at least six weeks. The purpose of the letter was to inform the defendant that Mr. O’Meara had no option but to cancel the direct debit payments for October and November 2009.
1.16 The response of the defendant, in a letter from Mr. Savage to Mr. Greely dated 20th October, 2009, was that in order to avoid “these facilities” falling into repayment arrears, the defendant proposed to utilise “the funds currently on liened deposit in a/c 929260 to fund these repayments”. An application form to be signed by Mr. O’Meara and the plaintiff, requesting that the defendant make transfers from the joint deposit accounts “to meet loan repayments on loan facilities attaching to reference 471216” was enclosed for signature. While it is not of any particular relevance to the issues the Court has to decide, I understand that the proposal did not relate solely to the interest payments on loan account No. 128. Mr. Greely’s response on behalf of Mr. O’Meara on 6th November, 2009 was that Mr. O’Meara was unable to accede to the request in relation to the “liened deposit account”.
1.17 Mr. O’Meara died on 27th November, 2009. His will, which was not put in evidence, has not been proved. As I understand the evidence, the plaintiff is the principal beneficiary under his will. However, that, unfortunately, is of no benefit to the plaintiff because the Court was informed that his estate is “very insolvent”.
1.18 The officials of the defendant had become aware of the death of Mr. O’Meara by 1st December, 2009. At a meeting held on 18th December, 2009 with Mr. Greely, the defendant’s officials, Mr. Savage and Michael Corcoran of the defendant’s BRU (Business Restructuring Unit), who had “taken over the file” in relation to Mr. O’Meara, Mr. Greely was informed that the defendant intended setting off the sum of €1.6m in joint deposit accounts Nos. 101 and 102 against the loan facility. Although, as the documentation discovered by the defendant illustrates, in late December 2009 internally some of the defendant’s officials had concerns as to whether the defendant was entitled to exercise a right of set-off against the funds in the joint deposit accounts, on 5th January, 2010, as I have recorded earlier, sums aggregating €1,600,000 were transferred from the two joint deposit accounts to loan account No. 128. As I understand the position, the effect of those transactions was to close joint deposit account No. 102, but a balance remained in joint deposit account No. 101, which by late March 2010 had grown to €46,209.51.
1.19 No contact was made by the defendant with the plaintiff following the death of Mr. O’Meara and prior to the transfers from joint deposit account Nos. 101 and 102 on 5th January, 2010. While no issue arose on this point in the course of the evidence, it is clear on the documentation before the Court that Mr. Greely’s client was Mr. O’Meara, not the plaintiff. The plaintiff attended at the defendant’s office at St. Stephen’s Green in Dublin on 22nd March, 2010. She met with Ms. Dwyer. The plaintiff’s evidence was that she wished to withdraw €20,000 from the joint deposit account with her late husband. Ms. Dwyer’s understanding was that she wished to withdraw all of the funds lodged to that account. In any event, Ms. Dwyer informed the plaintiff she could not withdraw the funds because there was a right of set-off on the account. The plaintiff requested that the balance on the account be transferred electronically to her personal current account at the Kilcock branch of Allied Irish Banks Plc and signed a withdrawal form on 22nd March, 2010. By letter dated 22nd March, 2010 Ms. Dwyer, on behalf of the defendant, and referring to the withdrawal request, required the plaintiff to furnish the following documentation: an original or a certified copy of the death certificate of Mr. O’Meara; an affidavit by Mrs. O’Meara confirming her marriage; and a copy of the marriage certificate. Subsequently, in April 2010 the plaintiff furnished the required documentation. However, the balance in joint deposit account No. 101 was not transferred to her personal account as she had requested.
1.20 These proceedings were initiated by a plenary summons which issued on 18th June, 2010.
2. The plaintiff’s case and the defendant’s defence and counterclaim as pleaded
2.2 To a large extent, the narrative contained in the statement of claim delivered on 12th July, 2010 is consistent with what I have outlined above. However, it is recited in the statement of claim that on or about 22nd December, 2008 the plaintiff and Mr. O’Meara opened joint deposit account No. 102 and authorised the transfer into the said account of monies in the sum of €600,000. The figure mentioned in incorrect, but, more importantly, it was contended on behalf of the defendant that the plaintiff had no involvement in the opening of that account. I will return to the issue to which that contention, which I am satisfied is factually correct, gives rise later.
2.3 In paragraph 6 of the statement of claim it is pleaded that the sums lodged to both deposit accounts were lodged by the plaintiff and Mr. O’Meara for the benefit and future welfare and security of the plaintiff and their sons, that the lodgement by Mr. O’Meara was intended to be “an advance” to the plaintiff and that Mr. O’Meara and the plaintiff intended that, in the event of the death of Mr. O’Meara, the plaintiff should have sole legal and beneficial ownership of the monies standing to the credit of the two joint deposit accounts. The defendant in its defence denies each of those assertions and further asserts that the purpose asserted by the plaintiff, namely, to provide for the future welfare and security of the plaintiff and her two sons was never disclosed to the defendant. On the contrary, it is contended that at the time of the creation of the deposit accounts and at all material times thereafter it was represented to the defendant that the monies would provide “cash-backing” for the loan advanced to Mr. O’Meara.
2.4 It is pleaded in the statement of claim that it was an express or an implied term of the contract between the plaintiff and Mr. O’Meara, on the one hand, and the defendant, on the other hand, that no monies would be withdrawn from the joint deposit accounts “without the express authority in writing of one of the Account Holders namely the Plaintiff and/or the said John O’Meara”. While the defendant does not admit the plea as to the express or implied contractual term, the defendant does admit that the defendant would be entitled “to set-off monies standing to the credit of” the joint deposit accounts or any of them “with the authority (express or implied) of any one of the account holders, namely, the Plaintiff and/or the late John O’Meara” (emphasis in original). Further, it is pleaded by the defendant that it was entitled “to set-off monies standing to the credit of” the joint deposit accounts or either of them on the instructions, authority or consent (in each case express or implied) of Mr. O’Meara. In other words, as I understand it, the position of the defendant, as pleaded, assuming it assimilates withdrawal instructions with “set-off” instructions, is not wholly in line with Ms. Dwyer’s interpretation of the withdrawal instructions on the mandate – that one account holder, Mr. O’Meara, was the only person who could give the defendant withdrawal instructions on the account.
2.5 The plaintiff pleads that the document entitled “Right of Set-Off” attached to the facility letter of 17th December, 2008, on its true construction, as regards the granting of a right of set-off, applied only to such accounts as were maintained in the sole name of Mr. O’Meara. In response, the defendant pleads that the plaintiff signed the “Right of Set-Off” document and that, although it appears from the face of the document that she signed as a witness to the signature of Mr. O’Meara, in signing the document –
(b) she became estopped from denying that she gave such authority.
2.6 The plaintiff pleads that the defendant acted wrongfully, unlawfully and in breach of contract and/or negligently and in breach of duty and of fiduciary duty on 5th January, 2010 in exercising a purported right of lien and set-off against the two joint deposit accounts. It is pleaded that the defendant did not have authority or the consent of the plaintiff or of Mr. O’Meara to transfer the funds as it did. The defendant denies all the allegations of wrongdoing and, additionally, denies that any duty of care was owed by the defendant to the plaintiff or that at any material time the defendant stood in a fiduciary capacity to the plaintiff.
2.7 In addition to claiming a declaration in the terms set out at para. 1.2 above, the plaintiff also seeks an order directing the defendant to pay the monies standing on 28th November, 2009 to the credit of joint deposit accounts Nos. 101 and 102 to the plaintiff together with interest thereon at the rate applicable by the defendant to six month term deposits up to the date of such payment. The plaintiff also claims various ancillary reliefs including damages for negligence, breach of duty, statutory and fiduciary duty and breach of contract and interest pursuant to the Courts Act 1981 or contractual interest. The position of the defendant is that the plaintiff is not entitled to any of those reliefs.
2.8 In its counterclaim, the defendant pleads that the common intention as between the defendant, the plaintiff and Mr. O’Meara was that the plaintiff would be a party to the right of set-off document, not only as a witness but also as a signatory to the joint deposit accounts to which the document related, but through inadvertence or mistake, the defendant, Mr. O’Meara and the plaintiff omitted to make sure that it was made clear in the text that the plaintiff signed not only as a witness but also as a party to such arrangement. Accordingly, the defendant seeks to have the document rectified so as to reflect the true intentions of the parties and seeks an order to that effect.
2.9 In its counterclaim, the defendant pleads that it has at common law a right to exercise the right of set-off in respect of the two joint deposit accounts. Finally, in its counterclaim the defendants pleads that, if the defendant has no entitlement to exercise the right of set-off in question, any sums which were unlawfully set-off enure for the benefit of the estate of Mr. O’Meara, subject to grant of probate and the taking out of letters of administration.
2.10 In general, in her reply and defence to the defendant’s counterclaim the plaintiff joins issues on the various matters which are pleaded in the defence and counterclaim, specifically denying any contract between her and the defendant other than the contract in relation to the joint deposit accounts. She denies that she agreed that the monies in the joint deposit accounts or any part thereof would provide “cash backing” or any security for the loan to Mr. O’Meara. She denies that there was a common intention that she should be a party to the right of set-off document and any intention to become bound thereby in her capacity as a co-signatory or in any contractual capacity. Finally, the plaintiff pleads that, in seeking the equitable relief of rectification, the defendant has failed to do equity and is guilty of equitable fraud and by its actions and omissions had disentitled itself to claim equitable relief. That plea is particularised by various alleged failings and actions on the part of the defendant, for example –
(ii) failing to advise her that she should seek legal advice before executing that document,
(iii) attempting to exploit the weakness of the plaintiff’s position, particularly in the absence of legal advice, and
(iv) failing to inspect the signed document and draw to the plaintiff’s attention that it showed her signature as merely that of a witness rather than a party.
2.11 It is noteworthy that it is not alleged by the plaintiff that either the execution of the mandate to open joint deposit account No. 101, or the execution of the right of set-off document, was procured by pressure, undue influence or any unconscionable conduct on the part of Mr. O’Meara. Moreover, there was nothing in the evidence of the plaintiff which would suggest that Mr. O’Meara exercised duress or undue influence over her. She was the only witness who could testify as to what transpired between her and Mr. O’Meara. I now propose to consider her evidence in relation to the transactions with the defendant.
3. The plaintiff’s evidence
3.2 The plaintiff’s evidence was that towards the end of November 2008, after he had started chemotherapy treatment, Mr. O’Meara told the plaintiff in the kitchen of their home that he was opening a joint account in both of their names and he was going to put “over a million and a half into it in cash” for the plaintiff and “the boys”, should anything happen to him. The plaintiff’s evidence was that she knew nothing about the defendant bank. As regards the documents she signed in relation to accounts with the defendant, her evidence was that she did not remember specifically any documents, although she recollected that her late husband got her to sign something. She did not remember seeing the front of the Anglo cheque but acknowledged that her signature was endorsed on it. She also acknowledged that the signatures on the application/mandate and on the right of set-off document were her signatures. She had no specific recollection of signing either document. Her evidence was that her late husband would have just asked her to sign her name and she would have done so. She received no explanation as to why she was signing the right of set-off document.
3.3 I accept the plaintiff’s evidence in relation to the matters referred to in the next preceding paragraph. I am satisfied that her late husband did not involve her in his business or financial affairs, save to procure her signature when it was necessary. Although the address of Mr. O’Meara and the plaintiff, as shown on the bank statements and other documentation in relation to joint deposit account Nos. 101 and 102, was their family home, Pitchfordstown Stud, Kilcock, County Kildare, the plaintiff’s evidence was that post was not delivered to the house but was collected by her husband from what she described as a “pigeon hole” in the Post Office. Her evidence was that she never saw post from a bank or even utility bills. I accept her evidence on that, because it is consistent with the documentation which was put in evidence. Mr. O’Meara’s address as shown on the bank statements or other documentation in relation to loan account No. 128 was his business address in the town of Naas. Many of the relevant documents were marked with a date stamp showing the date of receipt and the same type of receipt appears on the documentation in relation to joint deposit account Nos. 101 and 102.
3.4 Early in the course of her cross-examination the plaintiff stated that she knew nothing about the “Anglo money” and that she did not recall any form of joint investment in Anglo and she had no knowledge of her husband and herself making other joint investments previously. The plaintiff’s evidence was that she was unaware of the withdrawal by Mr. O’Meara of the two sums of €300,000 each from joint deposit account No. 101 in December 2008 and her explanation was that she never discussed money with her late husband. Later, she stated that in November 2008, when her husband told her he was depositing €1.5m, she was not concerned to check as to whether all the “paper work” was “legal”. She trusted him. She gave that evidence in a very distressed state and the remainder of her cross-examination was postponed until the following day.
3.5 A number of controversies arose when the cross-examination of the plaintiff was resumed on the following day. First, as was pleaded in the statement of claim, the plaintiff, in an affidavit to ground an application for an interlocutory injunction, which had been brought on behalf of the plaintiff at an early stage in the proceedings, had averred that the joint deposit account No. 102 had been opened on 22nd December, 2008 by her and Mr. O’Meara. It was put to her that that averment was not correct. Her response was that it was absolutely correct on the basis of the information she had seen in the bank statements. That, I believe, was her honest understanding of the situation. The plaintiff did not agree with the explanation put to her by counsel for the defendant as to the circumstances in which joint deposit account No. 102 was opened, which I do not find surprising. However, she did say that her understanding was that the monies which went into joint deposit account No. 102 were her and her husband’s money.
3.6 Secondly, contrary to the submission made on behalf of the defendant, I did not understand the plaintiff to make a concession in her evidence that the proceeds of the Anglo cheque were the sole property of her husband and were not joint property of herself and her husband, as the cheque prima facie indicated. The particular response of the plaintiff in cross-examination on which the defendant relies to support that submission arose in the context of counsel for the defendant putting to the plaintiff that Mr. O’Meara had effective control over the monies represented by the Anglo cheque, that the plaintiff gave him control over the monies, that she had not been induced into or tricked into so doing and that it was implausible that, given the knowledge she had at the time about Mr. O’Meara’s health, she would not have read at least the important points of the relevant documents and would not have understood their import. The plaintiff’s response was that her husband was an exceptionally wealthy man, she had no reason to be “intricately reading any small print”, she signed “millions of documents”, she did not know what she was signing, she trusted her husband emphatically, he was a wonderful provider and there was nothing they ever wanted and she knew nothing “about intricacies”. She went on to say that she believed he had a cheque for €1.5m in his hand. At that stage counsel interjected saying “With respect”. The plaintiff then stated:
3.7 The impression I formed of the plaintiff was that she was an intelligent and honest woman who respected her late husband and, as regards the business and financial matters, deferred to him. Her perception was that her husband was a very wealthy man and that perception may have been justified before the fateful events of mid-September 2008 and subsequently globally. I can fully appreciate why in late 2008 and throughout 2009 there were matters of greater concern to her other than the meaning and detail of business and financial documents which her husband asked her to sign.
4.2 Out the multiplicity of issues which arise on the pleadings, the evidence and the submissions made by the parties, I propose addressing the following, which I consider to be the key issues:
(b) How did the monies in joint deposit account No. 101 devolve on the death of Mr. O’Meara?
(c) Were the monies in joint deposit account No. 101 impressed with a trust?
(d) What was the effect of the death of Mr. O’Meara on any valid right of set-off vested in the defendant?
(e) How was the defendant permitted to operate joint deposit account No. 101 having regard to the terms of the mandate given by the joint account holders?
(f) What was the effect of the operation of joint account No. 101 by the defendant from the time it was opened to 23rd December, 2008?
(g) Did the defendant have a right of set-off against joint deposit account No. 101 on 5th January, 2010 on any basis – at common law, in equity or contractually?
(h) If it is found that a contractual right of set-off was not created over joint deposit account No. 101, should an order rectifying the right of set-off document, that is to say, attachment (5) to the letter of offer of 17th December, 2008 be made?
(i) Is the plaintiff estopped from contending that the defendant had no right of set-off against joint deposit account No. 101?
(j) Does the beneficial ownership of joint deposit account No. 102 differ from the beneficial ownership of joint deposit account No. 101 and, if it does, what are the consequences?
5.1 While on the pleadings and in their submissions the parties addressed the beneficial ownership of the monies in the joint deposit accounts, in my view, the starting point for the Court has to be consideration of who was the beneficial owner of the monies represented by the Anglo cheque before those monies were lodged in joint deposit account No. 101. As I have already indicated, prima facie, the cheque being payable to Mr. O’Meara and the plaintiff jointly, the monies were owned by them jointly. The provenance of those monies was not traced, although the evidence suggests that they represented the proceeds of an investment, which it must be inferred was in the joint names of Mr. O’Meara and the plaintiff, with Anglo, which had matured. This is supported by the application to the defendant’s credit committee, which is a reliable source as to what was known to the defendant’s officials, which records that Mr. O’Meara “received €1.6m cash from a matured Anglo Irish Bank investment”. Save that it establishes that Mr. O’Meara alone put up the entire money to acquire the joint investment with Anglo, because of the application of the equitable principles which I will outline, it is immaterial to the issue of the beneficial ownership thereof that the plaintiff was unaware of the existence of the joint investment.
5.2 In their written submissions, counsel for plaintiff asserted, reflecting what is pleaded in paragraph 6 of the statement of claim, that the monies deposited in joint deposit account No. 101 were contributed by both Mr. O’Meara and the plaintiff through the medium of the Anglo cheque, which was payable to them jointly. It was reiterated that the purpose of so doing was for the benefit and future welfare and security of the plaintiff and her two sons. Having referred to their relationship of husband and wife, it was asserted that Mr. O’Meara “is presumed to have advanced his “contribution” to the plaintiff”, without citing any authority. Counsel for the defendant did not, in their submissions, address the plaintiff’s reliance on the presumption of advancement. While I consider that the presumption of advancement does bear on the ownership of the funds lodged to joint deposit account No. 101, I consider that its application must be considered by reference to the acquisition of the investment with Anglo in the joint names of Mr. O’Meara and the plaintiff.
5.3 The core question which has to be considered as a prelude to determining all of the issues outlined earlier is what was the effect of Mr. O’Meara contributing the entire monies for the acquisition of the investment with Anglo but acquiring it in the joint names of himself and his wife, the plaintiff. Professor Delany in Equity and the Law of Trusts in Ireland (5th Ed.) quotes (at p. 170) the following passage from the judgment of Keane J., as he then was, in JC v JHC (High Court, unreported, 4th August, 1982), which explains the doctrine of advancement:
5.4 The Anglo cheque was payable to Mr. O’Meara and the plaintiff jointly and, prima facie, represented monies jointly owned by Mr. O’Meara and the plaintiff. Even if, as one must assume was the case, Mr. O’Meara was the sole contributor to the matured investment, the proceeds of which were represented by the Anglo cheque, in the absence of rebutting evidence, the presumption that Mr. O’Meara intended to advance the plaintiff in acquiring the investment in joint names applies, so that it must be assumed that Mr. O’Meara and the plaintiff were the beneficial owners of the matured investment and monies represented by the Anglo cheque.
5.5 The foregoing analysis is based on the assumption that the matured investment was some type of investment, for example, a bond, purchased by Mr. O’Meara in the joint names of himself and the plaintiff. If that assumption is incorrect and the matured investment was a fixed term deposit in their joint names, which matured by expiry of the fixed term, the position as to beneficial ownership is the same. Professor Delany states (at p. 162):
5.6 The defendant attempted to establish through cross-examination of the plaintiff, that Mr. O’Meara was the sole beneficial owner of the monies represented by the Anglo cheque, which was at variance with the position adopted by the officials of the defendant in their dealings with Mr. O’Meara. On 26th November, 2008 the officials of the defendant became aware that Mr. O’Meara and the plaintiff were the joint payees on the cheque. Aside from the fact that the cheque was crossed “Account Payee only”, the officials of the defendant obviously formed the view that Mr. O’Meara and the plaintiff were the joint owners of the proceeds of the cheque and all of the defendant’s conduct thereafter is consistent with that conclusion. In particular, the defendant required that the application to open a six month deposit account in which the proceeds of the Anglo cheque were to be lodged be made in the names of, and by, both Mr. O’Meara and the plaintiff, and this was done. In consequence, joint deposit account No. 101 was opened in the joint names of Mr. O’Meara and the plaintiff. I have come to the conclusion that the defendant has not displaced the presumption of advancement which applies to the creation of the joint investment with Anglo. Accordingly, I find that Mr. O’Meara and the plaintiff were the joint beneficial owners of the money in joint deposit account No. 101 when it was opened with the proceeds of the Anglo cheque.
5.7 If the Court was only concerned with the effect of the opening of joint deposit account No. 101 and the fact that the plaintiff was the surviving joint account holder, that conclusion would be of little relevance, having regard to the decision of the Supreme Court in Lynch v. Burke  2 IR 159. On the authority of that decision, the legal effect of the opening of that account in the joint names of Mr. O’Meara and the plaintiff on foot of the application signed by both of them was that the defendant became contractually bound to both account holders and, as a matter of contract between the plaintiff, as surviving joint account holder, and the defendant, she became entitled to the balance in the account on the death of Mr. O’Meara. The relevance of establishing the beneficial ownership of the monies on deposit in joint account No. 101 relates to the defendant’s claim to a right of set-off.
6. Devolution on death of Mr. O’Meara
6.2 It may be that that proposition is based on the contention that Mr. O’Meara was the sole beneficial owner of the monies lodged to joint deposit account No. 101. If that is the case, it is based on a false premise in the light of the conclusion I have reached as to the beneficial ownership of the monies represented by the Anglo cheque. As I have indicated–
(b) given the husband and wife relationship of Mr. O’Meara and the plaintiff, the presumption of advancement, rather than the presumption of a resulting trust, has arisen in relation to the beneficial ownership of the matured investment, in respect of which the cheque issued,
(c) there is no evidence, objective or otherwise, to rebut the presumption of advancement and, in the absence of any other evidence, there is no basis for inferring that the conduct of Mr. O’Meara in proffering ex post facto the Anglo cheque to “cash-back” the loan he was applying for is inconsistent with the finding of advancement, and, in any event, it is reasonable to infer that he did not anticipate that the defendant would have to resort to those monies; and
(d) the conduct of the defendant was wholly consistent with the monies being jointly owned by Mr. O’Meara and the plaintiff.
6.3 Different considerations apply to the monies in deposit account No. 102, which I will address later.
6.4 It is difficult to understand the rationale of Clause 3(d) of the terms and conditions in relation to joint deposit account No. 101, which I have quoted at para. 1.7 above, in requiring production of “testamentary documentation”, whether Mr. O’Meara died testate or intestate, and whether representation has been raised to his estate or not. As a matter of law, the plaintiff, as the surviving account holder, was entitled to the monies in joint deposit account No. 101 at the date of his death, if the defendant has not established that it is entitled to a right of set-off against that account.
7.2 The following passage from Paget’s Law of Banking (13th Ed., 2007) (at para. 11.28) quoted by counsel for the defendant in their submissions represents the law in this jurisdiction:
7.3 As regards the application of that proposition in the case of joint deposit account No. 101, even if the account holders, Mr. O’Meara and the plaintiff, regarded themselves as holding the money in a fiduciary capacity, that was not known to the defendant, and the defendant was entitled to, as it did, treat the funds as the absolute property of both Mr. O’Meara and the plaintiff, the account holders. However, the manner in which the defendant was permitted by the account holders to operate that account is crucial to the determination of the ultimate ownership of the monies lodged to it in November 2008.
8. Effect of the death of Mr. O’Meara on any valid right of set-off
8.3 In the interest of clarity, I should say that, while recognising that on the death of Mr. O’Meara the banker/customer relationship between him and the defendant terminated, the submission made on behalf of the plaintiff, in reliance on a passage in Derham on The Law of Set-Off (4th Ed. 2010) at p. 739, that the defendant was precluded after his death from combining accounts, which could have combined during the lifetime of Mr. O’Meara, although strictly an issue between the personal representative of Mr. O’Meara and the defendant, is not in line with the rationale underlying the decision of the Supreme Court in Dempsey v. Bank of Ireland.
9. Permitted operation of joint account No. 101
9.2 However, both on the pleadings and in its counsel’s written submissions, the defendant goes further, in that it contends that the defendant was entitled to set-off monies standing to the credit of joint deposit account No. 101 with the authority (express or implied) of any one of the account holders, namely, the plaintiff or Mr. O’Meara. The submission made on behalf of the defendant, while superficially attractive, is fallacious. It is based on the well established principle that, while the normal relationship between a banker and its customer is that of debtor and creditor, quoad the drawing and payment of the customer’s cheques as against the money of the customer in the banker’s hands the relationship is that of principal and agent as stated by Lord Atkinson in Westminster Bank Ltd. v. Hilton (1926) 43 TLR 124 at p. 126. On the basis that the instructions given on the application form were that “any one Account Holder” could give written instructions, it was submitted that either Mr. O’Meara or the plaintiff could instruct the defendant to withdraw money from the account without reference to the other. That is undoubtedly correct. However, whether it is correct, as the defendant contends, that the creation of the right of set-off document was a form of withdrawal instruction, and that it was entitled to treat the execution of attachment (5) as an instruction by Mr. O’Meara only and, as such, as having been provided by any one account holder, so that the defendant was entitled to act upon it and effect the set-off without further reference to the plaintiff, is primarily a matter of construction of the withdrawal instructions in the application form.
9.3 When it was executed by the plaintiff, the application form, which included the withdrawal instructions, was a “standalone” document. It would not be correct to regard its commercial context as subsuming the terms of the letter of offer dated 17th December, 2006 which stipulated the terms on which the loan would be granted to Mr. O’Meara.
9.4 When one looks at the entirety of the application form it is clear that it was envisaged that the completed application form might be brought in person by the applicant to the defendant or might be sent in by post. It set out, for instance, identification requirements generally regarded as “anti-money laundering” requirements, although they seem not to have been a consideration in this case. Taking an overview of it, the terms of the application form were addressed to the ordinary bank customer, who might or might not attend in person at the defendant’s office. Applying “commonsense principles” advocated by Lord Hoffman in ICS v. West Bromwich B.S.  1 WLR 896, which were adopted by the Supreme Court in Analog Devices B.V. v. Zurich Insurance Company  1 IR 274, given the purpose and nature of the application form, in my view, the withdrawal instructions which I have quoted are not open to the construction that, by ticking the “any one Account Holder” option, one joint account holder was permitting the defendant to put in place what would, in effect, be a form of security over the monies in the account, such as a right of set-off, without the consent of the other joint account holder. The words used in the explanation to the customer, which I have quoted earlier, must be given their natural and ordinary meaning. The explanation points to the withdrawal of funds, even all of the funds, by one account holder without requiring the consent or signature of the other. It does not point to, or envisage, a withdrawal of the funds by the defendant pursuant to a right of set-off given by one account holder.
9.5 Moreover, the reality of the situation is that the defendant did not consider that the right of set-off could be put in place without the consent of the plaintiff. In fact, Ms. Corrigan’s evidence was that when Mr. O’Meara brought the letter of offer back to the defendant on 22nd December, 2008 she considered that the right of set-off document “looked okay” because it was signed by Mr. O’Meara and the plaintiff, she having noted that the account was in joint names.
9.6 Accordingly, I have come to the conclusion that the defendant cannot make the case, in reliance on the withdrawal instructions in the application form, that the right of set-off could be validly put in place on the written instructions of Mr. O’Meara only as one account holder.
10. Operation of joint deposit account No. 101
10.2 Counsel for the defendant, properly in my view, took issue with the plaintiff’s contention that the sum of €665,873.40 which was lodged in joint deposit account No. 102 when it was opened on 23rd December, 2008 was from monies provided by Mr. O’Meara and the plaintiff jointly. The source of that money was loan account No. 128 in the sole name of Mr. O’Meara. It is clear from the statement of account that the transfer was made out of that account on 23rd December, 2008. The purpose of the transfer was to “top-up” the monies on joint deposit in the joint names of Mr. O’Meara and the plaintiff to the level of the security by way of right of set-off specified in the letter of offer of 17th December, 2008. The practical aspects of the transaction were that the joint deposit account No. 102 was opened and there was an internal transfer from loan account No. 128. On the basis of the documentation and oral evidence before the Court, it is clear that neither Mr. O’Meara nor the plaintiff were in any way consulted in advance about the implementation of the transaction, although, as I have stated earlier, clearly Mr. O’Meara tacitly accepted what was done. The account holders were not required to fill out a new application form because joint deposit account No. 102 was considered by the defendant’s officials to be a “sub-account” of joint deposit account No. 101.
10.3 As to what the implications of the transactions were, it was submitted on behalf of the defendant that, in commercial terms, the defendant’s “own” monies were used to “top-up” the joint deposit account over which Mr. O’Meara was required to give security. From a banking law perspective, as regards the first step in the transaction, the withdrawal from loan account No. 128, Mr. O’Meara became a debtor of the defendant in the amount drawn down. As a result of the second step in the transaction, that the sum drawn down was placed by the defendant’s officials in the joint names of Mr. O’Meara and the plaintiff in joint deposit account No. 102, the question arises as to whether the ownership thereof, including any right to which the ownership was subject, was the same as affected the balance which remained in joint deposit account No. 101 or different. As a matter of principle, one must come to the conclusion that it was not the same, for the reasons I have set out later at para. 17. Indeed, one must also conclude that, notwithstanding that her name was put on joint deposit account No. 102, there was no contractual relationship between the plaintiff and the defendant in relation to the monies in that account.
10.4 Having regard to those conclusions, it is necessary to address the remaining issues in relation to both joint deposit account No. 101 and the joint deposit account No. 102 separately.
11. Right of set-off against joint deposit account No. 101 – general observations
11.2 The contention of the defendant in this case, however, is that it is not limited to whatever right was created by the set-off document, but that its right of set-off falls within each of the following recognised categories of set-off, namely:
(b) equitable set-off, although that is not pleaded; and
(c) contractual set-off.
12. Bank’s common law right of set-off?
12.2 Accordingly, it is unnecessary to express a definitive view on the submission made on behalf of the plaintiff, by reference to the decision of the Supreme Court in Bank of Ireland v. Martin  I.R. 189, that, in the absence of a contractual arrangement, a bank may not combine a deposit account and a loan account, although I appreciate that particular emphasis was laid in the submission on the fact that the deposit account was a joint account, whereas the plaintiff was not indebted to the defendant and the plaintiff was not relying merely on the proposition that in this jurisdiction combining accounts at common law is confined to current accounts.
12.3 Nor do I consider it necessary to comment on the point made by counsel for the plaintiff in their submissions that, in any event, the defendant could not combine the loan account with any other account at any time prior to the death of Mr. O’Meara, because the loan account was for a term of three years, and the principal advanced had not become repayable prior to Mr. O’Meara’s death. Having said that, the reality of the situation is that, apart from whatever, if any, right of set-off the defendant has, it is clear on the evidence that the defendant is not going to recover the amount due on loan account No. 128.
13. Equitable set-off?
13.2 As counsel for the defendant pointed out, the most recent exposition of the principle of equitable set-off is to be found in a note on the decision of the Court of Appeal in England and Wales in Geldof Metaal Constructie NV v. Simon Carves Ltd.  4 All ER 847, which, in my view, is of little assistance in addressing the application of the principle to the facts of this case. Having considered the jurisprudence on equitable set-off, Rix L.J. set out his conclusions in para. 43 of his judgment, which is quoted in full in the note. He set out his conclusion at page 849 as follow;
13.4 The application of the doctrine of equitable set-off in the context of bank accounts is considered in Paget (op. cit.) at paras. 29.27 et. seq. relied on by counsel for the defendant. Reference is made by the editors of Paget to the decision of the Court of Appeal in Bhogal v. Punjab National Bank  2 All ER 296 which, like many of the authorities on the issue of equitable set-off, arose in the context of entitlement of a plaintiff to summary judgment. The appeal related to two actions, in each of which the plaintiff, who had monies on deposit in the defendant bank, had obtained summary judgment for the amount on deposit, and the defendant bank appealed, contending that it should be granted unconditional leave to defend the actions because it had a valid defence by way of equitable set-off. The basis of the claim for equitable set-off was the defendant bank’s contention that each of the plaintiffs was merely a nominee of a third party, who was indebted to the defendant bank and that it was entitled to set off the credit balance on each deposit account against the debit balance on the third party’s account. It was held by the Court of Appeal that, since the evidence did not clearly establish that the deposit account of each of the plaintiffs was a nominee account, the defendant bank could not raise a defence of equitable set-off in their actions. In the Court of Appeal the following passage from the judgment of Scott J. at first instance in one of the cases was quoted and in the judgment of Bingham L.J. there was reference to “the wisdom of the rule” which Scott J. laid down. The passage (which appears at p. 306 in the judgment of Bingham L.J.) is to the following effect:
13.6 The basis on which the defendant sought to demonstrate that there was an equitable right of set-off does not stand up to scrutiny. The defendant undoubtedly entered into two agreements with Mr. O’Meara which were closely connected from its perspective and probably also from Mr. O’Meara’s perspective. Under one, say Agreement A, the defendant advanced a loan of €1.6m to Mr. O’Meara. Under the other, say Agreement B, Mr. O’Meara and the plaintiff deposited the proceeds of the Anglo cheque with the defendant. The defendant contends that the two agreements are intimately connected and it would be unjust to enforce Agreement B by requiring the release of the monies on deposit on the demand of the plaintiff, because to do so would be to ignore the defendant’s claim to recover the loan advanced under Agreement A. That proposition ignores the absence of mutuality between the defendant’s liability under Agreement B and its entitlement under Agreement A. In the absence of some contractual foundation binding not only Mr. O’Meara, but also the plaintiff, the requirement of mutuality cannot be overridden by the defendant. It is not unjust that the defendant should be compelled to release the monies on deposit to the surviving joint account holder, the plaintiff, in accordance with its contractual obligation. The principle of equitable set-off does not apply.
13.7 Furthermore, it ill behoves the defendant to seek to rely on an equitable principle in support of the exercise of a right of set-off against the plaintiff, having regard to the fact that there was absolutely no communication between the defendant and the plaintiff and, in particular, the defendant did not advise the plaintiff to obtain legal advice and made no inquiry as to whether she had the benefit of legal advice in accordance with the principles referred to later in para. 15.6, when dealing with the issue of rectification. Given the plaintiff’s lack of understanding of what the defendant contends she was doing in subscribing her name to the right of set-off document, and her lack of understanding as to what was being agreed by Mr. O’Meara with the defendant, it would be unfair and inequitable to enforce the right of set-off against the plaintiff, if she is not contractually bound.
13.8 The kernel of the issue as to whether the right of set-off was validly exercised on 5th January, 2009 is whether the defendant, as it clearly had intended to do, effectively obtained from both of the account holders of joint deposit account No. 101 a contractual right to set-off Mr. O’Meara’s liability on loan account No. 128 against the monies in that account.
14. Contractual right of set-off?
14.2 Counsel for the plaintiff submitted that the right of set-off document should be construed contra proferentem. They submitted that, as a matter of interpretation of that document, neither Mr. O’Meara nor the plaintiff agreed to a right of set-off being effected against the deposit accounts. In fact there was only one deposit account in existence at the time – joint deposit account No. 101. For illustrative purposes, and not intending to preclude any argument which the personal representative of the defendant may make in the future, it can be observed that, if that account had been in the sole name of Mr. O’Meara, as a matter of construction, it would appear to have been captured by the right of set-off document in that, as borrower/account holder, he agreed that the defendant might “debit any credit balance on any account in my name”, which, prima facie, would capture the credit balance on a deposit account in his sole name. The real problem with the right of set-off document, from the defendant’s perspective, is that it was clearly drafted for execution by a sole account holder and, while it might have been, it was not adapted to bind joint account holders conferring a right of set-off on the defendant over a specific existing joint deposit account. The document did not signify that it was to be executed by a person other than a sole account holder and, ex facie, the plaintiff signed as a witness. Having regard to the finding I have made that Mr. O’Meara and the plaintiff had a joint legal interest in, and were jointly beneficially entitled to, joint deposit account No. 101, I consider that the right of set-off document was not effective to bind the plaintiff as one of the joint account holders and, in the events which happened, as the surviving account holder, so as to confer a right of set off on the defendant in relation to that account.
14.3 From the evidence of Mr. Savage, it is clear that when he reviewed the documentation following the meeting with O’Meara in July 2009, he noticed the fact that the right of set-off document was signed by the plaintiff only as a witness and had a concern about that. However, no steps were taken to rectify the situation.
14.4 It is convenient at this juncture to consider the relevance or otherwise of an authority relied on by counsel for the plaintiff – the decision of Costello J. in O’Keeffe v. O’Flynn Exhams and Partners and Allied Irish Banks (the High Court, Unreported, 31st July, 1992). The basis on which that case was decided against Allied Irish Banks in favour of the plaintiff, Mrs. O’Keeffe, is summarised in the judgment as follows (at p. 35):
15.2 On the basis of the defendant’s claim for rectification as pleaded, it is not suggested that the text of the right of set-off document as quoted at para. 1.11 above requires rectification. What is suggested is that the details of execution require rectification. If the application were acceded to, the details of execution (the words in bold type having been added) would read:
Signed/Witness John O’Meara
Signed/Witness: Claire O’Meara
Address: Pitchfordstown Stud
In the interests of clarity, I should say that the elements which are shown in italics are the signatures of Mr. O’Meara and the plaintiff, the date of execution by Mr. O’Meara, which I think it probable was inserted by Mr. O’Meara, and the address and final date, which also appear in manuscript and I think it probable were inserted by Ms. Corrigan on 22nd December, 2008. It was submitted on behalf of the plaintiff that, given that the preceding text is not proposed to be rectified, the additions to the right of set-off document proposed would still not expressly authorise the exercise of a right of set-off of the monies due on loan account No. 128 against the balance in joint deposit account No. 101.
15.3 The legal basis on which a court can order rectification is well settled. It was recently succinctly summarised by Clarke J. in Mooreview Developments & Ors. v. First Active Plc & Ors.  IEHC 214 in the following terms (at para. 9.9):
15.5 Even if it were possible to conclude that it was the intention of the plaintiff to execute the right of set-off document not merely as a witness but in a manner which would bind her as one of the beneficial owners of joint deposit account No. 101, and that the document needs to be rectified to reflect that, a question would arise as to whether the Court should exercise its discretion to grant the equitable relief of rectification in circumstances in which the defendant took no steps whatsoever to ensure that the plaintiff understood the implications of executing a document which would have given the defendant the type of security it was seeking over the monies in joint deposit account No. 101. In particular, the question would arise as to whether the defendant should have advised the plaintiff to seek legal advice to avoid being disentitled to equitable relief. While, on the basis of the finding I have made in the next preceding paragraph, the question is hypothetical, I propose to comment on it generally.
15.6 Apart from reference to a text (Hodge on Rectification, 1st Ed., 2010 at para 1 – 41 et. seq.), no authority was specifically cited by counsel for the plaintiff to support their contention that the defendant did not take the steps it should have taken, including advising the plaintiff to obtain independent legal advice. I have noted earlier that the plaintiff did not allege either in the pleadings or in her evidence that Mr. O’Meara exerted undue influence over her or that he took any unfair advantage of her. Her position was that she just signed what Mr. O’Meara put in front of her without seeking or obtaining any explanation. There is authority in the United Kingdom that a bank is always on inquiry when a wife provides security for her husband’s debt and that it must take reasonable steps to satisfy itself that the practical implications of the proposed transaction have been brought home to the wife, in a meaningful way, so that she enters into the transaction with her eyes open so far as its basic elements are concerned and reliance by the bank upon confirmation from a solicitor, acting for the wife, that he advised her appropriately is sufficient to discharge the bank’s obligation (the decision of the House of Lords in Royal Bank of Scotland v. Etridge (No. 2)  2 AC 773). The manner in which the defendant went about obtaining what it considered as security for the loan it was advancing to Mr. O’Meara solely over a deposit account in the joint names of Mr. O’Meara and his wife, the plaintiff, is so egregiously at variance with the principles enunciated by the House of Lords in Etridge (No. 2), which, as academic commentators have suggested should be applied by the courts of this jurisdiction (Mee (2002) 27 Ir. Jur. 292; Delany Equity and the Law of Trusts in Ireland, 5th Ed. at p. 746), that it is unlikely that a court would afford an equitable remedy to the defendant to perfect its security, if such was necessary and it was appropriate to do so, without seeking to explore in depth the application of those principles in this jurisdiction, having regard to the conduct of the defendant and the potentially improvident nature of what the defendant was requiring the plaintiff to do.
15.7 Finally, it is pertinent at this point to make two general observations in the interests of clarity. First, in the context of the application of equitable principles, in my view, it is necessary to distinguish between the operation of a joint deposit account by the account holders, which banks, understandably, as reflected in condition 3(a) of the general conditions quoted at para. 1.7 above, leave to the account holders, on the one hand, and the creation of what, in effect is a type of security over a joint deposit account, on the other hand. Secondly, I accept the argument advanced on behalf of the defendant that the defendant did not occupy a fiduciary position vis-à-vis the plaintiff and that the plaintiff’s claim, insofar as it is based on alleged breach of fiduciary duty, is misconceived.
16.2 The defendant’s submission was that it is to be found in the plaintiff’s assent to the lodgement of the Anglo cheque, which was to be “cash backing” for the loan to Mr. O’Meara, and her agreement (in effect) that Mr. O’Meara could mandate withdrawals from that account without reference to her, and her knowledge (if not her explicit assent) of the set-off commitment provided by Mr. O’Meara. All the plaintiff did was that –
(b) she signed the application form to open joint deposit account No. 101, which included the withdrawal instructions, which resulted, in due course, in the joint deposit account being depleted to the extent of €600,000, and
(c) she subscribed her name as a witness to Mr. O’Meara’s signature to the right of set-off document.
16.3 The fundamental problem for the defendant in this case is that it did not get the commitment it required from the plaintiff in order to obtain the security which it sought. In fact, it completely ignored the plaintiff’s interest. The result is that it must suffer the consequences of its own mistake.
17. Ownership/ rights over joint deposit account No. 102
17.2 On the basis of the doctrine of a resulting trust, as Mr. O’Meara, through the medium of the draw down from loan account No. 128, was the sole contributor to the monies in joint deposit account No. 102, prima facie, he was the beneficial owner of those monies, unless the presumption of advancement overrides the doctrine of resulting trust.
17.3 The plaintiff implicitly relied on the evidence of Mr. Savage in support of its contention that the monies in joint deposit account No. 102 were jointly beneficially owned by Mr. O’Meara and the plaintiff and passed to the plaintiff by right of survivorship. Mr. Savage was asked in cross-examination why a deposit account in the sole name of Mr. O’Meara was not opened to bring up to the level of €1.6m the balance on deposit with the defendant, given that the right of set-off document extended to any account in his name. The response of Mr. Savage was that Mr. O’Meara wanted it that way. He wanted the money to go back into the joint deposit account, which he had set up at the particular time. What he had instructed the defendant to do was to put the money in the name of himself and his wife. That response is inconsistent with the evidence of Ms. Corrigan and Ms. Dwyer, who were the officials of the defendant who were implementing the transactions on 23rd December, 2011 and who, on their evidence, did so without reference to Mr. O’Meara.
17.4 Even if Mr. O’Meara intended that the monies in joint deposit account No. 102 would be beneficially owned by himself and his wife, effect could only have been given to that intention subject to any trust or equitable interest known to the defendant to which the monies were subject. Mr. O’Meara was facilitated by the defendant in the draw down the sum of €665,873.40 from loan account No. 128 and its transfer to joint deposit account No. 102 for a specific purpose – to top up the monies on deposit to the level of the set-off requirement conditioned into the letter of offer of 17th December, 2008. Therefore, the monies in joint deposit account No. 102 must be deemed to have been impressed with an obligation in equity to fulfil that purpose. Accordingly, the right of the defendant to have that purpose fulfilled would have had priority in equity over the beneficial ownership of the monies, whether the beneficial ownership was vested in Mr. O’Meara and the plaintiff jointly or in Mr. O’Meara solely. It follows that, wherever the beneficial ownership was vested, the plaintiff cannot rely on beneficial ownership by right of survivorship to make the case that the defendant did not have a right of set-off as against those monies for Mr. O’Meara’s sole liability on foot of loan account No. 128 on 5th January, 2010.
17.5 The question whether Mr. O’Meara and the plaintiff jointly were the beneficial owners, or Mr. O’Meara was the sole beneficial owner, of the monies on deposit in joint deposit No. 102 subject to the defendant’s right of set-off arises between the plaintiff, on the one hand, and the personal representative of Mr. O’Meara, on the other hand. Representation has not been raised to the estate of Mr. O’Meara and his personal representative was not before the Court. Accordingly, it would be inappropriate for the Court to express any definitive view on that question. Notwithstanding the absence of the personal representative of Mr. O’Meara, it has been necessary to reach a conclusion as to whether beneficial ownership of the monies, wherever it lay, was subject to the right of the defendant to set-off, and I have concluded that it was.
17.6 Consistent with the view I have expressed earlier in relation to the analogy with the liquidation situation addressed by the Supreme Court in Dempsey v. Bank of Ireland, the personal representative of Mr. O’Meara would acquire no better title to the monies in joint deposit account No. 102 than Mr. O’Meara had.
18. Summary of conclusions and orders
18.2 There will be judgment for the appropriate sum, the quantification of which should be agreed between the parties.
18.3 Having come to the conclusion that the plaintiff did not have a beneficial interest in the monies lodged in joint deposit account No. 102, the plaintiff is not entitled to any relief in respect of those monies. While, in the absence of the personal representative of Mr. O’Meara before the Court, I think it is inappropriate to make the declaration sought by the defendant in its counterclaim that the defendant was entitled to set-off the monies in that account, I propose that a declaration be made that the plaintiff has no claim to the said monies.
18.4 Subject to that, the defendant not being entitled to rectification of the set-off document, the defendant’s counterclaim will be dismissed.