Joint account dispute

Garb1

Hi all, hope you can help with some legal knowledge or personal experience. I'll summarize as best I can; person A opens current account and makes a deposit (for simplicity let's say €100). Later invites person B to join as joint account holder for legitimate reasons. Neither account holder make any further deposits. Person A makes regular withdrawals. Person B at a later stage makes a withdrawal (keeping percentages accurate, let's say €40). After a time both people fall out for reasons not connected to the account. Following this, person A decides to sue person B for the sum they withdrew. Person B receives solicitors letter demanding return of their withdrawal. Considering person B made no contribution to the account, my question is do they have a genuine case? Apologies for the ambiguous description but I'm stuck in the middle of the two and am hoping resolution can be found before it ends up in court. I'd greatly appreciate any advice or thoughts on this issue as it threatens to tear a family apart. I may be able to answer any questions if you need more info. Thanks to anyone for your thoughts.

Xavi6

If the account was a one to sign account at the time person B made the withdrawal then person A has no grounds for legal action. Person B was as entitled to take money out as Person A under the terms of a joint account, whether they put any money into it or not.

amdublin

I'd completely agree with poster above that the account was managed correctly and the bank was correct to facilitate the withdrawal.

However if the money was not actually ever person b's does the fact it is in a joint account mean they now own it?? Maybe not... (in my opinion)

I'd assume person A got legal advice and I'd suggest Person B does too.

cirrus55

I think it's a good example just why joint accounts are more geared towards married couples, where there is a big element of trust involved. I think Person A doesn't have a leg to stand on. Unfortunate, but i'm sure lessons will be learned as a result.

Kristopherus

I'd keep the legal eagles out of it. If they get involved, it will result in 2 winners & 2 losers( the account holders).

nlgbbbblth

Was party B added to the account as

1) A named party (thereby changing it from a sole account to a joint account)
or
2) Just a signatory (maintaining it as a sole account)

Correct mandate for
1) Joint account mandate
2) Third party mandate

Garb1

Thanks to all for your replies. Regarding the status of person B with the account, I believe they are a named account holder. Person A has complained to the bank and the bank is satisfied that it acted correctly in allowing person B make a withdrawal.
To answer some of your other comments directly, Amdublin; yes person B is now seeking legal advice, cirrus55 & Kristopherus; yes it's an unfortunate circumstance, especially so because it involves two family members and it could well end up that the only party to profit will be the solicitors.

Marcusm

amdublin wrote: »

I'd completely agree with poster above that the account was managed correctly and the bank was correct to facilitate the withdrawal.

However if the money was not actually ever person b's does the fact it is in a joint account mean they now own it?? Maybe not... (in my opinion)

I'd assume person A got legal advice and I'd suggest Person B does too.

This is the most appropriate response; the joint nature of the account merely goes to the control of the funds not their ownership. Each account holder will likely have to hold the financial institution harmless against operating the account in accordance with its terms but this does no more entitle person B to retain the funds than being a signatory on a corporate account entitle a signatory to the benefit of the funds. If it goes to court, any relevant communications between the parties (including each persons' representations as to the facts) will be what determines the matter.

Fair Player

Both A and B were entitled to lodge and withdraw funds! Sorry for A, but maybe B's action was justified. Only A and B know the facts!

[Jackass]

It's a joint account. Essentially you are giving access of person B to the account with the implication that they can do with the money however they so wish.

The dispute isn't totally a legal one, as legally nothing out of the ordinary has happened, the bank of course has no responsibility, and unfortunately for person A, they gave access to the funds. But if person B took the money out just to mess over person A and it's a family issue, perhaps the family should put pressure on person B to repay the money as it was immoral.

However, if person B used the money for their own purposes and if this was not expressly agreed by person A, or if person A gave person B access to the account for reasons other than what person B used it for (be it a joint business account and person B used the money for personal expenses) then perhaps their is a legal matter to follow.

Of course, person A can sue on the grounds that whilst person B was authorised to access the funds, they were not authorised to use it in the manner in which they did as an agreement between you both, and depending on what the money was used for and the amounts involved and the relationship between the two parties (husband and wife = no case for person A, business partners, perhaps a case for person A) a civil judgement could be made against person B.

Marcusm

[Jackass] wrote: »

It's a joint account. Essentially you are giving access of person B to the account with the implication that they can do with the money however they so wish.

The dispute isn't totally a legal one, as legally nothing out of the ordinary has happened, the bank of course has no responsibility, and unfortunately for person A, they gave access to the funds. But if person B took the money out just to mess over person A and it's a family issue, perhaps the family should put pressure on person B to repay the money as it was immoral.

However, if person B used the money for their own purposes and if this was not expressly agreed by person A, or if person A gave person B access to the account for reasons other than what person B used it for (be it a joint business account and person B used the money for personal expenses) then perhaps their is a legal matter to follow.

Of course, person A can sue on the grounds that whilst person B was authorised to access the funds, they were not authorised to use it in the manner in which they did as an agreement between you both, and depending on what the money was used for and the amounts involved and the relationship between the two parties (husband and wife = no case for person A, business partners, perhaps a case for person A) a civil judgement could be made against person B.

If this were really true, Adam Clayton's personal assistant/house keeper wouldn't currently be in prison. Unless there was an agreement to allow B to use the funds for his own purposes, it is a case of theft.

chris85

Marcusm wrote: »

If this were really true, Adam Clayton's personal assistant/house keeper wouldn't currently be in prison. Unless there was an agreement to allow B to use the funds for his own purposes, it is a case of theft.

Thats not even a similar situation. Adam Clayton's PA would not have a joint account with him. She was authorised to use the account, massive difference to a joint account.

Marcusm

chris85 wrote: »

Thats not even a similar situation. Adam Clayton's PA would not have a joint account with him. She was authorised to use the account, massive difference to a joint account.

I agree that it's not on all fours; however, unless B reasonably believed that A intended to allow B to withdraw and disburse money from the account which A had deposited, B will be guilty of the same theft offence as Mr Clayton's PA. The existence of the joint account (as opposed to a bank mandate) does not of itself provide prima facie evidence as to the ownership of the funds.

Trish56

If you open a joint account with another person, you have the option of allowing withdrawals by having both to sign or either party. It looks like A agreed that either could make withdrawals so A will be wasting his/her money going down the legal route. If A did not wish B to access the funds well then he/she should have requested both signatures or that all withdrawals be allowed on the signature of A only.

[Jackass]

Marcusm wrote: »

If this were really true, Adam Clayton's personal assistant/house keeper wouldn't currently be in prison. Unless there was an agreement to allow B to use the funds for his own purposes, it is a case of theft.

She was a signatory on his account, the same way someone working in a bank may be a signatory on the corporate account and can sign off on cheques. You can be damn sure if you start signing off on cheques for your own personal use you will end up in jail, as happened Claytons P.A.

A joint account is joint ownership, unless an agreement is expressley in the contract of the account prior to the withdraw. i.e. joint borrowers on a mortgage, they are both jointly responsible for the mortgage, regardless of who has paid the mortgage every month for the last 20 years (i.e. "putting money" into the mortgage account), whilst they are jointly borrows, on a joint account, they are both jointly beneficiarys, regardless of which one is putting the money into the account.