Judgement by the Court of Appeal Not Allowing Client to Withdraw Funds from His Bank Account
Recently, the Court of Appeal in its inferior jurisdiction overruled a decision given by the Arbiter for Financial Services concerning BNF Bank’s decision not to authorize a client to withdraw funds from a bank account which was in his name own name. Such decision comes after the Bank received information that the client’s mother, who was a debtor in a number of garnishee orders, was using his account to deposit salary she used to receive.
In this case, the client admitted that his mother used his bank account to deposit her salaries but the Arbiter for Financial Services had ordered the Bank to release the funds in his bank account back to the client because no garnishee orders were filed against the client.
As a response, the Bank filed an appeal before the Court of Appeal (Inferior Jurisdiction). The bank noted that the Arbiter for Financial Services did not have the necessary competence to decide on the case because the Bank was observing a court order issued by a different court and also that the Arbiter has shown an incorrect interpretation of the law, as regards the case at hand.
The Court of Appeal rendered a decision that the Arbiter for Financial Services Act (Chapter 555 of the Laws of Malta) does not show that the Arbiter for Financial Services has the necessary competence to decide on all matters that involve financial service providers. The Court of Appeal agreed with the Bank that it is only the relative court that has issued the garnishee order, and not the Arbiter for Financial Services, that has the required competence to withdraw or issue decisions concerning garnishee orders.
The Court of Appeal agreed with the Bank that according to the information given by the client, the funds belonged to his mother and not himself which made it reasonable for the bank to rely on the garnishee orders of the issuing Court and withhold the withdrawal of funds from his account. The Court agreed with the legal position taken by the Bank that the client has to clarify the situation and obtain a court decree authorising him to withdraw funds.
The outcome of the case was that the Court of Appeal overruled the Arbiter’s decision by dismissing the complaint of the client on the basis that the Arbiter for Financial Services does not have the necessary jurisdiction to decide on the matter; therefore, taking a decision in favour of the Bank.
Author: Stephanie Marinova
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