Kate wanted the funds used to reduce their loan, while Kevin wanted the funds invested in a term deposit. The bank kept the funds in a holding account until the separation was complete, which ultimately took 18 months.

Their separation agreement said Kevin would sign over his share of the property and insurance funds to Kate. Kate believed the bank should have acted on her instruction because she would eventually become the sole owner of the property.

We thought it was reasonable that the bank did not act on either person’s instructions in a relationship dispute. However, there were other options the bank could have explored to ensure the funds were providing some benefit in the interim, but without taking sides.

For example, if the bank had put the funds into a savings account or used the funds to offset interest on the loan, Kate would have been better off. The bank agreed to compensate Kate as a result of our involvement. Given her difficult circumstances, the bank decided the more generous offset option was the fairer.