A First Active customer was unaware that the financial institution lodged £100,000 of his investment funds into a business acquaintance's account, the High Court heard yesterday.

Cornelius Cagney has taken a case against First Active, formerly known as First National Building Society, on grounds including negligence and non-compliance with instructions.

Mr Cagney told the court that he decided to open a joint investment account for himself and his two daughters in 1995. A friend and business acquaintance, Tony Sheridan, then introduced him to the manager of First National Building Society in Kilkenny, Declan McCann.

Mr Cagney said that he handed over two endorsed cheques worth a total of £141,161.48 to Mr McCann, £100,000 of which was subsequently lodged into an account set up for Mr Sheridan under the name of J Sheridan.

Mr Cagney said that he believed that the total investment had been lodged into a high-yielding account. He said that he only discovered the existence of the J Sheridan account two years later, by which point the balance had been reduced by withdrawals to £868.

However, Mr Sheridan's counsel, Colm Ó hÓisín SC, argued that Mr Cagney had agreed to enter into a business venture with his client, and that the £100,000 investment related to this agreement.

Following the death of his wife in a traffic accident, Mr Cagney decided to sell his insurance business and Mr Ó hÓisín suggested that he then discussed starting a fashion venture with Mr Sheridan, who already owned a clothing business, T&E Fashions.

The court heard that an agreement was reached whereby Mr Sheridan would manufacture jeans, which Mr Cagney would then sell. This was denied by Mr Cagney, who said that he had never discussed such a venture, and never had any intention of entering the clothing trade, as his area of expertise was in finance.

First Active's counsel, Michael Counihan SC, argued that Mr McCann had warned Mr Cagney that he would lose control of the £100,000 sum once it was lodged to Mr Sheridan's account.

This was also denied by Mr Cagney, who said that he had never given instructions for any money to be lodged to such an account.

The case is expected to continue until the end of the week.