The ruling on stage payments in Cork District Court yesterday underlined the principle that purchasers should not be forced to hand over payments in excess of the value of the work done.

In the case taken by Kenny Homes of Limerick against Mr John Leahy of Mallow and the EBS Building Society, the judge found that stage payments had been loaded unfairly against the purchaser who was being asked to pay 90 per cent of the cost before 90 per cent of the work had been completed.

"We are absolutely delighted," Mr Martin Walsh, head of lending at EBS, said. "It vindicates the stand EBS has taken on behalf of the consumer. We believe it's now time for the official machinery to act to bring the practise to an end as we believe it's an unfair practise."

The Law Society, which has been campaigning against stage payments for years, also welcomed the judgement, saying it hoped it was "another nail in the coffin in the practise of stage payments".

"The entire issue of stage payments should now be addressed in detail by the Director of Consumer Affairs in the hope that she will take the same robust line on the issue as her predecessor," the society's director-general Mr Ken Murphy said.

However, the judge confined his ruling to the case before him, saying that stage payments in principle were not unfair. Indeed, he lent support to the argument advanced by the Irish Home Builders Association (IHBA) that they kept a lid on house prices when he said that if they were abolished altogether, they would bring prices in Cork much closer to Dublin.

"I am pleased to see the judiciary acknowledge that stage payments are an acceptable way of doing business," said Mr Michael Goggins, director of the Irish Home Builders' Association (IHBA).

The Director of Consumer Affairs, Ms Carmel Foley, said yesterday that her office had looked into the issue in detail, including getting the advice of senior counsel on the IHBA's voluntary code on interim payments. She was of the opinion that stage payments themselves were not unfair except where they exceeded the HomeBond limit.