The wife of discharged bankrupt developer Larry O'Mahony has secured court orders for family living expenses of €9,000 a month out of €1m frozen money.

The order was made pending the outcome of legal action in which the Irish Bank Resolution Corporation has asserted a claim over the money.

Christine Connolly, who claims she owns the money from which the expenses are being paid, had looked for €10,000 a month total living expenses.

This was to include €3,000-€3,5000 to rent a four-bedroom house in south Dublin and €1,644 school fees and extra-curricular expenses for her three children.

The bank had opposed the application.

Its lawyer Cian Ferriter argued that while Ms Connolly and her husband Mr O'Mahony had "lived a Celtic Tiger lifestyle" when they had wealth, they did not have that anymore and should adjust accordingly.

He said IBRC accepted the law provides for payment of living expenses to fund the lifestyle to which a person was reasonably accustomed.

However, the bank was conscious that if its claim to the frozen monies was upheld, the expenses were being funded by the Irish taxpayer.

Senior Counsel for Ms Connolly, Martin Hayden, said the expenses sought were reasonable and his client had reduced the family outgoings.

IBRC had previously agreed to expenses of some €6,500 a month and Ms Connolly wanted an additional sum of €3,750 a month to cover costs including renting a property for her family who must leave their home on Dublin's Shrewsbury Road shortly as it had been repossessed by NAMA, Mr Hayden said.

Mr Justice George Birmingham said Ms Connolly had last June sought living expenses of €8,176 monthly - not including any rent as the family were then still living in Shrewsbury Road - and that sum was reduced, by agreement of both sides, to €6,500.

Ms Connolly was now seeking an additional sum of €3,750 a month to rent one of two "attractive" properties which she considered appropriate.

It was accepted there would have to be some topping up of the €6,500 figure to meet rental costs, there should be some regard to the family's previous lifestyle, they were not required "to live in penury" and their children should continue in their local schools, he said.

Where there was a claim over the monies at issue, the court must also exercise caution, he added.

In the circumstances, he considered the appropriate figure for monthly expenses was €9,000.

He believed that gave scope for the family to find an attractive rental property or live in either of the two properties suggested by them on the basis of trimming back their expenses.

The judge also noted the sides had agreed that a sum of about €67,000 should be paid out to meet some legal costs incurred by Ms Connolly in the proceedings to date, without prejudice to IBRC's right to dispute that payment later.

He reserved other costs issues for determination after the hearing of the full proceedings and adjourned the matter to January.

Today's application arose in an action brought by IBRC against Portal Properties LLC, Ms Connolly and Mr O'Mahony arising from a loan for some €2.5m allegedly advanced to Portal from 2006 by Irish Nationwide Building Society (since taken over by IBRC) to buy a luxury property at Pinheiros Altos, Almancil, Portugal.

It is alleged the couple effectively controlled Portal and allegedly induced INBS to enter into a loan agreement on foot of fraudulent and/or negligent misrepresentations.

IBRC claims part of the security for the €2.5m loan was an undertaking related to sale proceeds of the luxury property, plus an alleged undertaking by Ms Connolly over sale proceeds of an adjoining property owned by Ms Connolly.

Both properties have been sold and the proceeds are frozen pending the court action.

€39,000 living expenses paid to Ms Connolly since June have been deducted from the proceeds of sale of the property which she contends she owns.

The couple have denied the claims.

In her defence, Ms Connolly has denied the claims against her, denied any undertakings and denied any liability to IBRC.

She has also counter-claimed for damages on grounds including IBRC had wrongly alleged fraud against her.

Mr O'Mahony is a former business partner of Priory Hall developer Thomas McFeely.