High Court of Ireland Decisions

1. This is an application for a Mareva type injunction restraining the Defendants and each of them from in any manner or fashion howsoever disposing of, dealing with or otherwise charging their assets and bank accounts or dissipating same below the sum of £300,000 and an Order freezing all bank accounts held in the name of the Defendants and each of them or any such accounts beneficially owned by the Defendants and/or any account in which the Defendants have an interest below the sum of £300,000 and thirdly an Order restraining the Defendants by themselves, their servants or agents from dissipating the proceeds of sale of the property at 4 Oakley Drive, Grantstown, Waterford.

2. The first Plaintiff is a body corporate under the laws of Belarus and is the manufacturer of tractors. The second Plaintiff is an Irish company and is a wholly owned subsidiary of the first Plaintiff. It is the distributing company for Ireland for the tractors. The first Defendant is a citizen of Belarus and was managing director of the second Plaintiff from 1st January, 1993 to 31st July, 1997. The second and third Defendants are the wife and daughter of the first Defendant and are also citizens of Belarus.

3. It is alleged by the Plaintiff that the first Defendant misappropriated monies from the second Plaintiff and defrauded the second Plaintiff. These are very serious allegations. At this stage there is no Statement of Claim, and of course fraud must be pleaded with great particularity, and accordingly I do not have the sort of particulars of the claim which will eventually have to be given. The amounts concerned are very large, almost £300,000 according to the grounding affidavit of this motion. It is a matter of some concern to me that after the interim Order was granted, it was conceded in a replying affidavit that over £95,000 of this was in fact paid into an account of the first named Plaintiff. This must have been known to the Plaintiffs when the original affidavit was sworn.

4. I realise this is an interlocutory application made at an early stage and I do believe, having regard to all the affidavits filed, that the Plaintiffs have shown a good arguable case that at least some monies may have been misappropriated. I emphasise I am not making any finding that this is so, only that an arguable case has been made out, although not for the amount claimed by the Plaintiffs in the ex parte application.

5. In considering this matter, I am governed by the judgment of the Supreme Court in In The Matter of John Horgan (1996) 1 ILRM 161. The principal findings in that case were set out in the headnote as follows:-

6. This case also quoted with approval five criteria set out by Denning M.R. in Third Chandris Shipping Corporation -v- Unimarine S.A. 1979) Q.B. 655 at page 668. These criteria were set out by the Chief Justice in the Horgan case at page 164 as follows:-

7. I propose to consider each of these criteria in relation to the present case.

8. With regard to the first point, as I have said, I find it disturbing that the Plaintiffs misled the Court on the amount claimed by some £95,000. They now concede this money was paid to them on 27th March, 1995 and therefore they must have known of it.

9. In relation to the second point, in the grounding affidavit the Plaintiff did not state any points made against it by the Defendant, although these points are now before the Court.

10. With regard to the third point, the Defendant does have assets within the jurisdiction.

11. With regard to the fourth point, namely, the risk of assets being removed or dissipated, the Plaintiffs make the case that the Defendants are non-resident in this country and are selling their home. In fact the Defendants have been resident here since 1993 and I am satisfied that they are genuinely seeking to purchase a new home here. The Defendant has started a business here, a fact which again was known to the Plaintiff when the interim application was made but was not disclosed to the Court. I think it is unlikely in the extreme that the Defendants will voluntarily return to Belarus, particularly in view of the allegations against them by a Belarus company. The Horgan case contained the passage at page 167:-

12. I do not think there is any evidence before me to establish such an intention on the part of the Defendants.

13. Fifthly, an undertaking as to damages has been given, but it is also clear that the second Plaintiff is insolvent. Certain undertakings have been offered by the first Plaintiff and a property which is not owned by either Plaintiff has been offered as a security. I have no way of knowing the validity of the undertakings or the power of the first Plaintiff to give them. It in fact may well also be an insolvent company.

14. I would emphasise that a Mareva injunction is an extremely drastic remedy. In some civil law countries there is provision for the freezing of assets pending the outcome of a claim. There is no such provision in our law, and a Mareva injunction cannot be used to attain this purpose. The Court must look very carefully at any application to ensure that it is justified on the principles set out above.

15. Accordingly, I do not think that the Plaintiff has satisfied the necessary criteria in this case and I refuse the application.