THE HIGH COURT
1989 No. 7315P
BETWEEN
SUPERWOOD HOLDINGS PLC
SUPERWOOD LIMITED SUPERWOOD EXPORTS LIMITED
SUPERCHIP LIMITED
SUPERWOOD INTERNATIONAL LIMITED AND SUPERWOOD (U.K.) LIMITED
PLAINTIFFS
AND
SUN ALLIANCE AND LONDON INSURANCE PLC
TRADING AS SUN ALLIANCE INSURANCE COMPANY,
PRUDENTIAL ASSURANCE GROUP COMPANY LIMITED,
CHURCHJWGENERAL INSURANCE COMPANY LIMITED AND
RAYMOND P. MCGOVERN AS LLOYDS UNDERWRITERS
SOLE GENERAL REPRESENTATIVE REPUBLIC OF IRELAND
DEFENDANTS
Judgment of Mr. Justice Roderick Murphy dated the 25th day of July, 2002. 
1.        Application
This is an application nominally by all of the Plaintiffs but, as became apparent during the hearing, in reality by Superwood Holdings Pic, to vary the Mareva relief granted by Smyth J. on the 4th day May, 2001.

The Applicant seeks the release of the sum of almost €30,000 in order to pay the taxed costs and interest thereon of a third party, Coyle Hamilton Limited, on whom all the Plaintiffs, inter alia, had been allowed by the court to serve an amended statement of claim on terms that that party's cost be paid. That order was dated 4th December, 2000. A certificate of taxation issued on 30th August, 2001.
The applicant says that these costs predated the Mareva injunction when the Plaintiffs had ample assets to discharge them. The Plaintiffs are anxious to comply with the order of the court and discharge the costs. 
2.        Grounding Affidavit
Mr. Richard John Bunyan, the chairman of each of the six Plaintiffs, referred to the background to the application.
On the 27th June, 1995 the Supreme Court remitted the appeal by the Plaintiffs against the decision of O'Hanlon J. to the High Court to "determine what were the Appellant/Plaintiffs losses arising after the fire of their premises in Bray on the 26th October, 1987 and what percentage of those losses were attributable to the fire, and such other matters as are relevant and in issue ".
That determination was heard over 281 days between November, 1996 and March, 2000. Judgment of April, 2001 held against the Plaintiffs awarding costs to the Defendants. A stay on the judgment was granted. Lloyds, the fourth named Defendant, settled with the Plaintiffs in 1998. The remaining Defendants immediately applied for an order restraining the Plaintiffs from reducing their assets below the sum of IR£5 million and an order for disclosure and discovery relating to accounts and lodgement held or made on behalf of the Plaintiff companies. Such order was granted on the 7th April, 2001. That interim order was confirmed by interlocutory order dated the 4th May, 2001.
The order and judgment were appealed to the Supreme Court by notice dated the 16th May, 2001, filed on the 30th May, 2001.

The assets of the Plaintiffs subject to the mareva injunction totalled almost €188,000, being €61,000 approximately, in the account of the first named Plaintiff and €127,000 held by McCann Fitzgerald, Solicitors for Lloyds.
By way of supplementary action dated the 12th August, 1997 the Plaintiffs and a subsidiary company of the first named Plaintiff, Duranna Limited, proceeded against Coyle Hamilton Limited who, in turn, brought a motion pursuant to Order 19 Rule 28 to strike out the said proceedings on the grounds that no reasonable cause of action had been disclosed. The Plaintiffs and Duranna Limited were granted leave to file an amended statement of claim, by order dated the 4th December, 2000. Costs were awarded against the Plaintiff which costs were taxed in the sum of almost €27,000 on the 30th August, 2001. Coyle Hamilton Limited demanded payment of the amount certified together with interest amounting in total to under €30,000. The Plaintiffs, the Applicants herein, wish to discharge those costs but are not in a position to do so because of the mareva injunction and apply to have a variation of the order of the 4th May, 2001 to discharge the said taxed costs and interest. 
3.        Replying Affidavit
Mr. Ivan Durcan, partner in Good and Murray, Solicitors for the first, second and third Defendants outlined the context in which the mareva order was made. The Plaintiffs claim was £92 million. The ultimate award of £315,000 which was reduced to nil because those Defendants were entitled to the credit of the lodgment paid by Lloyds, the fourth named Defendant, which the Plaintiffs received in settlement of their claims against Lloyds.
Mr. Durcan referred to all but the first named Plaintiff being in receivership. The first named Plaintiff, Superwood Holdings Pic, is, he deposes, not a trading company.
The amount due by the Plaintiffs to Coyle Hamilton arose out of proceedings which had been in abeyance during the main trial. Those costs arose from a liability which occurred, not in the ordinary course of trading, but in a satellite action to the main proceedings. In relation to those proceedings the trial judge found that the Plaintiffs had been the authors of their own misfortune and had presented a grossly exaggerated claim. The Plaintiffs application seeks to give a priority to the order for costs which Coyle Hamilton obtained against them whereas the Defendants' costs were incurred long before the costs the subject matter of the application were incurred by Coyle Hamilton. It would be inequitable to give priority to the former.
Moreover, Mr. Durcan avers, the is no evidence to indicate when Coyle Hamilton has threatened to wind up the Plaintiff companies or one or more of them. The receiver of the other Plaintiff has not been put on notice of the Plaintiffs application.
Mr. Durcan said that the grounding Affidavit in respect of the security for costs motion before the Supreme Court referred to an original claim in the sum of £2 million in November, 1988. The sum was £5 million on the date of the commencement of the trial in June, 1989. At the conclusion of the trial of the action in July, 1990 the claim was in the sum of £8 m. Finally, in the aftermath of the Supreme Court judgment and order of June, 1995, a revised claim in excess of £92 million was presented in November, 1996 at the commencement of the action for assessment of damages.
That Affidavit also recited the conclusion of the trial judge that the Plaintiffs had, to a great extent, been the authors of their own misfortune; had shown a total lack of candour with the loss adjusters; had obstructed the flow of information to the said loss adjusters and prevented them from uncovering multiple weaknesses and efficiencies in the Plaintiffs business and its financial records. The trial judge found that there was a deliberate policy of non-cooperation by the Plaintiffs. It also found that the claim presented by the Plaintiffs was grossly exaggerated and overstated.
The fourth named Defendant, Lloyds, had lodged £1.6 m. Pursuant to the provisions of Section 17 (2) of the Civil Liability Act, 1961 the award, by the High Court, in assessing damages in the sum of £314,940, was reduced to nil. This was in the context of the lodgements made by the first three Defendants totalling over £3.15 m. The first three Defendants obtained an Order for the costs of the trial as against all of the Plaintiffs. The Plaintiffs had received sums in excess of IR£3 m. The first three Defendants, the deponent avers, are entitled to the credit of the lodgment of £1.6 million received by the Plaintiffs.
The Defendants cost drawer have estimated the costs of the appeal as being in excess of£5m.
The deponent avers that Mr. Bunyan and his wife directed the transfer of a sum of £60,000 from the accounts of the first named Plaintiff company to a deposit and current account of Mr. Bunyan on the 19th September, 2000, six months after the conclusion of the action but before the delivery of judgment by Mr. Justice Smyth.
It would appear that it was on this basis that the Supreme Court ordered security for costs.
The estimate of the Defendants' probable party and party costs was £1,253,883 as of the 18th December, 2001.
4.	Further Affidavits
Supplemental Affidavits were also filed by Mr. Durcan and Mr. Derek Burke solicitor for the Plaintiffs which exhibited, inter alia, previous proceedings and correspondence between the parties and the papers filed in the Supreme Court in the security for costs motion.
5.	Correspondence
The notice of motion and the grounding Affidavit refer to the High Court order of the 4th December, 2000 in favour of Coyle Hamilton as being the basis of the application to the Court for variation in the mareva order. This is echoed in a letter dated the 9th May, 2002 from Mr. Bunyan to the Solicitors for Coyle Hamilton which is exhibited in Mr. Burke's Affidavit sworn the 15th July, 2002.
Those Solicitors had written on the 7th February, 2002 stating that the payment set out in the Certificate of Taxation remained due and owing and informing the Plaintiffs' Solicitors that they would not correspond further in the matter and were taking their clients instructions with regard to steps to enforce payment of the sum due. That letter concludes:
"The remedies which we may be instructed to follow to enforce payment will be undertaken without further notice ".
 6.        Applicants' Submissions
Mr. James Salafia, S.C., on behalf of the Applicants, submitted that the variation sought was in respect of payment of legal fees to a third party the propriety of which could not be questioned given the Court order of Kelly J.
He believed that the test in Ireland differed from that in England as outlined in Courtney on Mareva Injunctions, paragraph 6.16. In this jurisdiction the Courts follow a subjective test with the focus on "intention " (see the decision In re John Horean Livestock Limited: O'Mahoney -v- Horean (1995) 21.R. 411 at 418). The appropriate payments should be paid out according to that test.
There was a full disclosure of the asset by the Defendants: no issue taken with the correctness of that disclosure. Those assets were outlined in the Affidavit of Mr. Bunyan in paragraph 9. In that respect the case differs from D.P.P. -v-E.H., (unreported, High Court decision, 27 April 1997).
Counsel urged that it was necessary to discharge the debt in order to prosecute the Plaintiffs/Applicants appeal and to avoid the Plaintiff/Applicant being wound up.
The mareva injunction was granted in May, 2001 on the occasion of the judgment in the High Court proceedings which is subject to the appeal to the Supreme Court. In relation to that appeal security for costs has already been obtained making the Mareva Injunction superfluous.

7.        Respondent/Defendants Submissions
Mr. John Gleeson, S.C. objected on the ground that the Court has to exercise its discretion on the basis of all the circumstances and be fair to both parties. The effect of the order is to preserve the assets of the Applicant/Plaintiffs.
The order for costs in respect of which the variation is sought, was made against all of the Plaintiff in relation to the costs of a third party. The security for costs order relates only to the costs of the appeal which is prospective not retrospective.
The payment of those retrospective costs does not arise in relation to "trading as a going concern". AH but the first Applicant/Plaintiff are in receivership and the first named, Superwood Holdings Pic, is not a trading concern.
In his submission there is no reality to the winding up application. There is no reply by the Applicant/Plaintiffs to the letter of demand by the third party. A winding up order would require notice to be given. The Court would be reluctant to wind up any of the Applicant/Plaintiffs pending an appeal to the Supreme Court. There is, in fact, no threat that the winding up petition would be presented following the statutory demand of the 7th May, 2002.
The trial judge granted both an interim and interlocutory order.
The cost order was made against Duranna and against the Applicant/Plaintiffs. Duranna Limited was not caught by the mareva injunction. It was an additional Plaintiff in the Coyle Hamilton proceedings. There is no evidence given as to its assets nor to its ability to pay.
Moreover the judgment in D.P.P. -v-E.H., at pages 3 and 4 held that there was no difference between Irish and English legislation in this regard. Full disclosure is required to be made.
Mr. Ivan Durcan's Affidavit at paragraph 16 avers to and exhibits correspondence in relation to the transfer of £60,000 from the first named Plaintiff's bank account to the personal accounts of Mr. Bunyan, the deponent of the grounding Affidavit.
To grant the order would be the converse of the application for the injunction in that it would undermine the status quo now obtaining. There could be liberty to re-enter on adducing sufficient evidence as required in D.P.P. -v-E.H., in relation to the assets of Duranna and the purpose for which the transfer of £60,000 was made.
8.        Case Law
8.1.	Application can be made for a variation of such an injunction.
In D.P.P. -v-E.L, ex-temporare judgment of Kelly J., 22nd April, 1997 it was held as follows:
"The mareva orders were always subject to being varied by the Court so as to allow a Defendant to draw down from the frozen fund or assets, money sufficient to discharge legal and living expenses. The legislator, in an acting Section 24 (of the Criminal Justice Act, 1994), expressly recognised that the restraint which might be imposed pursuant to orders made under that Section could also be subject to variation so as to provide for living expenses and legal expenses (see subsection 2 of Section 24)."
8.2.	A condition required for such variation is that the Applicant has no other funds
available.
Kelly J. referred to Robert Goff J. in A and Another -v- C. and Another (1981) 2 All ER 126 who held:
"Although the Court has jurisdiction to qualify a mareva injunction where the Defendant has satisfied the Court that assets subject to the injunction were required for a purpose which did not conflict with the policy underlined in the mareva jurisdiction, in order to satisfy that burden the Defendant had to go further than merely to state that he owed money to someone and had to show that he did not have any other assets available out of which the debt would be paid. Since the Defendants had failed to produce evidence to show that they had no other assets out of which they could pay the legal costs, their application was dismissed."
8.3.	Where funds have been withdrawn before the injunction the Court may decline to
vary the order.
In D.P.P. -v-E.H., unreported, High Court, 22nd April, 1997, the evidence established that since his release from Garda custody the Defendant had withdrawn substantial sums from accounts under his control which withdrawals ante-dated the mareva order. The Defendant stated that the moneys were used to repay a business associate but refused to identify that person. As the evidence which had been given on the application was unsatisfactory the application was refused.
8.4.	In addition full and frank disclosure is required.
In O'Mahonv -v- Horzan, in the matter ofJ. Horgan Livestock Limited (in liquidation) (1995) 21.R. 211 Hamilton C.J., in allowing an appeal against the mareva injunction granted by the High Court, referred to five criteria which should be established to ground mareva type injunctions being granted. These require the Plaintiff to make full and frank disclosure of all matters in his knowledge which are material for the Court to know, among other criteria. A mareva type injunction, as stated, is not intended to give security in advance of judgment but merely to prevent the Defendant from defeating the Plaintiffs chance of recovery by disapprobation of assets (per Hamilton C.J. at 420). O'Flaherty J., at 422 added that, on the facts of that case, the remedy was neither appropriate nor relevant as the amount which it had sought to freeze was but a tiny fraction of the amount involved in the main action.
8.5.	Notwithstanding, the Court may vary the injunction where there is hardship.
	In Powerscourt Estates -v- Patrick Gallagher and Paul Gallagher (1984) I.L.R.M. 123 at 126, McWilliams J. held as follows:
"In the present case, the reluctance of the Defendants to disclose their assets and their dispositions and proposed dispositions of them, combined with the fact their businesses are not personal but conducted by a group of companies, indicates that they are probably mainly interested in depriving the Plaintiffs of the opportunity of recovering. Accordingly, I ought to continue the injunction, but this can be removed on application by the Defendants showing grounds of hardship either to themselves or to anyone else, including creditors of the Defendants who are entitled to be paid in the ordinary course of business. "
8.6.     Even where future legal expenses are concerned the Court may refuse to vary.
In relation to the legal expenses provision Atlas Maritime Company S.A. -v-Avalon (1991) 4 All ER 785 (The Carol Rose (No. 3)) the Defendant company sought to have a mareva injunction, which restrained it from dealing with all of its assets, varied an order to permit it to expend fund its legal expenses.
In refusing to vary the order, the Court of Appeal referred to the Defendant being a wholly owned subsidiary of another company who could pay the defendants legal expense. Lord Donaldson of Lymington M.R. at 790 G. stated: 
"In the ordinary case of a wholly owned subsidiary company having a commercial, as distinct from a legal, existence involving some degree of independence from its parents, I would entirely agree with the (Trial) Judge. However, in citing the decision of this Court that there is no justification for piercing the corporate veil, i.e. challenging the existence ofAvalon as a separate legal entity, he failed to direct himself that he could and should "lift up or look behind it"...
Let me go back to the fundamental principle.  There is no doubt that the variation ordered by (the trial judge) is "designed to ensure " (in the sense that it will produce the results whether or not that is the object of the exercise) that, insofar as the frozen fund is used for the payment of Clyde and Companies Fees and Disbursements, any award in favour of Atlas is likely to be rendered less effective assuming, as for this purpose I must, that the award may well equal or exceed the amount of this fund." 
Lord Donaldson continued, at 791 F as follows:
"Leaving aside this unusual, and possibly unique, financial relationship, the fact that the variation of the injunction to enable legal costs to be paid would be likely to render any award in favour of Atlas less effective is not of itself a fatal objection because of the proviso built into what I have described as the fundamental principle. But this proviso only applies in cases in which the operation of the injunction would impede the person enjoined from defending himself against the claim. Would it be in this case? "
	…
With all respects I cannot accept that Clyde and Company minded from what fund their fees were paid. Their client is and was Avalon... But Avalon 's lack of unfrozen funds would in no way impede their defence of the claim against them if, nevertheless, they could obtain the necessary funds. (It was not ever said) that no such funds were obtainable in precisely the way in which Avalon 's funds always were obtained." 
9.        Decision of the Court
9.1. This is not an application for a mareva injunction nor, indeed, an appeal against the order of Smyth J. granting the relief sought on a interlocutory basis. It is an application for variation of that order made the 4th May, 2001 and perfected on the 11th May, 2001.
9.2.	In relation to the cases referred to, this Court must distinguish between those relating to the initial grant of injunctive relief and the more limited number of cases dealing with variation.
The five criteria set out by Hamilton CJ. in Horean at page 416 applies equally to a variation of injunction relief already granted. One of those is the full and frank disclosure of all matters in the knowledge of the Applicant which is material. Such must include the ability of each of the Plaintiffs in the action against Coyle Hamilton to make payment. In this regard the failure to advert to the assets (if any) of Duranna Limited, is significant.
9.3.	Even more significant is the disclosure of the application of the funds transferred from Superwood Holding Pic bank account to that of Mr. Bunyan. It is clear that, from the decision of Kelly J. in D.P.P. -v- E.H. (unreported, High Court, Kelly J., 22nd April, 1997) that this is significant.
	While there is no evidence that Superwood Holdings Pic. is trading, I do not believe this to be critical. Part of the business of a holding company includes all litigation which its directors deem appropriate.
More significant is, however, the timing of the debt. This is not an application for variation to enable the Applicants/Plaintiffs to pursue a legal appeal in the future. It is rather an application for payment of a debt incurred in relation to litigation against a third party in the past.
9.4.	The general criteria with regard to the right of Applicants to the variation of over extensive mareva injunction relates to the ability of Appellants to pursue remedies in the Court and not to the payment of previous legal fees or costs awarded against them. The pleadings, and to some extent, the submissions made relate to the quality of the debt. While it is not submitted that the Court order of Kelly J. gives any priority such as would obtain in insolvency, there is the suggestion that, as the sum is taxed and made an order of the Court that it should be paid on application for a variation. This seems to me to be a misconception. The sum owed is not secured by way of judgment mortgage. Neither are any of the Applicant/Plaintiffs in liquidation.
As already stated Duranna Limited is not referred to and, it would appear, and is not controverted, that it is as much a debtor in respect of the said debt as the Applicants herein.
9.5.	The application was made, in the pleadings, on behalf of all the Plaintiffs. The Application proceeded on the basis of a variation in respect of the assets of Superwood Holdings Pic. only. It does seem to me, in either event, that the Receiver of the remaining Plaintiffs should have been on notice. Whatever about Mr. Salafia's submissions that this case should not be followed by the Irish Courts (see Courtney: at 9.21), the evidence in relation to the interrelationships between the Plaintiffs, the relationship to Duranna and, most particularly, the application of the funds transferred from the first named Applicant/Plaintiff to Mr. Bunyan should have been explained to the Court.
9.6.	It should be made clear that this is not an application for the discharge of the injunction but simply for a variation. For the above reasons the application is refused on the basis of the evidence presently before the Court.