Caldwell and Others v Tracey and Others
| Jurisdiction | Ireland |
| Judge | Miss Justice Laffoy |
| Judgment Date | 16 April 2010 |
| Neutral Citation | [2010] IEHC 533 |
| Court | High Court |
| Date | 16 April 2010 |
[2010] IEHC 533
THE HIGH COURT
BETWEEN
AND
ESTUARY LOGISTICS v LOWENERGY SOLUTIONS LTD 2008 2 IR 806
CHELTENHAM & GLOUCESTER BUILDING SOCIETY v RICKETTS 1993 1 WLR 1545
GEE COMMERCIAL INJUNCTIONS 5ED 2004 PARA 11.021
O'MAHONY v HORGAN 1995 2 IR 411
TRACEY v BOWEN 2005 2 IR 528
UNIVERSAL THERMOSENSORS LTD v HIBBEN 1992 1 WLR 840
BAMBRICK v COBLEY 2006 1 ILRM 82
BEAN INJUNCTIONS 9ED P137
RSC O.52 r3
INJUCTIONS
Undertaking
Enforcement of undertaking as to damages - Mareva injunction granted ex parte - Undertaking as to damages - Principles applicable to enforcement of undertakings - Whether interim order should have been granted - Whether liberty to notify financial institutions of making of order ought to have been granted - Discretion of court - Failure to move to set aside order - Estuary Logistics v Lowenergy Solutions Ltd [2007] IEHC 410, [2008] 2 IR 806; Cheltenham & Gloucester Building Soc v Ricketts [1993] 1 WLR 1545; Columbia Pictures Inc . Robinson [1987] Ch 38; Norwest Holst Civil Engineering Ltd v Polysius Ltd (TLR, 23/7/1987); O'Mahony v Horgan [1994] 2 IR 411; Tracey v Bowen [2005] IEHC 138, [2005] 2 IR 528 and Bambrick v Cobley [2005] IEHC 43, [2006] 1 ILRM 82 considered - Rules of the Superior Courts 1986 (SI 15/1986), O 52, r 3 - Application dismissed (2007/6605P - Laffoy J - 16/04/2010) [2010] IEHC 533
Caldwell v Tracey
Facts: An interim Mareva-type injunction had been granted on an ex parte application made by the plaintiffs, preventing the defendant from reducing his assets below Eur 267,710.89. The plaintiffs had given an undertaking as to damages. The plaintiffs had paid deposits for property in Las Vegas, Nevada on foot of various contracts. The plaintiffs sought the return of the deposits in the substantive proceedings. The defendant had alleged that he was entitled to forfeit the deposits by law. The defendant sought an order directing an inquiry into the damages sustained by the defendant as a result of the granting of the interim order. The Court considered whether the interim order should have been granted and whether it was too wide in its scope.
Held by Laffoy J. that there would be an order dismissing the defendant”s application. The defendant had not established that there was any withholding of material information. The interim order had been properly made.
Judgment of Miss Justice Laffoy delivered on the 16th day of April 2010.
2 1.1 This application arises out of an order made on the 7 th September, 2007 (the interim order) by this Court (Birmingham J.), which was an interim Mareva type injunction granted on an ex parte application made on behalf of the plaintiffs. At the time, the title of the proceedings, which had been initiated by plenary summons which issued on the previous day, 6 th September, 2007, suggested that there were two distinct defendants in the proceedings, that is to say, David Tracey and DTS International Property Services (DTS), although it has since become clear that there was, in fact, only one defendant, namely, David Tracey, who traded in sourcing international property as "DTS International Property Services". By virtue of the interim order the defendants and each of them by themselves, their servants or agents or any person acting on his or their behalf, or any person having knowledge of the making of the order or otherwise, were restrained from "removing or in any way disposing of, reducing, transferring, charging, diminishing the value thereof or otherwise dealing with all or any of his or their assets wheresoever situate save and insofar as the value of the said assets shall exceed the sum of €268,710.69 until such time as the Court shall deem meet or until further order". Further, in the interim order, the plaintiffs' solicitors were given liberty to notify and serve the order on the defendants and to notify "any financial institutions of the making of this Order forthwith by telephone and fax". It was also expressly provided that the defendants had liberty on twenty four hours notice to the plaintiffs to move to set aside the order or apply for an order in relation to living and business expenses. The order records that the plaintiffs gave an undertaking as to damages to the Court in the following terms:
"And the plaintiffs jointly and severally by said counsel undertaking to abide by any Order which this Court may hereafter make as to damages in the event of this Court being of opinion that the defendants shall have suffered any damage by reason of this Order which the plaintiffs ought to pay…".
3 1.2 On this application, which was initiated by a notice of motion dated 11 th May, 2009, the defendant seeks an order directing an inquiry into the damages sustained by the defendant as a result of the grant of the interim order and, further, or in the alternative, an order enforcing the plaintiffs' undertaking as to damages given on the granting of the interim order.
4 1.3 The circumstances in which the defendant has come to seek that relief at this juncture are of significance.
2 2.1 Contemporaneously with the making of the interim order, the plaintiffs were given leave to issue a motion for an interlocutory injunction returnable for 14 th September, 2007.
3 2.2 The interim order was made on a Friday afternoon during the long vacation. On that evening, the plaintiffs' solicitor notified seven financial institutions of the making of the order. Seven more financial institutions were notified during the afternoon of the following Monday, 10 th September, 2007, of the making of the order. A copy of the order was sent to all of those institutions on Monday evening. On the afternoon of Tuesday, 11 th September, 2007, the defendant was personally served with the pleadings and affidavits and with a copy of the interim order. In his affidavit grounding this application, the defendant has averred that he first heard of the making of the order when he received a telephone call from the manager of his bank advising him of its existence. Strangely, the defendant has not deposed to when he received that call.
4 2.3 On the return date for the interlocutory application, 14 th September, 2007, that application was adjourned on consent at the request of the defendant to 2 nd October, 2007 on the basis that the interim order would continue.
5 2.4 On 1 st October, 2007 a replying affidavit sworn by the defendant was furnished to the plaintiffs. In that affidavit, which was expressed to be made to contest the order sought on the plaintiffs' motion, after stating that, on advice, he was not answering each allegation of the plaintiffs in their grounding affidavits on the motion although the defendant was not to be taken as accepting them and his intention was to vigorously defend the proceedings, the defendant -
(a) confirmed that he was the owner of DTS and fully responsible for any action taken in its name, although the affidavit suggests that DTS was merely a trade name,
(b) asserted that he had substantial assets in the State, that there was no basis for the alleged fear that the plaintiffs might not recover any monies allegedly due and owing to them, and that there was no evidence whatsoever that he was a person who would try to remove his assets from the jurisdiction in order to avoid any judgment that might be made against him,
(c) averred that as a gesture of goodwill he had informed the plaintiffs "that, notwithstanding the existence of the contracts, [he] was willing to refund all deposits subject only to the payment of some expenses incurred to all but the seventh, eighth and ninth" plaintiffs and in this connection he referred, inter alia, to the letter of 27 th August, 2007, the contents of which are outlined later in detail in paragraph 3.10 et. seq.,
(d) asserted that the interim order had caused him extreme embarrassment and professional difficulty and resulted in the freezing of his client account in which was lodged monies belonging to clients of his auctioneering practice,
(e) accused the plaintiffs of acting in a precipitous and peremptory manner in obtaining the interim order ex parte, stating that he would have given an undertaking not to reduce his assets below €267,710.89 pending the resolution of the proceedings if requested to do so, and that he was willing to provide such an undertaking to the Court,
(f) averred, as evidence of his bona fides, that he had lodged bank drafts representing the gross amount of the plaintiffs' claims with his solicitors, who were instructed to place the monies on deposit in a separate solicitors' account pending the resolution of the proceedings, copies of the demand bank drafts, which were dated 1 st October, 2007, being exhibited.
6 2.5 On 2 nd October, 2007, an undertaking in the terms proffered was given by the defendant to the Court. The interim order then lapsed. The costs of the interim and interlocutory applications were reserved by consent of the parties. Liability for those costs remains to be determined. Further, the parties agreed the terms of a letter of notification for the financial institutions which had been notified of the making of the interim order, informing them that the interim order had lapsed and that the order of 2 nd October, 2007 had been made. Letters in the agreed form were dispatched on 9 th October, 2007.
7 2.6 The plaintiffs' substantive action then proceeded to plenary hearing in the...
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Caldwell v Tracey
...O'Reilly, Kevin Dawe, Mark Foran and John Foran Plaintiffs and David Tracey trading as DTS International Property Services Defendant [2010] IEHC 533, [2007 No. 6605 P] High Court Injunctions - Interim injunction - Undertaking as to damages - Enforcement of undertaking - Principles to be app......