Countyglen Plc v Carway

• Jurisdiction: Ireland
• Judgment Date: 16 January 1995
• Date: 16 January 1995
• Docket Number: [1994 No. 339 Cos.]
• Court: High Court

High Court

[1994 No. 339 Cos.]

Countyglen plc v. Carway

In the matter of The Companies Acts, 1963 to 1990, And in the matter of Section 12 of the Companies Act, 1990. Countyglen plc

Applicant

and

John Carway and Others

Respondents

Cases mentioned in this report:—

Allied Arab Bank Ltd. v. Hajjar [1988] Q.B. 787; [1988] 2 W.L.R. 942; [1987] 3 All E.R. 739; 132 S.J. 659.

Barclay-Johnson v. Yuill [1980] 1 W.L.R. 1259; [1980] 3 All E.R. 190.

Campus Oil v. Minister for Industry (No. 2) [1983] I.R. 88; [1984] I.L.R.M. 45.

Fleming v. Ranks (Ireland) Ltd. [1983] I.L.R.M. 541.

Mareva Compania Naviera SA v. International Bulkcarriers SA [1980] 1 All E.R. 213n, [1975] 2 Lloyd's Rep. 509.

Rasu Maritima S.A. v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara [1978] Q.B. 644; [1977] 3 W.L.R. 518; [1977] 3 All E.R. 324; [1977] 2 Lloyd's Rep. 397; 121 S.J. 706.

Z. Ltd. v. A-Z and AA -LL [1982] Q.B. 558; [1982] 2 W.L.R. 288; [1982] 1 All E.R. 556; [1982] 1 Lloyd's Rep. 240.

Injunction - Interlocutory application - Mareva injunction - Whether circumstances justified the granting of such an injunction - Application to preserve the assets of defendants within the jurisdiction pending hearing - Whether real risk of removal or disposal of assets - Test to be applied - Whether fair bona fide question to be tried - Balance of convenience - Whether irreparable damage sustained.

Company - Inspector - Investigation - Inspector investigating affairs of company - Production of report as evidence of fraud - Companies Act, 1990 (No. 33), ss. 8, 12, 22.

Injunction.

The facts have been summarised in the headnote and are fully set out in the judgment of Murphy J., post.

On the 5th December, 1994, the applicant applied ex parte to the High Court (Murphy J.) for:

"1. An order restraining John Carway, Stephen Carway, Jane Carway and Warren Carway whether directly or indirectly or through any other person associated with them or through any company and in particular through a German registered company known as Unigrund GmbH from in any way whatsoever disposing of, transforming, charging, dissipating, diminishing or in any way howsoever dealing with any of their assets within the jurisdiction so as to reduce the value of such assets below the sum of £1,145,500. And in particular that none of the said persons or company in any way whatsoever dispose of, transform, charge, dissipate, diminish or in any way howsoever deal with the property known as Ballyvalley House, Killaloe, in the County of Clare.

2. An order directing that the defendants and each of them do upon oath disclose all assets held by them, their associates or associated companies, whether within this jurisdiction or elsewhere."

The High Court (Murphy J.) granted the interim injunction against the first, sixth, seventh and eighth respondents which was continued until the hearing of the interlocutory application which was heard by the High Court (Murphy J.) on the 9th and 10th January, 1995.

Section 12 of the Companies Act, 1990, provides:—

"(1) Having considered a report made under section 11, the court may make such order as it deems fit in relation to matters arising from that report including —"

• (a) an order of its own motion for the winding up of a body corporate, or

• (b) an order for the purpose of remedying any disability suffered by any person whose interests were adversely affected by the conduct of the affairs of the company, provided that, in making any such order, the court shall have regard to the interests of any other person who may be adversely affected by that order.

(2) If, in the case of any body corporate liable to be wound up under the Companies Act, it appears to the Minister from —

• (a) any report made under section 11 as a result of an application by the Minister under section 8, or

• (b) any report made by inspectors appointed by the Minister under this Act, or

• (c) any information or document obtained by the Minister under this Part, that a petition should be presented for the winding up of the body, the Minister may, unless the body is already being wound up by the court, present a petition for it to be so wound if the court thinks it just and equitable for it to be so wound up."

On the 19th January, 1994, the High Court made an order appointing an inspector, pursuant to s. 8 of the Companies Act, 1990, to investigate the affairs of the applicant. On the 7th July, 1994, the inspector produced an interim report and on the 17th October, 1994, he produced his final report. Proceedings were instituted against the respondents claiming various declarations and seeking to recover the loss sustained by the applicant or alternatively seeking an order under s. 12 of the Companies Act, 1990.

The applicant applied for an interim order to preserve the assets of the first, sixth, seventh and eighth respondents within the jurisdiction pending the hearing of the action. The applicant also sought an order requiring those respondents to make discovery on oath of all assets held by them in the jurisdiction. The High Court made the interim order sought on the basis of an undertaking as to damages given on behalf of the applicant. By agreement of the parties the interim order was continued until the hearing of the interlocutory application.

Held by Murphy J., in granting the interlocutory relief sought by the applicant, 1, that the party seeking interlocutory relief must show that there is a substantial question to be tried.

Campus Oil Ltd. v. The Minister for Industry and Energy (No. 2) [1983] I.R. 88applied.

2. That it is not necessary for an applicant seeking a Mareva injunction to establish as a matter of probability that his claim will succeed.

3. That if a serious question is raised it is not for the court to determine the matter at issue between the parties at the interlocutory stage: that is a matter to be decided at the trial of the action.

4. That the court will not grant an injunction to restrain a defendant parting with his assets so that they may be preserved in case the applicant's case succeeds. TheMareva injunction prevents an anticipated abuse by a defendant of his legal rights so as to frustrate unjustly the anticipated order of the court.

5. That, on the evidence available to the court, it appeared that the respondents had assets in the jurisdiction, that there was a real risk that those assets would be dissipated and that the respondents were not apprehensive of any real inconvenience caused to them as a result of the Mareva injunction being granted.

Fleming v. Ranks (Ireland) Ltd. [1983] I.L.R.M. 541 and Barclay-Johnson v. Yuill[1980] 1 W.L.R. 1259 considered.

6. That the application of the Mareva...