Irish Bank Resolution Corporation Ltd (in special liquidation) and Others v Quinn and Others
| Jurisdiction | Ireland |
| Judge | Mr Justice Michael Peart |
| Judgment Date | 06 August 2013 |
| Neutral Citation | [2013] IEHC 437 |
| Court | High Court |
| Date | 06 August 2013 |
[2013] IEHC 437
THE HIGH COURT
BETWEEN:
AND
CHELTENHAM & GLOUCESTER BUILDING SOCIETY v RICKETTS 1993 4 AER 276
PASTURE PROPERTIES LTD v EVANS UNREP LAFFOY 5.2.1999 2000/15/5840 1999 IEHC 214
MARTIN v BORD PLEANALA UNREP O'SULLIVAN 24.7.2002 2002/16/3901 2002 IEHC 82
O'MAHONY v HORGAN 1995 2 IR 411 1996 1 ILRM 161 1995/20/5202
FIRST NETCOM PTY LTD v TELSTRA 2000 101 FCR 77 2001 179 ALR 725
COMBET & ORS v COMMONWEALTH OF AUSTRALIA 2005 221 ALR 621
ESTUARY LOGISTICS & DISTRIBUTION COMPANY LTD v LOWENENERGY SOLUTION LTD & ANOR 2008 2 IR 806
SHELL E & P IRELAND LTD v MCGRATH & OTHERS 2007 4 IR 277 2007 2 ILRM 501 2007 55 11859 2007 IEHC 144
RIORDAN v MIN FOR ENVIRONMENT UNREP FINNEGAN 26.5.2004 2004 IEHC 89
STAINES v WALSH CH 1.8.2003 TLR
CAUDRON v AIR ZAIRE 1986 ILRM 10
RSC O.11
HARDING v CORK CO COUNCIL 2006 1 IR 294
PLANNING & DEV ACT 2000 S50(3)
O'CONNELL v ENVIRONMENTAL PROTECTION AGENCY 2001 4 IR 494
BROADNET LTD v DIRECTOR OF COMMUNICATIONS REGULATION 2000 3 IR 281
ALLEN v JAMBO HOLDINGS 1980 2 AER 502
MIN FOR JUSTICE v DEVINE 2012 1 IR 326
DUNNE v DUNLAOGHAIRE RATHDOWN CO COUNCIL 2003 1 IR 567
COMPANIES ACT 1963 S60
HOFFMAN-LA ROCHE & CO ASG v SECRETARY OF STATE FOR TRADE & INDUSTRY 1975 AC 295
AMERICAN CYANAMID CO v ETHICON LTD 1975 AC 396
KIRKLEES METROPOLITAN BOROUGH COUNCIL v WICKES BUILDING SUPPLIES LTD 1993 AC 227
INJUNCTIONS
Mareva
Discharge - Undertaking as to damages - Fortification - Test to be applied - Whether special liquidation of plaintiff rendered undertaking as to damages worthless - Whether offer of fortification of undertaking as to damages sufficient - Whether onus of proof on party seeking discharge to demonstrate scale of potential damages - Whether undertaking intended to comprise complete indemnity to defendant - Whether court entitled to take in account parallel proceedings for breach of undertakings and contempt of court - Whether balance of convenience lying in favour of injunctions remaining in place - Hoffman-LA Rocher & Co ASG v Secretary of State for Home and Industry [1975] AC 295 approved - Cheltenham & Gloucester Building Society v Ricketts [1993] 4 All ER 276; Pasture Properties Ltd v Evans (Unrep, Laffoy J, 5/2/1999); Martin v An Bord Pleanála (Unrep, O'Sullivan J, 24/7/2002); First Netcom Pty Ltd v Telstra [2000] 101 FCR 77; Combet v Commonwealth of Australia [2005] 221 ALR 621; Estuary Logistics & Distribution Co Ltd v Lowenenergy Solution Ltd [2007] IEHC 410, [2008] 2 IR 806; Shell E&P Ireland Ltd v McGrath [2007] IEHC 144, [2007] 4 IR 277; Riordan v Minister for the Environment [2004] IEHC 89, (Unrep, Finnegan J, 26/5/2004); Cauldron v Air Zaire [1986] ILRM 10; Harding v Cork County Council [2006] IEHC 80, [2006] 1 IR 294; O'Connell v Environmental Protection Agency [2001] 4 IR 494; Broadnet Ltd v Director of Communications Regulation [2000] 3 IR 281; Allen v Jambo Holdings [1980] 2 All ER 502; Minister for Justice v Devine [2012] IESC 2, [2012] 1 IR 326; Dunne v Dun Laoghaire Rathdown County Council [2003] 1 IR 567; American Cyanamid Co v Ethicon Ltd [1975] AC 396 and Kirklees Metropolitan Borough Council v Wickes Building Supplies Ltd [1993] AC 227 considered - O'Mahony v Horgan [1995] 2 IR 411 distinguished - Application to discharge injunctions refused (2011/5843P - Peart J - 6/8/2013) [2013] IEHC 437
Irish Bank Resolution Corporation Ltd (In special liquidation) v Quinn
Facts: This matter concerned an application brought by the first to seventh, ninth and twentieth defendants (‘the personal defendants) for two interlocutory injunctions that were in place in these proceedings to be discharged. The first injunction prevented the ‘personal defendants’ from dealing with certain assets (‘the IPG assets’), while the second was composed of Mareva-type orders, which included the appointment of a receiver over those assets. The first named plaintiff (‘IBRC’) gave an undertaking as to damages when applying for the injunctions. On the 13th February 2013, the Minister for Finance appointed Special Liquidators to IBRC pursuant to the Irish Bank Resolution Corporation Act 2013. As a result, the personal defendants brought their application for the interlocutory injunctions to be discharged on the basis that IBRC would not be able to honour the undertaking as to damages as it was in liquidation.
The plaintiffs argued that the application should be refused because the Special Liquidators had confirmed by affidavit the undertakings as to damages. They also offered to lodge in court a sum of €5,000,000 by way of fortification of the undertakings as to damages. Further, it was said that even if the Court had doubts about the adequacy of the sum of €5,000,000, the personal defendants still had to convince the Court that the balance of convenience was in favour of discharging the injunctions. It was said that the injunctions had originally been sought because the personal defendants had initiated a scheme to dissipate the IPG assets which IBRC claimed to be entitled to. Finally, it was argued that since the appointment of a share receiver to Quinn Finance Holdings on the 14 th April 2011 - the company through which the personal defendants held their interest in the IPG assets - the personal defendants lost all legal and beneficial interest in the assets; therefore, it was said that any detriment to the personal defendants” interest arose because of that appointment, and not because of the interlocutory injunctions. The personal defendants argued that the €5,000,000 being offered by the plaintiffs was inadequate because they valued the IPG assets at US$700,000,000. On the basis that there was insufficient money in place to guarantee the undertaking, it was said that the injunctions should be discharged.
Held by Peart J that it had previously been found by the Court when the injunctions were first granted that the personal defendants had initiated a scheme to dispel the IPG assets in order to keep them out of reach of IBRC. It was also clear that the injunctions were sought as a result of this action. After the injunctions were made, three of the personal defendants continued in their activities in breach of those injunctions, which led to contempt of court proceedings being held against them. On the other hand, it was undisputed that the IBRC had been placed in liquidation. All these factors were held to be especially important in determining the application.
It was held that where a plaintiff enters liquidation after an injunction is granted in his favour, the Court retained a discretion to allow an injunction to continue (notwithstanding the obvious weakness in the undertaking as to damages) where there was a serious issue to be tried in the case. Such discretion was said to exist so that the Court could weigh up all the circumstances of a case and decide where the justice of the situation lies. The Court could however require fortification of the undertaking if it was determined that such an order would best do justice to the parties. Applying these factors to the present case, it was said that there was no automatic right for the injunctions to be discharged because IBRC had entered liquidation. Indeed, it was for the personal defendants to demonstrate that the balance of convenience lay in favour of such a course of action, taking into account the plaintiffs offer of fortification of the undertaking as to damages and the personal defendants” previous conduct. It was held that even if the offer of fortification had not been made, the balance of convenience would still be in favour of leaving the injunctions in place. The injunctions were originally sought to prevent the removal of the IPG assets which were in issue in the substantive proceedings. Even after the injunctions were made, the activities of some of the personal defendants continued. It was said that it was right and proper in those circumstances to have granted the injunctions. The arguments of the personal defendants had not convinced the Court otherwise. Because the onus was on the personal defendants to demonstrate that the balance of convenience was in favour of the injunctions being discharged, and because they had failed to do so, the application was rejected. However, the €5,000,000 being offered to the Court by the plaintiffs as fortification of the undertakings was accepted.
Application rejected.
Interlocutory injunctions are in place in these proceedings ("the Conspiracy proceedings") on foot of one order made on the 20th July 2011 by Clarke J., and two orders made by Kelly J. on 25th July 2011 and 31st July 2011 respectively. Broadly speaking the former prevents the "personal defendants" from dealing with certain assets described as "IPG assets", while the latter are Mareva-type orders, including the appointment of a Receiver over those assets. The order of Clarke J. dated 20th July 2011 notes that the personal defendants gave certain undertakings to the Court in terms of a number of paragraphs in the interim injunction order made previously by Clarke J. by way of ex parte application. The reference to "the personal defendants" is a reference to the first to seventh, ninth and twentieth defendants. The eighth...
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Nolan v Dildar Ltd (1)
...pp. 431-432). This principle was also confirmed by Peart J in the High Court in Irish Bank Resolution Corporation Limited v. Quinn & ors [2013] IEHC 437 ( “Quinn”). At para. 76, Peart J. stated that the undertaking as to damages is “an undertaking which the plaintiff gives to the court” (pa......