Mareva Injunctions & Anton Piller Orders

Question 1

Mareva injunctions

What is a MI?

Answer 1

AKA ‘Freezing Order’: This prevents D from dissipating or otherwise dealing with his assets for the purpose of defeating any judgment that P may obtain against him in a substantive action.

Question 2

Mareva injunctions

What is the effect, classification and format of the MI?

Answer 2

Effect: Right in personam i.e. against D so if D fails to comply, held in contempt of court + imprisoned

Classification: It is prohibitory and quia timet in nature. It’s also usually interlocutory (granted before substantive action against D). Also ancillary: It is used in support of a substantive claim.

Format of Application: Ex parte so P must make full + frank disclosure of all material facts to the court

Question 3

Mareva injunctions - Draconian Nature of Remedy

O’Mahoney v Horgan [1995]

Answer 3

The MI is seen as one of the law’s ‘nuclear weapons’. Important to weigh up P + Ds rights.
- O’Flaherty J emphasised that the MI is a v powerful remedy which if improperly invoked will bring about an injustice – something it was designed to prevent.

Question 4

Mareva injunctions - Draconian Nature of Remedy

Moloney v Laurib Investments [1993]

Answer 4

• Lynch J was concerned with the fact granting a MI would interfere with the normal course of D’s business + would cause serious loss that couldn’t be made good if D was ultimately successful.
• Thus there are competing interests of the P and the D for the court to weigh up.

Question 5

Mareva injunctions - Practical Guidelines

Third Chandris v Unimarine [1979] set out the principles for applying, which was endorsed in
O’Mahony v Horgan [1995]

Answer 5

• Irish SC endorsed the principles set out in Third Chandris. They are in addition to what P must prove in order to establish an entitlement to a MI:
  (1) P must make a full and frank disclosure of all material facts to the court
  (2) P should give particulars of his claim against the D, stating the ground of his claim and the amount thereof, and fairly stating the points made against it by the D.
  (3) The P should give some grounds for believing D has assets in this jurisdiction (bank statements)
  (4) P should give some grounds for believing there’s a risk of assets being removed before judgment
  (5) P must give an undertaking damages. This is in case he fails or the inj turns out to be unjustified
• Held in deciding whether the duty of full and frank disclosure has been observed, the court has regard to the importance of any fact not disclosed and whether or not P was culpable for the non-disclosure.
• This high threshold seeks to balance the competing interests of the P and the D

Question 6

Mareva injunctions - Practical Guidelines

Bambrick v Cobley [2006]

Answer 6

• Held the test of materiality is one of whether, objectively speaking, the facts could reasonably be regarded as material with materiality to be construed in a reasonable and not excessive manner
• If the duty to make a full + frank disclosure isn’t observed, the court may refuse to grant an MI or set aside a MI already granted

Question 7

Mareva injunctions - Practical Guidelines

IRBC v Quinn [2012]:

Answer 7

Kelly J held the court may make an order that a D be called for cross-examination on his affidavit if it considers that the disclosure made is inadequate.

Question 8

Mareva injunctions - Practical Guidelines

Collins v Gharion [2013]:

Answer 8

Made clear there would be a subsequent discharge of an injunction if there was not full and frank disclosure on the facts.
NB: This is the courts attempting to balance the rights of the defendant and the plaintiff

Question 9

Mareva injunctions - The Conditions that must be satisfied in order to establish an entitlement to MI

Nippon Yusen v Karageorgis [1975]:

Answer 9

First case in which a MI was granted

Question 10

Mareva injunctions - The Conditions that must be satisfied in order to establish an entitlement to MI

Mareva Compania Naviera v Intern Bulkcarriers [1975]

Answer 10

• D in arrears in payments to P for ship charter. In India, but had money in London. Granted.
• Traditionally only granted if
  (1) P had a subsisting cause of action against D in Ireland
  (2) D was based in another jurisdiction
  (3) P proved he’d a very strong case against D in the substantive action.

Question 11

Mareva injunctions - The Conditions that must be satisfied in order to establish an entitlement to MI

Fleming v Ranks (Ireland) [1983]

Answer 11

• TU gave strike notice. D announced mills would close. P (employees of D) sought MI restraining D from dissipating its assets below certain level. Refused but said a MI can be granted if (1) P has an arguable case he’ll succeed against D in the substantive action and (2) D’s in jurisdiction
• Dropped need for foreign jurisdiciton and “very strong case” requirement from original mareva.

Question 12

Mareva injunctions - The Conditions that must be satisfied in order to establish an entitlement to MI

Powerscourt Estates v Gallagher [1984] Restated Fleming

Answer 12

• It is well-established a MI may be granted if P proves that:
  (i) He’s commenced/about to commence a substantive action against D in any EU MS.
  (ii) He has a good arguable case against D in the substantive action
  (iii) D has assets
  (iv) D intends to dissipate or deal w them to defeat judgment P may get against him in the sub action
  (v) The balance of convenience lies in favour of granting the MI

Question 13

Mareva injunctions - The Conditions that must be satisfied in order to establish an entitlement to MI - Substantive Action

What is a substantive action for these purposes and what statutes are relevant?

Answer 13

Substantive action: An action for damages/monetary judgment against D.

(1) S.31 Brussels Convention: this allows you to make a MI application in any MS of the EU
(2) S.13(1) Jurisdiction of Courts and Enforcement of Judgments Act 1998: This gives the courts jurisdiction to grant MI if P has commenced/about to commence a substantive action in any MS

Question 14

Mareva injunctions - The Conditions that must be satisfied in order to establish an entitlement to MI - Standard of Proof

Rasu Maritima v Perusahaan [1978]:

Answer 14

Test is ‘good arguable case against D in the substantive action’

Question 15

Mareva injunctions - The Conditions that must be satisfied in order to establish an entitlement to MI - Standard of Proof

Ninemia Maritime v Trave [1983]

Answer 15

• More than barely capable of serious argument yet not necessarily a better than 50% chance of success.
• It appears to be satisfied P has a good arguable case, the court must consider the merits of P’s case

Question 16

Mareva injunctions - The Conditions that must be satisfied in order to establish an entitlement to MI - Intention/Real Risk D will dissipate assets (NB Exam)

General Rule?

Answer 16

P must prove D intends to dissipate or deal with assets for specific purpose of defeating any judgment P may get against him. Is it necessary to show D’s intention is to frustrate judgment or is likelihood enough?

Question 17

Mareva injunctions - The Conditions that must be satisfied in order to establish an entitlement to MI - Intention/Real Risk D will dissipate assets (NB Exam)

Fleming v Ranks (Ireland) Ltd [1983]

Answer 17

• TU gave strike notice. D announced mills would close. P (employees of D) sought MI restraining D from dissipating its assets below certain level. Refused but said a MI can be granted against D who’s based in this jurisdiction if: (1) P has a good arguable case against D in the substantive action (2) the disposal is to stop P recovering damages + not merely carry on business/discharge lawful debts

Question 18

Mareva injunctions - The Conditions that must be satisfied in order to establish an entitlement to MI - Intention/Real Risk D will dissipate assets (NB Exam)

O’Mahoney v Horgan [1995] Endorsed Fleming and Powerscourt Estates

Answer 18

• Held there must be an intention on D’s part to dispose of his assets w a view to evading his obligation to P + to frustrate the anticipated court order. Insuff if in ordinary course of b/discharge lawf debts
  This places an onerous obligation on P to prove on affidavit evidence in ex parte app what D’s intention is

Question 19

Mareva injunctions - The Conditions that must be satisfied in order to establish an entitlement to MI - Intention/Real Risk D will dissipate assets (NB Exam)

Bennet Enterprises v Lipton [1999

Answer 19

HC noted direct evidence of intent is rarely available at interlocutory stage so it’s legit to consider all the circumstances of the case. Echoed by Capper and Delaney.

Question 20

Mareva injunctions - The Conditions that must be satisfied in order to establish an entitlement to MI - Intention/Real Risk D will dissipate assets (NB Exam)

Tracey v Bowen [2005]

Answer 20

• Clarke J said Bennet stood as authority for proposition that in assessing risk of dissipation, a court can take into acc all the circs: can incl. an inference from the nature of the wrongdoing alleged which if fraudulent or unconscionable may lead to establishing a risk that further such actions will occur
• Refused: insufficient evidence D would dissipate. However, held court can look at all the circs + if they feel the only assets he had were liquid ones in the state that could be easily moved around + if D’s an experienced business man, the court can have regard to this.

Question 21

Mareva injunctions - The Conditions that must be satisfied in order to establish an entitlement to MI - Intention/Real Risk D will dissipate assets (NB Exam)

Hughes v Hitachi [2006]

Answer 21

• Held in majority of cases the requisite intention would have to be established by having reg to all circs
• Held if D co was insolvent + evidence it intended to deal w the assets in breach of obligations under corporate law + if the action would affect Ps position, then the requisite intention would be established

Question 22

Mareva injunctions - The Conditions that must be satisfied in order to establish an entitlement to MI - Intention/Real Risk D will dissipate assets (NB Exam)

Bambrick v Cobley [2006]

Answer 22

The courts have held the fact a D may be planning to remove assets from the jurisdiction to a country that is part of the Brussels Conv will be relevant in determining if he intends to evade his obligation to P:
- Clarke J (obiter): while evidence of an intention to remove assets to another jurisdiction can give rise to an inference of a reasonable risk of evasion of obligation, the inference weighs less in a case where the country is a convention country i.e. this judgment will be as enforceable as in this jurisdiction

Question 23

Mareva injunctions - The Conditions that must be satisfied in order to establish an entitlement to MI - Intention/Real Risk D will dissipate assets (NB Exam)

Collins v Gharion [2013]

Answer 23

• HC refused MI: held the focus should be on (1) whether D has a clear intention to dissipate assets + (2) the intention is for purpose of avoiding his obligation of P + frustrating the anticipated judgment
• This represents judicial opposition to tendencies towards a less restrictive approach

Question 24

Mareva injunctions - The Conditions that must be satisfied in order to establish an entitlement to MI - Intention/Real Risk D will dissipate assets (NB Exam)

Bonice Property Corporation v Oakes [2016]

Answer 24

• Keane J granted a MI restraining a former employee from removing from Ireland, disposing of or dealing w or diminishing their assets in a case of wrongly appropriated funds through fraud.
• Held the indirect evidence (hearsay) was admissible (as in all interlocutory apps) in the P’s affidavit in setting up a good arguable case and added that D had little or no evidence to establish a defence to the case themselves. As the D had criticised there being no direct evidence adduced. E.g. Indirect evidence will get you a Mareva

Question 25

Mareva injunctions - The Conditions that must be satisfied in order to establish an entitlement to MI - Balance of Convenience

General rule?

Answer 25

In assessing the balance of convenience, adequacy of damages is not
relevant. What is important is (1) the hardship caused to the defendant and (2) P’s conduct

Question 26

Mareva injunctions - Variation of a Mareva injunction

Superwood Holdings v Sun Alliance Insurance [2002

Answer 26

NB: Highlights hardship on D if MI granted

• App to vary MI to let them pay the tax costs of a 3rd party.
• The order her was making it impossible for the Ds to meet security for costs ordered by the court.
• Held the terms of a MI may be varied, but here they refused: there must be a full and frank disclosure before a court before it would be varied. Evidence of relationships etc. should have been given

Question 27

Mareva injunctions - Disclosure Orders

Deutsche Bank v Murtagh [1995]

Answer 27

In deciding to grant an MI or not, the court may order D to disclosed the extent of
his assets and their whereabouts

Question 28

Mareva injunctions - World Wide Mareva Injunctions

General rule?

Answer 28

Courts reluctant to exercise extra-territorial jurisdiction. It must have judicially significant factor linking it to the jurisdiction. It is also a well-established principle that courts have jurisdiction to grant a worldwide MI.

Question 29

Mareva injunctions - World Wide Mareva Injunctions

Haiti v Duvalier [1989]

Answer 29

• D fled from Haiti with huge amount of Haiti’s assets. Used firm of UK solicitors to conceal the assets.
• Ordered a WMI in London freezing the assets everywhere + ordering the firm to give info on the assets

Question 30

Mareva injunctions - World Wide Mareva Injunctions

Deutsche Bank v Murtagh [1994]:

Answer 30

HC accepted Irish courts enjoy a similar jurisdiction.

Question 31

Mareva injunctions - World Wide Mareva Injunctions - Enforcement

Dadourian Group v Simms [2006] UK

Answer 31

If P gets a WMI in Ireland, must go through appropriate legal channels in foreign jurisdiction to enforce (i.e. get permission of foreign court). Court which grants a WMI must control oppressive action against D

• Set out practical guidelines for enforcing WMIs:
  (1) Granting it should be just + convenient + ensure effectiveness +shouldn’t be oppressive to the parties in the English proceedings. Reflects need to strike balance.
  (2) Must consider all the facts – allows court to grant permission to enforce WMI subject to terms
  (3) P’s interests should be balanced against interest of other parties in case+any likely to be joined
  (4) Permission shouldn’t be given in terms that enable P to get relief abroad better than that of WMI
  (5) App should contain all relevant info to allow the court make an informed decision
  (6) Standard of proof: A real prospect the assets are located in the jurisdiction of the foreign court
  (7) There must be evidence of a risk of dissipation of the assets.
  (8) Although ex parte, D should be able to have matter reconsidered at earliest practical opportunity

Question 32

The Anton Piller Order

What is an APO?

Answer 32

Requires D allow P to enter D’s premises and inspect and, if necessary, take away docs and other items specified in the order. It seeks to secure evidence that, if D found out about case, he’d likely destroy.
- An APO acts in personam: if D breaches, he can be held in contempt of court + imprisoned.

Question 33

The Anton Piller Order - Conditions for entitlement to APO

Anton Piller v Manufacturing Processes Ltd [1976]

Answer 33

• P was German computer parts manufacturer. Claimed D (distributor of P’s products in UK) was giving P’s competitors drawings + copyright material to let them copy. Got info from whistle blowers in D.
• Granted: Held not equivalent to search order. It’s essential that a P can search in order for justice to be upheld, otherwise vital evidence may be destroyed + the inspection foes no real harm to D.
• Ornrod LJ set out the four essential pre-conditions:
  (1) Must be an extremely strong prima facie case
  (2) The damage, actual/potential, must be very serious for the applicant
  (3) Must be clear evidence that Ds possess incriminating docs/items and there’s a real possibility that they may destroy such material before the trial
  (4) The inspection must do no real harm and is not a “fishing expedition”.

Question 34

The Anton Piller Order - Undertaking as to Damages and Requirement for Full and Frank Disclosure

Columbia Pictures v Robinson [1987]:

Answer 34

If P acts improperly, court won’t hesitate to enforce undertaking + award extra damages to D if appropriate
P sought APO for D’s alleged video piracy in breach of copyright. Failed to make full disclosure + removed items that weren’t specified in the order. Held since the APO was executed, no point setting it aside. However, held P liable in damages to D + noted need to strike a balance

Question 35

The Anton Piller Order - Contempt of Court

Columbia Pictures v Robinson [1987]:

Answer 35

Held if D refuses access + subsequently gets the APO discharged, he’d nevertheless be guilty of contempt of court. Punished D: had to pay P’s costs in contempt case. Thus the provision allowing D to challenge is pointless as he’ll be in contempt before this

Question 36

The Anton Piller Order - Privilege Against Self-Incrimination

Rank Film Distributors v Video Centre [1982

Answer 36

Allowed assert the privilege against self-incrimination

Question 37

The Anton Piller Order - Safeguards

Universal Thermosensors v Hibben [1992]

Answer 37

Set out guidelines to be followed in execution of an APO:

(1) D may get legal advice before APO executed so should be done only on working days and in office hours so they can expect a solicitor to be available.
(2) If executed at private house + likely woman alone, P must be woman/accompanied by one.
(3) A detailed list of items being removed should be made + checked by D at time of removal
(4) APO often contain an inj restraining D informing others of existence of it for limited period.
(5) APO shouldn’t be executed at business premises save in presence of responsible office/rep of D
(6) Execution should be supervised by an experienced solicitor to ensure proper compliance.