The High Court has refused an application to halt the sale of a Terenure property while a proposed company claim is considered, finding insufficient evidence that the sale was intended to put assets beyond the reach of a possible judgment.
Mr Justice Rory Mulcahy gave the ruling on 16 February 2024 on Sidney Sutton’s application for Mareva-type relief. Sutton had applied for leave to bring a derivative action on behalf of Salumi Grazing Limited. That separate leave application was listed for hearing the following Monday; the judge did not decide it in this ruling.
The proposed claim concerns the termination in May 2021 of the company’s licence to occupy Unit Two, Terenure Place, where it operated a restaurant. Cohesion Infheistíochtaí Limited cancelled the company’s licence and granted a new licence on the same terms to Karmar Limited, whose directors were Mark and Karen Leavey.
The judge said there was a good arguable case that the company had been wrongfully deprived of the benefit of the licence. He referred to concerns previously expressed by Ms Justice Stack about the termination and to evidence Karen Leavey gave at a disciplinary hearing. The judge made no finding on the proposed claim’s value and said he was not commenting on the amount sought.
Sutton put the company’s claim for lost profits and unpaid debts at about €2.5 million. He alleged that Cohesion was selling assets to avoid satisfying a future judgment and sought an order stopping the sale of Unit Two, which forms part of the property being sold. Cohesion said the property was publicly marketed from April 2023, had a purchaser and was “sale agreed”, although contracts had not been signed.
The judge accepted that interim relief could, in principle, be available before leave to bring a derivative action, if the application for leave might otherwise be frustrated. But he refused the injunction, saying the evidence did not come close to supporting an inference that Cohesion intended its sale to defeat justice.
He noted that the property was put on the market before the claimed invoices and before the derivative action was filed. It was publicly marketed, and there was no suggestion that the asking price was below market value or that Cohesion would not receive full value. The judge also distinguished the alleged facilitation of the Leaveys’ actions from evidence that Cohesion had misappropriated company funds.
The ruling also cited Sutton’s delay in bringing the proposed derivative action and in objecting to the sale, which weakened claims of urgency and risk of dissipation. The judge refused the relief sought and did not address whether the undertaking as to damages was adequate. The separate application for leave remained for determination.