The High Court dismissed David Tracey’s application for an inquiry into damages arising from an interim Mareva-type injunction obtained by nine plaintiffs in September 2007. It also rejected his alternative request to enforce the plaintiffs’ undertaking as to damages.
Miss Justice Laffoy’s judgment, delivered on 16 April 2010, concerned an application made after the plaintiffs had succeeded in their substantive claim for the return of deposits paid toward apartments in a Las Vegas development. The injunction restrained the defendants from dealing with assets unless their value exceeded €268,710.69. The plaintiffs’ solicitors notified 14 financial institutions of the order.
The order was made ex parte on 7 September 2007. On 2 October, it lapsed after Tracey gave the court an undertaking that the plaintiffs said provided better protection. The parties did not then resolve whether the plaintiffs’ undertaking as to damages could later be enforced. Tracey raised that issue during the 2009 trial and brought his application by notice of motion dated 11 May 2009.
Tracey argued that the injunction should not have been granted, or that its scope and notification to financial institutions were excessive. He said notification had damaged his professional prospects. The judge found that the evidence showed an arguable case of loss from the notifications, but that did not establish entitlement to compensation under the undertaking.
The court held that Tracey had not shown that the order should not have been granted. In particular, it rejected his claims that the plaintiffs had withheld material information on their ex parte application. It found that the affidavits and exhibits gave a comprehensive account of the transactions and relevant correspondence. The plaintiffs’ solicitors had acted in accordance with normal practice in notifying financial institutions, the judge said.
The judgment also recorded that, at the substantive trial, the seventh to ninth plaintiffs succeeded in recovering their deposits. Tracey had accepted the first to sixth plaintiffs’ entitlement to repayment, subject to expenses, but established only a US$424 deduction relating to mortgage appraisal and application fees for the fifth and sixth plaintiffs. Evidence at trial showed that deposits intended for escrow had instead been used in a deal involving five condominiums, and that the main contract underpinning the plaintiffs’ purchases had been released.
Because the injunction was properly granted, the court said it was unnecessary to decide whether its undertaking should be enforced. The judge nevertheless observed that the defendant’s success on the merits, the evidence of his conduct, and his delay in raising the undertaking issue were relevant considerations. The court’s order dismissed the application; it did not direct an inquiry into damages.