The High Court declined to vary an injunction restraining Breifne O’Brien from reducing his assets below €20 million. It said Anglo Irish Bank could exercise any existing rights of set-off or security enforcement without a variation, provided those rights were legally enforceable, pre-dated notice of the injunction and were exercised bona fide.
The judgment, delivered by Mr Justice Clarke on 21 December 2009, followed Anglo’s application to permit it to apply funds and realise assets towards Mr O’Brien’s debts. The application concerned injunctions granted on 15 December 2008 in this action and four related actions. The Dowleys had obtained judgment against Mr O’Brien for €3,065,350 on 9 January 2009.
Anglo said Mr O’Brien had defaulted on loans and asserted that it held contractual set-off rights and security over several assets. These included a deposit account, shares, an investment portfolio and properties in Monkstown, Reading, Paris and Munich. The bank sought permission to apply the account balance and realise or sell those assets to reduce the debts. Its motion was filed on 23 September 2009.
The Dowleys opposed a variation, arguing it was unnecessary and inappropriate. They also raised concerns about rents from the Paris and Munich properties and sought an updated valuation of the share portfolio. Mr O’Brien, who was unrepresented, sent a letter disputing Anglo’s valuations and stating that several properties generated rental income. He did not appear at the hearing.
Clarke J held that a typical mareva injunction restrains the defendant from removing assets so as to leave insufficient assets within the court’s reach. It does not give the plaintiff a charge over particular assets or ordinarily prevent the defendant from paying lawful debts. A third party such as a bank is not directly bound, though it may be liable if it knowingly assists a breach or frustrates the order.
The court concluded that the injunction did not prevent a bank from bona fide exercising set-off or enforcing security already in place before the bank received notice of the order. It also accepted that Anglo had standing to ask the court to revisit the injunction because it claimed its own interests were affected.
The court did not rule on whether Anglo actually had the asserted legal entitlements, nor did it assess the bank’s bona fides or approve any specific transaction. It declined to vary the injunction because a variation was unnecessary for any qualifying exercise of rights. Its conclusion was expressly conditional: Anglo could proceed only if it had the legal rights claimed and acted bona fide.