A company director and three Spanish property companies who have been restrained by the High Court from reducing their assets below €840,000 told the court yesterday that allegations made against them were "fundamentally wrong".

Karl Morris and the three companies of which he is a director - Simple Palmera Properties Ltd, Simple Overseas Property Ltd and Simple Property Group SL - asked Mr Justice Thomas Smyth to discharge or vary the order restraining him and the companies from reducing their assets here and in Spain below €840,000. Mr Justice Smyth said that he would rule on the application today.

The freezing order against Mr Morris, with an address at Mill House, Schull, Co Cork, and the companies was granted last month to Cyril McMorrow, Carrick Road, Boyle, Co Roscommon. He claims the defendants have retained some €540,000 paid over by him for investment in apartments in Spain and that he is also due some €300,000 for alleged loss of profit.

The court was told that some €2 million in client monies were wrongfully taken from certain company accounts. When the freezing order was granted, it was made on the basis of evidence from Mr McMorrow only. When making the order, Mr Justice Smyth said he had given the defence ample time to produce a replying affidavit.

Yesterday, Nicholas Butler SC, for the defendants, said the court could vary or discharge the freezing order because of the unnecessary hardship caused to his clients. Serious allegations had been made which were "fundamentally wrong", counsel said.

Mr Butler said that no replying affidavit was furnished to the court last month because, given the detail of the plaintiff's claims, time was required to put together a "coherent defence".

The freezing order would not have been granted had a replying affidavit been filed, he said. A "myriad of issues and facts" had been thrown up by the plaintiff which were "not plausible" and were "quite simply wrong". Not all matters which were "material" for the judge to know had been disclosed, Mr Butler also said.

Opposing the motion, Peter Finlay SC, on behalf of Mr McMorrow, said that the court did not have jurisdiction to change the freezing order. Such an application had to be made to the Supreme Court. Mr Justice Smyth was being asked to "judge his own case" and this went against "natural justice".

The application for the order was heard on notice to the defendants and there was plenty of time to file a replying affidavit, but there was a failure to do so, counsel added.

Mr Finlay said he was also rejecting any implications that the court had been misled.

Counsel also said that Kevin Devlin, a computer programmer who had worked with the defendants in Spain and was prepared to give evidence against them, had been followed to his hotel room and threatened after he appeared in the High Court on behalf of Mr McMorrow. The persons who did this were "associates" of the defendant, he said.

Mr Finlay said that gardaí were called in order to escort Mr Devlin safely away from the city.

When seeking the freezing order Mr McMorrow claimed the conduct of the defendants meant that he had been unable to complete the purchase of a block of 17 apartments, as agreed, resulting in serious financial loss to him.