injunctions (inteirm and freezing) Flashcards
nature of injunctions
EQUITABLE - equitable maxims apply (e.g. “clean hands”, “equity will not act in vain”)
DISCRETIONARY - even if all requirements are met, there is no automatic right to an injunction
equitable factors
- Delay (by applicant) – “delay defeats equity”
- Acquiescence (by applicant),
- Inequitable conduct by the applicant (“those who come to equity must come with clean hands”)
- Hardship
- Equity does not act in vain
- court cannot enforce the order
effect of interim injunctions
TEMPORARY injunction granted before trial
PROVISIONAL - continues in force for a limited period (until further order or trial)
‘prohibitory’ - prevent from doing something
‘mandatory’ requires other side to do something
Usually made in circumstances of urgancy
effect of freezing injunctions
CPR 25.1(1)f – an interim order restraining a party from:
ONE – removing assets located within the jurisdiction out of the jurisdiction
TWO – dealing with assets whether they are located within the jurisdiction or not
Purpose: prevent respondent’s assets being dissipated to frustrate enforcement of any judgement applicant might obtain (so order is usually restricted to assets not exceeding value of the claim against respondent together with provision for costs)
Mareva Compania (background)
CA decided it had power to grant an interim injunction restraining dissipation of assets in Mareva Compania
this power is now acknowledged in statute, s.37 SCA 1981, and in CPR 25.1(1)f)
jurisdiction to grant interim injunction
CPR 25.1(1)a
HC - derive inherent jurisdiction from s.37 SCA 1981 (granted if ‘just and convenient’ to dos o)
CC - s.38 CCA 1984 (as amended) - CC can make any order HC can make
applications for injunctions must generally be made to be judge rather than District Judge or Master
jurisdiction to grant freezing injunctions
CPR 25.1(1)(f)
- HC - generally available
- CC - can be granted by CC but will be allocated to a Circuit Judge (2B PD 8.4)
Worldwide applicability guidelines – Dadourian Group v Simms
when and who can apply for interim injunction?
either C or D
AFTER issuing proceedings or BEFORE (pursuant to CPR 25.2(1)a), if the matter:
(i) is urgent or if it is
(ii) otherwise necessary to do so in the interests of justice (CPR 25.2(2)b)
If made before, court will usually direct applicant to issue and serve CF ASAP and to proceed with main action quickly
how is the interim injunction application made?
with or without notice
Injunction may be granted on application without notice if it appears to the court that there were good reasons for not giving notice (CPR 25.3(1))
Matter of principle: no order should be made in civil proceedings without notice to other side unless there is a very good reason for departing from general rule that notice must be given
what is a good reason not to give notice ?
- Notice might itself defeat the ends of justice
- Notice would defeat purpose of injunction (e.g. freezing/searching orders) – e.g. dissipate assets
- No time to give notice (urgent matter) – e.g. the case is for disclosing confidential info – once disclosed, lost forever (rare, usually can give some form of notice even if informally and by telephone)
if without notice what duties does applicant have?
- explain (in evidence in support) why notice was not given
- full and frank disclosure (disclose to court all matters relevant to the application, including all matters, whether of fact or of law that may be, or are, adverse to it + applicant must fairly present facts they disclose)
- procie full notes of hearing to any party affected by relief sought
Memory Corporation v Sidhu (No.2)
full and frank disclosure
“High duty” requiring applicant to draw to the court’s attention “significant factual, legal, and procedural aspects of the case”
full and frank disclosure
Disclose fully to the court all matters relevant to the application, including all matters, whether of fact or of law that may be, or are, adverse to it + applicant must fairly present facts they disclose
- important bc other side doesn’t have opp to put evidence before court (court is wholly reliant on info provided by C)
- A might make points R wouldn’t have thought of!)
- if duty not observed, court may discharge injunction
Kazakhstan Kagazy v Arip
full and frank disclosure
A does not have to rehearse a detailed analysis of possible inferences that R may seek to rely on
• Sita v Serruys
full and frank disclosure
court has full discretion
court allowed an injunction despite material and deliberate non-disclosure (C had a good arguable case for injunction!) but claimant ordered to pay costs of application on indemnity basis
contents of order (interim injunction)
- penal notice on front page (if R doesn’t comply, contempt of court = imprisoned/fined)
- undertakings (to issue AN ASAP, to issue CF ASAP, serve CF, AN, order, evidence in support on R, undertaking in damages)
- duration
- operative part of the order
evidence for inteirm app - what contain?
- Cause of action
- What injunction is sought
- Why injunction should be granted
- Why notice was not given
- Ability to satisfy a cross-undertaking in damages
freezing injunction - brief summary
made against a R who is prepared to dissipate assets to frustrate any judgement the applicant may obtain
to be effective - application generally made without informing R (and before CF served)
- app can still be made during course of proceedings
- made to judge sitting in private
docs for freezing injunction
- AN (must set out why w/o notice + details)
- draft order
- undertaking to pay damages
- affidavit in support (evidence)
- CF (after issue but before serve or R is alerted)
- statement of costs
pros of injunction
- onerous remedy
- maintains client’s position/ensures pot of assets to enforce against
- contempt of court if breach
- psychological impact on R
- promotes settlement
- remedy without having to prove case at trial
- can be obtained within 48 hours - useful if urgent
- can be granted without notice
disadvantages of injunctions
- onerous tests
- full and frank disclosure (duty to investigate facts and fairly present evidence)
- duty to provide full notes
- high costs and time-consuming (highly time-pressured, lots of evidence required, court won’t grant it lightly)
- freezing injunctions require 3P cooperation
- remedy only provisional and temporary
- no guarantee of success (discretionary)
- undertakings (incl. undertaking in damages)
- compensate 3P for costs incurred (if freezing injunction)
- interim injunction actually might give more publicity
legal guidelines for prohibitory interim injunction
EQUITABLE
DISCRETIONARY
OO
CAUSE OF ACTION
American Cyanamid guidelines (Lord Diplock)
- serious Q to be tried
- damages adequate remedy? a) for A, b) for R
- balance of convenience?
- if too finely balanced/inconclusive:
- preserve status quo
- merits of case
- special factors
serious question to be tried
“the claim is not frivolous or vexatious”
NOT a difficult hurdle to surmount (low threshold)
In comparison: “good arguable case” (for freezing injunction) is a higher test
damages - adequate remedy for A?
if yes - unlikely to be granted
if no - go on to next stage
damages inappropriate if:
- harm is serious and likely to continue
- irreparable
- difficult to assess/cannot be quantified (e.g. loss of goodwill/reputation)
- R has no means to pay damages
- no competitor has similar product so damages = substantial
- if breach of confidence - court’s historic approach = grant injunction
damages - adequate remedy for R?
Would R be adequately compensated under applicant’s undertaking as to damages if it transpires that injunction was wrongly granted?
if YES, ADEQUATELY compensated from damages from A’s undertaking = likely to grant injunction
if no - consider next stage
if A in position to pay R, no reason to refuse interim prohibitory injunction on this ground
balance of convenience lie
Matters to consider and their weight varies from case to case
if both parties can (1) meet award of damages (2) bear financial burden of injunction pending trial –> swings balance of convenience towards injunction
court considers:
- equity of situation (is it unjust?)
- length of time till final trial heard
- public interest
will one party be disproporionatly harmed?
status quo
Position before R started conduct that A is complaining about (“status quo ante”)
E.g. stop using confidential information
PROBLEMATIC: relevant point of time might be difficult to determine and may vary
merits of case
(as revealed by written evidence adduced for interim application)
BUT MUST NOT CONDUCT MINI-TRIAL
- This should only be done where it is apparent upon facts disclosed by evidence as to which there is no credible dispute that the strength of one party’s case is disproportionate to that of the other party
- Not usually done – a last resort
exceptions to american cyanamid
- Restraint of trade cases
- Where grant or refusal of injunction would result in final disposal of the claim
- Where no arguable defence to applicant’s claim
- Privacy claims
freezing injunctions - LEGAL GUIDELINES
DISCRETIONARY
EQUITABLE
Mareva Compania requirements:
- substantive cause of action
- good arguable case
- r has assets within jurisdiction
- real risk R may remove from jurisdiction, dispose of, dissipate, or hide his assets in a way that will hinder enforcement of any judgement the applicant may obtain
substantive cause of action against the respondent justiciable in England and Wales
bc freezing injunction = remedy not cause of action
limited circumstances - court may grant injunction against 3P who will not be D if assets held on bare trust for D
Good arguable case against respondent
One which is “more than barely capable of serious argument, and yet not necessarily one which the judge believes to have a better than 50% chance of success”
(Mustil J, Ninemia Maritime Corp v Trave)
more burdensome test than ‘serious question to try’
Respondent has assets within the jurisdiction
Stems from equitable maxim: “equity will not act in vain”
- If injunction will not be effective, it will not be granted
- Assets include: money, shares, securities, cars, vessels, aircraft, jewellery, paintings, etc.,
- Check any knowledge of assets is up to date
There is a real risk that the respondent may remove from the jurisdiction, dispose of, dissipate, or hide his assets in a way that will hinder enforcement of any judgement the applicant may obtain
circumstantial and difficult limb of the test
factors;
- evidence of dishonesty?
- incidents of debt default by R
- evidence R started to remove/dispose of assets
- where assets are located
- where R is based?
Can be difficult – if you argue R has started to remove/dispose of assets, then that contradicts your argument for requirement 3 (that respondent has assets in the jurisdiction)
NB. applicant has obligation to make full and fair disclosure, this will oblige applicant to tell court ANY evidence suggesting no risk (as well as risk)
