SGS6 Interim injunctions

Question 1

What kind of interim injunction may a court graint?

Answer 1

Orders for interim remedies 25.1 (1) The court may grant the following interim remedies – (a) an interim injunction(GL); (b) an interim declaration; (c) an order – (i) for the detention, custody or preservation of relevant property; (ii) for the inspection of relevant property; (iii) for the taking of a sample of relevant property; (iv) for the carrying out of an experiment on or with relevant property; (v) for the sale of relevant property which is of a perishable nature or which for any other good reason it is desirable to sell quickly; and (vi) for the payment of income from relevant property until a claim is decided; (d) an order authorising a person to enter any land or building in the possession of a party to the proceedings for the purposes of carrying out an order under sub-paragraph (c); (e) an order under section 4 of the Torts (Interference with Goods) Act 19771 to deliver up goods; (f) an order (referred to as a ‘freezing injunction(GL)’) – (i) restraining a party from removing from the jurisdiction assets located there; or (ii) restraining a party from dealing with any assets whether located within the jurisdiction or not; (g) an order directing a party to provide information about the location of relevant property or assets or to provide information about relevant property or assets which are or may be the subject of an application for a freezing injunction(GL); (h) an order (referred to as a ‘search order’) under section 7 of the Civil Procedure Act 19972(order requiring a party to admit another party to premises for the purpose of preserving evidence etc.); (i) an order under section 33 of the Supreme Court Act 19813 or section 52 of the County Courts Act 19844 (order for disclosure of documents or inspection of property before a claim has been made); (j) an order under section 34 of the Supreme Court Act 19815 or section 53 of the County Courts Act 19846 (order in certain proceedings for disclosure of documents or inspection of property against a non-party); (k) an order (referred to as an order for interim payment) under rule 25.6 for payment by a defendant on account of any damages, debt or other sum (except costs) which the court may hold the defendant liable to pay; (l) an order for a specified fund to be paid into court or otherwise secured, where there is a dispute over a party’s right to the fund; (m) an order permitting a party seeking to recover personal property to pay money into court pending the outcome of the proceedings and directing that, if he does so, the property shall be given up to him; (n) an order directing a party to prepare and file accounts relating to the dispute; (o) an order directing any account to be taken or inquiry to be made by the court; and (p) an order under Article 9 of Council Directive (EC) 2004/48 on the enforcement of intellectual property rights (order in intellectual property proceedings making the continuation of an alleged infringement subject to the lodging of guarantees).

Question 2

Rule 34.2 summons.

Answer 2

(Rule 34.2 provides for the court to issue a witness summons requiring a witness to produce documents to the court at the hearing or on such date as the court may direct)

Question 3

Can remedies not listed in 25.1 be granted?

Answer 3

Orders for interim remedies 25.1 (3) The fact that a particular kind of interim remedy is not listed in paragraph (1) does not affect any power that the court may have to grant that remedy.

Question 4

When may an order for an interim remedy may be made?

Answer 4

Time when an order for an interim remedy may be made 25.2 (1) An order for an interim remedy may be made at any time, including – (a) before proceedings are started; and (b) after judgment has been given. (Rule 7.2 provides that proceedings are started when the court issues a claim form) (2) However – (a) paragraph (1) is subject to any rule, practice direction or other enactment which provides otherwise;

Question 5

What are the exceptions to 25.2(1)?

Answer 5

Time when an order for an interim remedy may be made 25.2 (2) However – (a) paragraph (1) is subject to any rule, practice direction or other enactment which provides otherwise; (b) the court may grant an interim remedy before a claim has been made only if – (i) the matter is urgent; or (ii) it is otherwise desirable to do so in the interests of justice; and (c) unless the court otherwise orders, a defendant may not apply for any of the orders listed in rule 25.1(1) before he has filed either an acknowledgment of service or a defence. (Part 10 provides for filing an acknowledgment of service and Part 15 for filing a defence)

Question 6

What directions should the court give where it grants an interim remedy before a claim has been commence

Answer 6

Time when an order for an interim remedy may be made 25.2 (3) Where it grants an interim remedy before a claim has been commenced, the court should give directions requiring a claim to be commenced.

Question 7

Need a court direct that a claim be commenced where the application is made for disclosure/inspection ?

Answer 7

Time when an order for an interim remedy may be made 25.2 (4) In particular, the court need not direct that a claim be commenced where the application is made under section 33 of the Supreme Court Act 1981 or section 52 of the County Courts Act 1984 (order for disclosure, inspection etc. before commencement of a claim).

Question 8

How do you apply for an interim remedy?

Answer 8

How to apply for an interim remedy 25.3 (1) The court may grant an interim remedy on an application made without notice if it appears to the court that there are good reasons for not giving notice. (2) An application for an interim remedy must be supported by evidence, unless the court orders otherwise. (3) If the applicant makes an application without giving notice, the evidence in support of the application must state the reasons why notice has not been given. (Part 3 lists general powers of the court) (Part 23 contains general rules about making an application)

Question 9

What is an injunction?

Answer 9

injunction is a court order prohibiting a person from doing something or requiring a person to do something.

Question 10

What is a perpetual injunction

Answer 10

injunction granted by judicial decision at trial after the claimant has established the existence of their right in law and the fact that the defendant has infringed it or is about to do so

Question 11

What is an interlocutory order??

Answer 11

An order other than a final judgment, whether such order be made before judgment or not, may properly be described as an interlocutory order

Question 12

what is an interim injunction?

Answer 12

injunction granted by interlocutory order as so defined is an interim injunction .

Question 13

Must an interim injunction be in terms that would be appropriate at trial?

Answer 13

An interim injunction may be in terms which would not be appropriate, or given the nature of the parties’ allegations, possible, at the final trial (Fresh Fruit Wales Ltd v Halbert The Times, January 29, 1991, CA).

Question 14

Who can apply for an interim injunction?

Answer 14

However, an application for the grant of an interim injunction may be made by any party, whether or not a claim for an injunction was included in that party’s claim form or Part 20 claim (e.g. counterclaim), as the case may be (r.25.1(4))

Question 15

How should an interim injunction be worded?

Answer 15

The interim injunction sought must be worded so that the person injuncted or otherwise affected knows precisely what he is to be prevented from doing or required to do.

Question 16

How clearly defined must the relief sought by way of an interlocutory injunction be?

Answer 16

If a claimant cannot define the relief sought with a sufficient degree of precision (for example, the extent of an area of land, or the trade secrets or confidential information alleged to be protected), no injunction will be granted (Lawrence David v Ashton [1989] I.C.R. 123; CEF Holdings Ltd v Mundey [2012] EWHC 1524 (QB), June 1, 2012, unrep. (Silber J.)).

Question 17

What is the requirement where an interim injunction is sought without notice with incomplete evidence?

Answer 17

Where an interim injunction is sought on a without notice application (see para. 23.4.1 above) with incomplete evidence, it is a basic requirement that there has to be a real urgency for the injunction, particularly where an early effective hearing date is available (Mayne Pharma (USA) Inc v Teva UK Ltd (Interim Applications: Costs) [2004] EWHC 2934 , December 3, 2004, unrep. (application refused in patent claim where no threat and damage requiring immediate intervention of court)).

Question 18

When may an interim injunction be granted?

Answer 18

Subject to certain limits, an interim injunction may be granted at any time (r.25.2) (see further paras 25.2.3 et seq. below). For freezing injunctions (formerly Mareva injunctions) see para.25.1.25 below.

Question 19

What disclosure duty applies to an applicant for an interim injunction?

Answer 19

The applicant is under a duty to make full, fair and accurate disclosure of material information to the court and to draw the court’s attention to significant factual, legal and procedural aspects of the case when applying without notice for an interim injunction, see para. 25.3.5 , Applicant’s duties where application made without notice to respondent below.

Question 20

In which cases may a court grant an injunction?

Answer 20

The Senior Courts Act 1981 s.37 (see Vol.2, para.9A-128 ) states that the High Court may by order, whether interlocutory or final, grant an injunction in all cases in which it appears to the court to be just and convenient to do so (s.37(1)).

Question 21

Is an injunction conditional?

Answer 21

Any such order may be made either unconditionally or on such terms and conditions as the court thinks just (s.37(2)).

Question 22

Can an injunction be granted against the Crown?

Answer 22

Generally, there is no jurisdiction to grant an interim injunction against the Crown (Crown Proceedings Act 1947 s.21); but see para.25.1.17.

Question 23

What is the difference between the County Court and High court for the purposes of jurisdiction in interim injunctions?

Answer 23

The County Courts Act 1984 s.38 (see Vol.2, para.9A-468+) provides that, generally, in any proceedings in a county court, the court may make any order (final or interlocutory and absolute or conditional) which could be made by the High Court if the proceedings were in the High Court (see also Burris v Azadani [1995] 1 W.L.R. 1372, CA). Regulations made under s.38 impose certain restrictions on the jurisdiction of county courts in this respect. Where the jurisdiction of a county court to grant injunctions is restricted, the circumstances may be such as to enable a party to invoke the jurisdiction of the High Court under the High Court and County Courts Jurisdiction Order 1991 art.3 to grant injunctions incidental to and in support of county court proceedings; see para.25.1.2 above, and para.25.1.27.2 below, and Vol.2 para. 15-59 .

Question 24

Which sub-objective of the OO is especially important in interim injunctions for the court?

Answer 24

In dealing with an application for an interim injunction, the court must seek to give effect to the overriding objective of dealing with the matter justly and at proportionate cost which includes, so far as is practicable, adhering to the sub-objectives referred to in r.1.1(2).

Question 25

What may be required from the judge where an application is contested at a hearing?

Answer 25

Where the application is contested at a hearing, its disposition may necessarily involve the judge in giving a reasoned determination of relevant issues of fact and of law.

Question 26

What should the court not attempt to do at a hearing for an application for an interim injunction?

Answer 26

In Sukhoruchkin v Van Bekestein [2014] EWCA Civ 399, March 31, 2014, CA, unrep., Sir Terence Etherton C., stated (at para.32) that it is now well-established as a general principle that, on an application for an interim injunction, the court should not attempt to resolve critical disputed questions of fact or difficult points of law on which the claim of either party may ultimately depend, particularly where the point of law turns on fine questions of fact which are in dispute or are presently obscure.

Question 27

Where an interim injunction is granted ex parte, and at the inter partes hearing on the return date the claimant accepts the defendants offer of security and a consent order is made, it is important that…

Answer 27

Where an interim injunction is granted ex parte, and at the inter partes hearing on the return date the claimant accepts the defendants offer of security and a consent order is made, it is important that the parties should be clear as to whether the claimants application to continue the interim injunction is thereby disposed of or whether it is simply adjourned.

Whether it is one or the other affects the grounds upon which the defendant may subsequently seek release from or variation of the undertaking.

Determining whether it is one or the other involves construing the terms of the undertaking in the context of the order as a whole.

Question 28

When can a court grant a declaration as a final remedy?

Answer 28

It is clear that the court has jurisdiction to grant a declaration as a final remedy at trial, including at the trial of a preliminary issue. It is also clear that in interlocutory proceedings the court may grant a declaration as a final remedy. Further, in judicial review proceedings a declaration may be granted as provided by the Senior Courts Act 1981 s.31 and the Crown Proceedings Act 1947 s.21 provides that, in proceedings against the Crown, in certain circumstances the court shall not grant relief by way of injunction or specific performance but shall in lieu thereof make an order declaratory of the rights of the parties.

Question 29

What is the difference between the effect of an interim injunction and an interim declaration?

Answer 29

As a practical matter, in most instances an interim injunction will achieve the same objective as an interim declaration (e.g. R. v Secretary of State for Transport , Ex p. Factortame Ltd (No.2) [1991] 1 A.C. 603, HL (interim injunction in effect declaring Act of Parliament ineffective pending reference to ECJ))

Question 30

Why is the grant of an interlocutory injunction a very important matteR?

Answer 30

15-7 The grant of an interlocutory injunction is a very important matter as a defendant can be sent to prison for breach (Rochdale BC v Anders [1988] 3 All E.R. 490).

Question 31

Why is making an interlocutory injunction difficult?

Answer 31

When an application is made for an order granting such relief, the court has a very difficult jurisdiction to exercise. It is sometimes impossible to make an order which may not do some injustice to one party or the other (Thompson v Park [1944] 1 K.B. 408 , CA at 411, per du Parcq L.J.).

Question 32

is a claimant entitled to interim injunctive relief simply because he seeks it?

Answer 32

A claimant is not entitled to interim injunctive relief simply because he seeks it. In Caterpillar Logistics Services (UK) Ltd v de Crean [2012] EWCA Civ 156 ; [2012] 3 All E.R. 129 , CA, where the claimant brought a claim for injunctive relief to prevent its former employee from misusing its confidential information and applied for an interim injunction, it was held that the relief was properly refused because the claimant was unable to establish any arguable case that the defendant had broken or intended to break a confidentiality agreement, or even that there was a real risk that it would be broken.

Question 33

What questions arise when an application is made for injunctive relief (American Cyanamid)?

Answer 33

According to the American Cyanamid Co case, when an application is made for an interlocutory injunction, in the exercise of the court’s discretion an initial question falls for consideration. That is: (1) Is there a serious question to be tried? If the answer to that question is, yes, then two further related questions arise; they are: (2) Would damages be an adequate remedy for a party injured by the court’s grant of, or its failure to grant, an injunction? (3) If not, where does the balance of convenience lie?

Question 34

What are the fundamental characteristics of the granting of an interlocutory injunction?

Answer 34

1. (1) The grant of an interlocutory injunction is a remedy that is both temporary and discretionary.

Question 35

What is the nature of the evidence available at an interlocutory injunction?

Answer 35

2. (2) The evidence available to the court at the hearing of the application for an interlocutory injunction is incomplete. It is given in written evidence and has not been tested by oral cross-examination.

Question 36

What shall the court avoid dealing with at a hearing for an application for an interlocutory injunction?

Answer 36

3. (3) It is no part of the court’s function at this stage of the litigation to try to resolve conflicts of evidence on the written evidence as to facts on which the claims of either party may ultimately depend nor to decide difficult questions of law which call for detailed argument and mature considerations. These are matters to be dealt with at the trial.

Question 37

What is the uncertain basis inherent making an interlocutory injunction to restrain a defendant from doing acts alleged to be in violation of the claimant’s legal rights on contested facts?

Answer 37

4. (4) When an application for an interlocutory injunction to restrain a defendant from doing acts alleged to be in violation of the claimant’s legal right is made upon contested facts, the decision whether or not to grant an interlocutory injunction has to be taken at a time when ex hypothesi the existence of the right or the violation of it, or both, is uncertain and will remain uncertain until final judgment is given in the action.

Question 38

Given the uncertainty described in principle 4, what were interlocutory injunctions designed to mitigate?

Answer 38

5. (5) It was to mitigate the risk of injustice to the claimant during the period before that uncertainty could be resolved that the practice arose of granting him relief by way of interlocutory injunction.

Question 39

What mechanism is used to insure the defendant against the possibility that it might be shown at trial that the injunction wasn’t warranted?

Answer 39

6. (6) But (at least since the middle of the 19th century) this has been made subject to the claimant’s undertaking to pay damages to the defendant for any loss sustained by reason of the injunction if it should be held at the trial that the claimant had not been entitled to restrain the defendant from doing what he was threatening to do.

Question 40

What is the object of the interlocutory injunction?

Answer 40

7. (7) The object of the interlocutory injunction is to protect the claimant against injury by violation of his right for which he could not be adequately compensated in damages recoverable in the action if the uncertainty were resolved in his favour at the trial; but the claimant’s need for such protection must be weighed against the corresponding need of the defendant to be protected against injury resulting from his having prevented from exercising his own legal rights for which he could not be adequately compensated under the claimant’s undertaking in damages if the uncertainty were resolved in the defendant’s favour at the trial.

Question 41

What is the balancing exercise carried out by the court in granting interim injunctions?

Answer 41

7. (7) The object of the interlocutory injunction is to protect the claimant against injury by violation of his right for which he could not be adequately compensated in damages recoverable in the action if the uncertainty were resolved in his favour at the trial;

but the claimant’s need for such protection must be weighed against the corresponding need of the defendant to be protected against injury resulting from his having prevented from exercising his own legal rights for which he could not be adequately compensated under the claimant’s undertaking in damages if the uncertainty were resolved in the defendant’s favour at the trial.

8. (8) The court must weigh one need against another and determine where, “the balance of convenience” lies.

Question 42

Does the court need to be satisfied that on the balance of probabilities the acts of the other party sought to be enjoined would, if committed, violate the applicant’s legal rights before it can go on to consider the balance of convenience test?

Answer 42

9. (9) There is no rule of law or practice to the effect that the court is not entitled to take any account of the balance of convenience unless it has first been satisfied that upon the evidence adduced by both the parties on the hearing of the application the applicant had satisfied the court that on the balance of probabilities the acts of the other party sought to be enjoined would, if committed, violate the applicant’s legal rights.

The purpose sought to be achieved by giving to the court discretion to grant interlocutory injunctions would be stultified if the discretion were clogged by such a technical rule.

I.e. Court does not need to be satisfied on the evidence that acts if committed would violate the applicant’s legal rights before it can consider the balance of convenience test.

Question 43

What about the claimant must the court be satisfied by before it can grant an injunction?

Answer 43

10. (10) However, the court must be satisfied that the claim is not frivolous or vexatious; in other words, that there is a serious question to be tried.

Question 44

In what circumstances would a court not go on to consider the balance of convenience?

Answer 44

11. (11) So, unless the material available to the court at the hearing of the application for an interlocutory injunction fails to disclose that the claimant has any real prospect of succeeding in his claim for a permanent injunction at the trial, the court should go on to consider whether the balance of convenience lies in favour of granting or refusing the interlocutory relief that is sought.

Question 45

Will it be possible to appeal against a decision of where the balance of convenience lies?

Answer 45

12. (12) It would be most exceptional for the House of Lords to give leave to appeal in a case which turned upon where the balance of convenience lay.

Question 46

What must the claimant’s need for protection under an interim injunction be weighted against?

Answer 46

7. (7) The object of the interlocutory injunction is to protect the claimant against injury by violation of his right for which he could not be adequately compensated in damages recoverable in the action if the uncertainty were resolved in his favour at the trial;

but the claimant’s need for such protection must be weighed against the corresponding need of the defendant to be protected against injury resulting from his having prevented from exercising his own legal rights for which he could not be adequately compensated under the claimant’s undertaking in damages if the uncertainty were resolved in the defendant’s favour at the trial.

Question 47

What are the 12 key Principles of American Cyanamid?

Answer 47

1. Temporary/discretionary
2. Incomplete evidence
3. No resolving conflicts of law/evidence
4. Uncertainty about rights
5. Mitigate uncertainty period injustice
6. Undertaking to pay damages
7. Object and counter-consideration
8. Balance of convenience
9. No need to satisfied on evidence that rights would be breached
10. Need to be satisfied that not frivolous or vexatious
11. Fails to disclose prospect of succeeding at trial
12. Appeal on balance of convenience rare

Question 48

On what assumption are the principles in American Cyanamid based?

Answer 48

the assumption that a trial is in fact likely to take place, in the sense that the applicant’s case shows that he is genuinely concerned to pursue his claim to trial, and that he is seeking the injunction as a means of a holding operation pending the trial.

Question 49

Which AmCy proposition is often stated in appeal courts?

Answer 49

The proposition in principle (3) is frequently stressed, particularly by appeal courts.

Question 50

Which are the most significant principles in AmCy?

Answer 50

(9) and (10).

Question 51

Which is the ‘great object’ of the court in hearing interim injunctions?

Answer 51

This approach is consistent with the great object of the court in hearing an application for an interlocutory injunction which is to abstain from expressing any opinion on the merits of the case until the hearing

Question 52

why is Amercian Cyanamid’s approach likely to discourage interlocutory appeals?

Answer 52

Further, the approach should have the effect of discouraging interlocutory appeals, because, as a practical matter, a respondent party is likely to find it more difficult to upset on appeal a judge’s finding arrived at by applying a lower threshold test.

Question 53

Why will the court abstain from expressing any opinion on the merits of the case until the hearing?

Answer 53

The objective is to prevent the court from being bogged down with complex, highly contentious issues, not suitable for determination in interlocutory proceedings, in circumstances where the date of trial cannot be predicted and is likely to be a long way off

Question 54

What is the historical context of American Cyanamid?

Answer 54

The American Cyanamid Co case was decided in 1975 when concerns about pre-trial delays in civil cases were rising and when interlocutory warfare was seen as a prime cause for delays.

Question 55

Is interim relief pending appeal available?

Answer 55

The court has a jurisdiction to grant interim protection by interim injunction to a party who has been unsuccessful at trial pending an appeal.

An unsuccessful claimant may be granted interim protection if he is seeking to restrain some irreparable harm pending appeal, notwithstanding that he has been unsuccessful in asserting his right at trial ( Novartis AG v Hospira (UK) Ltd [2013] EWCA Civ 583 , May 22, 2013, CA, unrep., where authorities on principles applicable to granting of interim injunction pending an appeal in patent proceedings explained).

Question 56

In which case does Browne LJ set out Lord Diplock’s guidelines to the American Cyanamid ?

Answer 56

Fellowes & Son v Fisher [1976] 1 Q.B. 122 , CA, at p.137, CA

Question 57

According to Browne LJ’s restatement of Diplocks’s American Cyanamid guidelines, what is the governing principle in interim injunctions?

Answer 57

1. (1) The governing principle is that the court should
   - first consider whether, if the claimant succeeds at the trial, he would be adequately compensated by damages for any loss caused by the refusal to grant an interlocutory injunction.
   - If damages would be adequate remedy and the defendant would be in a financial position to pay them, no interlocutory injunction should normally be granted, however strong the claimant’s claim appeared to be at that stage.

Question 58

According to Browne LJ’s restatement of Diplocks’s American Cyanamid guidelines, what should the court consider if it thinks that damages not be an adequate remedy?

Answer 58

2. (2) If, on the other hand, damages would not be an adequate remedy, the court should then consider
   - whether, if the injunction were granted, the defendant would be adequately compensated under the claimant’s undertaking as to damages.
   - If damages in the measure recoverable under such an undertaking would be an adequate remedy and the claimant would be in a financial position to pay them, there would be no reason upon this ground to refuse an interlocutory injunction.

Question 59

According to Browne LJ’s restatement of Diplocks’s American Cyanamid guidelines, when does the question of balance of convenience arise?

Answer 59

3. (3) It is where there is doubt as to the adequacy of the respective remedies in damages that the question of balance of convenience arises.

It would be unwise to attempt even to list all the various matters which may need to be taken into consideration in deciding where the balance lies, let alone to suggest the relative weight to be attached to them.

These will vary from case to case.

Question 60

According to Browne LJ’s restatement of Diplocks’s American Cyanamid guidelines, when will a court take measures to preserve the status quo?

Answer 60

4. (4) Where other factors appear to be evenly balanced it is a counsel of prudence to take such measures as are calculated to preserve the status quo.

Question 61

According to Browne LJ’s restatement of Diplocks’s American Cyanamid guidelines, is the capability of being compensated in damages in case of success at trial relevant in the balance of convenience?

Answer 61

5. (5) The extent to which the disadvantages to each party would be incapable of being compensated in damages in the event of his succeeding at the trial is always a significant factor in assessing where the balance of convenience lies.

Question 62

According to Browne LJ’s restatement of Diplocks’s American Cyanamid guidelines, if capability of being compensated in damages does not tip the balance, what factor should be considered?

Answer 62

6. (6) If the extent of the uncompensated disadvantage to each party would not differ widely, it may not be improper to take into account in tipping the balance the relative strength of each party’s case as revealed by the written evidence adduced on the hearing of the application.

This, however, should be done only where it is apparent upon the 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.

Question 63

According to Browne LJ’s restatement of Diplocks’s American Cyanamid guidelines, what residual factors may be taken into account?

Answer 63

7. (7) In addition to the factors already mentioned, there may be many other special factors to be taken into consideration in the particular circumstances of individual cases.

Question 64

Give the 7 points of Browne LJ’s restatement of Diplocks’s American Cyanamid guidelines

Answer 64

1. Would he be adequately compensated by damages?
2. Would he be adequately compensated under the claimant’s undertaking as to damages?
3. Consider balance of convenience
4. Preserve the status quo
5. Incapability of being compensated in damages in assessing balance of convenience
6. Strengths of each case on written evidence
7. Many other special factors?

Question 65

What are the 2 stages in applying the American Cyanamid test?

Answer 65

Stage 1-adequacy as a remedy of damages awarded at trial or payable under undertaking Stage 2-balance of convenience

Question 66

What often happens in considering Stage 1?

Answer 66

In practice, it is often hard to tell whether either or both of the respective remedies will be adequate. Consequently, it is frequently the case that the court is enjoined (by guideline 3) to proceed to this stage and to consider the balance of convenience issue.

Question 67

What is the importance of the willingness of the applicant to give the respondent a cross-undertaking in damages?

Answer 67

The willingness of the applicant to give the respondent a cross-undertaking in damages is a very material consideration for the court in determining whether or not the interim injunction should be ordered. The fact that an ultimately unsuccessful claimant will have to compensate the defendant for losses suffered by him through his complying with the interim remedy for the duration of the period during which it took effect is a major factor in assessing the balance of convenience (SmithKline Beecham Plc v Apotex Europe Ltd [2006] EWCA Civ 658; [2007] Ch. 71, CA, at para.26 per Jacob L.J.).

Question 68

When is the relevant point in time for the purpose of status quo?

Answer 68

The relevant point of time for the purpose of status quo may be difficult to determine and may vary (Alfred Dunhill Ltd v Sunoptic SA [1977] F.S.R. 337, CA, at p.376 per Megaw L.J.).

Question 69

How is guideline 6 to be used?

Answer 69

This factor has to be disregarded except as a last resort when the balance of convenience is otherwise even in the circumstances stated in guideline (6) and even then it should not be taken into account unless it is apparent upon the 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.

Question 70

When may a court take into account the relative strength of each side’s case for the purposes of interim injunctions?

Answer 70

• What is necessary is that
  
  • (1) there should be no credible dispute as to the facts,
  • (2) the court should not embark on anything resembling a trial of the action on conflicting affidavits in order to evaluate the strength of each party’s case, and
  • (3) the court should be of the clear view that one party’s case is much stronger than the other’s.

Question 71

Guideline 7 refers to which special factors?

Answer 71

It seems clear that guideline (7) refers only to special factors affecting the balance of convenience (see Hubbard v Pitt, ibid. at p.185 per Stamp L.J.).

Question 72

Injunctions in effect disposing of the action

Answer 72

Cases can arise in which, as a practical matter, the grant or refusal of an injunction at the interlocutory stage will, in effect, dispose of the action finally in favour of whichever party was successful in the application, because there would be nothing left on which it was in the unsuccessful party’s interest to proceed to trial. N.W.L. Ltd v Woods [1979] ….Lord Diplock said that in these circumstances the degree of likelihood that the plaintiff would have succeeded in establishing his right to an injunction if the action had gone to trial is a factor which should be brought into the balance by the judge in weighing the risks that injustice may result from his deciding the application one way rather than the other.

Question 73

What investigation must the court make where the grant or refusal of the Interlocutory injunction will end the action?

Answer 73

So, the position is that where the grant or refusal of an interlocutory injunction will effectively end the action, it is appropriate for the court in assessing the balance of convenience to investigate the degree of likelihood of the claimant succeeding at trial. However, such investigation need not, and perhaps should not, amount to a trial of the action. It is for the judge to control the extent of the inquiry undertaken

Question 74

Why, practically, does the interlocutory injunction hearing determine the issue sometimes?

Answer 74

Because, taking a commercial view, the court’s decision at the hearing renders it not worthwhile for the unsuccessful party to continue to prosecute or defend (as the case may be) the action

Question 75

What does a mandatory injunction do?

Answer 75

A mandatory injunction directs that a positive act should be done to repair some omission or to restore the prior position by undoing some wrongful act.

Question 76

What is a quia timet injunction?

Answer 76

that is to say, to prevent an apprehended legal wrong where none has occurred at present and the applicant is without any remedy at law (Morris v Redland Bricks Ltd [1970] A.C. 652 , HL).

Question 77

What is the basic principle the court should apply in decding whether to grant a mandatory injunction?

Answer 77

The basic principle is that the court hould take whatever course seems likely to cause the least irremediable prejudice to one party or the other (above.).

Question 78

What is the jurisdiction of the court to grant an injunction? And what is the test?

Answer 78

Senior Courts Act 1981 c. 54 37.— Powers of High Court with respect to injunctions and receivers. (1) The High Court may by order (whether interlocutory or final) grant an injunction or appoint a receiver in all cases in which it appears to the court to be just and convenient to do so.

Question 79

When can a mandatory injunction be given?

Answer 79

Further, it has been regarded as sufficient to give the court jurisdiction to grant a remedy in the form of a mandatory injunction, not only at a trial (as a final remedy), but also upon an interlocutory application (as an interim remedy).

Question 80

What were the facts of Nottingham Building Society?

Answer 80

In Nottingham Building Society v Eurodynamics Systems [1993] F.S.R. 468, the claimants brought a contractual claim against their suppliers of computer services. The remedies sought by the claimants included an order requiring the defendants to deliver up certain computer software to which they claimed to be entitled upon termination of the agreements. The claimants applied for an interim mandatory injunction to compel the defendants to deliver up such of the software as remained in their possession power or control.

Question 81

What happened in the High Court in Nottingham Building Society?

Answer 81

Chadwick J. applied the American Cyanamid principles and guidelines. Having determined that damages would not be an adequate remedy for either party, he went on to consider the balance of convenience. After considering the authorities referred to above (and, in addition, Films Rover International Ltd v Cannon Film Sales Ltd [1987] 1 W.L.R. 670), the judge said that the balance of convenience was to be determined in accordance with the following principles:

Question 82

In Nottingham Building Society, what principles did Chadwick J say that the balance of convenience was to be determined in accordance with?

Answer 82

• (1) The overriding consideration is which course is likely to involve the least risk of injustice if it turns out to be “wrong” in the sense of granting an interlocutory injunction to a party who fails to establish his right at trial (or would fail if there was a trial) or, alternatively, in failing to grant an injunction to a party who succeeds (or would succeed) at trial.
• (2) In considering whether to grant a mandatory injunction, the court must keep in mind that an order which requires a party to take some positive step at an interlocutory stage, may well carry a greater risk of injustice if it turns out to have been wrongly made than an order which merely prohibits action, thereby preserving the status quo.
• (3) It is legitimate, where a mandatory injunction is sought, to consider whether the court does feel a high degree of assurance that the claimant will be able to establish this right at a trial. That is because the greater the degree of assurance the claimant will ultimately establish his right, the less will be the risk of injustice if the injunction is granted.
• (4) But, even where the court is unable to feel any high degree of assurance that the claimant will establish his right, there may still be circumstances in which it is appropriate to grant a mandatory injunction at an interlocutory stage. Those circumstances will exist where the risk of injustice if this injunction is refused sufficiently outweigh the risk of injustice if it is granted.

Question 83

What are the 4 principles in Nottingham Building Society in Short hand?

Answer 83

1. which course involves least risk of injustice if injunction turns out wrongly given?
2. Positive order carries more risk of injustice than one ordering preservation of status quo
3. Greater degree of assurance that the claimant will succeed at trial, the less the risk of injustice
4. Even where unable to feel high degree of assurance, might be appropriate to grant injunction.

Question 84

What did Hoffman J say in Films Rover international that is relevant to Principle 4 in Nottingham Building Society?

Answer 84

Hoffmann J. in Films Rover International Ltd v Cannon Film Sales Ltd in which his lordship said that, if it appears to the court that the case is one in which withholding a mandatory interlocutory injunction would in fact carry a greater risk of injustice than granting it even though the court does not feel a high degree of assurance about the claimants chances of establishing his right, there cannot be any rational basis for withholding the injunction.

Question 85

Can a court make an interlocutory injunction ordering the performance of a contractual obligation?

Answer 85

the court has power, in an appropriate case, to grant an interlocutory mandatory order compelling the execution of a contractual obligation

Question 86

What is a cross-undertaking?

Answer 86

Where a claimant is successful in an application for an order for an interim injunction restraining the defendant, normally the order will impose various undertakings on the claimant. (Generally they are called “cross-undertakings”, to identify that, unlike most obligations in an injunction which are on the defendant, the undertakings are given by and are binding on the claimant.)

Question 87

In what circumstances may a claimant have to pay out pursuant to an undertaking as to damages?

Answer 87

• In American Cyanamid Co v Ethicon Ltd [1975] A.C. 396 , HL, Lord Diplock explained (at p.406) that, where a claimant is granted relief by way of interlocutory injunction, the practice is (and has been since at least the middle of the nineteenth century) to make this subject to a condition in the form of the claimant’s undertaking to pay damages to the defendant for any loss sustained by reason of the injunction if it subsequently transpires that it ought not to have been granted;
• for example, if the proceedings are discontinued, or if the injunction is discharged before trial, or if it should be held at the trial that the claimant had not been entitled to restrain the defendant from doing what he was threatening to do.

Question 88

Who is a cross undertaking in damages given to?

Answer 88

A cross-undertaking is not given by the applicant to the respondent; it is given by the applicant to the court

Question 89

May only the defendant enforce a cross undertaking in damages?

Answer 89

Secondly, it may be enforced by one who is not a party to the proceedings in those circumstances where it is given, not merely for the benefit of the respondent, but for his benefit as well

Question 90

What happens if a cross-undertaking in damages is not complied with?

Answer 90

Thirdly, when an undertaking given to the court (for example to issue a claim form) is not complied with, there must be an enquiry by the court as to why that happened and what, if any, sanction or consequential order should be imposed (Gray v UVW [2010] EWHC 2367 (QB), October 21, 2010, unrep. (Tugendhat J.)).

Question 91

Can a court compel an applicant to give a cross-undertaking in damages?

Answer 91

The court cannot compel an applicant to give a cross-undertaking, but it can refuse to grant an injunction unless he does. Where the court is minded to impose such a condition it is a matter for the applicant to decide whether he is prepared to give it and, if it is insisted upon, to provide security. If he is not, the injunction does not go (F. Hoffmann-La Roche & Co A.G. v Secretary of State for Trade and Industry, op. cit., at p.361 per Lord Diplock).

Question 92

is a cross-undertaking express or implied?

Answer 92

Usually, the cross-undertaking will be expressly given by the applicant and will be expressly incorporated in the courts order. Where it is not expressly given, the court may enforce an implied undertaking even if it had not been included in the order, unless the contrary had been agreed and expressed at the time (see SmithKline Beecham Plc v Apotex Europe Ltd , op. cit., at paras 26 to 37 and cases cited there).

Question 93

How might an undertaking as to damages be fortified?

Answer 93

As an extra condition, the claimant may be required to fortify the undertaking by giving security (see further para. 15-32 below).

Question 94

What must a court do to determine whether an undertaking is sufficiently valuable?

Answer 94

The point of a cross-undertaking in damages is to provide a means of compensation for loss if it occurs in relation to the injunction or undertaking.

To that extent the court has, if necessary, to form a view as to the kind and degree of loss that may result in deciding whether an undertaking has sufficient value (with or without fortification) (Re DPR Futures Ltd [1989] 1 W.L.R. 778 (Millett J.); Bhimji v Chatwani (No.2) [1992] 1 W.L.R. 1158 (Knox J.); Sinclair Investment Holdings S.A. v Cushnie [2004] EWHC 218 , (Ch), February 12, 2004, unrep. (Mann J.)).

Question 95

Can an applicant have to pay out to people other than the respondent under an undertaking as to damages?

Answer 95

when the court makes an order for an injunction it should consider whether to require an undertaking by the applicant to pay any damages sustained by a person other than the respondent, including another party to the proceedings or any other person who may suffer loss as a consequence of the order.

Question 96

What is the wording of an undertaking as to damages?

Answer 96

Where it is confined to damages suffered by the respondent, the usual form of undertaking is: “to abide by any order which this court may make as to damages in case this court shall be of the opinion that the respondent shall have suffered any by reason of this order which the applicant ought to pay”.

Question 97

Who can and cannot take advantage of an undertaking in damages, according to the Berkley Administration case?

Answer 97

• In Berkeley Administration Inc v McClelland [1996] I.L.P r.772, CA, the Court of Appeal concluded that, subject to any direction to the contrary a court may give in a particular case:
  
  • (1) advantage can be taken of a cross-undertaking in damages by every defendant who was a party to the action when the undertaking was granted;
  • (2) advantage cannot be taken of the cross-undertaking by persons who are not parties to the action, or, at least, do not become parties until after the order as been discharged. His lordship added that, in his opinion, the benefit 0of the injunction should extend to defendants who become parties while the undertaking is in force. Presumably, the benefit to such defendants runs from the time when they were joined, and is not retrospective

Question 98

Is the question of which defendants will be affected if the injunction is wrongly given up for consideration at the time it is given?

Answer 98

It is pointless, at the time of the grant of the injunction, to go into the question of which defendants will be affected if the injunction turns out to have been granted improperly, since damages will be payable only where damage is actually suffered (Dubai Bank Ltd v Galadari (No.2) October 3, 1989, unrep. (Morritt J.)).

Question 99

What is the position as regards claimants who are not able to give an adequate undertaking in damages?

Answer 99

where an impecunious claimant was applying for an injunction, the court would know that, although the claimant was putting on the line all the assets that they had, thus showing how strongly they felt about the claim that they were making, they would not in practice be able to meet the damages. That would be a factor to be taken into account by the court in deciding whether or not to make the order.

Question 100

When making an interim injunction application what is the applicant required to disclose?

Answer 100

The applicant must disclose fully to the court all matters relevant to the application, including all matters, whether of fact or of law, which are, or may be, adverse to it

Question 101

How must claimants present the facts in interlocutory injunction applications?

Answer 101

Moreover, it is not only the duty of the claimant to disclose material facts: they must also present fairly the facts which they do disclose (The Arena Corporation Ltd v Schroeder [2003] EWHC 1089 (Ch), May 15, 2003, unrep. (Alan Boyle Q.C.)).

Question 102

How did Bingham J describe the duties of disclosure in interlocutory applications in Siporex Trade ?

Answer 102

• Bingham J. in Siporex Trade SA v Comdel Commodities [1986] 2 Lloyd’s Rep. 428 at 437.
  
  • (1) The applicant must show the utmost good faith and disclose their case fully and fairly.
  • (2) They must, for the protection and information of the defendant, in the evidence in support of the application summarise their case and the evidence on which it is based.
  • (3) They must identify the crucial points for and against the application, and not rely on general statements and the mere exhibiting of numerous documents.
  • (4) They must investigate the nature of the claim asserted and the facts relied on before applying and must identify any likely defences. (5) They must disclose all facts which reasonably could or would be taken into account by the judge in deciding whether to grant the application.

Question 103

What is the particular duty of the advocate in interlocutory injunctions

Answer 103

It is the particular duty of the advocate to see that the correct legal procedures and forms are used; that a written skeleton argument and a properly drafted order are personally prepared and lodged with the court before the oral hearing; and that at the hearing the court’s attention is drawn to unusual features of the evidence adduced, to the applicable law, and to the formalities and procedures to be observed

Question 104

When may a claimant apply for an interim payment?

Answer 104

• Interim payments – general procedure 25.6 (1) The claimant may not apply for an order for an interim payment before the end of the period for filing an acknowledgment of service applicable to the defendant against whom the application is made. (Rule 10.3 sets out the period for filing an acknowledgment of service) (Rule 25.1(1)(k) defines an interim payment)

Question 105

How many applications for an interim payment may an applicant make?

Answer 105

Interim payments – general procedure 25.6 … (2) The claimant may make more than one application for an order for an interim payment.

Question 106

What is notice period for an application for an order for interim payment ?

Answer 106

Interim payments – general procedure 25.6 (3) A copy of an application notice for an order for an interim payment must –

(a) be served at least 14 days before the hearing of the application; and
(b) be supported by evidence.

Question 107

What is an application for an order for interim payment to be supported by?

Answer 107

Interim payments – general procedure 25.6 (3) A copy of an application notice for an order for an interim payment must – … (b) be supported by evidence.

Question 108

What must a respondent to an application for an order for interim payment do if he wants to rely on written evidence at the hearing?

Answer 108

Interim payments – general procedure 25.6

(4) If the respondent to an application for an order for an interim payment wishes to rely on written evidence at the hearing, he must –
(a) file the written evidence; and
(b) serve copies on every other party to the application, at least 7 days before the hearing of the application.

Question 109

What must the applicant do if he wants to rely on written evidence in reply to the respondent at his application for an order for interim payment?

Answer 109

Interim payments – general procedure 25.6

(5) If the applicant wishes to rely on written evidence in reply, he must –

(a) file the written evidence; and
(b) serve a copy on the respondent, at least 3 days before the hearing of the application.

Question 110

What exception is there for the rule on the filing of written evidence at an application for an interim payment application?

Answer 110

Interim payments – general procedure 25.6

(6) This rule does not require written evidence –
(a) to be filed if it has already been filed; or
(b) to be served on a party on whom it has already been served.

Question 111

HOw may an interim payment be paid?

Answer 111

25.6 (7) The court may order an interim payment in one sum or in instalments.

Question 112

What conditions must be satisfied and what matters must be taken into account

Answer 112

• Interim payments – conditions to be satisfied and matters to be taken into account 25.7
• (1) The court may only make an order for an interim payment where any of the following conditions are satisfied –
  
  • (a) the defendant against whom the order is sought has admitted liability to pay damages or some other sum of money to the claimant;
  • (b) the claimant has obtained judgment against that defendant for damages to be assessed or for a sum of money (other than costs) to be assessed;
  • (c) it _is satisfied that, if the claim went to trial, the claimant *****would obtain judgment for a substantial amount of money*****_ (other than costs) against the defendant from whom he is seeking an order for an interim payment whether or not that defendant is the only defendant or one of a number of defendants to the claim;
  • (d) the following conditions are satisfied –
    
    • (i) the claimant is seeking an order for possession of land (whether or not any other order is also sought); and
    • (ii) the court is satisfied that, if the case went to trial, the defendant would be held liable (even if the claim for possession fails) to pay the claimant a sum of money for the defendant’s occupation and use of the land while the claim for possession was pending; or
  • (e) in a claim in which there are two or more defendants and the order is sought against any one or more of those defendants, the following conditions are satisfied –
    
    • (i) the court is satisfied that, if the claim went to trial, the claimant would obtain judgment for a substantial amount of money (other than costs) against at least one of the defendants (but the court cannot determine which); and
    • (ii) all the defendants are either –
      
      • (a) a defendant that is insured in respect of the claim;
      • (b) a defendant whose liability will be met by an insurer under section 151 of the Road Traffic Act 1988 or an insurer acting under the Motor Insurers Bureau Agreement, or the Motor Insurers Bureau where it is acting itself; or
      • (c) a defendant that is a public body.

Question 113

In what amount will the court order an interim payment?

Answer 113

CPR 25.7 (4) The court must not order an interim payment of more than a reasonable proportion of the likely amount of the final judgment.

Question 114

Is contributory negligence, set-off or counterclaim relevant to an interim payment?

Answer 114

CPR 25.7 (5) The court must take into account – (a) contributory negligence; and (b) any relevant set-off or counterclaim.

Question 115

What powers does the court have where it has made an order for an interim payment?

Answer 115

• Powers of court where it has made an order for interim payment 25.8
  
  • (1) Where a defendant has been ordered to make an interim payment, or has in fact made an interim payment (whether voluntarily or under an order), the court may make an order to adjust the interim payment.
  • (2) The court may in particular –
    
    • (a) order all or part of the interim payment to be repaid;
    • (b) vary or discharge the order for the interim payment;
    • (c) order a defendant to reimburse, either wholly or partly, another defendant who has made an interim payment.
  • (3) The court may make an order under paragraph (2)(c) only if –
    
    • (a) the defendant to be reimbursed made the interim payment in relation to a claim in respect of which he has made a claim against the other defendant for a contribution(GL), indemnity(GL) or other remedy; and
    • (b) where the claim or part to which the interim payment relates has not been discontinued or disposed of, the circumstances are such that the court could make an order for interim payment under rule 25.7.
  • (4) The court may make an order under this rule without an application by any party if it makes the order when it disposes of the claim or any part of it.
  • (5) Where –
    
    • (a) a defendant has made an interim payment; and
    • (b) the amount of the payment is more than his total liability under the final judgment or order,
    • the court may award him interest on the overpaid amount from the date when he made the interim payment.

Question 116

Is there any restriction on disclosure of the fact there has been an interim payment?

Answer 116

The fact that a defendant has made an interim payment, whether voluntarily or by court order, shall not be disclosed to the trial judge until all questions of liability and the amount of money to be awarded have been decided unless the defendant agrees.

Question 117

What must support an application for interim payment?

Answer 117

• Evidence
• 2.1 An application for an interim payment of damages must be supported by evidence dealing with the following:
  
  • (1) the sum of money sought,
  • (2) the items or matters in respect of which the interim payment is sought,
  • (3) the sum of money for which final judgment is likely to be given,
  • (4) the reasons for believing that the conditions set out in rule 25.7 are satisfied,
  • (5) any other relevant matters,
  • (6) in claims for personal injuries, details of special damages and past and future loss, and
  • (7) in a claim under the Fatal Accidents Act 1976, details of the person(s) on whose behalf the claim is made and the nature of the claim.
• 2.2 Any documents in support of the application should be exhibited, including, in personal injuries claims, the medical report(s).

Question 118

Interim Payments: What must the respondent do if he wishes to rely on written evidence? What must the applicant do if he wishes to rely on written evidence in reply?

Answer 118

2. 3 If a respondent to an application for an interim payment wishes to rely on written evidence at the hearing he must comply with the provisions of rule 25.6(4).
3. 4 If the applicant wishes to rely on written evidence in reply he must comply with the provisions of rule 25.6(5).