Unit 7 Interim Applications and Interim Injunctions

Question 1

Where should you make an interim application?

Answer 1

(1)  The general rule is that an application must be made to the court or County Court hearing centre where the claim was started.
(2)  If a claim has been transferred to another court, or transferred or sent to another County Court hearing centre since it was started, an application must be made to the court or the County Court hearing centre to which the claim has been transferred or sent, unless there is good reason to make the application to a different court.
(3)  If the parties have been notified of a fixed date for the trial, an application must be made to the court where the trial is to take place.
(4)  Subject to paragraph (4A), if an application is made before a claim has been started, it must be made to the court where it is likely that the claim to which the application relates will be started unless there is good reason to make the application to a different court.

Question 2

Can interim applications be dealt with without a hearing?

Answer 2

Yes, the party can indicate their preference (with or without hearing) in their application. On receipt of an application notice containing a request that the application be dealt with without a hearing, the application notice will be sent to a Master or District Judge so that he may decide whether the application is suitable for consideration without a hearing.
Where the Master or District Judge agrees that the application is suitable for consideration without a hearing, the court will so inform the applicant and the respondent and may give directions for the filing of evidence.
Where the Master or District Judge does not agree that the application is suitable for consideration without a hearing, the court will notify the applicant and the respondent of the time, date and place for the hearing of the application and may at the same time give directions as to the filing of evidence.

Question 3

Are case management directions reserved for CCMCs only?

Answer 3

No. The parties must anticipate that at any hearing the court may wish to review the conduct of the case as a whole and give any necessary case management directions. They should be ready to assist the court in doing so and to answer questions the court may ask for this purpose.

Question 4

In what 6 circumstances may a “without notice” application be made?

Answer 4

1. where there is exceptional urgency,
2. where the overriding objective is best furthered by doing so,
3. by consent of all parties,
4. with the permission of the court,
5. where paragraph 2.10 above applies (out of time), or
6. where a court order, rule or practice direction permits.

2.10 Where a date for a hearing has been fixed and a party wishes to make an application at that hearing but he does not have sufficient time to serve an application notice he should inform the other party and the court (if possible in writing) as soon as he can of the nature of the application and the reason for it. He should then make the application orally at the hearing.

Question 5

Is evidence of factual matters required for Interim applications?

Answer 5

The requirement for evidence in certain types of applications is set out in some of the rules and practice directions. Where there is no specific requirement to provide evidence it should be borne in mind that, as a practical matter, the court will often need to be satisfied by evidence of the facts that are relied on in support of or for opposing the application. Evidence must be filed with the court as well as served on the parties. Exhibits should not be filed unless the court otherwise directs.

Question 6

What should the applicant bring to an interim application hearing?

Answer 6

A draught of the order sought.

Question 7

What interim remedies may the court grant?

Answer 7

1. The court may grant the following interim remedies—
   a. an interim injunction;
   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 subparagraph (c);
   e. an order under section 4 of the Torts (Interference with Goods) Act 1977 to deliver up goods;
   f. an order (referred to as a “freezing injunction”)—
   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 1997 (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 Senior Courts Act 1981 or section 52 of the County Courts Act 1984 (order for disclosure of documents or inspection of property before a claim has been made);
   j. an order under section 34 of the Senior Courts Act 1981 or section 53 of the County Courts Act 1984 (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 8

What does “relevant property” mean for the purpose of an interim remedy?

Answer 8

“relevant property” means property (including land) which is the subject of a claim or as to which any question may arise on a claim.

Question 9

Define Injunction

Answer 9

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

Question 10

When may an order for an interim remedy be made?

Answer 10

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.
However, 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
iii. unless the court otherwise orders, a defendant may not apply for any order before he has filed either an acknowledgement of service or a defence.

Question 11

Are interim order hearings heard in public or private?

Answer 11

The general rule is that a hearing (including a hearing other than at trial) is to be in public. However, a hearing, or any part of it, may be in private in certain circumstances. Exceptional circumstances which may be particularly apposite to the hearing of an application for an order for an interim remedy are:
o that publicity would defeat the object of the hearing;
o that it is a hearing on an application without notice and it would be unjust to any respondent for there to be a public hearing;
o that the hearing involves confidential information (including information relating to personal financial matters) and publicity would damage that confidentiality. 

Question 12

What is the duty of an applicant in making an interim application?

Answer 12

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. Full and frank disclosure: 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. 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 13

What is the procedure for an interim application before the issue of a claim form?

Answer 13

1. in addition to the provisions set out at 4.3 above, unless the court orders otherwise, either the applicant must undertake to the court to issue a claim form immediately or the court will give directions for the commencement of the claim,5
2. where possible the claim form should be served with the order for the injunction,
3. an order made before the issue of a claim form should state in the title after the names of the applicant and respondent “the Claimant and Defendant in an Intended Action”.

Question 14

Could a Litigant in Person have a telephone hearing?

Answer 14

Injunctions will be heard by telephone only where the applicant is acting by counsel or solicitors.

Question 15

What is the American Cyanamid Test?

Answer 15

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? (threshold requirement)
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 16

What is the object of an interim injunction?

Answer 16

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

Question 17

A full proceedings necessary to apply for an interim injunction?

Answer 17

Yes. In the context in which they were stated (though they may not be confined to it), these principles are based on 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 18

In American Cyanamid, are the court required to be satisfied that failing to order the injunction would violate the applicants legal rights?

Answer 18

No. The case establishes that it is not necessary, as a threshold requirement, for the court 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.
The American Cyanamid case substituted a lower threshold test. 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 19

In address the American Cyanamid threshold test, what must the court ask itself?

Answer 19

Is the applicant’s action “not frivolous or vexatious?” Is there “a serious question to be tried?” Is there “a real prospect that he will succeed in his claim for a permanent injunction at the trial?” These may appear to be three subtly different questions. It has been said that they are intended to state the same test

Question 20

What are the two necessary ingredients for a quia timet injunction application?

Answer 20

i. there must, if no actual damage is proved, be proof of imminent danger, in other words, a strong probability that, unless restrained by injunction, the defendant will act in breach of the claimant’s rights; and
ii. there must be proof that the damage will, if it comes, be very substantial. The harm must be so serious that, if it occurs, it cannot be reversed or restrained by an immediate interim injunction and cannot be adequately compensated by damages

Question 21

What principle should the court take when deciding where the balance of convenience lies? (American Cyanamid)

Answer 21

The court “has to engage in trying to predict whether granting or withholding an injunction is more or less likely to cause irremediable prejudice (and to what extent) if it turns out that the injunction should not have been granted or withheld (as the case may be).” The basic principle is that the court “should take whatever course seems likely to cause the least irremediable prejudice to one party or the other.” 

Question 22

Should the court consider the relevant strength of each parties case in granting an injunction?

Answer 22

Guideline (6) is cast in terms designed to restrict a consideration of the “relative strength of each party’s case”. This factor has to be disregarded except as a last resort when the balance of convenience is disputed 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.
If the guideline is put in context and in positive terms, some room for manoeuvre is apparent. Put this way the guideline states that,
1. where the uncompensatable disadvantage to each party does not differ widely and
2. there is no credible dispute as to the facts, and
3. without attempting to resolve difficult issues of fact or law, the court can come to the conclusion that “the strength of one party’s case is disproportionate to that of the other party”, then
4. the court may take that relative strength into account. It is not necessary that there should be no issues of fact or law to be resolved.
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.
It can be argued that the first of these three conditions is unduly restrictive and, indeed, that it is subsumed by the second. 

Question 23

Does “other special factors” include the strength of the parties’ cases in the American Cyanamid guidelines?

Answer 23

No. It has been suggested but has not prevailed. That guideline refers only to special factors affecting the balance of convenience.`

Question 24

Should the likelihood of success at trial be considered for American Cyanamid?

Answer 24

In circumstances where the grant or refusal of an injunction will dispose of the action finally in favour of the successful party on application. “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. 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 25

What is the exception to the American Cyanamid rules for banks and their autonomy principle?

Answer 25

The strict general rule that the court would not intervene to prevent a bank from making payment under a letter of credit (or other such financing document) following a compliant presentation of documents, so that no injunction will lie unless the claimant can rely on the “fraud exception,” that is to say, where the circumstances are:

1. that it is seriously arguable (a significantly more stringent test than good arguable case, let alone serious issue to be tried) that, on the material available, the only realistic inference was that the beneficiary could not honestly have believed in the validity of its demands under the letter of credit;
2. that the bank was aware of such fraud; and
3. that the balance of convenience must favour granting the claimant an injunction, which requires “extraordinary facts” and a claimant will face very considerable difficulty in having that balance found in its favour (paras 23 to 32).

Question 26

What does a mandatory injunction do?

Answer 26

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 27

What is the basic principle for awarding a mandatory injunction?

Answer 27

The basic principle is that the court “should take whatever course seems likely to cause the least irremediable prejudice to one party or the other”

Question 28

What three principles come from cross undertakings as to damages in interim in junctions?

Answer 28

First, where it is a matter for doubt, the proper interpretation of the cross-undertaking is not a matter of divining the mutual understanding of the parties to the proceedings.
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.
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

Question 29

What are the general principles as to who benefits from an undertaking made for an injunction?

Answer 29

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 has been discharged.
3. His lordship added that, in his opinion, the benefit of 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.
   It is fairness rather than likelihood of loss that leads to the requirement of a cross-undertaking

Question 30

What if an applicant isn’t in a position to make a cross-undertaking as to damages for their injunction application?

Answer 30

In Allen v Jambo Holdings Ltd [1980], it was said that the court will not deny a legally aided claimant an interlocutory injunction (in this case, a freezing injunction), to which he would otherwise be entitled simply on the ground that his undertaking in damages would be of limited value, since questions of financial stability ought not to affect the position in regard to what is the essential justice of the case. The position was clarified in Ellson, when it was said that, 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 their claim, 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.
If an applicant for an injunction says that they do not wish to, or are not in a position to give an unlimited cross-undertaking in damages, the burden is on them to show that external funds are not available, and why they should be able to provide a cross-undertaking in a lesser amount.