Interlocutory injunctions: Practical tips

The interlocutory injunction is a key tool in a litigant’s arsenal for protecting their legal interests before the final determination of proceedings. It is essential for any litigant to have a basic understanding of the interlocutory injunction including how to apply for one, what factors will be persuasive to a Court, and how to defend one.

What is it?

An interlocutory injunction is a temporary remedy to either prevent a party from doing something (prohibitory injunction) or require that they do something (mandatory injunction). Often, interlocutory injunctions will operate until the final determination of the proceedings.

A party will often seek an interlocutory injunction on an urgent basis in order to maintain the status quo pending the outcome of proceedings.

There are different categories of interlocutory injunction, for example orders to prevent a defendant from dealing with its assets (freezing orders).

Initial considerations

Is it necessary?

The first thing to consider before applying for an interlocutory injunction is whether it is the appropriate remedy for your situation. It is an intrusive remedy that can cause disruption and loss to the other party.

The Court will generally not order an injunction if damages would be an adequate remedy to address the other party’s conduct.

Which Court?

If the decision to apply for an interlocutory injunction is made, it is important to ensure that the court at which you apply has jurisdiction to hear the matter.

If there are existing proceedings on foot, then ordinarily you would apply to that court for the injunction. If not, it will depend on the final relief sought in the proceedings and the jurisdiction of the relevant court.

Do you need to put the other party on notice?

As a general rule, you should put the other party on notice before making an application for an interlocutory injunction against them. Usually, the party seeking the injunction will send a letter to the other party outlining their concerns about what the other party is doing or not doing (as the case may be), seeking that they give an undertaking not to engage in the conduct or to do the required act, and notifying the other party that they intend to apply for an injunction if the undertaking is not given.

An application for an interlocutory injunction should only be made without notice in cases of exceptional urgency or where there is a risk of irreparable loss if the other party was given notice of the application. In these cases (known as an “ex parte” application), the party making the application is subject to strict conditions. For example, it is under a duty of candour to disclose all relevant matters to the Court. The applicant will also be required to give an undertaking to the court to compensate the other party for any damages suffered by the other party if it is ultimately successful in the proceedings.

Matters considered by the Court

The decision to grant an interlocutory injunction is discretionary and will depend upon all of the circumstances. The applicant will need to satisfy the Court that:

• it has a prima facie case to the relief that it is seeking at a final hearing;
• the balance of convenience favours the grant of an injunction;
• damages are a not adequate remedy.

In addition to these issues, courts will factor into account whether the applicant has proffered an undertaking as to damages and whether there has been any delay in making the application.

Prima facie case

The applicant needs to show that it has an arguable case. The court will not delve deeply into the merits of the case, but there must be evidence upon which the applicant has a chance at being successful in the proceedings.

The hearing of the application for an interlocutory injunction is not a “mini-trial” and the Court will not pre-judge the matters to be determined at a final hearing.

Balance of convenience

The balance of convenience involves considerations such as:

1. whether irreparable harm will be suffered by the applicant if the injunction is not granted;
2. whether damages will be a sufficient remedy and whether the respondent will be in a position to pay such damages if ordered;
3. whether delay in making the application will cause prejudice to the respondent;
4. whether the interlocutory relief sought would change the status quo; and
5. the sufficiency of the applicant’s undertaking as to damages.

Damages as an adequate remedy

As mentioned above, the Court will generally not grant an injunction if damages would be an adequate remedy to address the respondent’s conduct (or failure to act).

Damages will not be an adequate remedy in circumstances where the respondent’s conduct (or failure to act) will cause irreparable damage to the applicant. A common example is where the applicant has an interest in land that is under threat.

Delay

The nature of an interlocutory injunction is that it is an urgent remedy – it is something that cannot wait for the proceedings to be determined on a final basis. Therefore, any unexplained delay in making the application is a factor that will weigh against the grant of the interlocutory injunction.

Practical tips for responding to an application for an interlocutory injunction

Some practical tips when responding to an interlocutory injunction

• you may consider giving the applicant an undertaking (even if only for a limited time) to attempt to avoid the application entirely;
• you should investigate the adequacy of the applicant’s undertaking as to damages and whether the applicant has the financial resources to pay your anticipated damages;
• you should scrutinise the scope of the injunction, particularly in cases of freezing orders where you may want to maintain the ability to pay reasonable operational costs of a business or legal costs of court proceedings;
• you should obtain and review the transcript if the interlocutory injunction was granted after an ex parte

McCabes has extensive experience with interlocutory injunctions.  Please do not hesitate to contact us if you require any advice.