Injunctions

In a commercial context, legal proceedings are mostly used to recover a debt or other sum of money. By far most commercial litigation seeks an order for the payment of money by the defendant to the plaintiff.

However, there are circumstances in which an order for the payment of a sum of money will not sufficiently redress the plaintiff’s grievance. The law has developed further powers of particular Courts to make certain orders other than simply for the payment of a sum of money. One category of these further powers is the power to grant an injunction.

There are a number of types of injunctions available for plaintiffs to seek, depending on their circumstances. Some are of a final nature and others are of a procedural, intermediate nature, given before the matter is finally resolved by the Court. These latter are termed “interlocutory injunctions”.

The usual test that a Court applies in considering an application for an injunction is the “balance of convenience” test. In short, the Court considers the benefit and detriment to each party if the injunction is granted and if it is not granted, weighs up those competing interests and decides upon the optimal course that is in the interests of justice. For interlocutory injunctions it is also usually required to show that there is a “serious question to be tried” that is, that the proposed injunction must be shown to relate to a valid claim that must be ultimately decided by the Court.

Injunctions can be classified into two convenient categories, prohibitive and mandatory. Prohibitive injunctions are those in which the Court orders a defendant to not do something (that is, prohibits them). Mandatory injunctions are those in which the Court orders a defendant to do a certain act or acts.

Non-compliance with an injunction, whether prohibitive or mandatory, is contempt of Court and may be dealt with by the Court pursuant to its contempt powers.

A well-known example is the “Mareva Injunction” or Freezing Order. In circumstances where the plaintiff can demonstrate to the Court a risk that the defendant will dispose of the defendant’s assets in order to avoid paying a judgment the Court may order that the defendant be restrained from selling, transferring or otherwise dealing with that property. This is to ensure that the plaintiff, if ultimately successful in the proceedings, will be able to gain the benefit of the final judgment. This is an example of a prohibitive interlocutory injunction.

If you have a legal matter which requires injunctive orders please get in touch with one of our litigation lawyers by contacting your nearest Prime Lawyers office.

We have debt recovery and litigation lawyers located at Sydney, Parramatta, Chatswood, Sutherland and Wollongong.