Litigation 101: interlocutory injunctions

Interlocutory injunctions are a powerful and important step for a litigant to consider, especially if there may be irreversible consequences in allowing another party to act against the litigant’s interests. Such applications can be fast-paced and an applicant must satisfy various requirements to obtain an interlocutory injunction to preserve the status quo until the final hearing occurs. We set out below the key feature of interlocutory injunctions to make sure you are prepared for making or defending an application.

What is an injunction?

In broad terms, an injunction is a Court order granted at any time after the commencement of a proceeding restraining a person from performing a particular act (prohibitory injunction) or, in more exceptional cases, requiring a person to perform a specified act (mandatory injunction).

Injunctions may have effect for a limited time or may be permanent.

What is an interlocutory injunction?

An interlocutory injunction is an injunction which operates until the final hearing.

In doing so, it is designed to protect the applicant against injury for which it could not be adequately compensated in damages, if the alleged infringement of its rights were to occur or continue, pending the final resolution of the proceedings.

An interlocutory injunction is distinguishable from an interim injunction (which operates until further order, which could be before a final hearing) and a final injunction (which is permanent).

What must an applicant prove to obtain an interlocutory injunction?

In all applications for an interlocutory injunction, the applicant must show that:

• there is a serious issue to be tried about its entitlement to relief;
• it is likely to suffer injury for which damages will not be an adequate remedy; and
• the balance of convenience favours the granting of an injunction.

The Uniform Civil Procedure Rules in each state and the Federal Court Rules 2011 procedures for applying to the Court for interlocutory injunctions.

Serious issue to be tried

An applicant must demonstrate that it has a “prima facie case”– in other words, there is a sufficient likelihood of success to justify in the circumstances the preservation of the status quo pending the trial.

This does not mean the applicant has to demonstrate it has a "greater than 50%" chance of success at the final hearing.

Adequacy of damages

If the interlocutory injunction is sought in aid of a legal right or title, the Court will not grant the injunction if damages would be an adequate remedy.

In contrast, where an applicant demonstrates that some equitable right is about to be infringed (or has already been infringed and the infringement is about to be repeated), they are entitled to an injunction as of right, unless the defendant can make out one of the equitable defences, such as laches, acquiescence or lack of clean hands.

Balance of convenience

In deciding whether to exercise its discretion to award an interlocutory injunction, the Court will also consider the balance of convenience.

This requires careful consideration of what effects the granting of an injunction will have on both parties: whether to grant one would cause undue hardship to the defendant or to refuse one would cause undue hardship to the applicant. For example, the following factors may be considered by the court:

• the nature of the property or rights in dispute;
• the nature of the allegations made;
• whether the interlocutory relief sought would overturn, or merely maintain, the status quo;
• the effect of the grant or refusal of the injunction on the parties' trade;
• the existence of any traditional defence affecting the availability of equitable relief; and
• the existence and sufficiency of alternative remedies.

Undertaking as to damages

With very few exceptions, the Court will refuse to grant an interlocutory injunction unless the applicant provides what has become known as "the usual undertaking as to damages".

In essence, this is an undertaking to compensate the defendant for any damage suffered because of the injunction, if it turns out that the injunction should not have been granted (as the applicant fails to prove its case at the final hearing).

Not a "mini-trial"

When hearing an application for an interlocutory injunction, the Court will not conduct a "mini-trial" and seek to pre-determine the outcome of the final hearing.

This means that:

• ordinarily, the Court will deal only provisionally with issues of fact or law;
• the Court will not determine the credit of witnesses; and
• the rules of evidence are somewhat relaxed (for example, hearsay evidence is allowed).

What is your legal or equitable right?

To obtain an interlocutory injunction, the applicant must be able to point to a recognised legal (which may be statutory) or equitable right which ought to be vindicated by final relief.

Notice

An application which is brought without notice is commonly referred to as an “ex-parte application”. In such an application, the applicant has a high 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, including matters that may be contrary to its position and beneficial to the other party’s position.