#14764 - Equitable Remedies - GDL Equity and Trusts

Topic 15 - Equitable Remedies I and II

• Equitable remedies = wider, alternative and more flexible range of options for Claimant than common law damages.

  • Nb – links clearly to breach and liability.

• Can seek a claim at common law BUT obtain an equitable remedy.

• Equitable Remedy = Sought to support course of action; a recognisable legal or equitable right (Day v Brownigg). They are discretionary (no right to claim)

  • Also subject to particular defences – even if satisfy all requirements for awarding a remedy, possible for defence to defeat the remedy.

• Injunctions

• Injunction = ‘court order compelling D to undertake an act or to prevent D for carrying out an act’ (can have positive or negative implications. Assist C when rights infringed

• Usually used when not practical to wait for full trial, as damage may occur to a party long before matter comes to trial. So secure interim remedy, may include injunction against other party.

• Awarding is entirely discretionary - and served with Notice (mandatory/prohibitory), so Respondent is informed injunction is sought and attend hearing to defend themselves against the application.

  • Mandatory = Compel D to undertake an act – to do or undone something

    • Court less ready to grant Mandatory injunctions Wrotham Park Estates Co v Parkside Homes Ltd

  • Prohibitory = Prevent D from doing something

• Injunctions may be granted at different stages:

• Interim (interlocutory) Injunctions = before a trial. Can turn one into a final injunction. Only effective until trial or specified date in order.

• Final (perpetual) Injunctions = awarded at trial and will last into perpetuity

• Injunctions granted with notice = Party applies for interim, notice is given to other party so both parties can present their evidence for/against granting it. Called ‘with notice’ application (inter partes).

• Injunctions granted without notice = matter extremely urgent there is a need for secrecy (e.g. search order or freezing order) party may apply for injunction ‘without notice’ so only applicant appears at hearing and other party not notified. Used to be called ‘ex parte’ applications

• Quia Timet = person’s rights not infringed by infringement threatened and serious damage likely to ensue – shows injunction sought before feared infringement or wrong has occurred.

• Non-compliance/breach with an injunction amounts to contempt of court – acts in personam (against person) so it is punishable by imprisonment, sequestration of property or fine.

• Damages may be awarded in lieu of, or in addition to, an injunction (Senior Courts Act 1981, s 50).

• Interim Injunction = ‘holding the ring’ making sure everything is kept in place before a trial. Civil Procedure Rules stress for justice to be done between the parties (as there’s always the possibility with injunctions of infringement Ds rights).

  • As a condition to granting interim injunctions, court generally requires C to enter undertaking to pay damages which might be awarded at full hearing if D suffered damage from interim injunction and C found not to have been entitled to.

  • Interim Mandatory Injunctions

  • Compelling a Respondent to do something. Traditionally IMI more difficult to obtain than IPI as forcing someone to do something.

  • Shepherd Homes Ltd v Sandham = court decided there must be a ‘high degree of assurance that at trial it will appear the injunction was rightly granted’. i.e. the court doesn’t want to grant IMI and rescind it later on. Actual trial takes placed 6 months later, but then don’t win SP so have to give property back – not good to have to take property away and return it to original owner.

    • Court WILL NOT grant IMI unless absolutely sure you will win your case at trial (judicial discretion). Court more reluctant to grant IMI than IPI need ‘high assurance’

    • Case = housing estate build with term not to erect fences in back gardens, but did to stop sheep. Housing company wanted IMI, court said no as should have done IPI when discovered fences were going to be built, otherwise having to tear down all the fences (expensive, intrusive).

  • Test approved in Locobail International Finance Ltd v Agroexport

  • IMI granted in Evans v BBC and IBA = to compel D to screen party political broadcast before election, clear that damages would not have been adequate remedy.

  • Sky Petroleum v VIP Petroleum Ltd = Negative injunction, mandatory in effect for D to be stopped from withholding supplies amounting to SP, not normally awarded for non-specific unascertained goods, but damages not sufficient where D likely be put out of business if injunction not granted.

  • ‘American Cyanamid’ guidelines DO NOT apply – just test of ‘high degree of assurance’.

  • SP is a final remedy, only available after a full trial – Not always fast. If don’t have time to wait for SP, as you’ve contracted for sale of goods and need them in 6 weeks for a bday, IMI provides a faster alternative to SP, only way to get what you want in product you’ve contracted for.

  • SP = Page 1 Records v Britain = when the effect of the IMI is to grant SP, the court has to be sure the SP claim will succeed. So when seeking IMI in lieu of a SP trial/remedy, the court will assess SP claim when they decide whether to grant IMI.

  • IMI NOT limited to contract.

  • Interim Prohibitory Injunctions

  • = Stopping D acting in a certain way, and as before his trial it is an Interim Prohibitory Injunction.

  • Assessing whether this type of injunction will apply – use The ‘American Cyanamid’ Guidelines from American Cyanamid Co v Ethicon Ltd

  • = main thrust is that courts avoid considering merits of the case at the interim stage of proceedings:

    • 1. Not frivolous/vexatious – serious question to be tried

      • Not a difficult threshold. Just to filter out cases with no merit.

      • i.e. must be a real question between the parties to be determined at trial – i.e. must be established that there is some prospect of success (Mothercare v Robson Books)

        • If prospect small lacking substance in reality, C’s claim for injunction will fail, as no serious question to be tried.

    • Q – determine if passes threshold – necessary to examine actual claim made – establish real right asserted and substantial infringement alleged.

      • Morning Star v Express Newspapers = left-wing newspaper and didn’t want Express using their star name for their own Daily Star. But it was physically much smaller as a tabloid and not a broadsheet. Also featured something completely different as Daily Star was naked women and not communist politics. Held “only a moron in a hurry would confuse these two newspapers’ – nothing alike except word in title, not serious question to be tried, frivolous case, didn’t pass first stage.

    • (if threshold reached) 2. Balance of Convenience lies in favour of granting/refusing interim injunction – adequacy of damages + other factors affecting Applicant/Respondent

      • Assess both sides (balancing act to minimise risk of doing injunction):

      • Adequacy of Damages:

      • IPI refused = but C wins at trial > could C be adequately compensated for pre-trial losses and can D pay

        • Think – if injunction not granted would losses would C suffer before a trial? = polluter case, i.e. property value but could be compensated with damages, could affect his health such as cancer, mental health issues (difficult to quantify). Can D pay – if they have factories, they presumably have capacity to pay.

      • IPI granted = but D wins at trial > could D be adequately compensated for pre-trial losses and can C pay. If C in financial position to pay, no reason to refuse IJ.

        • Nb – party applying for injunction usually has an undertaking in damages for any loss caused by granting interim injunction (to compensate other party for losses suffered from injunction if at later stage held wrongly granted).

        • i.e. no nuisance from factory. Lose profit with factory shut down but could be compensated for with money. BUT could lose loss of reputation (lose name forced to shut down), extreme bankrupt/insolvent as impossible to be compensated for with damages. Also forced to lay off employees, detrimental.

    • OTHER FACTORS to take account:

    • Court also considers other relevant matters affecting balance of convenience when deciding whether to grant injunction

      • Loss of employment = Fellows and Son v Fisher

      • Damages sustained to goodwill of the business = Associated Newspapers plc v Insert Media Ltd

      • Closing down of a business = Potters-Ballontini Ltd v Weston-Baker

      • Preserving a substantial investment = Catnic Components Ltd v Stressline Ltd.

    • 3. IF court cannot decide on balance (where balance of convenience does not clearly favour 1 party or other) – deciding factor will be preservation/enforcement of Status quo ante

      • Status quo ante = state of affairs before the last change – tends to favour Claimant/Applicant for granting the injunction – Garden Cottage Foods Ltd v Milk Marketing Board.

      • But position may alter if C delays their application as then the last state of affairs would actually be the alleged wrong and the status quo would favour letting the wrong continue and refusing the injunction (Shephard Homes Ltd v Sandham

• Exceptional cases where American Cyanamid Guidelines do not apply or modified:

• Guidelines do not always operate to bring about most appropriate or just result – categories have arisen where guidelines are modified and new categories may arise in future.

• 1. Certain plain and uncontested breaches = where clear D acted unlawfully, where there is a plain and uncontested breach of a clear negative covenant or admitted trespass (Hubbard v Pitt)

• 2. Freezing injunctions...