An injunction can be described as a court order by which one party is required to perform, or is restrained from performing, a particular act. An example is a breach of confidential information from an employer, such as a client list that is being used by a former employee to build a business in competition with the former employer.

If this has occurred the employer may have a right to obtain an injunction against the former employee pending a final hearing of the dispute. Seeking and obtaining an urgent injunction can be an important step in protecting your business from loss of profits due to an unlawful act.

This article touches upon some of the general legal principals pertaining to urgent injunctions espoused by leading Judiciary members.

OVERARCHING PRINCIPLE

The relevant factors considered by the court on an interlocutory injunction are:

1. a prima facie case;
2. balance of convenience favours the granting of an injunction;
3. the adequacy of damages as an alternative to an injunction; and
4. discretionary factors.

PRIMA FACIE CASE

Despite some historical judicial ambiguity over the adoption of the correct interpretation pertaining to a prima facie case, the confusion was arrested Australian Broadcastin Corp v O’Neill (2006) with the clarification through Gummow and Hayne JJ as follows:

The first [inquiry] is whether the plaintiff has made out a prima facie case, in the sense that if the evidence remains as it is there is a probability that at the trial of the action the plaintiff will be held entitled to relief … The second inquiry is … whether the inconvenience or injury which the plaintiff would be likely to suffer if an injunction were refused outweighs or is outweighed by the injury which the defendant would suffer if an injunction were granted…

[In other words]…a sufficient likelihood of success to justify in the circumstances the preservation of the status quo pending the trial.

BALANCE OF CONVENIENCE

The below discretionary factors have been found often to be a decisive factor when considering the balance of convenience:

1. hardship to either party;
2. irreparable harm;
3. undertakings as to damages;
4. impossibility or futility of performance; and
5. the unclean hands equitable maxim.

IRREPARABLE HARM

In Evans Marshall & Co Ltd v Bertola SA [1973] 1 WLR 349, Sachs LJ stated:

The standard question in relation to the grant of an injunction, “Are damages an adequate remedy”, might perhaps, in the light of the authorities of recent years, be rewritten: “Is it just, in all the circumstances, that a plaintiff should be confined to his remedy in damages?

CONFLICTS OF EVIDENCE

Lord Diplock in American Cyanamid Co v Ethicon Ltd [1975] AC 396 that in the context of an application for an interlocutory injunction:

It is no part of the court’s function at this stage of the litigation to try to resolve conflicts of evidence on affidavit as to facts on which the claims of either party may ultimately depend nor to decide difficult questions of law which call for detailed argument and mature considerations. These are matters to be dealt with at the trial.

BREACH OF CONFIDENCE

In Coors Pavey Whiting & Byrne v Collector of Customs (Vic) Gummow’s J, dissenting judgement neatly abridged the considerations and test to be adopted when considering a breach of confidence:

It is now well settled that in order to make out a case for protection in equity of allegedly confidential information, a plaintiff must satisfy certain criteria. The plaintiff: (i) must be able to identify with specificity, and not merely in global terms, that which is said to be the information in question; and must also be able to show that (ii) the information has the necessary quality of confidence (and is not for example, common or public knowledge); (iii) the information was received by the defendant in such circumstances as to import an obligation of confidence; and (iv) there is actual or threatened misuse of the information. … It may also be necessary… that unauthorised use would be to the detriment of the plaintiff.

THE RELEVANT FACTORS

In Ansell Rubber Co Pty Ltd v Allied Rubber Industries Pty Ltd, Gowans J outlined the following six factors pertaining to a determination as to whether a document, information or design is a trade secret (commercial confidence);

• “the extent to which information is known outside the plaintiff’s business;
• the extent to which the information was known by employees and others involved in the business (including the extent of the measures taken by the plaintiff to guard the secrecy of the information);
• the value of the information to the plaintiff and to its competitors;
• the amount of effort or money expended by the plaintiff in developing the information; and
• the ease or difficulty with which the information could be properly acquired or duplicated by others.”

RECIPIENT OF CONFIDENTIAL INFORMATION – CLEAN HANDS

In Ansell Rubber Co Pty Ltd v Allied Rubber Industries Pty Ltd, it was crystallised that a third party may be joined and liable for injunctive relief:

Anyone who aids, abets in or procures the breach of contract of confidence may be enjoined together with the servant against the use of the information.

But like him, I find that the defendant concerned, here the defendant company took the property in the machines with notice of the equity. It adopted Grigg’s conduct, and was infected by his and Ashcroft’s knowledge. It, too, is liable to injunctive relief.

If you would like any further information or have any inquiries pertaining to an injunction, please do not hesitate to contact our office on (07) 5563 8970.