Court emphasises importance of “just and convenient” test to grant of injunction

Sarah Speller

In Jbarco Investments Ltd v Omar, the High Court highlighted the importance of the “just and convenient” test to the grant of an injunction. Although the judge discharged a freezing order because there was no risk of the defendant dissipating her assets, he suggested obiter that, even if he had found there to be a good arguable case and a real risk of dissipation, he would have given “active consideration” to whether it would actually have been just and convenient to continue the injunction. The decision suggests that, where the court is concerned by the “peculiarities” of a case, it may refuse an injunction as not being “just and convenient”, regardless of the technical merits.

The claim had what the judge described as “some peculiar features”. It related to an agreement between the claimant, JBarco Investments, and a Hong Kong incorporated company called Dar Hay International, pursuant to which the claimant was to invest £80,000 in an oil trading opportunity held by Dar Hay in return for a profit share of £800,000 just 35 days later. The agreement was signed “for and on behalf of” Dar Hay by the defendant, Mrs Omar, who also gave what purported to be a personal guarantee. There were questions concerning whether the agreement satisfied the Statute of Frauds 1677 and the construction of the defendant’s guarantee, in particular whether it related only to the investment of £80,000 or to the full £800,000.

No payment was made to the claimant under the agreement, and it applied for an interim freezing order, which Sweeney J granted in the sum of £830,000. The claimant’s application to continue the freezing order was heard by HHJ Seymour QC. He declined to continue the order and instead discharged it on the basis that there was no evidence suggestive of a real risk that the defendant would dissipate her assets. In particular, the defendant’s evidence demonstrated that she had a shareholding in an Irish company (“BLS”) worth more than £800,000, and she asserted that the claim had been “concocted” by the claimant as a “scare tactic” to persuade her to part with the shareholding in BLS and resign her directorship of the company.

The interesting part of the judgment comes after HHJ Seymour QC’s dismissal of the freezing order. He commented, obiter, that had he come to a different conclusion on whether there was a real risk of dissipation, the “peculiarities” of the case would have led him to give “active consideration” as to whether, in the circumstances, it would actually be just and convenient to continue the injunction, even if technically there was a good arguable case. He continued:

The importance of the point is this: in an unusual case such as the present the necessity of the court to consider whether it is ‘just and convenient’ – and those are statutory words to be found in the Superior Courts Act 1981 – to grant any injunction, including a freezing injunction, gives the court the opportunity, if concerned by the peculiarities of the case, to stand back and say to itself: bearing in mind the unusual circumstances of this case, whatever technical merits there may be, is it right, is it just, is it fair to grant the injunction sought?

If it had been necessary to consider the point, it was “very likely” that the judge’s concerns about the unusual circumstances of the case would have prompted him to say that it was not just and convenient to grant the injunction sought.

Jbarco Investments Ltd v Omar [2014] EWHC 4682 (QB)

The judgment is available to Practical Law subscribers here.

Post By Sarah Speller (10 Posts)

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