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Interim applications and remedies — SQE1 DR question

A worked single-best-answer question on interim applications and remedies, with why each wrong option is wrong — the way SQE1 traps candidates.

Interim applications and remedies

Lucy was a senior account manager at Meridian Recruitment Ltd. Her contract contained a six-month covenant not to solicit Meridian's clients after leaving. Two weeks after resigning she joined a competitor and began contacting Meridian's largest clients. Meridian wants an interim injunction to restrain her pending trial. Lucy argues that the covenant is wider than necessary and unenforceable.

Which of the following best describes the test the court will ordinarily apply to Meridian's application?

  1. AMeridian must show that it is more likely than not to succeed at trial in establishing that the covenant is enforceable.
  2. BAn injunction will be granted as of right because Meridian can show a prima facie breach of an express contractual term.
  3. CThe court will grant the injunction without requiring any undertaking from Meridian, because the claim is for breach of contract.
  4. DIf damages would adequately compensate Meridian and Lucy could pay them, the court will still normally grant the injunction to preserve the status quo.
  5. EMeridian must show a serious question to be tried, after which the court considers the adequacy of damages and the balance of convenience.
Show answer and reasoning
E is the best answer. Interim injunctions are generally governed by American Cyanamid Co v Ethicon Ltd. The applicant must show a serious question to be tried; the court then asks whether damages would be an adequate remedy for either side and, if there is doubt, where the balance of convenience lies. The applicant will normally be required to give a cross-undertaking in damages.

Rule: An interim injunction requires a serious question to be tried, followed by consideration of the adequacy of damages and the balance of convenience.

  • A American Cyanamid rejected any requirement to show a prima facie case on the balance of probabilities. (wrong rule)
  • B An injunction is an equitable and discretionary remedy, never granted as of right. (wrong rule)
  • C An applicant is ordinarily required to give a cross-undertaking in damages to the respondent. (wrong rule)
  • D If damages would be an adequate remedy for the applicant and the respondent can pay, an interim injunction is normally refused. (wrong rule)

Source: American Cyanamid Co v Ethicon Ltd [1975] AC 396; Senior Courts Act 1981, s 37

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