Application of refined "Campus Oil " interlocutory injunction test case applied in commercial court case

Background

This decision concerned an appeal by EBS DAC (EBS) from a decision of the High Court on 13 February 2019. The High Court granted the Plaintiff an interlocutory injunction restraining the termination by EBS of Tied Agency Agreements until the outcome of the proceedings.  

The High Court applied the usual Campus Oil test in its decision to grant an interlocutory injunction. It held:

1. That there was a serious question to be tried regarding the lawfulness of the termination;
2. That damages would not be an adequate remedy for the Plaintiff because damages would not compensate for reputational damage; and
3. That the balance of convenience lay in favour of granting the injunction.   

The High Court decision was reached before the Supreme Court decision in Merck Sharpe and Dome v Clonmel Healthcare Ltd [2019] IESC 65 (MSD) case, which essentially revisited the adequacy of damages head of the Campus Oil test. 

Decision

The Court of Appeal noted that the MSD case marked a restatement of the approach to injunctions and the decision now meant that there was a more flexible and less rigid approach to interlocutory applications.

The Court reviewed the High Court decision through the lens of the more recent MSD decision. In particular, the issue of adequacy of damages was examined. The Supreme Court, in MSD, held that the key question in this regard would be to determine whether “the remedy in damages can be said to be necessarily commensurate with any possible injury so as to preclude the possibility of the grant of an injunction.”

The Court of Appeal in this decision accepted that damages would be an available remedy at trial. However, it acknowledged that the interests that the Plaintiff was seeking to vindicate extended beyond the purely financial and that there was a very real risk that an award of damages at trial would not adequately vindicate those interests.

Takeaway

The Court in this case emphasised the views of the Supreme Court in the MSD case that interlocutory injunction applications are not simply a tick-the-box exercise. The decision to grant an interlocutory injunction is a judicial decision, deriving from structured and careful assessment of the relevant considerations. There are likely to be multiple considerations to be weighed in the balance, none of which are likely to be decisive in isolation.

Betty Martin Financial Services Limited v EBS DAC [2019] IECA 327

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