An injunction is an order of the court that requires a party either to do, or refrain from doing, a specified act, such as preventing a newspaper from publishing a specific story. Injunctions are not granted lightly, mainly because of the detrimental effect that they can have on an individual’s rights or a company’s ability to conduct its business. As a result, this area of the law tends to develop incrementally in reaction to social and commercial changes.
For example, last year saw the first ‘stand-alone’ notification order granted. Notification orders require defendants to notify a claimant before they can deal with certain assets, i.e. spend their money or move their property. This kind of order is designed to prevent defendants from protecting their assets in anticipation of losing a future dispute by putting the claimant on notice.
Prior to the availability of the stand-alone notification order, claimants would have instead needed to apply for a freezing injunction that completely prevents defendants from dealing with certain assets.
Holyoake v Candy
The ongoing dispute between billionaire property developers Christian and Nick Candy and their (former) friend Mark Holyoake gave rise to this interesting development. The dispute concerns a loan of £12m made to Holyoake by the Candys to be used for a property investment. Holyoake claims he was the victim of a conspiracy and that he was coerced into a series of further agreements that were highly disadvantageous to him. Believing that the Candys might try to protect their assets, Holyoake sought an injunction.
Holyoake could have asked the court for a freezing injunction but instead sought and obtained a notification injunction requiring the Candys to notify him seven days in advance of dealing with any assets with a value in excess of £1m. In principle this would give him time to take action to preserve the position if he needed to.
Wider significance of stand-alone notification injunctions
The decision to award a ‘stand-alone’ notification order raised the question of whether the court had effectively created an alternative order for claimants that was easier to obtain but similarly inconvenient for defendants.
The Candys appealed the decision. Interestingly, the judge at appeal held that a notification injunction of this type was in effect a modified version of a freezing order, rather than a distinct type of injunction, and did not accept that the threshold for obtaining it was less than required for a conventional freezing order. This was mainly because they still both have the “nuclear effect” of preventing a party from dealing with its assets freely.
While it appears that this case will now not significantly extend the scope or availability of injunctions, it illustrates the way the courts must grapple with forms of injunctive relief in order to meet the needs of clients in the modern world.
Ian Tucker is a partner, Tom Whittaker a solicitor and Tom Gillett a trainee solicitor at Burges Salmon