In Short
- An injunction is a court order that mandates a party to either undertake a specific action or cease a particular activity.
- These legal orders can be interim (temporary) or permanent and are crucial in preventing harm or preserving conditions during legal disputes.
- Obtaining an injunction requires clear evidence of potential irreparable harm.
Tips for Businesses
Before seeking an injunction, ensure you have strong evidence demonstrating the potential harm you aim to prevent. Engaging a legal expert to guide you through the process is vital, as they can assist in preparing your case and clarifying the temporary or permanent nature of the injunction necessary for your situation.
Certain actions can have devastating consequences for your business. For instance, you may need your supplier to deliver their end of the bargain to operate your business successfully. In certain circumstances, you can apply to a court and request an injunction to stop the other party from carrying out a specific act. Injunctions can come in many different forms and include an array of orders (both actions and omissions). This article will outline what an injunction is and detail the most common types that the New Zealand courts award.
What is an Injunction?
An injunction can either instruct a person to do or to stop doing a specific action. They can compel a person to act, or prevent a person from commissioning, repeating or continuing a particular act. In New Zealand, an urgent injunction is also commonly called an emergency application.
An injunction is a legal remedy. The courts can grant this order to enforce a recognised legal right, such as ordering a person to complete their contractual obligations. Alternatively, injunctions can protect a legal right from behaviour that amounts to a legal wrong. In assessing whether an injunction is appropriate, the courts exercise their discretion on a case-by-case basis. They evaluate whether the injury or impact of an action (or omission) is likely to be continuous or substantial. The courts will also consider whether other legal remedies are more appropriate, for example, damages. To evaluate the most appropriate remedy, the courts will ultimately consider where the interest of justice lies.
There is a range of injunctions that the courts can grant you, including:
- perpetual restrictive injunctions;
- mandatory injunctions;
- interlocutory and interim injunctions; or
- freezing and search orders.
We will explore each kind of injunction below.
Perpetual Restrictive Injunctions
A perpetual restrictive injunction stops a person from committing or continuing to carry out a wrongful action. This means that the courts will grant it to protect an individual’s rights that might, or has been, infringed by another. For example, the courts may grant such an injunction to prevent you from breaching the terms of a contract that you have entered into or from passing on information that you received in contractual confidence.
Continue reading this article below the formMandatory Injunctions
Instead of preventing an individual from doing something, a mandatory injunction compels a person to perform some positive act. If the court grants a mandatory injunction, the order in question should outline the precise action that you must complete.
The court will not make an order:
- requiring you to perform personal services, for example, to force a singer to perform;
- that would require your continuous attention or for you to employ others; or
- to do something that is impossible or illegal.
Instead, a court will usually order a positive act to undo a wrong that you have committed. For example, this may include delivering goods that you had to provide under a contract.
Interlocutory and Interim Injunctions
Most people use the phrases ‘interlocutory’ and ‘interim’ interchangeably. Both remedies prevent actions for a temporary period. However, the two differ slightly.
When applying for an interlocutory or interim injunction, you must demonstrate that:
- you would experience irreparable injury without the injunction; and
- there is a serious issue of law or fact that could warrant a potential court case and the granting of a permanent injunction; and
- damages would not be an adequate remedy.
After receiving an application, the court will balance the rights of all parties involved, as well as other factors, such as:
- whether the injunction would prejudice any third persons or parties;
- the public interest;
- the status quo; or
- the conduct of the individuals involved.
Activities that typically warrant interlocutory or interim injunctions include:
- defamation;
- breach of contract;
- intellectual property infringement (trademark or copyright infringement);
- breach of confidence or misuse of confidential information;
- trespass or nuisance;
- breach of restrictive covenants in employment contracts; or
- to prevent the disposal of assets (freezing orders).
Commercial disputes are costly, stressful and can damage your business reputation. LegalVision’s free Guide to Resolving NZ Business Disputes can help.
Freezing and Search Orders
Both freezing orders and search orders are forms of interlocutory injunctions. However, the court will grant the two injunctions for slightly different reasons.
Freezing Orders
A freezing order restrains you from removing, dealing with or reducing the value of assets that are in or outside of New Zealand. This court order prevents you from disposing of assets that would impact or defeat a current legal claim against you.
If you are the party suffering injury, you can apply for a freezing order at any time during legal proceedings. In granting a freezing order, a court has to be satisfied that:
- you have a good arguable case;
- the assets in question exist and the person the order is against owns them;
- there is a real risk that this individual will dispose of these assets in a way that would defeat the claim against them; and
- it would be fair to grant the injunction, meaning the need to protect you, as the applicant, outweighs the hardship the order would have on the individual you are making the order against.
Search Orders
The courts may grant a search order if there is evidence that is (or may be) relevant to a court case or future court proceedings. Search orders permit authorities to secure or preserve any relevant evidence and will require the individual to allow entry onto their premises to obtain this evidence.
The court should only make a search order if it is satisfied that:
- the individual applying for the order has a strong case on a clear legal cause of action;
- there will be, or could be, a severe loss or damage to the applicant if they do not grant the order; and
- there are sufficient grounds that the individual in question has this evidence in their possession, and a real possibility that they may destroy it or make it unavailable for use by the court.
Timelines and Costs
The timing and costs of obtaining an injunction in New Zealand can vary depending on the nature and urgency of your dispute. Interim injunctions may be granted within hours or days in emergencies. Other more permanent injunctions may take several months or years to be established by the court.
Applying for an injunction can be costly. The key costs you must provide are the court’s fees and your legal costs. Should your application be unsuccessful, you may also be liable to contribute to the respondent’s legal costs.
Given the financial and time constraints, you must consider the strength of your case and whether any alternative dispute resolution methods can facilitate a similar resolution.
Alternative Actions to Injunctions
While injunctions are strong legal tools, depending on your dispute, there may be alternatives you can consider before seeking the court’s intervention. These alternatives may result in a similar solution and be more time-efficient and cost-effective.
Negotiation and mediation are usually the first steps to resolving any dispute, allowing you and your opposing party to resolve the issues between yourselves or be facilitated by an independent third party. These methods can lead to mutually agreeable solutions without the need for court orders. Another alternative is arbitration, where an independent arbitrator makes a binding decision on the dispute. This can be faster and more flexible than court proceedings.
For intellectual property and defamation disputes, a cease and desist letter may achieve the desired outcome by restricting or stopping the other party’s actions. Employment disputes are typically resolved through internal procedures, Mediation or the Employment Relations Authority.
Key Takeaways
New Zealand courts have a wide range of powers to enforce a legal right or prevent such a right from being affected by an unlawful act. There is a range of injunctions which the court can grant, each of which serves a different purpose. This includes:
- a restrictive injunction, to prevent an individual from committing a wrong;
- a mandatory injunction, to enforce a legal right or prevent its infringement through a positive act;
- an interlocutory or interim injunction, if action needs to be taken quickly and for a fixed time; and
- a freezing or search order.
If you are thinking of applying for an injunction, our experienced dispute and litigation lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0800 005 570 or visit our membership page.
Frequently Asked Questions
Seeking an injunction is when an individual applies to a court for an order that would prevent the commission or continuation of an act or order a certain act to be carried out.
There is a wide range of injunctions or emergency applications. The most common are: perpetual restrictive injunctions; mandatory injunctions; interlocutory injunctions; interim injunctions; freezing orders; and search orders.
Examples of restrictive injunctions are: restricting a party to a contract from doing something that would breach the terms of its contract, for example, transferring property promised under the contract to a third party; or preventing construction work from starting where there is a question of interference with the rights of a third party. An example of a mandatory injunction is an order to remove rubbish or other property from another person’s premises.
A temporary injunction refers to injunctions that only prevent or orders conduct for a fixed period of time. Freezing orders or search orders are temporary injunctions.
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