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“Direct threats require direct action” (Dick Cheney)

For centuries, the common Law Courts have exercised the jurisdiction to intervene by injunction to prevent a wrong that is merely threatened, and not yet embarked on, both permanently after a full trial, and also on an interim basis pending the trial.

The discretion to grant the so called “quia timet” (because it fears) injunction is sparingly exercised, and applicants must in particular be cautious in seeking interim injunctions, because those sought on an urgent basis, where there is no real urgency, or without full disclosure to the Court of all relevant facts and law where the application is made ex-parte in the absence of the defendant, are liable to be refused or set aside by the Court with serious adverse cost orders.

The legal requirements for the grant of an interim quia timet injunction are that, in addition to the usual requirements for an interim injunction (including that damages awarded at trail would not be an adequate remedy), the applicant must show at least some real risk of an actionable wrong being committed if the injunction is not granted.

These issues fell to be considered by the Cayman Islands Grand Court in the recent case of Frontera Resources Corporation v Hope and Outrider Master Fund LP, where a variation to an injunction obtained by the plaintiffs against them, obtained by the defendants on an “urgent” ex parte application to vary that injunction, had itself amounted to a quia timet injunction against the plaintiffs.

The Court found that the variation should be set aside as having been obtained on the basis of affidavit evidence which had failed to disclose material facts and/or fairly to present the merits of the case, and that the legal requirements for an interim quia timet injunction were not met; the Court was also critical of the lack of urgency. The variation was set aside with costs against the defendants to be assessed on the indemnity basis.  Applicants for interim quia timet injunctions would do well to bear in mind the advice of Friar Lawrence to Romeo; “Wisely and slowly; they stumble that run fast”.

“Direct threats require direct action” (Dick Cheney)

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