Protege Services Ltd, Re

Where an interim injunction is granted on the balance of convenience and the merits remain unresolved, costs will ordinarily be reserved or made in the cause. The court may depart from that approach where the conduct of the interim proceedings has caused avoidable costs. A party who delays unreasonably in confirming that an injunction will continue may be ordered to pay costs thrown away by preparation for an unnecessary hearing.

Mr Robinson sought continuation of an injunction granted without notice by Mr Justice Mann. The injunction restrained the respondents from removing him as a director, dissolving the company, terminating its client agreement, or releasing claims against the client. The respondents initially indicated that they would seek to set aside the injunction, but later agreed that it should continue until trial or further order.

The hearing therefore proceeded principally on costs. The issue was whether costs should be reserved to the trial judge, as proposed initially, or whether the respondents’ conduct justified a separate costs order.

1. The injunction granted by Mr Justice Mann was continued until trial or further order. The underlying allegations remained unresolved and the court did not determine the merits.
2. The normal order where an injunction turns on the balance of convenience, rather than an adjudication of the underlying merits, is for costs to be made in the cause or reserved to the trial judge. That approach is not inflexible.
3. A different order is justified where the conduct of the interim hearing warrants it. The respondents’ solicitors had failed to respond promptly to a reasonable request for their position, despite the imminent hearing. Their later agreement to continuation of the injunction caused the petitioners to incur preparation costs that could have been avoided.
4. The respondents were therefore ordered to pay the petitioners’ costs thrown away by the hearing. Those costs were summarily assessed, subject to a reduction of £1,000 plus VAT because part of the claimed expenditure was not properly attributable to wasted preparation.
5. Subject to that order, the costs of the injunction application were reserved to the trial judge.

The judgment records that Mr Justice Mann had granted the interim injunction on 1 April 2011. The present judgment concerned the adjourned return hearing and made consequential costs orders. No appeal is stated.