Peel Land and Property (Ports No. 3) Ltd v TS Sheerness Steel Ltd

An injunction pending appeal is governed by the principles applicable to interim relief pending trial. The applicant must show a serious issue to be tried, but success at that threshold does not make relief automatic. The court must assess all relevant circumstances, including the likely hardship and potential injustice to each party.

The special approach to clear negative covenants in Doherty v Allman does not automatically apply to interlocutory relief where the covenant’s meaning and validity remain disputed. Where the applicant cannot show harm beyond interference with an unestablished right, and an injunction may cause substantial unquantifiable harm to the respondent, relief should be refused.

The claimant lessor sought an interim injunction restraining the defendant lessee from removing trade fixtures pending the claimant’s appeal against an earlier judgment.

In [2013] EWHC 1658 (Ch), the court had held that removal of the trade fixtures did not breach clause 2(6) of the lease, dismissed the claim for a permanent injunction and declared that the defendant was entitled to proceed. Permission to appeal was granted.

The central issues were whether an injunction pending appeal should be approached under the principles in American Cyanamid v Ethicon Limited, and whether the claimant’s reliance on Doherty v Allman made injunctive relief inevitable.

1. Application dismissed. The claimant had shown a serious question as to whether removal of the trade fixtures breached clause 2(6), and a serious question as to whether an injunction might ultimately be appropriate. It had not shown that a final injunction would inevitably follow if its construction succeeded.
2. An injunction pending appeal is essentially analogous to an interim injunction pending trial. The principles in American Cyanamid v Ethicon Limited therefore apply. The court must consider the real prospect of success, all relevant circumstances, the period before the appeal, and the balance of hardship or potential injustice. Relief is not confined to cases in which refusal would render the appeal nugatory. The court should arrange matters so that the appellate court can do justice after the appeal.
3. The reasoning relied upon from Doherty v Allman concerned final relief where the contractual bargain was clear and indisputable. It did not make an injunction automatic on an interlocutory application where the covenant’s meaning remained disputed. The approach in Texaco Ltd v Mulberry Filling Station Ltd was persuasive and remained cogent after American Cyanamid v Ethicon Limited.
4. The claimant had not established harm to its reversion or any loss beyond the possible receipt of nominal damages. The alleged interference with contractual rights could not itself justify interim intervention before those rights had been established. The defendant, by contrast, faced a real possibility of insolvency and unquantifiable harm if prevented from selling fixtures to meet rent and outgoings.
5. The evidence did not support giving weight to the suggested public interest in preserving the steelworks or local employment. The balance of hardship and justice therefore decisively favoured refusing the injunction.

• High Court (Chancery Division): In [2013] EWHC 1658 (Ch), the court held that removal of the trade fixtures did not breach clause 2(6), dismissed the claim for a permanent injunction and declared that the defendant could proceed. Permission to appeal was granted.
• High Court (Chancery Division): The application for an injunction pending appeal was dismissed.