Bentley Motors Ltd v GTI Corporation

On an application for an interim injunction, the court must assess the likely consequences of granting or withholding relief on the particular facts. It must seek a result that, as nearly as possible, holds the ring between the parties pending trial. The inquiry is not a mechanical checklist. Where the trial and judgment will occur within the relevant period, a defendant’s offer may adequately protect both sides, even though the claimant must account for a contingent liability. An accounting provision does not itself require funds to be ring-fenced or placed in escrow.

A supplier disputed whether it remained obliged to provide bespoke components under a supply contract after the purchaser reduced its requirements. The purchaser alleged that the contract continued, or was terminable only on reasonable notice, and sought an interim mandatory injunction requiring continued supply at the existing price.

Jay J found a serious issue to be tried and considered damages inadequate for either side, but refused the injunction because he could not reach a high degree of assurance that it would ultimately prove justified. Permission to appeal was refused by Jay J and by Christopher Clarke LJ on the papers. The purchaser renewed its application for permission in the Court of Appeal after the supplier made a revised offer governing payment pending trial. The central issue was whether that offer adequately protected the parties pending trial.

1. Application refused. There was no real prospect of successfully appealing the judge’s exercise of discretion.
2. The court’s task on an application for an injunction pending trial, where both parties may suffer loss, is to reach a result which, as nearly as possible, holds the ring pending trial. The court must examine the likely consequences of granting or withholding relief on the particular facts. A mechanical checklist is inappropriate: National Commercial Bank Jamaica Limited v Olint Corporation Ltd [2009] 1 WLR 1405, especially the analysis at paragraphs 19 and 21.
3. The supplier’s revised offer preserved its position if it succeeded at trial, while allowing the purchaser to obtain supplies at the existing contractual price without paying the increase if it succeeded. The purchaser’s evidence showed, at most, an accounting provision against a contingent liability. Such a provision affected the accounts but did not require the funds to be ring-fenced or placed in escrow.
4. The trial was due to take place in May 2016, with judgment expected within weeks. The purchaser would therefore know the outcome before the end of the relevant six-month period. The evidence did not establish concrete interim prejudice sufficient to justify an injunction.
5. The court concluded that the revised offer adequately protected both parties and refused permission to appeal.

1. Court of Appeal (Civil Division): renewed application for permission to appeal refused; [2016] EWCA Civ 148 .
2. High Court of Justice, Queen’s Bench Division: Jay J found a serious issue to be tried and refused an interim mandatory injunction requiring continued supply at the existing price.
3. On the papers: Christopher Clarke LJ refused permission to appeal, considering the decision to fall within the judge’s discretion and to achieve substantial justice.