Praxis IFM Trustees (Nz) Ltd v Riva & Ors

On an application for an interim injunction, the court must assess whether there is a serious issue to be tried, whether damages would be an adequate remedy, and where the balance of convenience lies. Where the relief is preventive, the court must also assess whether there is a sufficient real risk of the feared future event and whether intervention is justified under quia timet principles. An ex parte order may be made where advance notice could provoke the threatened conduct and the application has been fairly presented. Maintaining certainty in the administration of a trust may favour temporary injunctive relief.

The applicant trustee applied without notice for an interim injunction concerning four English-law discretionary trusts. Following the death of the protector, his widow and children purported to appoint Mr Zimmer as replacement protector. The issue was whether they fell within the trust deed’s reference to the deceased protector’s executor, administrator or personal representative.

Mr Zimmer had indicated an intention to remove the existing trustee and appoint another. The trustee sought an order restraining him from acting as protector and, in particular, from removing the trustee. The respondents were absent and unrepresented. The central issues were whether there was a serious issue to be tried, whether the threatened conduct justified quia timet relief, whether the matter should be heard ex parte, and where the balance of convenience lay.

1. Interim injunction. The court was satisfied that there was a serious issue to be tried as to whether Mr Zimmer had been validly appointed protector. The competing interpretations of the trust deed could not be resolved summarily.
2. Adequacy of damages. Damages would not provide an adequate remedy for the dispute concerning the identity and powers of the trustee. The application therefore turned principally on the balance of convenience, together with the principles governing quia timet relief.
3. Quia timet relief. Mr Zimmer might or might not remove the trustee, but his stated intention created a real risk that he would do so. If that occurred, uncertainty would arise immediately as to the identity of the trustee, its powers and its duties. That risk was sufficient to justify protective intervention.
4. Ex parte procedure. Although the court proceeded with hesitation, advance notice might provoke the very conduct which the application sought to prevent. The application had been fairly presented, and there was no material indication that relevant matters had been withheld. An ex parte order was therefore appropriate.
5. Balance of convenience and order. Preserving the existing trustee for seven days would cause no apparent prejudice to those interested in the trusts. Refusing relief could lead to an immediate and destabilising dispute over the trusteeship. The balance of convenience favoured the injunction. The order was made in the terms of the draft order, pending an inter partes hearing.