Mo-Musa Nico Consari & Anor v Bensport Limited

On an application for an interim injunction, the court should apply the American Cyanamid approach: whether there is a serious question to be tried, whether damages would adequately compensate the relevant party, and, if not, where the balance of convenience lies.

Where neither side’s ability to pay damages is established and delivery up could cause irredeemable prejudice, the just and convenient course may be to preserve the status quo while restraining disposal of the disputed goods.

The claimants sought urgent interim delivery up of 11 vehicles, two engines and a car bonnet valued at approximately £485,500. The defendant resisted, asserting liens arising from unpaid contractual and sale proceeds and disputing aspects of the claimants’ ownership.

The court had initially refused delivery up and made a restraint order. A further hearing was directed after inaccuracies were identified in the defendant’s skeleton argument. The central issues were the adequacy of damages and the balance of convenience.

1. Serious question to be tried. The parties agreed that the dispute met this threshold.
2. Adequacy of damages. Applying the principles in Fellowes & Son v Fisher [1976] 1 QB 122 (CA), the court considered whether each side would be adequately compensated if the injunction were wrongly granted or refused. There was no direct evidence of either party’s means. An asserted insurance policy did not establish that the defendant could pay damages, particularly since its terms were not in evidence and insurance would not prevent disposal of the vehicles.
3. The claimants’ undertaking as to damages also provided inadequate protection. The first claimant required the vehicles to generate funds to pay creditors. At least £265,000 remained owing by the second claimant, whose balance sheet showed capital and reserves of only £1,250.
4. Balance of convenience. Applying the test in American Cyanamid Co v Ethicon Ltd [1975] AC 396 (HL), delivery up could cause irredeemable prejudice to the defendant if its lien ultimately proved valid. Refusal could cause equivalent prejudice to the claimants if the lien proved meritless.
5. The only just and convenient course was therefore to maintain the status quo while restraining the defendant from disposing of the vehicles. The court’s earlier erroneous understanding of the timing of the purchase of WM’s assets did not affect that conclusion. The restraint order was continued and delivery up was refused.

not stated in the judgment.