In Holyoake v Candy [2016] EWHC 970 (Ch), the High Court of England and Wales has broken new ground in asserting the existence of a 'notification injunction'. The purpose of that injunction is to require a defendant to notify a claimant before the defendant should dispose or deal with its assets.

The case concerned a loan given by the sixth defendant (CPC Group Limited) to the first claimant (Mr Holyoake) in October 2011 for the amount of ₤12m. What followed was a "highly unpleasant and atrophic campaign of threats, abuse, intimidation and coercion", which the claimant said amounted to what was broadly described as a conspiracy on the part of the defendants. The result of that conspiracy was, in the claimant's view, to require the second claimant to sell the property acquired with the loan at a loss in February 2014, and pay a total of more than ₤37m to CPC Group Limited.

The claimants brought the application for an injunction because of their concerns that the defendants may make it difficult or impossible to enforce any judgment against them if the claimants were successful in the action.

Nugee J held that such a 'notification injunction' was available for the following reasons:

  • The jurisdiction of the Court to grant injunctive relief arose from s 37 of the Senior Courts Act 1981
  • It was well established that an injunction was available under s 37 of the Senior Courts Act 1981 when there was a threat to do an act that constituted an "invasion of a legal or equitable right"
  • It is also well established that a freezing order is an appropriate means of protecting the rights or obligations as between claimants and defendants
  • Requiring a defendant simply to notify a plaintiff was less onerous than freezing the assets altogether, which meant that if the Courts could do the latter it could plainly do the former.

The Court held that the claimants would need to show that there was a "good arguable case" in the sense that it is one "more than barely capable of serious argument".

Nugee J found there was a genuine risk that the defendant's assets would be dissipated, and that the balance of convenience was in favour of the claimants, such that a notification injunction was an appropriate remedy.

It is an open question as to whether or not the New Zealand Courts would apply the Holyoake decision. The jurisdiction of the High Court to grant injunctive relief arises from s 16 of the Judicature Act 1908, which is drafted broadly. Further, the Court of Appeal in Shaw v Narain [1992] 2 NZLR 544 (CA) at 158 emphasised the importance of reserving the flexibility of the freezing order jurisdiction, pointing out that the principles are "still evolving". There would seem to be no reason in principle why Holyoake would not be applied, given that a 'notification injunction' is less onerous than a freezing order, yet still required to meet the stringent test that applies to the latter.

See the Court's decision here.