Establishing a Fair Question to be Tried in Interlocutory Injunctions: Creaby v Allied Irish Banks PLC & Ors [2022] IEHC 282

Introduction

The case of Creaby v Allied Irish Banks PLC & Ors (Approved) ([2022] IEHC 282) was adjudicated in the High Court of Ireland on May 11, 2022. The plaintiff, an 84-year-old gentleman named John Creaby, faced an indebtedness exceeding €4 million to Allied Irish Banks PLC (the first defendant). This indebtedness originated from a guarantee provided by the plaintiff for his sons' company, Loughcourt Ltd., and additional personal borrowings. The core dispute emerged when the plaintiff sought an interlocutory injunction to prevent the defendants from interfering with his properties pending the trial of the action.

Summary of the Judgment

The High Court examined whether the plaintiff had established a fair question to be tried, a prerequisite for granting an interlocutory injunction. The court found that there was indeed a fair question regarding the existence of a binding oral agreement between the plaintiff and the first defendant, despite the defendants' argument that the agreement was merely indicative and not binding. Consequently, the court granted the interlocutory injunction, preventing the defendants from interfering with the plaintiff's properties in Lower Drumcondra Road until the trial.

Analysis

Precedents Cited

The judgment extensively referenced several key precedents to establish the standards for interlocutory injunctions:

Campus Oil v Minister for Industry (No. 2) [1983] IR 88 - Established the foundational test for granting interlocutory injunctions.
Merck Sharp & Dohme Corporation v Clonmel Healthcare Ltd [2020] 2 IR 1 - Reinforced the application of the Campus Oil test.
O'Gara v Ulster Bank Ireland DAC [2019] IEHC 213 - Clarified that the threshold for a fair question to be tried is low.
Crossplan Investments Ltd. v. McCann & Ors [2013] IEHC 205 and Wingview - Highlighted the low threshold for establishing a fair question to be tried.

These precedents collectively underscored that the plaintiff does not need to present a compelling case at the interlocutory stage but must merely raise a legitimate question to be examined at trial.

Legal Reasoning

The court dissected the arguments presented by both parties, focusing on whether an oral agreement existed that was binding and whether the plaintiff's actions constituted part performance. The plaintiff argued that there was a binding oral agreement to sell five properties to settle the indebtedness, supported by actions such as consenting to a judgment and selling properties. The defendants contended that the "Heads of Terms" were non-binding drafts, emphasizing language like "subject to contract" to negate any binding commitment.

Despite the defendants' strong stance on the non-binding nature of the documents, the court acknowledged the plaintiff's position that an oral agreement, supplemented by part performance, podría existindo. Importantly, the court did not take a definitive stance on the agreement's validity but recognized that a fair question exists for trial.

Impact

This judgment has significant implications for future cases involving interlocutory injunctions, especially in scenarios where oral agreements and part performance are contested. It reinforces the notion that plaintiffs can secure interlocutory relief even when contractual agreements are not formally documented, provided there is sufficient indication of a binding agreement and actions supporting it. Additionally, the decision highlights the court's balanced approach in weighing the interests of both parties, particularly considering factors like the plaintiff's age and the potential preservation of property value.

Complex Concepts Simplified

Interlocutory Injunction

An interlocutory injunction is a temporary court order that restrains a party from taking certain actions until the final decision in the case is made. It aims to preserve the status quo and prevent potential harm that could occur if the defendant proceeds with the contested actions.

Fair Question to be Tried

For an interlocutory injunction to be granted, the plaintiff must demonstrate that there is a "fair question to be tried." This does not require proving the case's merits fully but showing that there is a legitimate issue worth examining at trial.

Part Performance

Part performance refers to actions taken by one party that unequivocally indicate that a binding agreement exists, even if some terms are not formally documented. In this case, the plaintiff's actions in selling properties and providing proceeds to the bank were argued as part performance of an oral agreement.

Conclusion

The High Court's decision in Creaby v Allied Irish Banks PLC & Ors underscores the judiciary's readiness to grant interlocutory injunctions when a fair question is presented, even amidst conflicting interpretations of contractual agreements. By acknowledging the plaintiff's actions as potential part performance and recognizing the low threshold for establishing a fair question to be tried, the court provided a nuanced approach that balances the urgency of preserving property rights with the necessity of ensuring fair trial procedures. This judgment serves as a critical reference point for future disputes involving oral agreements and the granting of interim relief.