Interlocutory injunctions: costs in the cause? 

An injunction is a remedy available at law restraining a party from specific conduct or requiring a party to take specific actions.

Often, a party will apply for an interlocutory injunction to restrain the respondent from engaging in specific conduct until such time that the matter can be dealt with substantively. This may protect the applicant from harm which could otherwise not be adequately compensated in damages.

There is risk in applying for an interlocutory injunction, given the applicant must persuade a court that:

• there is a serious question to be tried;
• damages is an inadequate remedy; and
• the balance of convenience favours the granting of an injunction.

Usually, a court will order that the costs of an application for an interlocutory injunction be costs in the cause. This means that an order for payment of legal costs will usually be made in favour of the party who is ultimately successful at trial.

However, the recent decision of Hill J in Brusa v Brusa provides some guidance on circumstances that may warrant a special costs order should the application for an interlocutory injunction fail.

Hill J confirmed that costs in the cause is the preferred order, given that “the determination of the [interlocutory injunction] application does not involve the determination of substantive rights or obligations”.¹ 

However her honour referred to other factors that may enliven the court’s jurisdiction to make a special costs order, including: 

• whether the applicant failed in persuading the court that there is a serious question to be tried;
• whether “the application was brought or run in a manner which unreasonably inflated the costs of the application…”²; and
• whether the applicant ought to have accepted a reasonable without prejudice offer made by the respondent.
• Her honour was not persuaded that these exceptions applied, and ordered that the costs be in the cause.

Lavan comment

A party must take great care when considering whether to commence an application for an interlocutory injunction.

If that party cannot readily prove there is a serious question to be tried, or conducts itself in a manner that causes the respondent to incur significant legal costs, a court may order that the applicant pay the respondent’s costs.