Court dismisses interlocutory injunction application where plaintiff fails to prove justice is impossible at trial.

[*490] 1978 June 8

(BOYADJIS, S.D.J. )

IN THE DISTRICT COURT OF NICOSIA

Michalis Melis,

Plaintiff-Applicant,

and

Spyros Charalambous,

Defendant-Respondent.

(Application in Action No. 982/78).

Injunction

- Interlocutory injunction - Section 32 of the Courts of Justice Law, 1960 - Whether power thereunder to issue interlocutory injunction restraining defendants from disposing of their assets within the jurisdiction - Discretion of the Court - Principles applicable - "Difficult or impossible to do complete justice at a later stage" in the said section 32 - Meaning.

J. Erotokritou, for Plaintiff-Applicant.

A. Danos, for Defendant-Respondent.

RULING

The following ruling was delivered by:-

BOYADJIS, S.D.J.:- On March 17 the plaintiff [*491] took out a generally indorsed writ claiming against the defendant "general and special damages, for personal injuries and loss suffered by him on or about 13.3.1978 whilst lawfully driving motor-car under Reg. No.J.N.555 along Stassinos Avenue, in Nicosia, due to the negligence and/or breach of statutory duties by the defendants whilst the latter was driving motor-car under Reg. No. E.E.345".

Together with the writ of summons the plaintiff applied ex parte for "an order of the Court prohibiting the defendant from selling, transferring and/or in any way alienating his motor-car under Registration No.E.E„345 referred to in the general indorsement until final determination of the action and/or until further order".

In support of the application the plaintiff swore a short affidavit alleging that:-

(a) On 13.3.78 the defendant drove his said car so negligently that it collided with plaintiff's car thus causing the plaintiff "considerable injuries and personal damage which exceed £1,000.-, as advised by his advocates".

(b) Plaintiff believes that he has a good cause of action and his claim is a real one.

(c) Plaintiff has information that the defendant is already negotiating a sale and/or alienation of his said car. [*492]

(d) Unless the defendant is prohibited by a Court order from alienating his said car, the plaintiff will suffer irreparable damage because he has information that the defendant will not be in a position to pay for the damage which he caused to the plaintiff.

On the same day the application was put before another Judge of this Court who adjourned it to the 31st March, 1978, directing at the same time service of notice thereof to the defendant-respondent.

The defendant had in the meantime entered an appearance to the action and having been served with copy of the application he appeared before the same Judge on 31.3.1978 through his counsel and opposed the application. The learned Judge adjourned the application for hearing to the 15th May, 1978, without making any order in the meantime.

On the 4th April, 1978, the defendant filed, a written notice of opposition pursuant to 0.48, r.4, and swore in support of his opposition an affidavit stating only that the Court has no power to issue the order applied for since his car is not the subject-matter of the action.

The application is stated to be based on Sections 4 and 7 of the Civil Procedure Law, Cap. 6, on Section 32 of the Courts of Justice Law No. 14 of 1960, and on the inherent jurisdiction of the Court, It is [*493] evident that s. 7 of Cap. 6 cannot afford a basis for the application and the learned counsel for the plaintiff had most probably in mind s. 9 of Cap. 6. Be that as it may, in the course of the hearing which took place before me on 15.5.1978, counsel for the applicant relied only on s.32 of the Courts of Justice Law and expressly abandoned the legal foundation of his application based on all the other legal provisions stated therein.

Both sides relied on their respective affidavits and their learned counsel addressed the Court.

Counsel for the applicant argued that the powers of the Court under s. 32 of Law 14 of 1960 are wide enough to cover this application. He prayed for the issue of a "Mareva" injunction and cited in support the English cases of Mareva Compania Naviera S.A. v. International Bulkcarriers S.A., (1975) 2 Lloyd's Reports, 509, and Owners of Cargo lately laden on board the vessel Siskina and Others v. Distos Compania Naviera S.A. - The Siskina, (1977) 3 All E.R. 803. He further cited our Supreme Court case of Nemitsas Industries Ltd. v. S.& S. Maritime Lines Ltd. and Others, (1976) 10 J.S.C, 1542.

Learned counsel for the respondent argued that the Court has no power under s. 32 of Law 14 of 1960 to issue the injunction applied for and cited the case of Cyprus Palestine Plantations v, Olivier & Co., 16 C.L.R., 122. He further submitted that the exercise of any powers of the Court under s. 32 of Law 14 of 196O are subject to the Civil Procedure Law, Cap. 6, and in particular s.4 thereof. [*494]

The main issue before me is one of jurisdiction and depends solely on the interpretation of s. 32 of the Courts of Justice Law No. 14 of 1960, which reads as follows:-

"32 - (1 ) Subject to any Rules of Court every court, in the exercise of its civil jurisdiction may, by order, grant an injunction (interlocutory, perpetual or mandatory) or appoint a receiver in all cases in which it appears to the court just or convenient so to do, notwithstanding that no compensation or other relief is claimed or granted together therewith:

Provided that an interlocutory injunction shall not be granted unless the court is satisfied that there is a serious question to be tried at the hearing, that there is a probability that the plaintiff is entitled to relief and that unless an interlocutory injunction is granted it shall be difficult or impossible to do complete justice at a later stage."

The corresponding legal provision at present in force in England is section 45(1) of the Supreme Court of Judicature (Consolidation) Act. 1925, which repeated s. 25(8) of the Supreme Court of Judicature Act, 1873. It reads as follows:-

"45(1) - The High Court may grant a mandamus or an injunction or appoint a receiver by an interlocutory [*495] order in all cases in which it appears to the court to be just or convenient so to do".

It may be seen that the wording of s. 45(1) of the English Act, 1925, is closely similar with the first part of our section 32 of Law 14 of 1960. There is of course the proviso to our last aforesaid section to which I shall refer later in my ruling. It suffices at this stage to say that the presence of this proviso limits in my opinion the powers of the courts in Cyprus to make interlocutory orders compared with the powers of the courts in England which are wider.

I shall presently endeavour to examine what was the practice in England and what was the extent of the powers assumed and exercised in this respect by English courts interpreting the aforesaid corresponding enactments in force in England.

In Mills v. Northern Railway of Buenos Ayres Company, (1870) 5 Ch. App. 621 Lord Hatherley, L.C., said at p. 627:-

"Work is done for a limited company; no engagement is taken from them by way of security; no debenture or mortgage is granted by them; but the work is done simply on the credit of the company. The only remedy for a creditor in that case is to obtain his judgment and to take out execution; or it may be that he may have a power, if the case warrants it, of applying to wind up the company.[*496]

But it is wholly unprecedented for a mere creditor to say, 'Certain transactions are taking place 'with the company, and dividends are being paid to shareholders which they are not entitled to receive, and therefore I am entitled to come here and examine the company’s deed, to see whether or not they are doing what is ultra vires, and to interfere in order that, as by a bill quia timet, I may keep the assets in a proper state of security for the payment of my debt whensoever the time arrives for its payment'. "

"The case must have occurred, of course, many years ago, before joint stock companies were so abundant, but certainly within the last twenty or thirty years the money due to creditors must have been many millions and the number of creditors must have been many thousands; yet I have never before heard - and I asked in vain for any such precedent - of any attempt on the part of a creditor to file a bill of this description against a company, claiming the interference of this Court on the ground that he, having no interest in the company, except the mere fact of being a creditor, is about to be defrauded by reason of their making away with their assests. It would be a fearful authority of this Court to assume, for it would be called on to interfere with the concerns of almost every company in the Kingdom against which a creditor might suppose that he had [*497] demands, which he had not established in a court of justice, but which he was about to proceed to establish."

The above extract from the judgment of Lord Hatherley, L.C., was cited with approval by Crean, C.J., in The Cyprus Palestine Plantantions Company Limited v. Olivier & Company (Cyprus) Limited, (16 C.L.R. 122), allowing an appeal against the issue of an interim order restraining the defendant company from distributing its profits, made under s. 8(1) of the Civil Procedure Law, 1885, repeated in s. 4(1) of Cap. 6.

In Robinson v. Pickering,

(l881) Ch. D. 660, James, L.J., said at p. 661 :-

"You cannot get an injunction to restrain a man who is alleged to be a debtor from parting with his property".

In Lister & Co v. Stubbs,

(1890) 45 Ch.D. 1, Cotton, L. J., stated at p. 14 that such an order "would be introducing an entirely new and wrong principle - which we ought not to do, even though we might think that, having regard to the circumstances of the case, it would be highly just to make the order".

The line of authorities continues with Newton v. Newton, (1885) 11 P.D. 11, where Sir James Hannen, P., said at p. 13:-

" . . . . I come to the conclusion that as it has [*498] been decided that the Judicature Act (1873, s.25(8)) does not give any enlarged powers to the court in this respect, it is not competent for a court, merely quia timet, to restrain a respondent from dealing with his property",

and Jagger v. Jagger, (1926) P. 93, in which Scrutton, L.J. said at p. 102:

"I am not aware of any statutory or other power in the Court to restrain a person from dealing with his property at a time when no order against him has been made."

The extracts from the judgments in the last aforementioned two cases were both cited with approval by the Court of Appeal in the more recent case of Scott v. Scott, (1950) 2 All E.R. 1154.

It is pertiment at this stage to refer to what it came to be known as a "Mareva" injunction which the learned counsel for the plaintiff has invoked as a foundation for his application. "Mareva" was the name of a vessel whose owners applied to the Court in England against the charterers thereof in the case of Mareva Compania Naviera S.A. v. International Bulkcarriers S.A., (1975) 2 Lloyd's Rep. 509, for an ex parte injunction to restrain the charterers from removing or disposing of any of the moneys (which the charterers had received under the voyage charter and kept in a bank in England) out of the jurisdiction pending the determination of the shipowners’ claim against [*499] the charterers for unpaid hire and damages for repudiation of the charter.1 Mr. Justice Donaldson granted the injunction but only until 1 7.00 on June 23, 1975, and refused to extend it. The shipowners appealed.

In the Court of Appeal Lord Denning, M.R., described the issue as one raising a very important point of practice. He then referred to section 45 of the Supreme Court Court of Judicature (Consolidation) Act, 1925 which repeats section 25(8) of the Judicature Act, 1873, and to the very wide interpretation of that section given in Beddow v. Beddow, (1878) 9 Ch. D. 89, by Sir George Jessel who had said in this respect:-

"I have unlimited power to grant an injunction in any case where it would be right or just to do so", and he (Lord Denning, M.R.) concluded by saying at page 510 of the report:-

"In my opinion that principle applies to a creditor who has a right to be paid the debt owing to him, even before he has established his right by getting judgment for it. If it appears that the debt is due and owing - and there is a danger that the debtor may dispose of his assets so as to defeat it before judgment - the Court has jurisdiction in a proper case to grant an interlocutory judgment so as to prevent his disposing of those assets. It seems to me that this is a proper case for the exercise of this jurisdiction". [*500]

The other two members of the Court of Appeal (Lord Justice Roskill and Lord Justice Ormord) agreed that the injunction should be extended until judgment in the action or until further order but, as they dealt with an ex parte application, and had not heard any argument from the other side, they reserved their views and abstained from expressing any opinion as to what the result would be were this matter hereafter to be argued fully. Lord Justice Roskill further said at p. 511:-

"Indeed it is right to say that, as far as my own experience in the Commercial Court is concerned, an injunction in this form has in the past from time to time been applied for but has been consistently refused. This Court should not, therefore, on an ex parte interlocutory application be too ready to disturb the practice of the past save for good reasons. But on the facts of this case, there are three good reasons for granting this injunction.. ... If therefore this Court does not interfere by injunction, it is apparent that the. plaintiffs will suffer a grave injustice which this Court has power to help avoid - the injustice being that the ship will have to continue on her voyage to India and perhaps - as is not unknown in India ports - wait a long time there for discharge without remuneration while the defendants will be able to dissipate that £174, 000.

In my judgment it would be wrong to tolerate [*501] this if it can be avoided. If it is necessary to find a reason for distinguishing this case from Lister v. Stubbs, I would venture to suggest that it is at least arguable that the Court should interfere to protect the shipowners' rights which arise under cl.18 of the time charter. The relevant part in lines 110 and 111 reads: 'That the owners shall have a lien upon all cargoes, and all sub-freights for any amounts due under this Charter'".

The first case where a "Mareva" injunction was issued was actually the case of Nippon Yusen Kaisha v. Karageorghis and another, (1975) 3 All B.R. 282, decided about one month before the Mareva case (supra). The Nippon case concerned also a claim by shipwoners against the charterers for charterparty hire; the former applied ex parte for an injunction to restrain the latter from disposing within or outside the jurisdiction of their money kept in a bank in England. Lord Denning, M.R. said at page 283 of the report:-

"We are told that an injunction of this kind has never been done before. It has never been the practice of the English Courts to seize assets of a defendant in advance of judgments or to restrain. the disposal of them. We are told that Chapman, J., in chambers recently refused such an application. In this case also Donaldson, J., refused. We know, of course, that the practice on the continent of Europe is different. [*502]

It seems to me that the time has come when we should revise our practice. There is no reason why the High Court or this Court should not make an order such as is asked for here. It is warranted by s.45 of the Supreme Court of Judicature (Consolidation) Act, 1925, which says the High Court may grant a mandamus or injunction or appoint a receiver by an interlocutory order in all cases in which it appears to the Court to be just or convenient so to do. It seems to me that this is just such a case. There is strong prima facie case that the hire is owing and unpaid. If an injunction is not granted, these moneys may be removed out of the jurisdiction and the shipowners will have the greatest difficulty in recovering anything".

Thus stood the legal position in England when our Supreme Court decided in its Admiralty jurisdction the case of Nemitsas Industries Ltd. v. S.& S. Maritime Lines Ltd. & Others, (1976) 10 J.S.C. 1542. The claim against the defendants in that admiralty action in personam was for £2,000.- paid by the plaintiffs to the defendants under two bills of lading signed by the defendants, on account of the freight and charges for the carriage of goods from Limassol to Damman on board the vessel "Karterado" chartered by the defendants, which goods were never carried to their destination.

Before judgment was given on their claim, Nemitsas Industries applied ex parte under s. 32 of the [*503] Courts of Justice Law, 1960, for an order restraining the defendants from withdrawing any money from their Bank account with the National Bank of Greece, Limassol Branch, until the final determination of the action. It had been shown by the affidavit filed on behalf of the plaintiff company that there was a serious question to be tried at the hearing and that there was a probability that the plaintiff company was entitled to the relief sought. It was also alleged that the plaintiffs feared that the defendants might dispose of their money then kept in the bank if the order applied for was not granted and that it would be difficult or impossible to do justice at a later stage,

A.Loizou, J., before whom the application was presented, considering the nature of the claim against the defendants and all the other circumstances including the reasonable fear of the plaintiffs that the defendants might dispose of or transmit their money out of the jurisdiction in which case the plaintiffs might never be able to recover same and would thus suffer great injustice which the Court had power to help avoid, granted the injunction applied for until the 2nd October, 1976, at 10 a.m. when he defendants could appear in Court and challenge the order if they so wished. On that date the order was by consent made absolute subject to certain variations regarding the amount of money affected by the order.

The following points from the above judgment call for particular attendance:- [*504]

(1) In granting the injunction applied for Mr. Justice

A. Loizou expressly adopted and followed the cases of Nippon Yusen Kaisha v. Karageorghis and Another, (supra), and Mareva Compania Naviera S.A. v. International Bulkcarriers’ S.A. (supra) upon which the plaintiffs had relied in support of their application.

(2) The Court held that both above cases turned on the jurisdiction under section 45(1) of the Supreme Court of Judicature (Consolidation) Act, 1925 (supra), to grant interlocutory injunction ex parte pending trial of the plaintiff’s action restraining the defendant from disposing any assets within the jurisdiction, and, because the said section is in substance similar to section 32 of the Courts of Justice Law, 1960, the latter should by analogy be likewise interpreted.

(3) This is a power which, no doubt, should be sparingly exercised having regard to settled reasons or principles and on proper facts justifying the exercise of the Court’s discretion in order to help the plaintiffs avoid suffering grave injustice.

(4) The only other case where an effort was made to restrain a bank from remitting the money out of the jurisdiction, i.e. that of Sofoclis Mamas & Co. v. Carl Borgward, 1962 C.L.R. 209, and where the Court, relying on the authority of Cyprus Palestine Plantations, v. Olivier & Co. (16 C.L.R. 122), [*505] refused the injunction, was distinguished on the ground that the appellant in the Mamas case applied under s. 4(1 ) of the Civil Procedure Law, Cap. 6, which was rightly held to be inapplicable and that there was no power under s. 4(l ) of the said Law to make an order affecting property not itself the subject of the action. Although at the time s. 32 of the Courts of Justice Law, 1960, was in the statute book, it was never relied upon or considered and the Mamas case (supra) was not, therefore, a precedent on the interpretation of s. 32 in the present context.

It follows from the above that the Courts in Cyprus have now power in a proper case to issue a "Mareva” injunction. How far and to what extent this new practice, a glaring example of the evolutionary process, has affected the established practice in this respect as laid down in Lister v. Stubbs (supra) and in a long series of cases some of which are set out earlier in this judgment, was considered in Rasu Maritime v. Portambangan, (1977) 3 All E.R. 324, the first contested case where the Court of Appeal in England ruled on the power of the Courts to issue a "Mareva" injunction, after hearing arguments from both sides. Lord Denning, M.R., (the Judge who first issued the "Mareva" injunction) delivered the main judgment of the Court. He referred to the Nippon case (supra) and Mareva case (supra) and added at p. 331 of the report:- [*506]

"Those were cases in which the owners of vessels had let them out on charters. The charterers had not paid their hire. They were out of the jurisdiction but they had funds here in banks in London. As soon as the writs were issued and before any judgment had been obtained, we granted ex parte interlocutory injunctions to restrain the defendants from removing any of their assets out of the jurisdiction."

He then went on to make a historical and comparative survey of the procedure of seizure of assets before trial or judgment and said that in former times it was much used in the City of London by a process called foreign attachment; it was extended to all case where the defendant was not within the jurisdiction whereupon the plaintiff was enabled instantly, as soon as the plaint was issued, to attach any effects of the defendant whether money or goods to be found within the jurisdiction. It was based on custom then prevailing in London and other ancient cities in England and in most maritime towns in the continent. In the latter it has most vigorously survived and in Franch it is called "saisie conservatoire".

Speaking of the law prevailing at present, Lord Denning, M.R. said at page 332 of the report:-

"So far as concerns defendants who are within the jurisdiction of the Court and have assests here, it is well established that the Court should [*507] not, in advance of any order or judgment, allow the creditor to seise any of the money or goods of the debtor or to use any legal process to do so. His proper remedy is to get judgment under R.S.C. Ord. 14, if he can, and issue bankruptcy proceedings against the. debtor. In those proceedings any fraudulent conveyance or preference to defeat creditors can be set aside. There are statements of the highest authority to this effect".

Reference is then made to the cases of Mills v. Northern Railway of Buenos Ayres Co. (supra ), Robinson v. Pickering (supra), Lister & Co. v. Stubbs (supra) ,Newton v. Newton (supra), Jagger v. Jagger (supra), Burmester v. Burmester, (1913) p. 76, and Scott v. Scott (supra) and to the statements made therein and he (Lord Denning) continues at pages 332 and 333 of the report as follows:-

"None of those statements was made, however, in relation to a defendant who was out of the jurisdiction but had money or goods in this country, save in Burmester v. Burmester (supra) and there the point was not canvassed. I do not think they should be applied to case where a defendant is out of the jurisdiction but has assets in this country. To those cases, at least, I think we should apply the principle which was applied by the customary courts in olden times and by the courts of the continent today. We should do it by means of the modern procedure of granting an interlocutory injunction". [*508]

I shall lastly refer to the most recent case on the subject, i.e. that of Owners of cargo lately laden on board the vessel Soskina and, others v. Distos Compania Naviera S.A. - The Siskina, (1977) 3 All E.R. 803, C.A. and H.L., where the cargo owners sued in England the Greek shipowners of the vessel Siskina for damages for breach of duty resulting in the loss of their cargo. At the same time they applied for an interlocutory injunction restraining the shipowners from disposing of their moneys within the jurisdiction or removing them out of the jurisdiction, and for leave to serve notice of the writ on the shipowners in Greece. The Judge gave the cargo owners the leave for which they applied and granted an interim injunction. The shipowners successfully applied for an order to set aside the writ and the injunction, and the cargo owners appealed. The Court of Appeal allowed the appeal by majority and restored the writ and the interim order, but the shipowners appealed successfully to the House of Lords and the writ and interim order were finally set aside. Although the case turned mainly on the territorial jurisdiction of English Courts and the construction of R.S.C, Ord.

11 , r. 1(1)(i), the nature and extent of the "Mareva" injunction was also considered in both Courts.

Although the judgment of Lord De ning, M.R., in the Court of Appeal was reversed in the House of Lords on Others grounds, the following extract therefrom remained, I think, unaffected. He said at page 809 of the report:-

"During the last two years the Courts of this country have rediscovered a very useful procedure [*509] which used to be known as foreign attachment. It is now called the ’Mareva injunction'. It is a procedure by which the Courts can come to the aid of a creditor when the debtor has absconded or is overseas, but has assets in this country. The Courts are ready now to issue an injunction so as to prevent the debtor from disposing of those assets or removing them from this country, thus defeating the creditor of his claims Up to the present, however, it has only been applied in cases where the defendant is abroad, but leave would be given to serve him out of the jurisdiction".

Bridge, L.J., gave a dissenting judgment in the Court of Appeal, which was uphold in the House of Lords. He said at page

817 of the report:-

" An injunction of this type has been described as a 'Mareva’ injunction. Since its essence is to attach in favour of a plaintiff the the assets within the jurisdiction of a foreign defendant pending determination of the plaintiff's claim against him, it may be appropriately described as an injunction by way of foreign attachment".

Delivering his opinion in the House of Lords in the above case, Lord Diplock said at page 822 of the report:-

"The purpose of this kind of interlocutory injunction against a foreign defendant is to [*510] ensure that there will be a fund available within the the jurisdiction to meet any judgment obtained by a plaintiff in the High Court against a defendant who does not reside within the jurisdiction and has no place of business there. It is a procedural innovation of very recent origin which has acquired the sobriquet of a ’Mareva’ injunction from the name of the case in which its validity was first uphelf in a reasoned judgment of the Court of Appeal given on an ex parte application: Mareva Compania Naviera S.A. v. International Bulkcarriers S. A. A Mareva injunction is interlocutory, not final; it is ancillary to a substantive pecuniary claim for debt or damages; it is designed to prevent the judgment against a foreign defendant for a sum of money being a mere brutum fulmen".

Lord Hailsham of St. Marylebone agreed with the opinion delivered by Lord Diplock and stated the following (at p. 828 of the report):-

"Three years ago I would have regarded the cargo owners' case as wholly unarguable. I believed it to be settled law, to employ the language of Lord Hatherley, L.C., in Mills v. Northern Railway of Buenos Ayres that 'The only remedy for a creditor in that case (i.e. an unsecured creditor) is to obtain his judgment and to take out execution '.....".

He then cited with approval the authorities of Robinson v. Pickering (supra), Lister & Co. v. Stubbs [*511] (supra) and Newton v. Newton (supra) and continued as follows

"Now, however, this well-established list of authorities, to the effect that an unsecured creditor cannot convert himself into a partially secured creditor merely by bringing an action against the alleged debtor and then seeking to freeze his assets by an injunction, is, apparently, no longer reliable at least as regards foreign based defendants with assets in this country (of. Nippon Yusen Kaisha v. Karageorghis; Mareva Compania Naviera v. International Balkcarriers Ltd; and Rasu Maritime S.A. v. Pertamina). If R.S.C, Ord. 11 can be applied to such defendants so as to enable service to take place outside the jurisdiction an interlocutory injunction may be available to restrain them from disposing of their assets here or from removing them elsewhere. So far such injunctions seem to have been confined to the commercial list, and perhaps entirely to shipping cases".

Lord Hailsliam then proceeded to make the following observation at page 829 of the report:-

"One cannot help contrasting the comparatively favourable position accorded in the Mareva cases to the plaintiff suing a foreign based defendant with assets in England to whom R.S.C. Ord. 11 can apply contrasted with that of a similar plaintiff with a claim against an English based defendant served in [*512] the ordinary way ... I believe the truth to be that sooner or later the courts or the legislature will have to choose between two alternatives. Either the position of a plaintiff making a claim against an English based defendant will have to be altered or the principle of the Mareva cases will have to be modified. In any event it is clear that Mareva injunctions cannot be allowed to flourish independently in the Arcadia of the commercial list without being applied in the High Court generally in all cases where plaintiffs and defendants are comparably placed."

Lord Simon of Glaisdale, Lord Russell of Killowen and Lord Keith of Kinkel agreed with the speech of Lord Diplock and with the supplementary observations of Lord Hailsham of Marylebone.

In view of the above authorities the position in England concerning the issue of interlocutory injunctions restraining defendants from disposing of their assets within the jurisdiction under s. 45(1) of the Supreme Court of Judicature (Consolidation) Act, 1925, may be summarised as follows:-

According to a long established practice, it is not competent for a Court, merely quia timet, to restrain a defendant from dealing with his property.

During the last three years, however, the Courts have rediscovered a procedural innovation known as foreign attachment or "Mareva injunction" by which the Courts can [*513] come to the aid of a creditor when the debtor has absconded or is overseas but has assets in England. In such a case the Courts are now ready to issue an injunction to prevent the debtor from disposing of those assets or removing them from the country, thus defeating the creditor of his claim. So far such injunctions have been confined to the commercial list, and perhaps entirely to shipping cases.

The injunction, therefore, applied for in the case before me would have never been made against the present defendant by a Court in England under the aforesaid S. 45(l) of the Judicature Act, 1925, inasmuch as the defendant is not a foreign based defendant and the case is not a shipping case. A fortiori in Cyprus where the powers of the Court to issue interlocutory injunction under s.32 of the Courts of Justice Law, 1960, are not as wide as those of the Courts in England under the corresponding s.45(1) of the Judicature Act, 1925.

Irrespective of the above, Upon an examination of the case for the applicant on its merits from the discretional point of view, I have come to the conclusion that it should be dismissed on this ground as well.

In a number of cases in England ranging from Preston v. Luck, (l884) 27 Ch. D. 497, to American Cynamid v. Ethicon, (1975) 1 All E.R. 504, several rules were laid down to guide the Courts in the exercice of their discretion in granting or refusing interlocutory injunctions. The corresponding principles prevailing in Cyprus follow more [*514] closely the rules laid down in the former rather than in the latter case: Acropol Shipping Co. Ltd. and two others v. Rossis, (1976) 2 J.S.C. 188, and Nemitsas case (supra). The principles formulated in Preston v. Luck (supra) are that a party seeking an interim injunction must show that there is a serious question to be tried at the hearing and that on the facts before the Court there is a probability that the plaintiff is entitled to relief. These two principles are identical with the two first requirements laid down in the proviso to our section 32 of the Courts of Justice Law, 1960.

It should not, however, be lost sight of the fact that in England these principles have not the force of statutory provisions and there is authority to the effect that when a statute gives a discretion, the courts must not fetter it by rigid rules from which a Judge is never at liberty to depart: See Blunt v. Blunt,

(1943) 2 All E.R. 76, and Ward v. James, (1965) 1 All E.R. 563, where Lord Denning said at p. 571 :-

"... the courts can lay down the considerations which should be borne in mind in exercising the discretion. ... From time to time the considerations may change as public policy changes, and so the pattern of decision may change: this is all part of the evolutionary process".

In Cyprus, unlike in England, the existence of the proviso to our section 32(1) of Law 14 of 1960, applicable only in cases of interlocutory injunctions, limits [*515] the powers of the Court and fetters the exercise of a Judge's discretion to the extent to which it is therein expressly set out in a manner from which he is never at liberty to depart. The said proviso shortens the range of cases and delineates in an inflexible way the perimetre of the circle within which interlocutory injunctions under s. 32(1) can be made.

In order to succeed the applicant in the case before me must not only satisfy the Court that on the balance of convenience it is just t at the interim order should be made, but he must also show that:-

(1) there is a serious question to be tried at the hearing; and,

(2) there is a probability that the plaintiff is entitled to relief; and,

(3) unless an interlocutory injunction is granted it shall be difficult or impossible to do complete justice at a later stage.

The above is the clear and unambiguous language of our statute, section 32 of the Courts of Justice Law, 1960, and the Court should go by it: Acropol case (supra).

Requirements

(1) and (2) above are being averred in the applicant's affidavit and, although no statement of claim has as yet been filed and no particulars of how the collision occurred are given In the affidavit apart from a general allegation that the defendant was driving his car negligently, I am inclined to find [*516] that the applicant has satisfied these two requirements in view of the fact that, in his affidavit in opposition, the defendant did no dispute them.

Where the applicant has failed in this respect is with requirement (3) above. It is not alleged in the applicant’s affidavit and his counsel has never argued that ’unless an interlocutory injunction is granted it shall be difficult or impossible to do complete justice at a later stage'. What was alleged was that, unless the interim injunction is granted, the defendant shall part with his car, in which case the plaintiff shall suffer irreparable damage inasmuch as the defendant has no other assets and the amount of any future judgment shall remain unsatisfied. I am of opinion that this allegation is completely a different thing from that required by the. Statute. It might be a circumstance or fact to be had in mind by the Court in considering whether it would or would not be just or convenient to make the order, but surely it cannot substitute the requirement expressly laid down in the Statute s.32(1) to the effect that the applicant must show that 'unless the interlocutory injunction is granted, it shall be difficult or impossible to do complete justice at a later stage'. The construction of this phrase causes me concern in view of the decision in Nemitsas case (supra) which is binding on me. As, however, the interpretation of s.32(1) of Law 14 of 1960 in the present context was never raised in that case and the point there was never canvassed, I consider it permissible for me to express, with all due respect, my opinion thereon and give my interpretation thereof. [*517]

The words "at a later stage" should, in my opinion, be construed to mean at a later stage of the proceedings before the Court, i.e. of the trial of the main issues in the action. The difficulty or impossibility to do complete justice at the later stage envisaged by the proviso refers to the trial of the issues between the parties and not to the availability of funds or property for the satisfaction of a future probable judgment. If, by the aforesaid phrase, the legislature meant the securing of funds or assets enough to satisfy a future judgment, it would have used, in my opinion, plain words to that effect similar to those used in s.5 of the Civil Procedure Law, Cap. 6, where power is granted to the Court to restrain a defendant, pending the determination of a money claim against him, from parting with so much of his immovable property as would be sufficient to satisfy the plaintiff's claim. I hope that the present case will provide an appropriate vehicle to carry the Supreme Court into a consideration of the point and an interpretation of s. 32 in the present context.

I have here in ablove endeavoured to examine this application from the jurisdictional as well as from the discretional aspect. The line between the two aspects is difficult if not impossible to draw in Cyprus especially in view of the proviso to s.32(l) of Law 14 of 1960, as the requirements laid therein are conditions precedent to the exercise of the jurisdiction by the Court rather than rules to guide the exercise of the Judge's discretion in the matter. [*518]

For all the above reasons which stand in the way of the present applicant, I dismiss the application as unfounded as regards both principle and authority. Applicant to pay respondent’s costs.

Application dismissed with costs.