The Court of Appeal has allowed Breccia’s appeal and discharged an injunction that had restrained it from enforcing security over Joseph Sheehan’s shares in Blackrock Hospital Limited and Blackrock Clinic Limited.
The appeal concerned a High Court order of 30 November 2017 refusing Breccia’s application to lift the injunction. The injunction was first granted on an interim basis on 22 December 2014 and continued by consent as an interlocutory injunction on 26 January 2015, pending trial of the underlying proceedings.
Breccia argued that an earlier Court of Appeal decision, Flynn & Benray Limited v Breccia, had rejected an implied general duty of good faith and fair dealing under the parties’ shareholders’ agreement. It said that this removed the main basis for the injunction. Sheehan maintained that other claims remained, including conspiracy, misuse of confidential information, inducement of breach of contract and interference with economic interests.
Delivering judgment on 31 July 2019, Mr Justice Michael Peart said the High Court had applied the wrong test when it concluded that the remaining claims were not bound to fail. The question, he said, was whether those claims could support a permanent injunction of the kind sought, as well as meeting the requirements for interlocutory relief. The Court of Appeal considered the claims and evidence at this stage; it did not decide whether the allegations would succeed at trial.
The judgment said the remaining claims sought damages. Even if established, they would not entitle Sheehan to an order preventing Breccia from enforcing its security for loans that were in default and unpaid. The rejected good-faith issue had previously provided a possible basis for permanent injunctive relief, but the court said that basis had fallen away following Flynn.
The Court of Appeal therefore ruled there was no proper basis to keep the injunction in place. It allowed the appeal and discharged the injunction granted by Noonan J. on 22 December 2014 and continued on 26 January 2015. It did not address Breccia’s other appeal grounds concerning alleged lack of candour and delay, as they were unnecessary to its decision.