Interlocutory injunctions in employment and company disputes require a clear legal right and recognised exceptional circumstances.
An interlocutory injunction will not ordinarily enforce a contract of personal service, including a branch manager's employment, where the arrangement is terminable on notice and damages are an adequate remedy. A claimed right to remain a director was also refused because the company's articles vested appointment in general meeting, the qualifying share requirement was not met, and no clear valid corporate consent was shown. Relief over share allotment was likewise declined because the challenge was not properly pleaded and non-filing of the statutory return did not by itself invalidate the allotment. The application for interim restraint was rejected in full.
Issues: (i) Whether an injunction could be granted restraining the employer from dispensing with or interfering with the petitioner's service as branch manager; (ii) whether an injunction could be granted restraining interference with the petitioner's position as a director of the company; (iii) whether an injunction could be granted in relation to the allotment of shares.
Issue (i): Whether an injunction could be granted restraining the employer from dispensing with or interfering with the petitioner's service as branch manager.
Analysis: The service arrangement was governed by the ordinary law of master and servant and was terminable on notice or salary in lieu of notice. A contract of personal service is not ordinarily specifically enforceable, and the recognised exceptions were not attracted. Since damages were an adequate remedy and no special circumstances were made out, interim equitable relief could not be used to compel continuance in service.
Conclusion: The petitioner was not entitled to an injunction protecting his managerial employment.
Issue (ii): Whether an injunction could be granted restraining interference with the petitioner's position as a director of the company.
Analysis: The alleged right to directorship rested on an asserted oral understanding, but the company's articles vested the power of appointing new directors in the company in general meeting and not in the board. The petitioner had not complied with the qualifying share requirement, the consent contemplated by section 314 was not shown to have been validly obtained by special resolution, and the company was not bound by an arrangement made without it being a party. In these circumstances, the petitioner did not establish a clear legal right to interim protection, and the court would not restrain the company from exercising its internal corporate powers.
Conclusion: The petitioner was not entitled to an injunction preserving his alleged directorship.
Issue (iii): Whether an injunction could be granted in relation to the allotment of shares.
Analysis: The challenge to the allotment of shares was not properly pleaded in the petition, and the absence or incompleteness of a return with the Registrar did not by itself invalidate the allotment. Non-filing of the return attracted the statutory consequences provided by the Companies Act, but did not render the allotment void. No sufficient basis for interlocutory restraint was therefore shown.
Conclusion: The petitioner was not entitled to any injunction concerning the share allotment.
Final Conclusion: No interim relief was made out on any of the grounds urged, and the application was rejected in its entirety.
Ratio Decidendi: An interlocutory injunction will not be granted to enforce a contract of personal service or to restrain a company from acting within its articles and statutory powers unless the applicant establishes a clear legal right and a recognised exceptional circumstance.
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