The plaintiffs sought an interlocutory injunction to prevent the defendants from enforcing a security interest over corporate shares that the plaintiff, Avinoam Rabinowitz, had purchased from the defendant, James Westbrook.
Rabinowitz defaulted on the first instalment of the purchase price and claimed equitable set-off due to alleged damages from the share purchase transaction, asserting causes of action including breach of fiduciary duty, fraudulent misrepresentation, and oppression.
The court granted the injunction on the condition that the plaintiffs deposit $650,000 cash or an irrevocable letter of credit with the Accountant of the Court as alternative security.
The judge found that while the plaintiffs' claims on the merits were weak and their conduct lacked "clean hands," the risk of business loss constituted irreparable harm, and the balance of convenience favored protecting the defendants' security interest through alternative collateral.
Costs were reserved to the trial judge.