Case Nos: CA-2025-001485 - [2025] EWCA Civ 1108

The Judge was also, as it seems to me, plainly entitled to conclude, as he did, that “the balance of convenience tips in Yodel’s favour”.

It is true that it can potentially be “a counsel of prudence to take such measures as are calculated to preserve the status quo” (to quote Lord Diplock in American Cyanamid) and that, absent an injunction, Yodel intends to proceed with its “transformation plan” rather than to continue to trade as it has in the past. However, the “transformation plan” is already being implemented and so in a sense now represents the status quo. In fact, Mr McCourt has expressed the view in his recent witness statement that much of the work of integrating Yodel’s business with InPost’s is “effectively irreversible, in that the time, costs, legalities and/or practicalities of undoing the steps taken … would simply not be viable”. Moreover, it is common ground that Yodel has been incurring large losses for a prolonged period and requires some form of reorganisation. Nor do I understand it to be disputed that the company needs to obtain funding from a third party, whether InPost or someone else, to cover any losses incurred before any restructuring restores it to profitability. Mr Rivett suggested that Yodel might be able to obtain such funding from someone other than InPost, but it is hard to see who else would be willing to provide it. In practical terms, therefore, the Judge was faced with a choice between, on the one hand, permitting Yodel to proceed with a “transformation plan” which was already underway, which appeared to have prospects of turning the company round and for which InPost was prepared to provide finance and, on the other, granting an injunction during the currency of which the company would continue to incur large losses which, on the face of it, could only be covered by InPost so that Shift and Corja would have the opportunity, if they won at trial, to pursue a plan of their own of which few details have been given and in respect of which, as the Judge said, Shift and Corja “have adduced no evidence at all as to how, in the event of their success, they will [repay the debt incurred through parental support]”. Mr Rivett submitted that the question of how Shift and Corja proposed to manage Yodel once they had been held to be the company’s rightful (majority) owners was not a matter on which the Court could or should express any view, but I do not myself see why the apparent viability (or lack of it) of Shift and Corja’s plans had to be disregarded. The injunction is avowedly being sought to allow Shift and Corja to implement their own plan. If it is not apparent that they will be able to do so even if granted injunctive relief, the purpose of such relief falls away.

The conclusions I have arrived at above as to the prospects of Shift and Corja, on the one hand, and Yodel, on the other, suffering uncompensatable loss are also of importance in this context. As Lord Diplock observed in American Cyanamid, “[t]he extent to which the disadvantages to each party would be incapable of being compensated in damages in the event of his succeeding at the trial is always a significant factor in assessing where the balance of convenience lies”. In the present case, the guarantee from InPost SA means, as I have said, that there is no good reason to doubt that Shift and Corja could recover proper compensation for any assessable loss. In contrast, as I have also said, there is a very real prospect of an injunction causing Yodel to suffer sizable losses for which it would be unable to recover compensation from Shift or Corja under their cross-undertakings.

Mr Rivett suggested that the Judge had failed to take into account the fact that the proposed injunction would include a consent mechanism and liberty to apply to the Court. However, the proposed terms would have prohibited Yodel from “[i]ncur[ring] a liability outside of the ordinary course of business of £50,000 or more” notwithstanding that the company would have needed to borrow millions of pounds to cover its losses. In effect, therefore, the company could not have continued to trade without the consent of Shift and Corja. As the Judge said, the injunction would have “require[d] Yodel’s directors to subordinate their decision-making power on those matters set out in the draft order to Shift and Corja”.

In the course of his submissions to us, Mr Rivett submitted that the fact that one or more parts of the proposed order were thought unacceptable did not mean that there should be no order at all. However, it was not suggested in the grounds of appeal that a piecemeal approach should have been, or should be, adopted. To the contrary, the appellant’s notices ask that an order be made in the form of the draft that was before the Judge. In any event, the decision for the Judge was essentially binary: whether or not to allow Yodel to proceed with its “transformation plan” as a whole.