Cease and desist order (in the context of injunction)

A cease and desist order is a type of injunction that requires an individual or company to refrain from doing a certain thing. However, a cease and desist order can be contrasted with an interim or interlocutory injunction, whereby the former is made by a body who has had this type of power conferred upon it by statute and the latter is an order of the court.

Cease and desist orders are more common internationally and, for example, in the United States the counterpart to the Australian Competition and Consumer Commission (ACCC), the Federal Trade Commission, has the power under section 5 of the Federal Trade Commission Act 15 USC 45 to issue a cease and desist order. However, in Australia the ACCC does not have the same powers and must use court procedures in order to restrain people from engaging in such behaviours. For example, pursuant to section 44ZZG of the Competition and Consumer Act 2010 (Cth) the Federal Court of Australia has the power to grant an interim injunction on application by the ACCC.

An analogous power that is exercisable by the Australian Securities and Investments Commission (ASIC) is a ‘stop order’. These orders are quasi-injunctions and prevent offers being made under a disclosure statement where the document contains a misleading or deceptive statement (see section 379 of the Corporations Act 2001 (Cth)).

In Australia the process involved in obtaining a “cease and desist order” is through an application to a court of competent jurisdiction for an interim or interlocutory injunction. An injunction is an equitable remedy that has the purpose of maintaining the status quo and prevent a party’s position from being prejudicial prior to the final resolution of a dispute. In determining whether the court should issue an injunction it must consider whether:

  1. The balance of convenience is in the favour of the party seeking the injunction; and
  2. The party seeking the injunction has a seriously arguable case.

The principles for granting an interlocutory injunction in Australia were stated in the case of Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57.