Injunctions to Address Public Rights

AGAB v. Plantation Indoor Plants

The SCC had struck down the Act, but the order still applied and thus ∆ was in contempt

Note: in another similar case, where the ∆ violated an injunction while appealing it, the CA struck down the injunction but found them in contempt for violating it.

Robinson v. Adams [1924, ON]

There may also be a civil wrong done to an individual, but where parliament has forbidden acts, then unless a private property right is also affected, civil courts shouldn’t interfere and forbid by injunction something already forbidden by parliament.

Also, try not to touch the criminal law with civil.

AGBC v. Couillard

Note: you can have a private nuisance that is also a public nuisance.

Some nuisance came from common law into criminal offences – e.g. CC s. 180: criminal nuisance.

AGs and Courts have set a residual jurisdiction where the AG can bring actions regarding public nuisances.

Issue: this case was about a prostitution issue

Street solicitation is the (a) part that’s illegal. It’s kind of a nuisance based offence – keeping sidewalks clear, etc.

In 1978, Hutt v. the Queen added a requirement that conviction was only available on these provisions where the behaviour was “pressing and persistent”

The policy was to avoid public annoyance, so the SCC in Hutt said that you had to establish a certain level of public annoyance to pursue a penalty.

The police felt that with this high bar they could never get convictions, so they felt they couldn’t enforce anymore.

So, the province brought an action for an injunction, on the basis that street solicitation is a common nuisance.

Held: McEachern J granted the injunction, even though the behaviours required in the criminal code probably couldn’t be established.

Common law grows with the times.

Note: the actual effect of this was to shut down street solicitation in the West End of Vancouver, and move it all to the other side of Granville.

AGNS v. Beaver

The NSSC and CA refused the injunction.

Reasons:

You have the whole criminal code – use that. And if you can’t use it, it’s not the courts’ job to change it.

It was the SCC who interpreted the law to make it difficult to charge street prostitutes, so why should other courts provide a way around that?

Reconciling Couillard and Beaver?

Where the SCC says we won’t interfere with street solicitation unless the behaviour is ‘pressing and persistent’, why can another court step in and create an inconsistent enforcement scheme?

Note: a bunch of municipalities tried to ban street solicitation, but the SCC struck down those laws as unconstitutional, since cities aren’t allowed to make criminal law.

Interlocutory Injunctions

General

Introduction & Context

They are designed primarily to deal with the risk of harm that litigants are exposed to as a result of delays associated with trial.

Interlocutory injunctions have been available for hundreds of years, but have dramatically increased in usage recently

People used to be able to get into court faster, so it wasn’t as necessary to get a pre-trial injunction.

Also, the traditional approach and threshold made it difficult:

The old rule was that you needed a strong prima facie case  so, you had to show that you were likely going to win at trial.

Challenges in civil procedure:

Social, economic, and technical developments have created problems

In the 1970s, a crisis in civil litigation began.

There was a lengthy time period before court, time spent in court, then a delay while waiting for judgment

Delays of 1-3 years are not at all unusual.

Plus, things outside of court have sped up considerably:

Due to globalization, computing, and worldwide banking, ∆s can get out of jurisdiction

With the click of a button, ∆s can move assets outside the national legal regime.

1975-1980: American Cyanamid, Mareva, Anton Piller  three important cases decided by UK courts, basically creating three new remedies.

Cyanamid establishes a general broad framework for all interlocutory injunctions

Sets out new rules about how they’re going to be made available, analyzing the risks

Jurisdiction & Procedures

Law and Equity Act s. 39

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  (1) if emergency, order can be given where “just or convenient”  don’t get too reliant on that; still strict.
  
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  (3) order can be requested/granted before the cause
  

BC Supreme Court Civil Rules:

R. 8 – Orders other than at trial

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  Notice  goes to court and to ∆
  
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  Summarize factual and legal arguments you will make, and then ∆ is aware; it’s like a mini-trial.
  
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  8-5: you can get an order without notice to the other party, in cases of urgency.
  
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    It can be almost as informal as calling up and saying “I need a judge, right now”
    
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    Sometimes, if an order isn’t granted within two hours, something bad will happen
    
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    More commonly: you do it when you don’t want ∆ to know what’s happening.
    
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      Ex parte order – given absent the other side’s knowledge.
      
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      Mareva injunctions are often done ex parte – get it b/c you think ∆ is dishonest and will transfer out of the jurisdiction. If you needed to give notice and two days’ prep time, it will often be self-defeating, since ∆ will take action before the injunction drops.
      
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  8-5(7)  must tell ∆ promptly after order made.
  

R. 10-4 – Injunctions

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  10-4(5) unless court orders otherwise, a pre-trial injunction application must contain applicant’s undertaking to abide by any order that the court may make as to damages.
  
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    These remedies expose ∆s to huge reciprocal risks
    
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    This undertaking is a mechanism used by courts to protect ∆s too:
    
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      Say ∆ has to shut down business for 2 years as a result of the injunction, but then wins at trial. So they lost two years of income. Now  has to pay up for that, because wrongly subjected to an injunction for that period.
      
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      So, if courts are mistaken in granting the injunction in the first place, then ∆ can be compensated.
      
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      ∆ doesn’t have to establish cause of action. If ∆ wins at trial, they just remind the judge about their lost business due to the injunction. The fact that the injunction is dissolved means liability is established, by virtue of the fact that the injunction shouldn’t have been granted in the first place. (May still need to hash out the correct amount of damages, though.)
      

New Approach: Balancing the Risks

American Cyanamid

New approach to interlocutory injunctions  lowers the threshold

Facts: Dispute over patent relating to absorbable sutures.  has patent, ∆ invents its own and starts marketing it in same jurisdiction.

Issue:  thinks ∆ has violated their patent, so they seek an injunction to stop them from selling in the jurisdiction until a trial can determine whether there is an infringement.

Held: Injunction granted; new test set out.

Reasons:

To demand a strong prima facie case really defeats the purpose of interlocutory injunctions, which is to provide some relief in advance of resolving the issue.

Note: there’s now a greater risk that courts will be wrong about injunctions.

The court in Cyanamid moves away from the merits of the case and considers instead the balance of convenience/risk

No longer trying to guess who will win or lose, but rather who is more vulnerable – who has a higher risk of suffering?

If ≠ granted,  vulnerable. If granted, ∆ vulnerable. We call the comparison of vulnerabilities the “balance of convenience”

Test for Interlocutory Injunction per American Cyanamid:

1. Serious issue to be tried?

Can’t decide cases on the merits at this early stage  just establish a threshold of a serious question.

Not frivolous or vexatious

Court must believe there is a bona fide dispute between the parties. Might even believe  will lose, just has to be a serious question for the courts – a bona fide legal case to make that couldn’t be dismissed at preliminary stage.

So, if no serious issue, application fails and no injunction will be granted.

If there is a serious issue, move on to step 2.

2. Is there a risk of irreparable harm to ?

If not, no injunction.

If yes, move on to step 3.

3. Is there a risk of irreparable harm to ∆?

If not, the injunction will be granted.

If yes, continue to step 4.

4. Balance of Convenience

Courts assess who is most at risk: a fluid, discretionary assessment.

So, at this point in the analysis, the biggest thing the judge is worrying about it the risk of being wrong  the balance of convenience is a function of the consequences to the parties of getting or not getting the injunction.

Note: in RJR MacDonald, the court said you don’t consider irreparable harm to the  until you hit the balance of convenience assessment, but it doesn’t really matter because these are the things that are getting assessed, at one stage or another.

Nuanced Analysis of the Situation – Other things to Consider

So, the basic principle is that you go through the Cyanamid test and assess whether irreparable harm is evenly balanced.

You aren’t supposed to look at the merits as in the past, but there are some situations where the merits become relevant, so you always need to be aware of them.

Final Determination

Where the injunction is really a final determination of the case, courts do have to look at the merits of the case [NWL v. Woods]⁵⁹

Where a judge knows the case will never actually get to trial, and everything depends on whether or not the injunction is granted, they will consider the merits of the case and decide on that basis.

Pure Question of Law

Where a judge just has to assess based on the law (i.e. no issues of fact) they will make the decision up front. [C-Cure]⁶⁰

Mandatory Injunctions [see below]

Telling someone to do something in advance of trial may raise a greater chance of irreparable harm to ∆, since positive steps are required.

As a result, courts are more cautious about awarding mandatory interlocutory injunctions.

Restrictive Covenants [see below]

Designed to restrict the ability of employees to compete with employer once they leave employment

Can restrict livelihood if too broadly drafted  so courts are careful in awarding injunctions to enforce restrictive covenants

Higher threshold, because they are often determinative of the issue. So, strong prima facie indication of a serious issue is required.

Free Speech

Courts are cautious in granting interlocutory injunctions where the issue is a question of freedom of expression, etc.

No Undertaking

Where  cannot afford to post the undertaking (see below), a court may still grant an injunction where there is a strong case on the merits.

Assessing “Irreparable Harm”

Courts ask: why aren’t damages appropriate?

Two baskets into which injunction-appropriate situations fall:

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  (1) Where there is an interest of  that can’t be properly measured in monetary terms
  
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    Might be immeasurable b/c too complicated/speculative
    
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      E.g. 20 year K breached near beginning
      
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    Or might be just b/c it’s something that isn’t measurable in money
    
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  (2) Where ∆ won’t pay
  
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    Might be b/c ∆ doesn’t have the wherewithal,
    
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    Or, more often, where ∆ is or seems to be dishonest
    
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      This is where we get Anton Piller orders and Mareva injunctions
      

See e.g. Cyanamid: parties competing over patent.

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  1. Court says the point of a patent is to give  a monopoly over a time period to est a market share, brand recognition, exclusive rel’ships, and it’s tough to predict the advantage of that monopoly over the time of the patent (in terms of market share, brand loyalty, customer rel’ships, etc.)
  
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  2. Irreparable harm b/c of difficulty  would have getting an injunction at trial if they don’t get it today  problem of restoring the status quo.
  
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    Say court refuses to grant injunction now, and the parties continue to compete in the market  after 3 years, ∆ will wrongly, but realistically, have est’d a market presence and clients who have relied on the product etc. It will be difficult to get it taken off the market, and would have negative reputation consequences for  in enforcing their right then.
    
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    But, if  in the wrong, ∆ will have lost the advantage of being in the market.
    
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    But the status quo is that ∆ hasn’t yet started in the market (about to, but hasn’t yet). All else being equal, courts will preserve the status quo.
    

Yule Inc v. Atlantic Pizza Delight Franchise

 has exclusive rights to open franchise stores, ∆ repudiating.

Court seems to think ∆ is wrongly repudiating the K, and  is being unfairly treated

If injunction isn’t granted,  will be put out of business, will lose reputation, goodwill in marketplace will deteriorate  all things that are difficult to measure.

Also, court subtly considers interests of third parties: 29 employees of  who will be out of work if he can no longer operate the franchises

Held: Injunction granted. Not the same type of irreparable harm to ∆ as to . ∆ can supervise, and  is making them money

David Hunt Farms Ltd. v. Canada (Minister of Agriculture) [1994, FCA]

Stands for: courts will take into consideration an admission against interest by one of the parties.

Facts

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  Cattle infected w. mad cow. Government of Canada decided to slaughter lots of cows.
  
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    Trade competition issues w/ the US (closing borders to cows etc.)
    
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   sues for interlocutory injunction to stop government from killing his cows
  

Held: injunction granted.

Analysis: Cyanamid test

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  1. Definitely a serious issue to be tried.
  
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    Government appears to have authority, but could be many legal arguments about why it’s unnecessary or shouldn’t be done here.
    
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  2. Does  stand to suffer irreparable harm?
  
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    Easily measured in damages - $4-5k.
    
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    But b/c of legal impediment,  probably wouldn’t be able to get the full amount of damages.
    
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  3. Harm to ∆?
  
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    National stakes are high – industry could suffer huge losses
    
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  4. Balance of convenience?
  
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    Strategic decision: in a related case, gov’t agreed ≠ to kill cows in Nova Scotia because they had an early court date set. Quarantined the cows for 6 months til trial.
    
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    The court in Hunt says equality is an important issue  gov’t said that elsewhere, and they think it can be achieved here as well, so gov’t has in essence admitted that it won’t suffer irreparable harm if injunction is granted.
    

Mandatory Interlocutory Injunctions

May require a higher level of proof

There’s no rule of law that says you can’t get a mandatory interlocutory injunction, but courts don’t like to grant them at the interlocutory stage because they tend to go past maintaining the status quo [see Sheperd Homes]⁶¹

It is possible to get a mandatory interlocutory injunction – you just have to watch out for those special concerns, but if the injunction is not especially intrusive and the risk of harm to  is high, courts will grant them [see Prairie Hospitality].⁶²

Undertakings

 has to compensate ∆ for losses if ∆ wins at trial

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  e.g. Cyanamid
  
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  it’s a significant form of insurance for ∆s in dealing w/ that balance of convenience consideration.
  

The point is to indemnify ∆s against wrongfully obtained injunctions.

There is a longstanding debate about when ∆ can claim damages pursuant to the undertaking. Two views:

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  1.  has to pay out on the undertaking only when  has done sthg wrong by way of obtaining the injunction
  
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    i.e. there has been bad faith or dishonesty,  has done sthg inappropriate to get the injunction
    
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    This view is represented by McBrantny J. in Viewegar analysis
    
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    Misrep of facts, maliciously or improperly obtains injunction.
    
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  2. Competing view says that it’s automatic  except in exceptional circumstances, ∆ will always be compensated.
  
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    SCC adopted this view in Viewegar Construction.
    
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    Historical reasons:
    
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      Test for injunctions used to require a strong prima facie case
      
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        Given that, s could say at the end that they were acting appropriately, met the high threshold and it was just the judge who was wrong. So then at the end they would say they shouldn’t have to pay damages because for some reason they lost at trial.
        
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    But now it’s so much easier for s to get the injunctions, that doesn’t really track anymore.
    
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      So now, ∆ has the right, except in exceptional circumstances, to collect on the undertaking.
      
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    In some situations courts don’t allow collection: where they really frown on ∆ behaviour. E.g. where ∆ only prevails on a technical legal rule, but they don’t have clean hands. That’s what ‘exceptional circumstances’ is about.
    

 can’t post an undertaking to pay damages if they can’t afford it.

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  Means they may not be able to get an injunction if they won’t be able to compensate. That is often fatal, but court can exercise its discretion to waive the req’mt of an undertaking.
  

Other waived undertakings: environmental disputes, e.g. a FN band who has little money and ∆ stands to lose huge amounts of $ if logging etc. is shut down  courts may, but may not, allow it to move forward anyway.

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  Depends on third parties, losses to community etc.
  

Can often be used as a way for ∆ to obtain a better legal costs order than they would otherwise get

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  General rule in Canada: winner gets costs, which compensates for (a small portion of) legal fees
  

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