Parties won’t be coming back to court – it’s basically on or off right now. So, an injunction would work better than SP here. 188

Parties won’t be coming back to court – it’s basically on or off right now. So, an injunction would work better than SP here. 188

Vancouver Island Milk Producers v. Alexander [1922 BCCA] 188

Canadian illustration of Fothergill. 188

Facts: Three-year K whereby a farmer agreed to sell all his milk to the milk marketing board. Price of milk goes up and ∆ starts selling his milk directly to vendors. 188

Held: No injunction. 188

Reasons: 188

Milk is fungible, damages are calculable, the loss is not irreparable. 188

The key factor: the K had a liquidated damages clause that specified that if either of the parties breached the contract, the damages would be $500. 188

The parties had contracted for an efficient breach model, so the court allows them to stick to that. 189

Metropolitan Electric Supply v. Ginder 189

The alternative/“emerging” approach. 189

Courts will grant injunctions, even in situations where they would not grant SP, if they’re of the view that the injunction is necessary to protect plaintiff from irreparable harm, so long as there is no substantive reason to avoid the injunction. 189

The most commonly-cited substantive reason to avoid the injunction is that it’s going to force the parties into a co-operative relationship they’re not really capable of being in. 189

Facts: Long-term requirements contract. 189

A requirements contract is one in which a buyer agrees to take all of his or her requirements for a certain thing (here, electricity) from one supplier. 189

Note: an exclusive supply K is the same thing but the other way around: where supplier agrees to provide all their supply to one buyer. 189

These are the types of cases (exclusive requirement, exclusive supply) where courts are most willing to expand the range of the injunction. 189

Held: Injunction granted. In appropriate cases, injunctions can be used. 189

The court says SP can’t be ordered because they can’t assess what that would entail. The buyer hasn’t promised to take electricity at all. What they’ve promised is to not take electricity from anyone else. So it is conceptually possible to grant an injunction of that negative promise. 189

There are no definitional or supervision issues, so the court grants the injunction. 189

Nothing close or collaborative about the parties (electrical co and person), so there’s no concern about forcing people into a relationship. 189

Not a JV and not likely to cause much friction. 189

The appeal is that it solves the dispute today without forcing the plaintiff to go back to court three years from now to argue what the damages remedy should be. 189

However, we’ll still only grant these injunctions where damages are inadequate 189

This is a long term arrangement that is intended to lock them in long term. How would damages be calculated? Can they go out and arrange Ks with other parties? That wouldn’t cover the full benefit obtained from this K. 189

Thomas Borthwick 189

Exclusive supply contract 189

Facts: The defendant slaughterhouse agreed to supply one distributor with all its product. The court gives quite a detailed evolutionary analysis of how courts enforce injunctions differently from SP. 189

Held: Court grants injunction. Slaughterhouse may not sell to third parties. 189

Reasons 189

1. There does not have to be an express negative covenant. It can’t be implied. 190

2. There may be practical reasons to avoid SP (long term, necessary good faith) but the injunction may be a practical way to provide the plaintiff with what it needs. 190

Adopts paragraph from Corbin on p. 1163 and says that where SP raises technical or practical concerns, it’s fine to use an injunction even if that injunction has the same practical effect as SP. 190

However, it’s only done where damages are inadequate. 190

Here they are inadequate because it’s a long-term arrangement meant to give a distributor a secure source of supply so it can go out and enter other contracts with the people it’s going to sell do. 190

Difficult to measure what the loss of that would mean. 190

Second step is: Are there any substantive reasons not to enforce the injunction? 190

The most common reason is that the courts will not force the parties into an antagonistic relationship. 190

Here the court decides that it’s not a partnership or a joint venture and slaughtering cows is a relatively standardized, mechanistic business where the relationship between the parties is kind of irrelevant to carrying out the contract. 190

How does this Mesh With the Concept of Efficient Breach? 190

JC: It’s sort of because the contracts have been drafted this way. By making the covenant negative, you’re sort of saying that damages aren’t an appropriate remedy. That you wanted this thing and no other thing. 190

Assessing whether to grant a K Injunction: 190

1. Should the court exercise its discretion to grand an injunction? 190

Cassels mentioned that we seem to need a negative covenant, or at least to be able to imply one. 190

The parties seem to be deciding that damages are going to be inadequate, when they impose a negative covenant – maybe the courts are just deferring to the decision of the contracting parties? 190

2. Are there any reasons not to award? 190

Most common reason is forcing the parties to return to/continue in a bad relationship 190

Ask whether the relationship requires good faith. 190

Using Injunctions to Enforce Restrictive Covenants 190

Restrictive covenants usually come up in sale of business Ks that include a term saying “And X agrees not to enter into this trade for X years in the same geographical area” 190

Also in employment contracts. 190

Restrictive Covenants in Sale-of-Business Contracts 190

Issue: how should the courts balance the freedom to enter into contracts with the public policy in favour of free competition? 190

Consider the importance of letting people work and not preventing them from earning a livelihood. 191

Cantol v. Brodi Chemicals Ltd. 191

Court refuses to grant injunction to enforce a clause in employment K that would prevent the employee from selling plumbing fixtures. 191

Three points: 191

1. These cases are different from the American Cyanamid model. A strong prima facie case that the clause is valid is required. Para 12 of Cantol. 191

2. Even if there is a strong prima facie case, irreparable harm is going to get a harder look. Damages are really going to have to be inadequate. 191

3. There is a paradox in these cases. In order to be valid, a restrictive covenant has to have a short duration. If the employer tries to prohibit the employee from working in the same industry for 10 years, it’s illegal. What that means is that these cases are usually decided at the interlocutory stage. So this is going to decide the case. 191

Towers v. Cantin 191

You can sometimes get an injunction. 191

Facts: High-placed executive with insurance company. Gets hired away by KPMG who basically hired her to get her customers from her former company. Former company seeks an injunction. 191

Held: Granted. First of all, there’s no question that the covenant was legal and that it was breached. 191

This case involved the establishment of major business relationships over a long period of time and the goodwill was significant. 191

The injunction was also not oppressive. KPMG agreed they would have hired her anyway. 191

Other reasons why injunctions are more readily given in this context: 191

1. Easy to enforce 191

2. Courts assume that when a contractual clause is stated in the negative then an injunction is kind of the only way to protect the plaintiff’s interest. There was an old rule of equity (p. 1153) that said where there was a negative covenant, the courts had to issue an injunction. This is no longer the case, but there is a general presumption that for negative covenants, damages are not adequate and injunctions are the proper remedy. 191

Restrictive Covenants in Employment Contracts 191

This involves one of the closest to absolute rule that exists in the law: You cannot get specific performance of a personal service contract. 191

In the ordinary employment contract, damages are adequate. Note that this assumes the employee’s services are not unique – the adequacy of damages is predicated on the fungibility of employee services. 191

Employment contracts are a paradigm of good faith and consideration. You have to get along in order for it to work. Courts are realistic about forcing a disgruntled employee/r to work together. 192

 If the court is forcing someone to work, it’s state-sponsored enforcement of labour, which is the same thing as slavery or indentured servitude and we don’t care for that. 192

 The problem is, it’s a little more complicated when it comes to issuing an injunction. 192

 Where there is an explicit negative covenant in the employment agreement, while SP can’t be ordered, injunctions can be issued, sometimes. 192

Lumley v. Wagner [1852, Eng.] 192

First case where this happened. 192

Facts: W had a contract to sing for L for three months and would not sing for anyone else. The courts say they would never force her to sing. But they can stop her from singing for someone else. And they did. 192

So long as the injunction doesn’t necessarily amount to an order of SP, we will grant the injunction.  192

Warner Brothers v. Nelson [1937, Eng.] 192

Gives nuance to Lumley 192

“Bette Davis case”
 192

Facts: Bette Davis had a contract with WB. Required her to give WB her exclusive services to perform in movies for them and not to work for anyone else. So the contract had positive and negative features. 192

Held: The court builds on Lumley and grants the injunction. 192

Points: 192

1. An affirmation that SP will not be granted. You can’t make someone do a job. 192

2. But you can grant an injunction so long as its necessary effect is not to grant SP. This is the “sing or starve” rule. If the necessary effect of the injunction is that she will remain idle and unpaid or work for the employer, then the court will not grant the injunction. But so long as she has other options and the injunction won’t necessarily compel her to work, then the court will grant the injunction. 192

3. There does have to be irreparable harm. The mere fact that there’s a negative covenant does not remove the court’s discretion. The court here says that an injunction will only be granted if there’s irreparable harm. Here, the court said that Bette Davis was irreplaceable and was a unique asset. WB also had Bette Davis movies they were about to market and if she could go make other movies their movies would be less valuable. 192

4. These are not restraint of trade cases. Not so concerned about the employee. 192

The contract here is inside the employment relationship. It’s not saying she can’t work after she’s employed. She has a job. She just can’t have two jobs. So this doesn’t raise restraint of trade concerns because she is currently capable of plying her trade. 192

The clause said that Bette Davis would not, during the contract, render any services in business of any other person or engage in any other occupation. So the clause, literally enforced, would have created a sing or starve situation. 193

So the court doesn’t enforce the clause as written. They write the order in a narrower fashion, saying it’s only about making movies and also that it’s only for three  years (the time that was reasonably necessary to protect current Bette Davis movies) 193

JC: Does it mean anything that the two leading cases both involve women? 193

Detroit Football Club v. Dublinski [1955, ONHC] 193

Facts: Quarterback for Detroit hired by the Argonauts. 193

Held: No injunction granted. His services are not that unique. There are lots of QBs. The loss can be compensated in damages. And this is a football-or-starve situation. 193

Page One Records v. Britain 193

(The Troggs case) 193

Facts: The Troggs sang “Wild Thing,” in case you didn’t know. Further, Cassels seems legitimately convinced they were one of the most important bands of all time. The Troggs wanted to break ties with their manager. Manager sued for injunction. 193

Held: No injunction. 193

Reasons 193

1. An injunction would have compelled performance. The Troggs couldn’t work without a manager. Note that this is much more employee-favourable than Bette Davis. Because the Troggs could have worked without a manager, just not as a band. 193

2. The situation lacked mutuality. If they were forced to use the manager, the manager wasn’t forced to work for them. They would be vulnerable to exploitation because it was possible that the court would force them to only use the manager, the manager stopped working or stopped going a good job, the band couldn’t sue for SP. The court refused to put them into that position. This is the principle of mutuality. 193

This isn’t a big problem in most employment cases, because the employer usually just has to pay money. 193

3. The court says that damages were easily calculated. 193

Legal Architecture 193

Not rocket science. There are easily-stated general principles, but the way you tell the story and frame the facts can have a big impact on the way the courts exercise their discretion.  193

Special Situations – Some Discrete Issues in Interlocutory Injunctions 193

Speech 193

Canada Metal Co. v. CBC [1974, ON HC] 193

Facts: 193

Analysis 194

Procedural background: 194

Held: injunction was granted by TJ, but CA overturned. We read the much later appellate decision. 194

Canadian Tire v. Desmond 195

Facts: ∆ sign “Canadian tire cheated me” 195

Held: injunction granted against libelous sign 195

Procedural notes about CBC: 195

On the day of: documentary was airing at 6pm. 3pm s get injunction, served on ∆ at 5pm  “don’t allege anything about  buying experts” 195

A few months later, CBC wins on appeal  so the injunction should never have been granted. 195

In the interim, though, on the night of: CBC went ahead with the broadcast, but did some on-the-fly editing. They read out parts of the injunction on the air to explain what they weren’t allowed to allege/refer to. 195

CBC was sued by Canadian Metal for contempt of court 195

Medical Treatment 196

Possibly a lower threshold than for speech 196

These are difficult cases for the courts. 196

Typically these are disputes on the treatment of a terminally ill person  either dispute among family members or between family members and doctors/health authority. 196

Patients who are terminally ill or in a permanent comatose/vegetative state (the lowest possible diagnosis on the brain injury scale; implies no functionality/consciousness and no hope of recovery) 196

Court decisions are highly nuanced, tied to facts of specific cases. [see Jin v. Calgary Regional Hospital and CS v. Capital Health Authority] 196

In both of these cases: families argued as substitute decision-makers that there was something left that they or the person would value; doctors argued there was no hope, and a fine line between prolonging life and prolonging death. 196

Concern: doctors swear an oath to do no harm, and courts shouldn’t force them to undertake treatment practices that they feel violate this oath. 196

Note: in the background, diplomatically unmentioned, is the issue of cost to the healthcare system 196

Problem of social choice regarding cost 196

An ICU bed with a ventilatory and the attendance that would be required in these types of cases  costs $3-5k per day. 196

Should courts be commandeering scarce public health dollars for these patients? 196

Whose life will not be saved as a result of an emergency ward having, say, $1million less per year? 196

Key Differences that Help Courts Make these Decisions: 196

1. Time 196

In Jin, the family was just looking for a little more time. 196

The eldest son was in China and hadn’t made it back to Canada yet to say goodbye. 196

The family just got the information; father had only been put into ICU and on ventilator a few days before. 196

So, the judge allows some time for the psychological adjustment  a little time may solve the problem. 196

Whereas in CS, the  was a dedicated daughter who was in total denial about her mother’s death 196

The situation looked pretty intractable; time did not seem to be making any difference. 197

2. The terms of the order sought were slightly different between the two cases 197

In Jin, the only procedures currently being applied: he was in intensive care, on a ventilator, and there was no DNR order. 197

In CS, there were a lot of positive measures keeping her alive: ventilator, lots of drugs and procedures. 197

Balancing: patients and their representatives get autonomy over treatment decisions, but doctors shouldn’t be forced to do things they think are bad/wrong/harmful. 197

It’s one thing to say “don’t pull the plug on a ventilator”, and another thing to say “spend a few hours of your time and resources every day applying a treatment you think is wrong.” 197

So, in Jin, the court said the hospital could withdraw all other treatment, but couldn’t unplug the ventilator. If they were going to do that, had to give 72 hours notice so the family could go to court again and seek an injunction, if necessary. 197

Rasouli 197

ON case, recently got leave to appeal to SCC 197

Facts: 197

R went into hospital for brain operation, got an infection and was left in what doctors said was a permanent vegetative state. 197

Family believed there was some spark still there. 197

Ventilator to breathe – lungs weren’t working. 197

ONCA gave injunction in May 2011, SCC gave leave to appeal but it hasn’t been argued yet. 197

A recent news story indicated that Mr. R had some degree of consciousness; his doctors raised his prognosis from totally vegetative to one step above. 197

So, SCC had to have a mini-hearing to determine whether the action is moot, since the facts are different from those in front of the TJ now  but ultimately they decided to hear it on the original facts. 197

This is a prime opportunity for legislative intervention. 197

Environmental Disputes and Aboriginal Interests 197

MacMillan Bloedel v. Simpson [1996, SCC] 197

Company had legal license to log; 197

One of several cases emerging from dispute around MacMillan’s logging operations in the Clayoquot Sound area in BC 197

Seeking injunction to prevent petty criminal activity 197

Standing issue: does company have right to bring action? 197

Issue: John Doe/Jane Doe usage 198

At the end of the day,  photocopied many, many copies of the order, and anytime someone came by in the woods they’d hand them a copy and read it to them, as would the police. 198

There were more than 500 arrests made as a result of these orders. 198

Platinex v. Kitchenuhmaykoosib Inninuwug First Nation 198

Dispute re crown land owned by third party 198

 had mineral rights in NW ON 198

License allows exploratory drilling for mineral samples 198

But, also, KI first nation. Ceded the land to the crown under their treaty, but still have use rights (hunting etc.) 198

So, issue: how do you reconcile the two competing interests? 198

Courts sets out the approach (following Cyanamid architecture): 198

After the injunction was granted, parties met and couldn’t resolve, injunction ran out and they wound up back in front of the same judge. 199

Constitutional Cases 199

AG MB v. Metropolitan Stores: 199

Legislation: 199

Employer suing to have legislation declared unconstitutional 199

In the meantime, they want to freeze everything pending the final determination of the issue. 199

Govt of Manitoba: want the injunction availability test not to apply where the ∆ is government – should be a starting point/presumption of validity of government action, unless/until law is overturned by a court. 199

SCC rejects this argument, but fixes the problem 200

RJR MacDonald v. Canada 200

Nuance: reaffirms American Cyanamid (and Metropolitan Stores) in a slightly different context. 200

Facts: Tobacco companies seeking an injunction after QC CA has already upheld the constitutionality of the law. 200

Decision 200

Mareva Injunctions 201

The Established Rule 201

Lister v. Stubbs and policy of no execution before judgment 201

Exceptions: 201

Problems: globalization, flags of convenience, corporate shells, international banking. 201

Lord Denning to the Rescue – Mareva 201

Significant law reform. 201

There were some Mareva-type orders granted before this case, but this is the leading/first fully reported case. 201

Mareva v. Int’l Bulk Carriers 201

Discussion: J Act goes back to 1850 – how did it take until 1970s to figure out this power? 201

George Jessel in Beddow: 201

Principles: 201

The Reception in Canada: Aetna 202

There was a gradual and uneven adoption by provincial courts until a cautious adoption by the SCC in Aetna. 202

These orders are prone to exploitation, dangerous for ∆s  threshold is high. 202

Criteria 202

Jurisdiction 202

The concept means national jurisdiction – typically won’t cover interprovincial transactions. 202

You don’t need to have another trial in Ontario to get assets ∆ has moved there. You just register your judgment there, it’s not that difficult. 202

So, SCC in Aetna says we typically won’t grant Mareva injunctions for inter-provincial asset transfers [But see Southin J in Gateway Village] 202

Extraterritorial effect: 202

Court needs jurisdiction over ∆. 202

Issue: once they have that, can they make orders about ∆’s property outside of Canada? 202

Protections for ∆ 203

These injunctions are super intrusive/burdensome. 203

Courts try to even the playing field. 203

Undertakings – if  freezes ∆ assets for 2 years and ∆ bus goes bankrupt and then ∆ prevails at trial,  will be liable for the loss. 203

Full disclosure 203

Early return  as described above. Can go back to court w/in a few days to argue. 203

Third parties 203

Third parties are bound if given notice of the order [see Z Ltd. v. A-Z] 203

Distinction: technically not bound as parties to the order, but anyone w/ knowledge of a court order ≠ breach or in contempt 203

3rd parties are usually banks. 203

They have to do searches, but no disclosure to  203

So, they have to go into the accounts and find out what kind of assets of ∆ are in their control  but don’t have to tell  that. 203

’s undertaking covers the cost to 3rd parties of complying w/ the Mareva injunction. 203

Notice to third parties will typically carve out things that the bank is allowed to do 203

May meet its own obligations (e.g. pay charges on letter of credit, bank guarantee, credit card) 203

Anton Piller Orders 203

Developed primarily in the context of theft of intellectual property 203

Intended to prevent irreparable harm to   usually the loss of critical evidence needed to establish case at trial. 203

Scenario: Think ∆ is stealing your IP; you expect that if you start the action and seek evidence, they, as criminals, will get rid of the evidence. 203

This wasn’t a big problem when you could get into court fast, and before information was digital. 203

Starting point: Entic v. Carrington – no search and seizure before full court process. 203

No one can enter private property and take away material. 204

That’s still the law, but courts can grant Anton Piller orders that do allow this, sort of. 204

Lord Denning, who created them (of course) said explicitly that he was not giving out a “civil search warrant”. 204

Courts aren’t telling  they can knock down the door – just telling ∆s to open the door. 204

Important distinction:  doesn’t have any right to use force on an Anton Piller order  whereas a real search warrant does allow police to break down the door. 204

It’s just an order to ∆ that if you don’t open door court will put them in jail. 204

Circumstances: an alternative to discovery 204

Fraud  surprise  ex parte 204

Requirements 204

Very high threshold: “If Mareva injunctions are nuclear, this is the borg” 204

Extremely strong prima facie case 204

Evidence of possession of incriminating docs/things 204

Evidence of risk of loss/destruction 204

Irreparable harm 204

Protecting ∆s 204

It’s significantly intrusive, so there are protections. 204

Full factual disclosure on application (may be exposed to trespass charges, punitive damages if obtain order fraudulently) 204

Role of supervising solicitor 204

For the first ten years of these orders,  solicitor had dual role: 204

Solicitor went to court to get the injunction, but also executed it. 204

In the course of execution, you are office of the court – have to make sure your client et al aren’t acting outside the order. 204

Order will often specify what you can take away, e.g.  have to watch your client. 204

This was putting  lawyers in difficult pos’n. 204

Standard practice now: appoint a supervising solicitor. 204

So,  lawyer gets injunction, participates in deployment as  lawyer, but there’s an independent lawyer who supervises the whole thing, solely as an officer of the court. 204

Some debate as to whether you need supervising solicitor at every site where you exercise an Anton Piller order 204

This question comes up in regard to rolling orders – where you have street vendors, flea markets etc. selling copyrighted material, but dispersed around a large area. 204

A draft order indicates how the court foresees possible problems: 204

E.g. in Celanese,  goes in, seizes documents, many of which are correspondence b/w ∆ and solicitor  so, privileged. 204

Also may get ∆’s own trade secrets, etc. 205

So, the typical Anton Piller order assigns the supervising solicitor to sort through all the docs taken, to ensure  doesn’t see things they shouldn’t. 205

Rolling Orders 205

Often the point isn’t to get stuff for litigation; you’re just trying to shut down a counterfeit operation e.g. 205

Tshirt vendors – you aren’t going to sue them, it’s too small time. But you get an order to seize the counterfeit material and thereby stop it from being sold outside a stadium, e.g. 205

Red Hot Video 205

Counterfeit copies of porn movies. 205

First part of order: can’t hide or dispose of any of the material. Preserve it. 205

Second: regular injunction: stop copying our porn. 205

Third: gag order. Don’t notify anyone else who’s been supplied. 205

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